Bill C-2 (Historical)

An Act to amend the Income Tax Act

This enactment amends the Income Tax Act to reduce the second personal income tax rate from 22% to 20.‍5% and to introduce a new personal marginal tax rate of 33% for taxable income in excess of $200,000. It also amends other provisions of that Act to reflect the new 33% rate. In addition, it amends that Act to reduce the annual contribution limit for tax-free savings accounts from $10,000 to its previous level with indexation ($5,500 for 2016) starting January 1, 2016.

Income Tax Act

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, I wish the member's daughter a happy birthday. This is a place for serious discussion, but also we have families. I am very pleased that he acknowledged his daughter.

It is very simple. Our tax plan is to reduce taxes for nine million Canadians. We went across the country and spoke with people from all walks of life, small business owners, people from the non-profit sector, and people from universities. We consulted in a way which is unprecedented in our country. People understood that cutting taxes for the middle class, investing in our children, investing in a historical way for infrastructure was the way to kick start the economy and provide long-term prosperity for all Canadians.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Mr. Speaker, the member for Glengarry—Prescott—Russell earlier today spoke of the differences in home prices in different parts of the country. In some of those places it is very expensive and hard to get into the market.

Since TFSAs are a very effective savings vehicle for people trying to build their savings and get a down payment so they can get into the market, especially in the high-cost areas, areas where it might be difficult for young Canadians to get into the market, does it make sense to restrict one of the most effective savings methods ever introduced? Would it not make sense to allow Canadians to save for the future?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, the answer is quite simple.

We have chosen to invest in the middle class. In 2013, just 6.7% of eligible Canadians made the maximum contribution. When the Conservatives doubled the maximum yearly contribution, it did nothing for 93.3% of Canadians.

During the election campaign, we said that we would help the vast majority of Canadians, the middle class, and that is what we have done. That is exactly what our tax cut does: it helps nine million Canadian taxpayers.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased to rise today in the House, on behalf of the people of Sherbrooke, who put their trust in me for a second time. Since this is my first official speech in the House in 2016, I want to thank them for their renewed trust in me. It is a privilege to represent them here. I am also pleased to speak to Bill C-2, as national revenue critic for the progressive opposition, the NDP. I will provide a brief explanation of how our opposition to the current government is a progressive and constructive one, unlike the other oppositions in the House.

Bill C-2 amends the Income Tax Act, an extremely important and complex piece of legislation. It deserves all the attention we are giving it today. Earlier, I heard some government members talking about topics that are not in Bill C-2. I will try to stick as much as possible to what is in this bill.

I will start off by saying that my colleagues and I will support Bill C-2 because it has some good things in it. It does have some bad things though, and that is what I will focus on in my speech if the government does not mind. I will spend more time talking about the worrisome aspects of this bill.

The two main points I want to talk about are changes to income tax rates—the tax brackets that will be in effect if the bill passes—and changes to the savings plan known as the TFSA, the tax-free savings account. The bill introduces a change to reduce the limit, making it somewhat lower than what the Conservatives brought in last year.

Let me begin with the new income tax rates. Unfortunately, I had high expectations about these changes, and I was hoping to see some help for the middle class, but that is clearly not what we have here. Wealthy Canadians will benefit from the cuts, but 60% of Canadians will get nothing. That is disappointing. Canadian voters expected a lot from the government, as did I with respect to this first bill. The government promised that the middle-class tax cut would be the first item on the agenda right after the election. It is now clear that our definition of the middle class is very different, which is very unfortunate for Canadians who were so hopeful. They put their faith in the Liberals. They expected a lot from them, but unfortunately, it is clear from this bill that things are well below their expectations—and mine, too.

There is one other thing I just have to mention, something we have been hearing for a while and not just in today's debate. Since coming to power, the government keeps talking about the future. It keeps talking about a plan. It keeps saying that it will do something in the future and that it is going to tackle this problem or that—soon—and that we should not worry, because everything is coming. However, people need action now. I would have preferred to hear the government begin by talking about right now, talking about what it is doing and bringing in right now.

Unfortunately, in many of today's speeches, the Liberals are still talking about the future, about plans, and about what it intends to do in the future, when people have real needs now and they cannot wait until March or later to see these much-anticipated changes take place.

