Bill C-28 (Historical)

Budget and Economic Statement Implementation Act, 2007

An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007

Part 1 implements goods and services tax and harmonized sales tax (GST/HST) measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. Specifically, the Excise Tax Act is amended to
(a) increase the percentage of available input tax credits for GST/HST paid on meal expenses of truck drivers from 50% to 80% over five years beginning with expenses incurred on or after March 19, 2007;
(b) increase the GST/HST annual filing threshold from $500,000 in taxable supplies to $1,500,000 and the annual remittance threshold from $1,500 to $3,000, both effective for fiscal years that begin after 2007;
(c) increase the GST/HST 48-hour travellers’ exemption from $200 to $400 effective in respect of travellers returning to Canada on or after March 20, 2007; and
(d) implement changes to the rules governing self-assessment under Division IV of Part IX of the Excise Tax Act to ensure that GST/HST applies appropriately in respect of intangible personal property acquired on a zero-rated basis and consumed in furthering domestic activities, applicable to supplies made after March 19, 2007.
Part 2 amends the non-GST portion of the Excise Tax Act to implement measures announced in the March 19, 2007 Budget. Specifically, the excise tax exemptions for renewable fuels, including ethanol and bio-diesel, are repealed, effective April 1, 2008.
Part 3 implements income tax measures proposed in the March 19, 2007 Budget but not included in the Budget Implementation Act, 2007, which received Royal Assent on June 22, 2007. In particular, it
(a) introduces a new Working Income Tax Benefit;
(b) eliminates income tax on elementary and secondary school scholarships;
(c) eliminates capital gains tax on donations of publicly-listed securities to private foundations;
(d) enhances the child fitness tax credit;
(e) expands the scope of the public transit tax credit;
(f) increases the lifetime capital gains exemption to $750,000;
(g) increases the deductible percentage of meal expenses for long-haul truck drivers;
(h) provides tax relief in respect of the 2010 Winter Olympic and Paralympic Games;
(i) allows for phased-retirement options for pension plans;
(j) extends the mineral exploration tax credit;
(k) enhances tax benefits for donations of medicine to the developing world;
(l) streamlines the process for prescribed stock exchanges;
(m) introduces an investment tax credit for child care spaces;
(n) introduces a new withholding tax exemption with respect to certain cross-border interest payments;
(o) prevents double deductions of interest expense on borrowed money used to finance foreign affiliates (the Anti-Tax-Haven Initiative);
(p) eases tax remittance and filing requirements for small business;
(q) introduces a mechanism to accommodate functional currency reporting;
(r) provides certain tobacco processors that do not manufacture tobacco products with relief from the Tobacco Manufacturers’ Surtax; and
(s) provides authority for regulations requiring the disclosure by publicly traded trusts and partnerships of information enabling investment managers to prepare the tax information slips that they are required to issue to investors on a timely basis.
Part 4 implements the disability savings measures proposed in the March 19, 2007 Budget. The measures are intended to support long-term savings through registered disability savings plans to provide for the financial security of persons with severe and prolonged impairments in physical or mental functions. Part 4 contains amendments to the Income Tax Act to allow for the creation of registered disability savings plans. It also enacts the Canada Disability Savings Act. That Act provides for the payment of Canada Disability Savings Grants in relation to contributions made to those plans. The amount of grant is increased for persons of lower and middle income. It also provides for the payment of Canada Disability Savings Bonds in respect of persons of low income.
Part 5 implements measures that provide for payments to be made to provinces as a financial incentive for them to eliminate taxes on capital under certain circumstances.
Part 6 enacts the Bank for International Settlements (Immunity) Act.
Part 7 amends the Pension Benefits Standards Act, 1985 to permit phased retirement arrangements in federally regulated pension plans by allowing an employer to simultaneously pay a partial pension to an employee and provide further pension benefit accruals to the employee. These amendments are consistent with amendments to the Income Tax Regulations to permit phased retirement.
Part 8 authorizes payments to be made out of the Consolidated Revenue Fund for the purpose of Canada’s contribution to the Advance Market Commitment.
Part 9 amends the Canada Oil and Gas Operations Act to authorize the National Energy Board to regulate traffic, tolls and tariffs in relation to oil and gas pipelines regulated under that Act.
Part 10 amends the Farm Income Protection Act to allow financial institutions to hold contributions under a net income stabilization account program.
Part 11 amends the Federal-Provincial Fiscal Arrangements Act to provide for an additional fiscal equalization payment that may be paid to Nova Scotia and Newfoundland and Labrador. This Part also specifies the time and manner in which the calculation of fiscal equalization payments will be made and it amends that Act’s regulation-making authority. In addition, this Part makes consequential amendments to other Acts.
Part 12 amends the Canada Education Savings Act to clarify the authority of the Minister of Human Resources and Social Development to collect, on behalf of the Canada Revenue Agency, any information that the Canada Revenue Agency requires for purposes of administering the registered education savings plan tax provisions.
Part 13 authorizes payments to be made out of the Consolidated Revenue Fund to an entity, designated by the Minister of Finance, to facilitate public-private partnership projects.
Part 14 implements tax measures proposed in the October 30, 2007 Economic Statement. With respect to income tax measures, it
(a) reduces the general corporate income tax rate;
(b) accelerates the tax reduction for small businesses;
(c) reduces the lowest personal income tax rate, which automatically reduces the rate used to calculate non-refundable tax credits and the alternative minimum tax; and
(d) increases the basic personal amount and the amount upon which the spouse or common-law partner and wholly dependent relative credits are calculated.
Part 14 also amends the Excise Tax Act to implement, effective January 1, 2008, the reduction in the goods and services tax (GST) and the federal component of the harmonized sales tax (HST) from 6% to 5%. That Act is amended to provide transitional rules for determining the GST/HST rate applicable to transactions that straddle the January 1, 2008, implementation date, including transitional rebates in respect of the sale of residential complexes where transfer of ownership and possession both take place on or after January 1, 2008, pursuant to a written agreement entered into on or before October 30, 2007. The Excise Act, 2001 is also amended to increase excise duties on tobacco products to offset the impact of the GST/HST rate reduction. The Air Travellers Security Charge Act is also amended to ensure that rates for domestic and transborder air travel reflect the impact of the GST/HST rate reduction. Those amendments generally apply as of January 1, 2008.

