House of Commons Hansard #46 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

Message from the Senate
Government Orders

3:55 p.m.

Conservative

The Acting Speaker Bruce Stanton

Before we resume debate, I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bill:

Bill S-3, A third Act to harmonize federal law with the civil law of Quebec and to amend certain Acts in order to ensure that each language version takes into account the common law and the civil law.

Resuming debate, the hon. member for Brandon—Souris.

The House resumed consideration of Bill C-13, An Act to implement certain provisions of the 2011 budget as updated on June 6, 2011 and other measures, as reported (without amendment) from the committee, and of the motions in Group No. 1.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

3:55 p.m.

Conservative

Merv Tweed Brandon—Souris, MB

Mr. Speaker, it is a privilege and honour for me to stand to speak about the next phase of Canada's economic action plan. When I was preparing my notes for these comments, I could not help but realize that many things have already been done prior to part two of this action plan, and I want to touch on them as I move through my comments.

It is not unknown to anyone in Canada that our government believes in lowering taxes. It believes that leaving more money in the pockets of people who work, raise families, and create and live in and participate in communities is better than having the government take it from them and reinvest it in their communities. Often when governments do that, they tend not to hear or understand the needs of the communities, and therefore, although the investment was well intentioned, the money is quite often misspent.

It is interesting to note that since 2006 our government has cut taxes 120 times. If it is not a record, it is a darn good average. Canadians are recognizing that and are benefiting from the removal of the tax burdens that were in place before. We have removed over one million low-income families, individuals and seniors, from the tax rolls. These are the same low-income people we hear members opposite talking about and being concerned about. By changing thresholds for offering tax benefits, we have removed that many people from the tax rolls. That is something everyone in Canada should be very proud of.

We have cut personal taxes, consumption taxes, business taxes and excise taxes, and the list goes on. We have reduced personal income tax, we have increased the amount Canadians can earn tax free, we have introduced the landmark tax-free savings account--one of the most important personal savings vehicles since the RRSP--and we continue to reduce the small business tax rate from 12% to 11%. Due to our government's low-tax plan, the average typical Canadian family's tax saving is now over $3,000.

Where do we go from here? What is the next step, and what are we presenting to Canadians to provide the security they need to continue to invest in their homes, families and communities? We have introduced a new family caregiver tax credit and a new hiring credit for small businesses.

I want to mention one measure in particular, because it has a huge impact on job creation and on opportunities for the future.

We have extended the accelerated capital cost allowance that allows businesses to invest in new technology and industrial benefits for their businesses and create efficiencies not only in production but on the environmental side. Since they will be able to write that off at a faster pace, they will be more interested in making that investment and writing it down as quickly as possible.

In my previous life, those types of investments would sometimes take 20 years to write off, so businesses were always carrying them. Whether they were using it or whether it was obsolete, they still had to show it. This is one area of support that business communities and manufacturers have told us has been tremendous.

We talk about supporting families. This is probably one of the most important issues we deal with. We have introduced a family caregiver tax credit that caregivers of all types of infirm, dependent relatives--including, for the first time, spouses, common-law partners and minor children--can utilize. We have introduced an enhanced medical expense tax credit, removing the $10,000 limit on the amount of eligible medical expenses that can be claimed on behalf of financially dependent relatives.

We are continuing the eco-energy retrofit program, one of the most successful programs we introduced in previous budgets, and I hope the opposition recognizes it as a milestone. It allows people with lower incomes to find ways to create more efficiencies in their homes by reducing their electricity and heating bills, thus making their homes more efficient and allowing them to have more money in their pockets.

Another part of the budget that is very important to me and to many of the members is the support that we are offering for seniors. Since 2006 when we became government, we have offered $2.3 billion in annual tax relief for seniors and pensioners. That equates to removing over 85,000 seniors from the tax rolls. We have introduced pension income splitting so people can split their incomes and pay lower taxes and have more money in their pockets to do the things they want to do, to do the things they saved for and worked all their lives for.

We have increased the age credit by $2,000. We have doubled the pension income credit to $2,000. We have increased the amount that guaranteed income supplement recipients can earn through employment without a reduction of their GIS benefits. Where does the next step take us? Where does phase two of this action plan go?

We recognize that Canada's seniors not only helped build and make our country great, but they continue to do so. Part of our new plan is going to enhance the GIS for eligible low income seniors who will receive additional benefits up to $600 for single seniors and $840 for couples. That will have an impact for over 680,000 seniors across Canada. These are important numbers because they reflect the number of people who will benefit from this directly. We are doing things to help people move forward.