Why is it that we on this side of the House see that the proposed changes to the tax brackets as less than ideal? The Liberals are tossing around huge numbers, just as the Conservatives did. They are saying that nine million Canadians will benefit from this tax cut. That is a nice number. Everyone watching us at home thinks they are part of that nine million. The Liberals are talking about the middle class. They are saying that nine million people will benefit from a tax cut, but if you look at it a little closer, you see that you have to earn more than $45,000 a year. If you earn $45,000, you get only a $50 reduction. It may bring to mind a nice number when they say they are going to put more money in the pockets of nine million people, but some people might be expecting more than $50.

It is better than nothing, and that is partly why we are supporting this bill. However, many people are disappointed today because those who benefit the most from this measure have the highest tax rates. Accordingly, those who earn the most income have the most to gain.

Luc Godbout, from Université de Sherbrooke in my riding, is a renowned tax expert who often speaks about subjects we are called upon to discuss in the House. To illustrate that those who had the most to gain were those with the most money, he pointed out that with the new changes, a couple with a combined income of $250,000 would get up to $1,120 in tax cuts, whereas a couple with a combined income of $75,000 would on average get between $0 and $4 in tax cuts. My colleague mentioned this earlier. The numbers speak for themselves.

I want to be sure to talk about TFSAs because they are another reason we are supporting Bill C-2. I am talking about the change to the contribution ceiling for this somewhat contentious savings vehicle.

Many people use them for the right reasons. However, there have been documented cases of people using TFSAs as a way to avoid paying taxes. That is unfortunate because the primary objective of the TFSA is a noble one. Various studies have shown that some people are putting money that does not necessarily constitute new savings into their TFSAs. People are not always putting new money for their retirement into those accounts. Instead, they are transferring other assets into their TFSAs. They are simply transferring assets that they already have from one place to another to try to avoid paying taxes. It is unfortunate that some people have been using the TFSA that way. As many members have said today and as is quite obvious to everyone, only a very small number of people make the maximum contribution to a TFSA, and it is usually the wealthiest people who do.

When the Conservative government announced that it was going to raise the limit to $10,000, I had a hard time accepting it. I thought it was a bad decision. I am pleased to see that the Liberals are reversing that decision, and that at the very least, they are going to minimize the cost for future generations. It is important to mention that future generations would have had to pay exorbitant amounts if the government had kept the limit at $10,000. The parliamentary budget officer estimated that the fiscal cost could have reached approximately $130 billion by 2080. When we talk about future generations, I try to include myself in that. I would like to think that I will still be around in 2080. As a result, this increase in the limit really bothered me because it would have had a direct impact on tax revenue for future generations for years.

We must be careful and look at studies that also ask us to carefully consider what will happen with TFSAs, because this is a recent savings vehicle and it could have rather significant consequences for the tax system. Jonathan Kesselman came up with the idea for the TFSA in the early 2000s and together with a colleague whose name escapes me—I apologize for that—studied the possibility of a tax-free savings vehicle. In the article “Tax-Free Savings Accounts: Expanding, Restricting or Refining?”, which appeared in an issue of the Canadian Tax Journal in 2015, Mr. Kesselman presented some options to help the government realize the impact the TFSA could have and ensure that it will be a sustainable program for future generations.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, the member indicated that he would be supporting Bill C-2, and I am encouraged to hear that.

One of the things I would look to him to at the very least acknowledge is the fact that, in good part, the legislation addresses the issue of income inequality, which is very real. Many Canadians want us to address that. In doing so we would be affecting the middle class directly. The middle class would, in fact, benefit by the passage of this legislation.

Would the member not agree with that?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased that my colleague mentioned income inequality, which is a very important issue for me and, I am sure, for my colleagues as well.

In my opinion, Bill C-2 does not do enough on that front. When Bill C-1 was introduced, we proposed a technical amendment, which would have been very easy to adopt. It was rejected. We wanted to reduce the tax rate on the first income bracket from 15% to 14%.

Everyone probably has their own definition of middle class, but it seems that the government has a rather broad definition. In my opinion, reducing the tax on the first taxable income bracket would have been better for the real middle class. In the NDP's plan, the people who would have saved the most tax by year-end would have been those who earn $45,000 a year.

Therefore, I am very disappointed that our plan was not accepted, because Bill C-2 will not help the middle class, but rather the upper middle class, if I may call it that.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I tend to agree with the member. My own conception of the middle class probably falls somewhat lower than transferring money from the high six-figure earners to the low six-figure earners, which unfortunately is what Bill C-2 would seem to do.

