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

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, I think all members on this side have acknowledged the fact that the Liberal plan is not what it has been made out to be. I said very clearly in my remarks that those who needed it the most would not actually benefit from it. It will be members of Parliament who will benefit from this tax decrease.

As someone who comes from the middle class, I can say, in contrast to the member opposite, that many people in my riding, such as university students and seniors, use tax-free savings accounts as a vehicle, because it gives them choices for their future. Many people in my riding have used tax-free savings accounts as a vehicle to save for their future. To reduce it is morally flawed, because they do not want to live on government dependence. They want to do things on their own. It is just the wrong thing to do.

[Scott Reid, Conservative, Lanark—Frontenac—Kingston, ON]

Mr. Speaker, I want to thank my colleague for mentioning what is arguably my very favourite quote of them all, which is from H. L. Mencken: “...For every complex problem, there is an answer that is clear, simple and [mistaken]”. The government's plans are just full of these kinds of things.

I want to ask the member about the reduction in the size of the TFSA annual donation from $10,000 to $5,000. Also, one of the things that strikes me is that when one is a senior citizen, the assumption that exists under the old RRSP system is that one is no longer a saver but is now supposed to spend for the remaining period of one's life. It is a policy that may have made sense when the average life span was much shorter than it is today. However, people turning 70 or 71 who have to start taking money out of RRSPs may reasonably expect to be around for two or more decades. That is a big problem which the TFSA helps to overcome.

Does the member believe that it is possible setting aside only $5,000 a year in a TFSA to adequately plan for a decent retirement, or is that amount too small?

[John Brassard, Conservative, Barrie—Innisfil, ON]

Mr. Speaker, the amount of $10,000 provided a lot of flexibility to people. I mean, incrementally, people can come into money and they can save a little more throughout the year. For most Canadians, for 11 million Canadians, that investment vehicle was just that. It was an option and vehicle to save, clearly in all of the investment strategies and retirement planning.

I will use myself as an example. I do not just have a TFSA, I have other investment vehicles as well, but I chose the option of a TFSA because it was there.

Many young Canadians are using that option because it is available to them. It provides them with the opportunity to gain income for retirement, or for buying a home, and or for many other circumstances in a tax free way. That is what we should be encouraging among Canadians. It is one option of many.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, it is my pleasure to rise in the House today on behalf of the hard-working taxpayers in my riding of Kitchener—Conestoga. It is with their interests in mind that I speak in opposition to the government motion that does not help the middle class. Instead, it raises taxes on Canadians and makes it harder for my constituents to save their hard-earned money.

What we are debating today in the House is a fundamental difference between the Liberal Party and the Conservative Party of Canada. On this side of the House, we know that ordinary Canadians are best positioned to determine how their money is saved and spent. On this side of the House, we believe the government should be making it easier for Canadians to adequately prepare for their own retirement.

The Conservative Party supports both immediate and long-term, broad-based tax relief. Reducing personal income taxes is a priority for the Conservative Party because it increases take-home pay and raises the living standards of all Canadians. It leaves more money in their pockets and less in the government's, where far too often it is not used efficiently by governments of all stripes.

Over the past 10 years, our Conservative government cut the GST from 7% to 5%. We cut taxes for small business. We created the tax-free savings account, which is now being clawed back. We introduced pension income splitting and the family tax cut. Indeed, since 2006, our Conservative government reduced the overall tax burden to its lowest level in 50 years. We cut taxes over 180 times. As of 2015, our tax relief is saving a typical family of four up to $6,600 per year. I am proud of that record. I have been approached in my riding by parents who were very grateful for the reduced tax burden, which lets them now meet the financial needs of their families.

However, what I cannot be proud of is the current Liberal government's failed election promise of a revenue neutral tax cut to what it has determined to be the middle class and restricting the ways that Canadians can save for that special project, or for their retirement.

These two measures will not help middle-class Canadians, and they are election promises that should be abandoned, as the Liberal government has already done on many of its other election promises.

First is the creation of the middle-class tax cut. It sounds great: a tax cut for the middle class. The Liberals' election promise was that this tax cut would be revenue neutral. We know that this was never true, and it was not until after the election that the current Minister of Finance realized it. This means bigger deficits with no end in sight and higher taxes in the future to pay for this failed election promise. It is money going to pay interest that could be invested in health care, palliative care, and mental health care services.

Let us look at exactly who would be benefiting from this so-called tax cut.

David Macdonald, who is a senior economist with the Canadian Centre for Policy Alternatives, analyzed this so-called middle-class tax cut. The reality is that for those Canadians making between $48,000 to $52,000 a year, the average saving would be $51 a year. That is less than a dollar a week. For Canadians making from $62,000 to $78,000, it would be $117 in savings per year. He classifies what comes as the next level as the upper middle class. Those making $124,000 to $166,000 would gain $521 a year. Then from $166,000 to $211,000, it would be a gain of $813.