We have enhanced the new horizons for seniors program. The uptake in this program in my constituency of Brandon—Souris has been phenomenal. Seniors are reaching out to other seniors to create opportunities and learning environments. They are doing things together to create a better and healthier lifestyle. We certainly support that.

I mentioned previously about helping families. Extending the eco-energy retrofit program definitely will help seniors particularly those with a low income. That I have no trouble supporting and I would hope that members opposite would support it too.

One of the great things that has been accomplished by this government is that we established the tax-free savings account. That has been a tremendous benefit to seniors.

We talked about volunteer firefighters. I have heard some of the debate today. Volunteer firefighters play a huge role in our rural communities. They are the people who work in our communities, but at the sound of a bell, they leave their work to go and help a neighbour, friend, relative, anyone in the community. They often put themselves at great risk. They do it for one reason. They do it because of their neighbours and families and the communities in which they live. Nearly 85,000 volunteer firefighters provide their services to protect our lives and property in Canada's urban and rural communities, but rural communities in particular rely on volunteer firefighters and their professionalism.

There are many things I want to touch on, but I will finish by touching on the government's support for farmers. Farmers are the backbone of the country. They have fed the world for many years. In this budget we are introducing a new agricultural innovation initiative of $50 million to keep us on the cutting edge of agricultural innovations. We talk about strengthening the food safety system which is very important. We have invested $100 million for new training and additional science capacity. We are helping producers by extending the accelerated capital cost allowance.

There are many reasons in the budget for everyone to support it. I would ask members to do so. I will be supporting it.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:05 p.m.

Liberal

Ted Hsu Kingston and the Islands, ON

Mr. Speaker, I would like to comment on the eco-energy retrofit program for homes which my hon. colleague brought up twice in his remarks. There is a problem with it. Let us look at the program from the point of view of small businesses which are in the business of retrofitting homes. These are businesses that are hiring people and there are many of them in my riding. A one-year program is not something that businesses can use for planning, hiring and training.

We put forward a proposal that this program go for five years so that small businesses could take advantage of the supposed stability of the majority government to actually grow their businesses. At the end of five years we could have a viable industry doing energy retrofits for homes and helping people save energy and money.

Is the hon. member disappointed that in this budget bill no thought has been given to having a longer period, say five years, for the eco-energy retrofit program so that small businesses could count on that kind of stability?

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:05 p.m.

Conservative

Merv Tweed Brandon—Souris, MB

Mr. Speaker, if I understand it correctly, the program has been around since 2007. It was introduced by the government at that time in a budget. We have seen the benefits of it. It has worked tremendously well in many parts of the country. Therefore, we thought it was desirable to continue with the program.

Many people benefited from this. Not only did people have the work done, but there was training and job creation in the last four years as well. Those people, particularly young people, were able to stay in their communities and continue in the profession they chose. They are now prepared to face the future.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:05 p.m.

NDP

Guy Caron Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I would like to get back to the question my colleague asked. I do not think his question was answered, because I have heard the same concerns about the eco-energy retrofit program. The problem is not who created it, when it was created or whether it will be renewed. The problem is that contractors and voters in general do not know whether the program will survive for a year, two years, three, four or even five years. The program would be much more effective if people could be certain that it will be around for more years. This way, contractors and the public could plan renovations over a longer period of time.

I would like to know whether the government member could tell us whether he is satisfied or dissatisfied with the fact that these measures are decided on year by year and whether he thinks they would be more effective if they were more long-term to allow people to plan over a longer period of time.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:05 p.m.

Conservative

Merv Tweed Brandon—Souris, MB

Mr. Speaker, I am not sure how more clear I can be. This was introduced in 2007. It is now 2011. The program is continuing to operate. The benefits that we have seen in our communities have been tremendous not only for the people who are utilizing the services, but it has helped keep trained people in those new jobs, particularly in the housing industry. It has been a tremendous boon. We now have accredited professionals in our communities carrying on in the jobs of the future and the opportunities that they present.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:10 p.m.

Conservative

Jeff Watson Essex, ON

Mr. Speaker, I want to commend my colleague from Brandon—Souris, which is a rural riding. Obviously, it is one of our fine western ridings.

Would the member comment on how this budget, the next phase of Canada's economic action plan, speaks to the needs of rural Canadians and rural Canada?

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:10 p.m.

Conservative

Merv Tweed Brandon—Souris, MB

Mr. Speaker, as important as it is when we talk about introducing and implementing programs and policies that would impact Canadians, I think we all would recognize there are differences between the rural and remote parts of Canada and the urban parts of Canada and that we have to always be sensitive to those differences.

Many of the things that we have introduced in the budget have been things which the rural caucus has brought forward to the Minister of Finance and to the government, and they have listened to us. That is the most important part. We get things done by working together, by listening to our constituents and, at the end of the day, producing a product that I hope all members will support.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:10 p.m.