There are many people now who would have been in the middle class, however one would define that a year ago, but have lost their jobs. We have seen a lot of urgency put on Bill C-2, but not the same urgency put on reforms to the employment insurance program.

Could the member speak to how much that might have helped people who are no longer in the middle class because they do not have employment, but a year or two ago would have found themselves there?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague from Elmwood—Transcona for his question.

It is true that many people had high expectations of this government. They were hoping to see a significant tax cut rather quickly.

The government is incorporating the tax cut into Bill C-2 for people who may not need it as much as others. People were expecting something better than this.

Many Canadian voters are probably now disillusioned with what the government is presenting to them, since all the government does is speak in future tense. Some people are still being left out, and it is important to mention these people, who may not have enough income to pay taxes, in the House. We do not talk enough about these people in the House.

I hope that the government will at least address these issues in the future. I know that I was asking the government not to speak in future tense. However, I urge the government to at least think of those who have lost their jobs, who might be receiving employment insurance, who are not as fortunate as others, or who simply cannot pay taxes because they do not have enough income.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, it is with pleasure that I rise to address what I think is a very important piece of legislation that we have been debating for the last while. It is important in the sense that we are witnessing the implementation of what I believe is a very significant aspect of an election platform that the Prime Minister of Canada campaigned on, not only for a relatively short period of our summer and leading to October 19, but something about which the Liberal Party had talked for many months while in opposition.

We acknowledge and recognize the importance of Canada's middle class. In fact, members will find that when the Prime Minister was first elected leader of the Liberal Party the term “middle class” started to be talked about and mentioned a whole lot more inside the House of Commons, because that is an issue that he brought to the House and, time and again, has reinforced with great success since his capture of the leadership of the Liberal Party. Through that, we have heard members of all political parties talking more about Canada's middle class.

Let us get back to the election platform. The election platform was very clear that we would change tax rates and that those who make in excess of $200,000 a year would be expected to pay a little more. If we talk to those individuals, I am sure we would find that a good-sized majority of those people understand the need to pay a little more. After all, it is all about fairness.

Then we have those people in a tax bracket on which we have focused a great deal of attention here in the House for well over a year now. It was incorporated into an election platform that there would be a tax break to the middle class. That is what this bill would do. It would deliver on an election promise that was made and will be kept. That is why we see a sense of pride when members of the Liberal caucus stand to speak to address this particular piece of legislation. It is because we are keeping a commitment.

It would even go a little further than that tax break. Again, the last budget doubled the contribution limit to the TFSA. It was roundly criticized when the then Conservative majority government proposed to double the contribution limit. I argued at that point that doubling the limit was not the appropriate tax break to give to Canadians. In terms of percentages, very few Canadians actually take advantage by contributing the maximum amount to the TFSA, which at that time was just over $5,000.

I represent a riding that is working class in a very real way, and my constituents do not have $10,000 sitting around to invest in a tax-free savings plan. They are trying to cope with the economic demands facing them today. We made the commitment back then that we would not be supporting the increase that the previous Conservative government was making. There was wide support for our not supporting it. The previous government of Canada did not have support from the different stakeholders when it implemented that particular tax break. There was no real support. It all came from the Prime Minister's Office back then. The Liberal Party is correcting a wrong. The contribution limit should never have been increased. This is something that is also incorporated into the legislation we have before us.

I know a lot of people talk about what sort of tax breaks we want to provide to Canadians. Let us recall the debate on income splitting. That was another Conservative idea that did not have the support of Jim Flaherty, members will recall. Do they remember the income split? It was a couple of billion dollars annually to Canada's wealthiest individuals. Who was going to foot the bill? Canada's middle class was going to foot that particular bill. Even Jim Flaherty, the former Conservative minister, recognized the flaw of that Conservative policy. We recognized back then that this was not the type of Canada we wanted to see and that there was a need to reinforce the positive.

This is something I believe is a step in the right direction.

I hear a lot of the Conservatives talking about deficits. This is really something to hear, now, being on the government side. When I was in opposition, we raised the issue of deficits. I raised the issue on numerous occasions. In fact, when they brought in the budget, saying that they had a balanced budget, I made it very clear that it was a bogus balanced budget, that they were fudging the numbers. Members can check Hansard. They will see it right there, in black and white.