Budget and Economic Statement Implementation Act, 2007

[The Acting Speaker, Royal Galipeau]

Questions and comments, the hon. member for Burnaby—Douglas.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I thank my colleague from Parkdale—High Park for her intervention in this debate this afternoon. It has been a very important one.

We have seen a trend over the last decade or more in the governments that we have had. We have seen Liberals and Conservatives pursuing the same kinds of policies, the same mistaken approaches to managing our economy and to managing and addressing the needs of Canadians.

We have seen both Liberal and Conservative governments fail to estimate correctly the size of the surplus. It announces surprise record surpluses and then directs that money directly toward the debt, without considering the needs of Canadians and without considering what else might be necessary in our communities, what families might need and what seniors might need.

We have seen both the Liberals and Conservatives adopt a flawed approach to program and economic planning in Canada. We have seen many other occasions where the Conservatives only seem to be improving on the bad Liberal record of 13 years when they were in government, where promises made about important new social programs were not kept or flawed approaches were adopted.

I think the best example would be the Liberals' failure for 13 years to address child care. They promised it continuously but never put something into action until the very last minutes of their government.

We have seen those kinds of approaches for many years. I wonder if the member could comment on why the current government seems to be adopting so many of the same directions as the previous failed Liberal approach on these important issues.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, it really does beg the question of why government after government, whether Liberal or Conservative, takes the exact same economic approach to the running of our country.

What is that approach? That approach is to cut back on the role of government. How does it do that? It does that by starving our budgets. We should all pay down our debts but it is a question of degree. Do we aggressively pay down our mortgage if our roof is falling in? No. We need to have balance. However, neither of the previous parties in government have had balance. What they have done, step by step, almost by stealth, is starve our governments of funds and then argue that they did not have the funds to invest in the significant social, cultural, environmental, economic infrastructures that this country so badly needs.