NDP

Annick Papillon Québec, QC

Mr. Speaker, I am very pleased to rise today to stand up for New Democrats’ ideals when it comes to the economy. With Bill C-13, the Conservatives have supported the NDP motion calling for immediate economic action. Unfortunately, however, this bill is very simply not enough.

A lot more has to be done to respond to the legitimate concerns that Canadian families have about the economy. The Canadian public wants to see real action taken to stimulate the economy, create jobs and combat the social inequalities we are facing. And today I would like to stress that last point, because, in my opinion, it is crucial to understand the economic benefits that are produced by a more equal society.

Income inequality is an important indicator of fairness in an economy and has repercussions on other areas, such as crime and social exclusion. A study done by the Conference Board of Canada shows that Canada ranks 12th out of 17 comparable countries when it comes to inequality. In other words, the income gap is wider in Canada than in 11 comparable countries. Although Canada’s wealth is distributed more equitably than in the United States, Canada’s 12th place ranking suggests that it is doing a mediocre job of guaranteeing income equality, according to the Conference Board.

A significant widening of the income gap occurred in Canada between 2000 and 2006. Canada is the only country in the Conference Board study whose relative score fell between the mid-1990s and the middle of the next decade because of its significant increase in income inequality. Statistics Canada recently released some income figures. Incomes from the 2006 census show an increase in inequality. That study was based on full-time workers’ median earnings between 1980 and 2005. The figures show that earnings grew by 16.4% for people with the top incomes, while they stagnated for people in the middle income group and fell by 20.6% for people in the bottom income group.

To summarize, from 1980 to 2005, earnings for the top group rose by 16.4%, while middle-income Canadians saw their incomes stagnate and earnings for the bottom group declined sharply. In the richest group of Canadians, the big winners were the super-rich, the top 1%. That increase is not attributable solely to wise investments; it also stems from the base salaries paid to bank presidents and corporate CEOs, which have exploded in recent years. So we should not be surprised to see that in recent weeks, income inequality has been in the media spotlight.

The Occupy Wall Street movement, for example, and the movements that followed it are a signal that the public is rejecting the income gap between the richest 1% and the other 99%. There is a widespread fear now being felt around the world that the rich are getting richer and the poor are getting poorer. And that fear certainly does not seem to be unfounded. For example, a recent study by a professor at Berkeley found that income inequality in the United States is at an all-time high, even exceeding the levels observed during the Great Depression. The example he gives is that the top 10% of earners in 2007 accounted for nearly 50% of total income in the United States.

In contrast, Denmark and Sweden, which have the lowest levels of poverty among children and the working age population, are also undisputed leaders in terms of income equality. The relationship between social spending and poverty rates has become clearer over time. Thus, it is not surprising that these countries have strong traditions of redistributing wealth. They have been able to keep poverty rates down thanks to a universal welfare policy that has been effectively combined with job creation strategies that support gender equality and accessibility. That is the example the NDP would like to follow, because it appears that the model that this government insists on copying is producing extremely disappointing results.

According to the Conference Board, one reason for the growing inequality in Canada is globalization, which rewards highly qualified workers while leaving everyone else behind. This situation is also largely the result of the interaction between family factors and economic factors. The gap is widening considerably between families with two highly educated spouses and those that have only one breadwinner or those with no one who can work.

In addition, government transfer programs meant to address some of these inequalities are not as effective as they were 20 years ago. For instance, fewer workers are receiving employment insurance benefits, and social assistance rates do not always mimic the cost of living. To date, many of the tax breaks granted by this government have disproportionately benefited the wealthy, because they have not been applied based on income. They have instead centred mainly around lowering the GST and around tax credit programs.

Speaking of inequality, we must also address the issue of poverty in Canada. Once again according to the Conference Board of Canada, more than 12% of adult Canadians live in relative poverty. That is twice as high as the rates found in Denmark and Sweden. Canada ranks 15th out of 17 peer countries in terms of the working age poverty rate. Canada's working-age poverty rate increased from 9.4% in the mid-1990s to 12.2% in the mid-2000s.

While the NDP has been asking this government to rethink its plan to promote employment, a recent OECD report states that poverty rates are directly dependent on the ability of household members to be gainfully employed. The OECD concludes that the failure to tackle the poverty and exclusion facing millions of families and their children is not only socially reprehensible, but it will also weigh heavily on countries’ capacity to sustain economic growth in years to come.

The relationship between social spending and poverty rates is striking. Among working-age adults, the relative poverty rate is lower in countries with higher social spending.