However, I was not alone. They do not have to believe me. Even the Governor of the Bank of Canada indicated that this was going to be a deficit budget, and that was done in the month of July.

There was no surplus budget handed over to the Liberal government on October 19. That is a deception. We inherited a deficit, much as Jean Chrétien inherited a deficit, and he turned that deficit into a multibillion-dollar surplus.

Then what happened? Then the Conservatives got their hands on the purse again and they turned that multibillion-dollar surplus into a multibillion-dollar deficit within two years. That was even prior to Canada getting into the recession.

Ever since they achieved that deficit, every year since then, they have had a deficit, including the 2015 and 2016 budget.

The opposition will have to excuse me, as I suspect most Canadians realize that the Conservatives do not know how to balance the books. The only party that has balanced the books here in Ottawa has been the Liberal Party, and it has demonstrated that time and again.

I would suggest that we listen to what the Prime Minister has very eloquently said to Canadians, that at the end of the day, today, this is doing a lot for the middle class.

Well, there is a lot more that is coming down the pike.

We can talk about the Canada child benefit program that would be lifting, literally, tens of thousands of children out of poverty. That is a very strong positive.

Imagine a government, now, that is going to take a proactive approach at dealing with some of those important social issues that, again, are going to help Canada's middle class and those aspiring to become a part of the middle class—programs such as housing and the impact that housing would make across all regions of our country, coast to coast to coast, not to mention the hundreds of millions of dollars that would be spent on our infrastructure.

This expenditure on infrastructure would create jobs, real jobs.

The infrastructure program that the Conservatives had was nothing more than an empty shell. They would say they were going to spend this kind of money on infrastructure, but it was years down the line, not when the economy needed it, not when the municipalities were calling for it. They had their own political agenda, in terms of the expenditure of public dollars dealing with infrastructure, when the needs are today. That is what they should have been doing, but they did not recognize that.

This government does recognize that. We are seeing more money invested in infrastructure at a time when Canada most needs that money to be spent in the history of our country, or at least in the most modern history, in the last 40 or 50 years. It is because we believe in building Canada's infrastructure. By building our infrastructure, we are helping the local economies throughout the country in many different ways, not only from a social perspective, but also from an economic perspective.

There is a lot of discussion about oil prices. It is interesting watching the Conservatives yap across the aisle on that particular issue. We should remind them what the price of oil was when they were in office. It was $110. When they left, before October 19, it was at maybe $30. I might be a little bit off.

Where were all those Alberta members of Parliament? They were nowhere to be seen. I can tell members that the Alberta members of the Liberal caucus are very vocal, as they understand, as all the Liberal caucus understands, the importance of what is taking place in Alberta.

We are going to do for Alberta what we do for other provinces. We are not only going to demonstrate that we care, but we are going to invest. By strengthening Canada's middle class, we will be strengthening the economy, and all of us will benefit by it despite what the Conservative opposition might have to say.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, the hon. member has never let facts get in the way of his speeches in the House, facts from the parliamentary budget officer and the finance officials' own report as of November, and facts from the Auditor General in terms of the rollout of the stimulus plan.

The member did start off his speech earlier talking about a promise he made to his constituents, talking about the commitment the Liberals are going to keep. Did he also promise them that it was only going to be a $10-billion deficit? That was also a promise. Is he going to break that promise?

Even though the Liberals have not been able to define middle class yet, did the member tell his constituents that the so-called tax swap of raising the taxes on the rich and giving the middle class a break was going to cost $1.4 billion and add to the structural deficit of his government?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I did tell my constituents the truth, the truth being that the Conservative government had a significant deficit for 2015-2016. I also let them know that it was not just me saying that. The Governor of the Bank of Canada, who is an apolitical individual, made it clear back in July that there was a deficit situation, and we are not talking about thousands of dollars but rather about hundreds of millions of dollars.

There is a lot to be learned. I would suggest to the Conservative Party that it reflect on its past behaviour in regard to balancing the books. You never really achieved a balanced book, unless of course we take into consideration the very first budget when you first took office immediately following Paul Martin's defeat. He handed you a multi-billion-dollar surplus. That is the only time you actually had a surplus. Outside of that, it was deficit after deficit. We do not have to take any advice from the Conservatives with regard to financial management.

Under this Liberal government we will achieve a balanced budget at some point.