I was saying earlier that before the tax cut era Canada was fifth in the level of competitiveness. After seven years of tax cuts, guess what? We are in 16th place. Even by their own measure of economic success, they are failing. Who are we losing to? We are losing to countries like the Nordic countries that in fact have a higher tax regime. Why? It is because they are more successful societies. They are investing in their people, in their economies and in their infrastructures, and, guess what, it pays off.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, I would like to ask my colleague whether she thinks the Conservative government is being somewhat shortsighted by only using the budget surpluses to pay down the debt. We all know that the manufacturing and forestry sectors have suffered greatly because of the overheating of the oil industry. The government is suggesting that we use the budget surpluses to pay down the debt and give gifts to the big oil companies. We should remember that if a company did not generate a profit in the last year, a 1% tax cut across the board will hardly help.

I would like to know what my colleague thinks about the Conservative government's shortsighted policies.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, one of the reasons we have such a crisis in the manufacturing sector is because of the high dollar. Why do we have a high dollar? One of the major causes is the fact that we are increasingly a commodities dollar, a petro-dollar.

What happens when we give across the board tax cuts, as we are debating in Bill C-28, is that we reward the oil and gas sector and the large banks and insurance companies, which are already making multi-billion dollar profits, and we further threaten the manufacturing sector, which is the most value added, most beneficial sector of our economy in terms of the spin-off jobs and the overall value.

The handling of the manufacturing crisis and the boom in the commodity sector is just exacerbating this situation. It is jeopardizing our manufacturing sector. I do not know whether it is from a bias toward the polluting industries, the oil and gas sector, or a lack of experience with the manufacturing sector, but we could do permanent damage to our valuable manufacturing sector and, frankly, we will see the impact of the current high dollar, not tomorrow, not next month but in two or three years to come. We have not seen the worst of this yet.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I was glad the member for Parkdale--High Park talked about the way seniors were being shortchanged because of the error that was made in calculating the indexing of guaranteed income supplement pensions.

The member noted that there was a huge surplus available right now to go into some of our social programs and that the government has chosen not to correct that error that was made and ensure that the seniors who lost that $1 billion in income would receive it. The previous Liberal government also refused to correct that error.

I wonder if the member would talk a little more about why those governments are refusing to help some of the most vulnerable people in our society, seniors who have the lowest income of all of our elders. Why would the government not use some of that money to address that shortfall in their income and to supplement their income so they can have a reasonable life in their so-called golden years?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I have a lot of seniors in my riding of Parkdale--High Park and I hear from them quite often about the issues they are facing: concerns about high drug costs, housing costs, people who want to stay in their homes and the lack of home care.

They have a lot of issues and they are concerned about their incomes. They worry all the time whether they will be able to stretch their income to meet their needs. Costs are going up way faster than their income.

When I tell seniors that, due to a miscalculation by the present government and previous governments, seniors are owed a billion dollars that they should rightfully have in their pension income, they are absolutely shocked. They know that if the shoe were on the other foot and they somehow miscalculated their taxes and owed the federal government $50 or $100, they would be afraid that the government would come down on them like a tonne of bricks. To be sure, the government would ensure that money was collected.

Seniors are baffled, as I am, and I am also quite angry that the government would allow that money to be denied to the seniors of our country. A billion dollars is a huge amount of money. Surely, out of the $250 billion that the country has forgone in taxes over the last 20 years, we would think that it could find 1/250th for the seniors of our country.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, I was interested to hear the member for Parkdale--High Park talk about high interest rates and their impact.

In my community of Hamilton, and in Hamilton East particularly, I have been talking to people regarding the impact on companies. I had the owner of one company say that by December he would be finished, which would mean 276 jobs lost and that was unless the dollar dropped by 15%.

I presume the same impact is happening in Toronto.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Yes, Mr. Speaker. We have lost over 125,000 manufacturing jobs in Toronto. It is a disgrace and we are still waiting for the government to do something about it.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, this debate gives us a golden opportunity to remind Canadians of the disastrous effects the Conservative government's policies are having on the economy.

Bill C-28 is barely getting any reaction from the Liberal Party of Canada, but that is nothing new. I must admit that as a new member in this House, it is a wonder to me to see how—and my colleague from Toronto just talked about this—some people who are close to the Liberal Party of Canada have managed to pass themselves off as being concerned about poverty and food banks. In fact, the Conservative government is currently granting tax reductions and giving big gifts to the oil companies and the banks. But Liberal members are doing nothing.