As incomes rise, the larger the break from government taxes. Is this really the Liberal message? I am sure all Canadians would like to have a few extra dollars in their pockets, but it seems quite clear that those who the Liberal government consider the middle class are receiving far less from this tax cut than those of us serving as members of Parliament in the House of Commons.

It is very clear that this modification to the income tax rate change the Liberals are championing is not a significant tax cut at all, but it also comes with a very high price tag in deficit financing. The policies of the government will be economically destructive for Canada. These destructive economic policies will create a huge burden for our children, our grandchildren, and, indeed, our great grandchildren.

This small tax break is not enough to stimulate our economy. Nor will throwing money at the middle class stimulate growth. It does not help create jobs. We have not seen anything from the government that will help with innovation, allowing companies to expand, or anything that will help create jobs for Canadians.

However, we know that creating jobs is not a top priority of the Liberal government. Since forming government, the Liberal Party has spent and promised billions of dollars outside of Canada, spent time here in the House repealing laws that increase union transparency, but have not created a single job here in Canada.

While in government, we on this side of the House took our jobs seriously and knew what it took to create jobs, to return to balanced budgets, and create a fairer tax system. In our 10 years as government, we eliminated the deficit while continuing to enhance the integrity and fairness of the tax system while refusing to raise taxes. These are the measures the government should be taking, not an expensive tax cut that benefits members of Parliament here in the House more than middle-class Canadians.

Second is the clawing back of the tax-free savings account. A few days after the throne speech, my office received a phone call from a senior who asked for my help to do everything possible to ensure that the Liberal government did not reduce the limit she could contribute to her primary source of savings. This woman, by the way, was not someone with a large income.

Contrary to what the Liberal government would like Canadians to believe, TFSAs have been a very effective tool for all Canadians, both young and old. Members should not take my word for it, as experts in the business community recognize the value of the higher contribution limit for the TFSA. In fact, one chief actuary from a well-respect HR firm said, “I think it is really quite a positive move for the retirement security in general”. Who said that? It was the chief actuary of the Toronto-based HR firm Morneau Shepell. I would encourage our Minister of Finance to perhaps talk to his former colleagues about the benefits of the TFSA and the increase in contribution limits for all families.

In response to this, the Liberal government will claim that only the top 1% of income earners in Canada benefit from TFSAs and that their plan to increase the mandatory CPP contribution limit is better for Canadians. However, 60% of those who max out their TFSA contributions make under $60,000 per year. Let me repeat that for my colleagues here in the House: 60% of Canadians who utilized the maximum amount they can contribute to their TFSA make less than $60,000 a year. It goes without saying that these are not the top 1% of income earners in Canada.

I would return to my initial point on the differences between our two parties. On this side of the House, we trust Canadians with their own money. We realize that it is our job to create ways that which Canadians can save for their own retirement and make it economically beneficial for them to do so. The Liberals, on the other hand, have decided that they know what is best and that Canadians have no say in how their money is invested for their retirement.

I would humbly ask on behalf of my constituents that the Liberal government abandon its ill-conceived plan and instead introduce real measures that would lower taxes on the middle class and not claw back the TFSA contribution limit. Let Canadians keep more of their hard-earned money in their own pockets where it will be invested wisely and spent judiciously in ways that spur our economy. We do not need more debt and more interest payments.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I enjoyed the member's speech, although his philosophy is different from mine.

I am just curious. If I were a Conservative member, I would be really worried about the vote tonight, because I cannot understand how a Conservative member could vote against a tax cut.

As he said at the beginning of his speech, it is their philosophy to let Canadians keep their money, and this would allow millions of Canadians to keep some more of their income. I assume, had that been a Conservative proposal, he would have voted for it, and so I am sure the Conservatives must be conflicted internally to vote against a tax cut for millions of Canadians.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, I want to welcome my colleague back to the House. I had the honour of serving with him on the aboriginal affairs committee a number of years ago.

No, I am not be conflicted to vote against the motion, because as I pointed out in my comments, the Liberals are trying to imply that this is a tax cut for the middle class when in fact it is some of our lower and middle-income earners that will fare the poorest under this system.

If my colleague could say that a $1 a week benefit is something that should take up this amount of time in Parliament to debate and discuss and then implement, when we know that in the end, this so-called tax cut will simply add to our deficit, I can assure him that I will have no conflict in voting against the bill tonight.

[Blaine Calkins, Conservative, Red Deer—Lacombe, AB]

Mr. Speaker, I would like to thank my seatmate for his elucidation on sunny ways.