[The Assistant Deputy Speaker, Anthony Rota]

I want to remind the hon. member and all members to speak through the Speaker and not directly across the floor.

The hon. member for Elmwood—Transcona.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, the hon. member mentioned that many people in his riding do not have $10,000 a year to contribute to a TFSA, and I am sure he is right about that. He is right about that in part because so many people in his riding do not make the $45,000 a year that they would need in order to qualify for the Liberal tax cut in Bill C-2.

I am wondering if he could get up and explain to the House why it is that he will not support the NDP proposal to give tax breaks to people who make under $45,000 a year. Will he admit that he would be doing more for more people in his constituency if he supported our plan over what is presented in Bill C-2?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I acknowledge and I appreciate what appears to be NDP support of this particular piece of legislation. It is a smart thing to do.

The member and I both come from Manitoba. I have been watching and listening to the NDP provincial government for over 15 years now. I have looked at its taxation policies and I have listened to some of the points it has raised with respect to some of the social conditions in the province of Manitoba, such as trying to get children out of poverty. It is not a position of pride, but Manitoba literally has the worst position of any other province in Canada on a per capita basis. That is one of the things that I would caution the member about.

In terms of taxation policy, when NDP members here talk about corporate tax breaks, they might want to reflect on what the Manitoba NDP, which has been in power over 15 years, has done with respect to reducing corporate tax rates. In part, we have the NDP in opposition versus the NDP in government, and certain taxation policies.

I would like to think that the responsible approach that I see at times from New Democrats is what we are seeing in this debate on this legislation, in the sense that they are supporting a good piece of legislation, and I am glad to see that.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I am thankful for this opportunity to speak on behalf of my constituents. Like I did last time when I spoke on energy east, I am going to use a Yiddish proverb: the heaviest burden is an empty pocket. Lowering the tax on the middle bracket and hiking taxes on savings would empty the pockets of my constituents.

With this bill, the government would also defer taxation to another generation, because, by its own admission, it will run big deficits well into the future. Why are we punishing savers? The tax cut has the biggest impact on the highest income earners. They get full advantage, whereas others would get pennies on the dollar. Most importantly, the government's economic plan seems to involve sacrificing energy and resource jobs to satisfy and mollify opponents of major energy infrastructure projects. A Canadian without a job pays no income tax, and that is the truth for many of my constituents right now who are out of work. They cannot contribute to the national coffers, but, more importantly, they cannot do anything for their families, their loved ones, to earn income to pay for their daily expenses.

Albertans understand the value of thrift and frugality. I do not see those values on that side of the House. I see an insatiable appetite for deficit spending and debt bingeing. The Bill C-2 tax plan further offends the principle of equal pay for equal work. Let me explain.

Let us take two of my constituents, both welders. Many of my constituents happen to work in the trades. One of them works a standard 40-hour week and opts to forgo overtime to stay home with his family and take up coaching on weekends. The other welder decides to work seven days a week, three weeks on, one week off, and spends 14 or 16 hours per day working. This welder gives up time with his family, his kids do not see him, and it strains his marriage. Why does he do it? He does it because he believes it is worth the sacrifice for the reward. That is not an exception in Alberta.

Many families over the past decade have struggled with this choice between a higher income and the quality of life that it brings and family time at home. There exists no practical scheme of averaging incomes that can do justice to the author or inventor, artist or actor, or tradesman, who either sacrifice a few years with their family or reap the rewards of their craft after decades of effort in a few short years. Their extra effort is taxed more in those years. The income after tax does not purchase as many goods and services for their effort.

The purchasing power of these two welders varies significantly and the effort that each expends for the work should be fairly addressed by our income tax system. The tax scheme proposed in Bill C-2 punishes them all. Why are we punishing professionals and tradesmen who work extra hours, sacrifice their weekends with their families, and contribute more to our common prosperity? How fair is this? Bill C-2 punishes success and hard work. It says no to extra effort and to greater endurance at work.

Like other members have said, we know from the parliamentary budget office that the tax plan partially set out in Bill C-2 is not revenue neutral. The budget office confirmed what Conservatives have always been saying, and have repeatedly said today, which is that this tax plan, if we can call it a tax plan, would create an $8.9 billion budget hole by fiscal year 2020-21. The deficit spending of today is simply the deferred taxation of tomorrow. It is a tax hike of tomorrow on our children's futures.