If the current government manages to force the passage of Bill C-28 before Christmas by virtue of its seat count, then we will miss out on quite the show. The leader of the Liberal Party of Canada has publicly said that he wants to make sure Canadians understand that, after the holidays, the fun will be over, that he will prove the skeptics wrong, that we will have to hold him back or he might hurt the Conservative Party. What we have seen instead this fall is a Liberal Party of Canada that is keeping the Conservatives in power.

I would like to say a few words about what that means. Before becoming a minister in Quebec for a number of years, I was part of the opposition for nine years. I know what it is like to be in the opposition. The job of the opposition is to do two things: make the government accountable, in other words, be the public's conscience and ask the right questions, but at the same, hope that our policies will one day lead us to power. In other words, it is our job to be a government in waiting.

In the NDP, we have clear policies and we are absolutely ready to be in power. Just look at the depth of talent on the NDP benches in this House. We are a political party with a great number of people who have extensive experience in public administration. It is absolutely extraordinary to see the Liberal members sitting on their hands when they could be defeating the Conservative government if they voted just once with us. But they will not. Why? I guess they must be happy enough with the Conservatives' policies or they would be helping us defeat them.

Day after day, they criticize Conservative policies during question period, and at the end of the day, when the time comes to vote against the Conservatives, the Liberal Party drops the ball. It does not have the political courage to stand up and vote. Last night, we witnessed an unprecedented spectacle in this House during the vote on Bill C-28, which is now before us. This is the Conservatives' Christmas bill, their $14 billion gift to oil companies and banks. Some Liberal members showed up to vote against it because the infamous Atlantic accord was part of this bill.

How many of them showed up? Ten or so. Not even enough to form a party in Parliament. The so-called official opposition can no longer call itself a recognized party in Parliament because the members of the official opposition no longer even show up to vote. They are afraid they might defeat the government on what might be considered a matter of confidence.

People who made the mistake of voting for the Liberal Party of Canada are really questioning that decision. The members of the NDP are telling people to take a good look at our policies and who we are. When I look at my colleagues who were once ministers in British Columbia, Manitoba, Ontario or, in my case, Quebec, people with a great deal of experience in education, industry, their churches and their communities, I realize that the NDP possesses the kind of wealth and social vision to do a good job of running a government that would renew Canada's reputation as a peacekeeper, international cooperator and environmental steward.

What do we have instead? We have a Conservative government that is embarrassing Canada internationally and that drew us into the quagmire of war in southern Afghanistan. Only the NDP has adopted a clear position against the war in Afghanistan, in favour of the withdrawal of our troops and a comprehensive, stable process for the development and maintenance of lasting peace in Afghanistan.

The Conservatives are embarrassing Canada on the world stage by not trying to achieve an objective that is supposedly shared by all political parties, that is, committing 0.7% of our gross domestic product to foreign aid. In that regard, they are the worst government in the history of Canada since the 0.7% objective was adopted. We are farther than ever from that objective, which is so crucial if we want to help our fellow human beings around the globe.

We need look no further than the conference currently under way in Bali, Indonesia, to understand just how much the Conservatives are embarrassing us. We sent our pitiful Minister of the Environment there to embarrass us. It is bad enough to have to watch his buffoonery here every day when he gets up and talks about a file on which he clearly has not done the least bit of work. He reads quotations and spews nonsense of that nature, when what Canadians really want to know is what will be done to fulfill our obligations to future generations.

Those who have the opportunity should go to McGill University to meet the extraordinary people who work at the Centre for International Sustainable Development Law. These people understand that sustainable development is not just a slogan invented over the past few decades. Sustainable development is a legal obligation we have towards future generations.

Canada ratified the Kyoto protocol five years ago, even though this protocol is celebrating its 10th anniversary today. Because Canada ratified it five years ago, it is part of Canada's domestic law. The Kyoto protocol is an international obligation, but it is an integral part of our law, which means that it is a legal obligation.

The Conservative government prides itself on respecting law and order. Yet this law and order government is becoming irresponsible and even an international outlaw because of its disrespectful behaviour toward future generations. It is casting a shadow over a generation of Canadians who have worked hard to earn our country the utmost respect of the international community when it comes to the environment.