Why so much talk about income inequality and poverty? Because there are direct links between inequality and a country's economic growth. It is reasonable for there to be a compromise between equality and effectiveness so that wealth redistribution does not impede productivity. A recent OECD study on income inequality notes:

A society in which income was distributed perfectly equally would not be a desirable place either. People who work harder, or are more talented than others, should have more income. What matters, in fact, is equality of opportunity, not equality of outcomes.

However, the idea that income inequality reduces the potential for growth is real. Income inequality undermines social cohesion, leading to social conflicts. A study done by Michael Forster highlights new research showing that a society should be concerned about income inequality. He says that a number of authors have produced evidence that poor income distribution could ultimately have a negative effect on economic growth through education, health and access to the labour market.

In a letter published in Le Devoir, Paul Bernard, a professor at the Université de Montréal, showed that social investment is a key to economic development. To support his position, he cited numerous studies that show that social spending does not operate to slow growth. In fact, it actually operates to provide everyone with the prerequisites that enable them to participate in the labour market in large numbers and on the best terms. This strong participation helps to increase the productivity of the economy and means that the taxes needed for maintaining those services can be raised intelligently.

In other words, economic development can be achieved through social investment, with the bonus of a healthy additional dose of social justice. So we have to look at combating income inequality not just as a matter of principle, but also as a practical contribution, what social development can and must do for economic development. Providing all Canadians with access to adequate health care services, a quality education and social and family services appropriate to their situation is what will ensure the long-term development of our economy. In other words, we have to redistribute wealth in order to create wealth.

So it seems there is an alternative to this government’s economic plan, which is an attempt to stimulate the economy by cutting social programs and the services provided to the public under the false pretext of contributing to economic growth and helping Canadians find jobs.

This plan does not do enough for the Canadian economy. We need a government that demonstrates leadership, today even more than in previous years. Canada is not immune to a new recession. That is why we cannot stop there. We have to be proactive and redistribute wealth in order to create wealth.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:20 p.m.

Liberal

Ted Hsu Kingston and the Islands, ON

Mr. Speaker, I think Canadian corporations have roughly $500 billion in cash in their coffers. This does not contribute to investment, economic growth or job creation. What is missing from this bill to ensure that this money can be used for our economy and the Canadian public?

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:20 p.m.

NDP

Annick Papillon Québec, QC

Mr. Speaker, I want to thank the hon. member for his question. This bill lacks more serious measures for helping Canadian families. I think that is key. As I was saying, we have to put an end to the Conservatives' erroneous way of talking about social spending, spending for social programs and public services. It is more of a social investment to invest in an education system and a universal health care system. This will then allow us to deal with other potential recessions and to keep our heads above water.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:20 p.m.

Saint Boniface
Manitoba

Conservative

Shelly Glover Parliamentary Secretary to the Minister of Finance

Mr. Speaker, I commend my colleague across the way for her speech. However, I would like her comments on a very serious situation that occurred in Quebec. In fact, many of the people who probably elected her are familiar with the Earl Jones case.

As Bill C-13 discusses a securities regulator and there are provinces that are on board to try to address this problem, I would like to hear what the member says to the victims of the Earl Jones case when Joey Davis of the Earl Jones victims committee said very clearly, “We support the idea of a single national regulatory body overseeing financial organizations”.

Keeping Canada's Economy and Jobs Growing Act
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4:20 p.m.

NDP

Annick Papillon Québec, QC

Mr. Speaker, I will talk about my weekend. I watched the documentaries Meltdown: The Secret History of the Global Financial Collapse and Inside Job. In light of that and the fact that protesters are camping out just a few blocks away from my Quebec City office, I can also say that we really have to take the downturn more seriously. I do not really see a change in strategy in this bill. Unfortunately, I believe that this bill does not contain the tools required to deal with potential recessions or economic difficulties in this country. That is what I have to say. There are solutions. They are found on this side of the House and they can also be found among those participating in Occupy Wall Street, Occupy Quebec City, Occupy Vancouver. The solutions can be found there. We must listen to the people. They have suggestions. I believe that is where we must listen to the people.

Keeping Canada's Economy and Jobs Growing Act
Government Orders

4:20 p.m.

NDP

Yvon Godin Acadie—Bathurst, NB

Mr. Speaker, I would like to ask my colleague what Quebeckers have to say about firearms registration in light of the Polytechnique incident that resulted in the death of 14 women. The Conservative government has eliminated the registration of firearms and has even appropriated the registry. It wants to destroy the registry to ensure that the Province of Quebec will not even be able to have its own gun registry. This is a government that wants to build prisons and put everyone behind bars. I would like to hear what my colleague has to say about crime and especially about what happened in Quebec.