Mr. Speaker, it is a great honour to rise in debate on Bill C-265 introduced by my colleague from Essex, who is a new member of this place but who has already proven himself to be an extraordinarily talented, hard-working and dedicated representative of his constituents.
That is nowhere better evidenced than the fact that we are debating this bill tonight, a commitment he made when he first ran for public office many years ago that he would not forget or abandon Canadian seniors, particularly those residents in the Windsor area who depend upon their social security income for dignity in their retirement. He did not forget them. To the contrary, one of his first acts in the House of Commons was to introduce this bill to restore justice and fairness for Canadian citizens who depend upon social security for their retirement income.
This is a matter that is very close to my heart. I was the revenue critic for the official opposition when I first came to this place in 1997. The government at the time brought forward a bill to give effect to amendments to the U.S.-Canada tax treaty. The government, not surprisingly, it is part of its track record, essentially misled us back in 1997 when it told us that this huge tax amendment bill contained technical amendments that had no substantive effect on Canadians and that we should just pass it at all stages without even looking at it.
Thankfully, the day before we were to consider the bill I got a call from Bill Thrasher from Windsor, who spent an enormous amount of time on the phone explaining to me how the government had managed to betray senior citizens in Canada who receive social security. He painted the whole picture for me about a somewhat complex series of changes to the Canada-U.S. tax treaties.
The upshot of it was quite simply this. In 1995 the 80,000 Canadian senior citizens who received and relied upon U.S. social security payments for their retirement income were taxed at an inclusion rate of 50% and by 1997 the government had decided to increase the inclusion rate to 85%, increasing their effective tax burden by 70% . The government did not disclose this in the bill back in 1997. It did not tell anybody about it. It even tried to sneak it by the seniors who were relying upon this income.
Sadly, because of the Liberal government's total mismanagement of this file, people were already losing their homes, as my colleague from Windsor just described and as my colleague from Niagara mentioned earlier. This massive, uncalled for increase in taxation on the retirement income of these modest income seniors had a very concrete and devastating effect on many of them. For many of them, this was their retirement income.
Perhaps some of us do not quite understand the situation. There are tens of thousands of Canadians who principally work in the United States. They cross the border everyday or they may work there for months at a time. When they pay their U.S. social security premiums, they pay them with after tax dollars, unlike Canadians who effectively get to write off the value of their CPP premiums. Canadian recipients of U.S. social security have in effect already paid a tax burden that their counterparts here at home never had to pay in making contributions to their public pension plan.
One of the basic principles of benefits for seniors is that the state enters into a de facto contract with people in terms of promised benefits. In a sense they are politically vested benefits. If people want to have financial stability, they need to be able to calculate and rely on a certain retirement income.
I submit that it is immoral to change the rules on people, not only as they are approaching their retirement age but, worse yet, when they have retired, when they have no more choices and when they cannot generate income any longer. To pull the financial rug out from under them is immoral. That was the effective result of the changes to the tax code adopted by the government in the mid-1990s. It was a total betrayal of these 80,000 Canadians, people who had helped build this country, many of whom were veterans who defended it in foreign wars, all of whom lived by the rules, obeyed the law and tried to build a better country, most of whom raised families and invested in this country's future. I guess they made the mistake of taking jobs where they could get them in the United States and then being treated by the Liberal government as second class citizens.
What I found to be particularly disturbing, and I have ever since I first encountered this issue eight years ago, was how the representatives of many of these Canadian seniors in border constituencies, the largest concentration being in the Windsor area, were members of the Liberal government. Usually these Liberals say to people, as part of the nudge, nudge, wink, wink at election time, is, “Elect us. We will be in government. We will deliver the goods for you. We will defend your interests. We will stand up for you. They cannot do that in the opposition but we will in government”. That is what Susan Whelan said to them, what Herb Gray said to them and what the whole lot of the Liberals in the border constituencies across the country said to social security recipients. They betrayed those people and they betrayed that public trust.
Why did Susan Whelan let this go through when she had a chance to stop it? I remember sitting in the House of Commons industry committee in October 1997 fighting tooth and nail against Susan Whelan's efforts to ram through this 70% tax increase for her constituents, for her seniors on fixed incomes who were losing their homes and their apartments, some of whom were having to eat cat food. I have the letters from these people and sadly some of them have since passed on without seeing justice done.
In this bill, which I originally introduced several years ago, we are trying to undo the injustice of the tax changes in 1997. We are trying to make one very simple change: to reduce the inclusion rate on U.S. social security income from 85% back to where it was for decades to 50%.
We are not asking for special treatment. We are not asking for something that would cost a lot of money. We are not asking for anything except basic fairness and justice for people who have worked their whole lives and deserve to live with a modicum of dignity as seniors. That is why all members of the opposition parties, I believe, have endorsed this bill.
If the government wanted to let justice happen, it could accept the passage of this bill at all three stages here tonight and send it over to the Senate for ratification. This does not need to be held up for any prospective election. This could be passed and, indeed, the finance minister could have done right by people like Olive Smith. Years ago he could have done right by them in the budget. In fact, and I do not think I am going out on a limb here, let me say that the Conservative Party would be quite happy to accept an amendment to the budget implementation act to give effect to Bill C-265.
I know my colleague from Essex has worked hard on this but I see he is indicating that he too would accept allowing the government to take credit for doing this. This does not have to be a partisan football. This could and should be an all party effort to restore justice for these seniors.
I just want to say in closing that my dear friend, Olive Smith, who has been a champion on this issue of fairness for years, is now in a period of very difficult health. I want to send my best wishes to her and say that we will continue to fight and I promise her that help is on its way. We will restore justice for people who were badly done by, who had worked hard and who deserve to live in dignity.