I know that whenever the Kyoto protocol comes up, the Conservatives inevitably point to the seats opposite them and say it is the Liberals' fault, because they did nothing for 13 years. We agree, and we will always agree that the Liberals did nothing. On the contrary, instead of meeting the Kyoto target, which is to reduce our greenhouse gas emissions by 6% compared to 1990 levels, the Liberals saw emissions increase by 33% in the 13 years they were in power. This is shameful, and it is the worst performance in the world.

Eddie Goldenberg, the former Prime Minister 's chief of staff, was kind enough to remind us, during a recent presentation to the London Chamber of Commerce in Ontario, that when the Liberals signed the Kyoto protocol, it was purely because of public opinion. He said that it was to galvanize public opinion. Eddie Goldenberg is admitting that, as was the case with the Kelowna Accord and all other Liberal measures, their actions were exercises in public relations.

This is why the NDP now has such support in Quebec and the other provinces. Citizens realize that the Liberal Party of Canada is but an empty shell, a creature of the 1960s designed to keep Quebec in its place and now being superseded by political parties that understand that what is truly important in life is to look after our neighbours and our society, and that we have to look after our planet.

That is the NDP vision. Unlike the Liberals who have never looked after these interests, unlike the Conservatives who do not wish to do so, and unlike the Bloc who cannot, the NDP is the only political party with representation throughout Canada, from British Columbia to Nova Scotia, that speaks to Canadians about real issues.

One of the nicest compliments I received in the recent byelection in Outremont was from someone living at Father Dowd Memorial Home. After my presentation, a severely handicapped gentleman beckoned to me and said something that touched me deeply. He said that it was the first time that a federal candidate had come there and spoken about human beings rather than about the Constitution, or disputes, or differences that too often are the subject of debate in Quebec.

Like those voting in the Outremont byelection, many Quebeckers have realized that the NDP is the only credible party in the House of Commons speaking for peace, the only credible party speaking out against war in Afghanistan, and the only party standing up for the environment. Our leader has a great deal of experience in environmental issues. This very afternoon, he is introducing an important bill that has received support not only from David Suzuki, but also from the Pembina Institute. This bill would put us on the path toward real greenhouse gas reductions so that we can respect the right of future generations to experience the same standard of living, the same quality of life and the same living environment we have experienced. That is what the NDP is all about. We are a political organization that puts people first, unlike the Conservatives.

This brings me back to Bill C-28, which is before us today. The primary goal of this bill is to use State moneys for their intended purpose, that is, to help people, to help with infrastructure, and to help create programs for people. We want to give that money to people. Who do the Conservatives want to give that money to? They want to give it to big oil companies and banks.

The outcome of all this is bizarre because the overheated oil industry pushed the value of the loonie up. Such a high Canadian dollar is making it very hard to export products. As a result, people across Canada are losing their jobs. Many people in New Brunswick and Quebec who work for Shermag have recently lost their jobs. This is not because the company is badly managed. In fact, it is an outstanding company that makes quality products. The Conservative government does not seem to understand that. It has destabilized Canada's relatively stable economy made up of primary resource sectors, processing sectors, a manufacturing sector and, of course, an oil sector based mainly in the west. There was wealth, but there was also balance.

The Conservatives are in the process of killing the manufacturing sector, getting rid of not just workers, which is bad enough. Because of this, many families will have to do without come Christmastime. This is primarily because the Conservatives could not care less about people's lives. They are not interested in helping people. Their only motivation is an economic dogma that has convinced them, even if they are wrong, that the last thing a government should do is get involved in the economy. But by proposing tax cuts, regardless of the size of the business or profits, they are, in fact, getting involved in the economy. Some oil companies in the west would get $40, $50 or even $60 million presents all at once.

These businesses, in western Canada, will earn even more in the oil sector. This will create a greater imbalance in our economy and will destabilize us even more. It will push the dollar even higher, which will cause an even greater drain on the manufactured goods sector of the economy, the industrial sector, particularly in the east, in Ontario, Quebec and New Brunswick.

These are good jobs being lost, and the Conservative government does not care at all. It does not care because it does not believe that the government should get involved, any more than it believes the government should get involved in the environment. There are important things to be done with a little vision.

There was a press conference today with the leader of the NDP and Daniel Breton, who is the president of the Coalition Québeckyoto. Daniel Breton is a visionary.