In January 2009, the Conservative government announced a $63-billion economic stimulus. The opposition then crowed that it was not enough. It took many years of stewarding the economy and careful spending reductions to wrestle that deficit to zero. In fact, the “Fiscal Monitor” published by the Department of Finance showed that the outgoing Conservatives left the Liberals a $400 million surplus. That was in November. They are welcome.

Members on the other side of the House accused us of running deficits for the stimulus that they were demanding in 2008-09, the stimulus they threatened to bring down the government over. They wanted more spending, a bigger deficit, and more debt. Now they are about to embark on a spending spree with the taxpayers' credit card, totalling $125 billion over 10 years. This excludes, of course, all the other ill-thought-out promises they made in their platforms. It also excludes any potential emergencies, new policy initiatives, or new operating costs associated with this new public infrastructure that will be built, and on and on.

I am concerned that the government plans to run massive, long-term structural deficits, which would increase the tax burden on future Canadians and leave Canada more vulnerable to economic headwinds or economic shocks. It seems the answer from the other side of the House is that the next generation can pay.

I truly believe the worst part of this bill is the slashing of the TFSA in half. We know that 75% of tax-free savings account holders earned less than $70,000 in 2013. Nearly 700,000 seniors have a tax-free savings account.

It was the number one issue brought up to me while I was enjoying the Calgary Stampede, serving my constituents in New Brison, Cranston, and Auburn Bay. The number one issue that they brought to my attention was how much they enjoyed using the TFSA to plan for their future.

Past Liberal members of this House in 2008-09 criticized the TFSA when we introduced it for the first time as only for the 1%, but Canadians have proved them wrong. They were wrong then and they are wrong now. In fact, 11 million Canadians took advantage of the TFSA and said that the Liberals were wrong.

It is not just for retirement. It is also an excellent saving tool in general, because when done right, it allows Canadians to save tax-free. The TFSA can be used to save for a post-secondary education, for a new car, to start a small business, or even for a down payment for a home. Here I think we can extend the analogy a little bit to buying a house.

An individual's investment in it is like a TFSA. An individual can pay for their house out of after-tax income, but any gains on the sale of a principal residence are tax-free. If the individual cannot afford a house as an investment vehicle, the TFSA serves that role admirably. It is that intermediary goal between owning a house and something else as a savings tool.

Some Canadians use the TFSA to save for emergencies, and we in Calgary have experience with that. A BMO survey in September 2015 found that 66% of respondents had less than $10,000 available in an emergency. It is not about maximizing the use of the tax-free savings account. I understand many Canadians cannot reach the maximum, but it is about choice. It is about freedom of choice. It is about flexibility. It is about humility from the government to admit it does not have all the answers, and Canadians know best how to save for themselves.

Canadians understand their own personal needs much better than we do in this House, and some Canadians have chosen RRSPs. On average, 30% set aside money in an RRSP every single year, but 11 million Canadians have chosen a TFSA as their retirement service of choice.

Like many parents, I spend a lot time trying to teach my kids the fundamentals of the economy so that they will understand the importance of saving their money, their income.

I will spend decades rewarding good behaviour and reminding them why it matters. We spend a lifetime teaching this to our children, but the government sends the opposite message when it slashes the TFSA. We have spent years promoting financial literacy at the federal level, and we prize financial literacy in our students, yet when it comes to creating and preserving efficient savings vehicles that facilitate savings, we slash them in half.

I wholeheartedly reject the notion that the TFSA has a public cost associated with this, as a cost to the treasury. We are taxing the savings of Canadians. It is not a cost to government. It is an unfair tax on those Canadians who want to save. It is taxing thrift and frugality. It is taxing those who plan for themselves and make choices for their own future. By slashing the TFSA in half, the government is simply moving the cost to private households, and that is wrong.

In closing, I heard someone on this side of the House say that this bill was an election promise, so the government has to go ahead with this ill-advised plan. However, one aspect of leadership is the ability to adapt to changing conditions. Conditions have definitely changed, especially in my province, Alberta. Cutting TFSA contributions is not a show of leadership. Instead, it will hurt Canadians' ability to save. Under a previous Liberal government, led by this Prime Minister's father, Canada's net debt rose from $18 billion to $206 billion, from 24% to 43% of GDP.

I encourage all members to vote against this bill. Canadian families are not here to support the government's frivolous spending.