Madam Speaker, our government has introduced its sixth budget. It provides the health care system, the most fundamental need of Canadian families and children, with $11.5 billion in new funding over five years. It also provides over $7 billion in broad based tax relief that will benefit every Canadian. A large portion of the relief is to lower income individuals and families.
Now we have a motion by the official opposition before us. Does it challenge our health care investment? Does it propose a new tax assistance for those in need? The answer is no.
It is an outrageous idea that a family in which both parents work at lower income levels may pay less tax than a single breadwinner who is lucky enough to earn as much as the other two people combined.
The false logic of this alleged discrimination has been properly and precisely rebutted by my colleagues in government. I will step over this red herring motion, or maybe I should say misleading proposal, and address the underlying issues. The real agenda behind the motion is to try to suggest that the government is not taking concrete, committed action on the tax burden affecting every Canadian.
As the budget made clear, tax reduction plays a key role in the government's objective to build today for a better future. The federal government is committed to providing substantial tax relief in the fairest way possible.
Significant relief was directed at students, charities, persons with disabilities and the children of parents with low incomes upon the elimination of the deficit in 1997-98. The 1998 budget began the process of providing broad based tax relief. For the first time since 1965 tax relief is provided for every taxpayer without deficit financing, without borrowing money to pay for it.
In the interest of fairness, the greatest tax relief in the 1998-99 budget will go to low and middle income Canadians. The 1998 budget benefited low income Canadians by increasing by $500 the amount of income they can earn annually before paying income tax. The 1999 budget increases that amount by $175, to $675, and extends it to all Canadian taxpayers.
This means that effective July 1, 1999, the basic amount of income that all Canadians can therefore earn annually on a tax free basis will rise to $7,131. As well the spousal equivalent will increase to $655.
Those measures will benefit low income Canadians. In the 1998 budget, 400,000 low income Canadians no longer pay any federal taxes. The 1999 measures will build on those numbers by removing 200,000 more Canadians from this tax burden, for a total of 600,000.
The 1998 budget began the process of eliminating the 3% surtax introduced in 1986 by the previous government as a measure to help reduce the federal deficit. Last year the government abolished the 3% surtax for taxpayers with incomes of up to $50,000 and reduced it for those with incomes between $50,000 and $65,000. All in all, 14 million Canadians received tax reductions as a result of this measure.
The 1999 budget also builds on previous action to assist families through the Canadian child tax benefit which is composed of basic benefits and a supplement for the low income family.
As the finance minister has noted, the tax measures in the 1998 and the 1999 budgets reflect three fundamental principles of the government's tax policy. First, our tax system must be fair. Second, broad based tax relief should focus initially on personal income tax. Third, because of our debt burden broad based tax relief should not be financed with borrowed money.
Together the 1998 and the 1999 budgets provide the largest tax reduction at the lowest income level. For example, single taxpayers earning $20,000 and less will have their federal income tax reduced by at least 10%. A typical one earner family with two children and an income of $30,000 or less will pay no net federal tax. A family with income of $45,000 or less will have tax reduced by a minimum of 10%, and in some cases even more.
The 1998 and 1999 budgets ensure that 600,000 low income Canadians will no longer pay any federal tax. As a working mother I would support whatever help we can give to working mothers either at home or at work. The government has focused on helping low income families, providing also for mothers working at home. It is our purpose to support and help the 600,000 low income families.