Today, he drew a comparison to what Quebec managed to do in the 1960s, when it decided to be the master of its own destiny. This operation in Quebec, which was called, “Maîtres chez nous”, was decried, castigated and criticized. Some predicted the worst, that this would fail. Some 40 years later, where are we now? We have Hydro-Québec, a government corporation that is a world model of good management. Quebec will be able to produce 4,000 megawatts—or 4,000 times a million watts—thanks to wind energy, now that these projects are being built or have been approved and are going through.

This is clean and renewable energy. With a little vision, a little self-confidence, we could do the same across Canada. Unfortunately, the Conservatives have absolutely no self-confidence and they certainly have no vision. They do not believe for an instant that the government can play a role in this.

This makes me think that if the Conservatives had been in power in Europe during the planning of the high-speed trains, which now crisscross Europe at 300 km an hour, they never would have been built. This required vision and confidence in the fact that government has a role to play and can be a driving force in achieving these big projects.

If our government here in Ottawa had just a bit of vision, Canada could become a world leader in clean and renewable energy. In remote villages the woods were cut a long time ago, but a tremendous amount of forest biomass was left behind. In fact, tens of millions of tonnes of forest biomass was left to slowly release carbon. Instead of allowing that to continue, imagine using infrastructure already in place, namely the roads and bridges that are already built, to transport this forest biomass to what would become a methanol production plant.

We can use ethanol, we can produce wind energy, we can use hydraulic power and wind power to produce hydrogen. We could become a world leader in hydrogen energy, which is clean energy and is renewable for future generations. But no, we are digging up the oil sands. We are in the process of using relatively clean fossil energy, namely natural gas, to melt the sand and extract, at a high environmental cost, the bitumen contained in the oil sands of western Canada. It is outrageous. It is the antithesis of sustainable development. It is absolutely not sustainable. This cannot last long, but such is the Conservative government: it does not believe in the future.

We in the NDP have a vision for the future, a vision that takes into account our primary, unending and inescapable responsibility towards future generations. And we will do everything we can to meet those expectations. We will oppose this government and its far right plans. We will oppose the war in Afghanistan and we are the only ones who oppose it.

Indeed, the Bloc Québécois supports the Conservative government regarding the war in southern Afghanistan until 2009. Its members are still unable to explain why it will suddenly be a bad war in 2009, yet it is not a bad war right now. The Bloc Québécois owes an explanation to voters. Bloc members had a very hard time explaining this in Outremont.

The Liberals are responsible for the debacle in Afghanistan and they are also responsible for the worst performance in the world when it comes to greenhouse gas emissions. They too have some explaining to do to voters.The Conservatives, on the other hand, who incessantly hide behind Liberal negligence and incompetence, will have to explain themselves to future generations.

They must stop hiding behind the Liberals to make excuses. They must stop hiding behind the United States, China, India and Brazil and trying to justify the unjustifiable regarding how the oil sands are being developed in the west. It is starting to have a destabilizing effect on our economy and even on the planet. And this government is the primary driving force. We, on the other hand, will do all we can to propose a vision of the future, a vision of hope, a vision that takes into account our obligations towards future generations.

The House resumed consideration of the motion that Bill C-28, An Act to implement certain provisions of the budget tabled in Parliament on March 19, 2007 and to implement certain provisions of the economic statement tabled in Parliament on October 30, 2007, be read the third time and passed.

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I want to thank my colleague from Outremont for his speech this afternoon because it was very helpful in understanding some of the problems with the Conservative government's approach to the budget and its mini financial statement.

I wonder if he would agree with me that there is a fundamental flaw in the bill. It puts all the government's eggs essentially in one basket, that being the corporate tax cut basket.

We have seen time and time again that these types of corporate tax cuts do not deliver the kinds of benefits that they proclaim. Reaganomics and the corporate tax cuts that were done then did not trickle down to people like they were supposed to. The tax cuts proposed by the member for LaSalle—Émard, when he was finance minister and then prime minister, did not trickle down to ordinary Canadians so they could improve their lives.

I heard the member for Outremont talking about a more balanced approach that would see us using some of the funds available to address the needs of Canadians and the important concerns about the environment. I heard him talk about the importance of not gutting our fiscal capacity with these irresponsible corporate tax cuts.

I wonder if he might talk a bit more about how he sees this issue.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, my colleague is quite right. In putting all of its emphasis on tax reductions for large corporations, the government has failed to realize that a lot of people are going to be left out.

It is not a figure of speech to talk about a prosperity gap in Canada. If we look at the most recent statistics published by the most neutral source available in this country, Statistics Canada, and we divide income into five brackets, those are called quintiles, we will notice that it is the middle quintiles, literally the middle class, that has been the hardest hit in the past 20 years.

Contrary to what we might hope because Canada is a prosperous country, the people who are working hard in this country, the middle class, are actually taking home less than they were in 1989. That is not an opinion. That is a matter of documented statistical fact.

The people at the highest end of the earning spectrum are earning up to 25% more than they were in 1989, but if individuals are in the middle quintiles, the third, the fourth or the fifth, chances are they are among Canadians who are actually earning 4% to 5% less even though they are working harder.

More and more families have two breadwinners. That does not take away from the fact that modern families are having more and more difficulty making ends meet. That is the way things are in my province of Quebec and that is the way things are in a lot of other places in Canada. It is a crying shame that the Conservative government does not understand that.

What is equally scandalous is that the posers from the Liberal Party of Canada, who love to talk about the role of food banks and community groups and things of that nature, have been sitting on their hands. They are in fact backing the Conservative Party. They are maintaining the Conservatives in power. We find that scandalous.

Canadians have a right to know that the Conservatives are being kept in power because of weak leadership in the Liberal Party of Canada and that party's incapability of coming to any real decision. The Liberals keep voting for all of the government's bills, including this one.

It would be interesting to see, after all his posturing and posing and chest thumping, the leader of the Liberal Party, when he gets back from his Christmas holidays, become Mr. Tough Guy when it comes to the Conservatives. It will be really funny to see what he is going to do with Bill C-28 if it is carried over until after the holidays. I think I know. He will do what he has done with every other Conservative bill, sit on his hands.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I appreciate the opportunity to speak to some of the points that my colleague from Outremont raised. I want to thank him for pointing out Statistics Canada's research on the five income quintiles and how they have actually fared, from a chart that I have, from 1989 to 2005.

I think I will ask him to expand on the point that he was making. Our taxation policies are the most effective tools that we have for the redistribution of wealth in the country, so that we can in fact all share in the bounty of this great nation, and as profits grow and productivity grows therefore workers' wages and our standards of living grow.

What other tasks should we have here as members of Parliament, as elected representatives, but to make sure that we elevate the standards of living and working conditions for the people who we represent? Perhaps through a fair taxation policy we can do that.

My colleague raised the issue of the five quintiles. I think people would be shocked to learn that, between 1989 and 2005, by these neo-conservative, right-wing policies implemented by perhaps the most wasteful government in Canadian history that squandered $190 billion worth of fiscal capacity, giving half of it away to their corporate buddies, the lowest quintile of earnings of $12,200 dropped by 11% in that period of time.

Their standard of living in the lowest quintile dropped 11% by virtue of the neo-conservative, right-wing policies of the Liberal government and then by the neo-conservative policies of the Conservative government. They squandered an opportunity to raise all votes. They raised all yachts. They forgot the rest of us.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, I think my colleague raised a very important point with regard to the abject hypocrisy of the Liberal Party of Canada because of course, if it believed for a second any of its stock speeches about helping people it would of course help us to unseat the Conservatives. However, it is incapable of doing that because no one believes it anymore and it knows what is going to happen to it in the next election.

It is scandalous that in a country as prosperous as Canada, that since 1989 the middle class has actually gotten poorer and not only are the neo-conservative policies of the Liberals to blame for a lot of that, what is even more interesting to see is that when the current leader of the Liberals went to Toronto a couple of weeks ago, he called upon the government to reduce corporate taxes even more quickly. Believe me, as we say in French, ce n'est pas tombé dans l'oreille d'un sourd, it did not fall into a deaf man's ear when he said that.

Within hours our national elf was up explaining that he was going to reduce taxes even faster and he went before the cameras and boasted. He said he was able to do it because the Liberals were asking him to and not only that, he never thought he would be able to reduce corporate taxes that fast. He was giving himself a big pat on the back for it.