The comment I want to make to him, notwithstanding the ridiculous question posed by the member from the Liberal Party, is this. Anyone who is a financial advisor or understands financial investment and personal income security would understand that anyone earning less than $40,000 a year currently has no or little-realized benefit from putting their money into an RRSP. That money is better put into a tax-free savings account until the income earner is in an income bracket where it makes more sense for them to put their money into an RRSP.

If we do the math and apply it, if an individual Canadian earning less than $40,000 a year who can save or put, say, $5,000, $6,000, or $7,000 a year into an RRSP were instead to put it into a TFSA—whose extra capacity they will lose under Bill C-2—they would be able to further advance their own income security and income for retirement. By maximizing their contributions to the tax-free savings account early in their careers and then when they become seniors and need to take money out of their RRSPs or their locked-in retirement accounts at the other end, they are taking advantage of the most important financial vehicle that has ever been brought in by a government. The fact that this has been undermined and political games have been played with it is astounding.

Could my colleague talk to the importance of Canadians who can look after themselves and are able to do so with vehicles like a tax-free savings account?

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Mr. Speaker, it is obvious that my colleague is more of an expert in financial matters than I am. However, let me say that this goes to the heart of the differences between the Liberal Party and our party. We, on this side, do believe that we, as Canadians, should take the primary responsibility for our retirement savings, and the TFSA has been an incredible tool for that.

It has been mentioned a number of times that it only benefits the wealthiest. As I pointed out in my remarks, most of the people who maxed out their contribution to a TFSA were making $60,000 or less. These are not the wealthiest Canadians.

In terms of what we use the TFSAs for, it could be used for retirement. However, I know people who are not even close to retirement who are using it to save up for that special project they want to do three, four, or five years from now. It could be a renovation to their house, or it could be as simple as making a lump-sum payment on their mortgage when it comes due. If they save the money in February, March, April, or May, and put it in a TFSA, then when their annual renewal date comes up, they could make a lump-sum payment on their mortgage and reduce their debt.

The TFSA maximum limit of $10,500 was an incredible tool that should be maintained. It is really disappointing to see the Liberals taking it away.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, I want to begin my remarks today with a point of refutation, because in listening to the debate we have heard some discussion around inequality in Canada, with the member for Saanich—Gulf Islands using the phrase a “crisis in Canada with inequality”. We need to review the record with respect to inequality. Frankly, this bill is going in the wrong direction.

However, over the last 10 years as a government we had a really positive record addressing inequality, as the numbers clearly show. As I have mentioned before, at the beginning of our mandate we lowered the GST, which is the tax that all Canadians pay. We also cut the lowest marginal tax rate. This is a very different approach from that of the current government.

In my view, the best way to measure inequality is through something called “intergenerational earnings elasticity”, which is the ability of people to move between different income brackets across generations. In other words, what are someone's chances of being a wealthier person even if he or she had relatively lower income parents and vice versa?

I will refer members to a paper written by Miles Corak from the University of Ottawa. If we look at the data on intergenerational earnings elasticity, the numbers are clear that Canada is near the top when it comes to equality. In terms of intergenerational earnings elasticity, Canada gets a score of 0.19, where low is good. We are fourth in the world. We are far ahead of the United Kingdom, France, Italy, and countries with a very different social system. We are also ahead of the United States. Therefore, we have a combination of factors in Canada that is good for equality. I would argue that it is a combination of certain necessary social programs in areas like education and health care but also of economic opportunity, and what we have had historically over the last 10 years with limited but effective regulation of business and low business taxes. This environment has been good for equality. It is one thing for members to throw out phrases like “crisis in Canada with inequality”, but if we look at the data specifically I would argue that with respect to intergenerational earnings elasticity, we see that Canada is in a very good spot right now.

Nonetheless, I would argue, and here I agree with our colleagues in the NDP, that this bill does not move in the right direction with respect to inequality because it cuts taxes in certain categories but not in others. Many low- and moderate-income Canadians would not benefit at all.

I am concerned about this bill because we might call this a Liberal promise-wrecking ball. It is a bill that breaks through what were clear election commitments by the Liberal Party. The Liberal Party committed in two key categories when it comes to fiscal measures. It promised to run three modest deficits of $10 billion, balance the budget after that, and ensure that all tax changes were revenue-neutral. It also promised to cut taxes for, in their words, the “middle class, or [those] hoping to join it”, and to pay for those tax cuts with tax increases on higher-income earning Canadians. We see very clearly that this bill makes utter nonsense of these two commitments.

In terms of the Liberals' commitment to run only three modest deficits of $10 billion, balance the budget after that, and ensure all tax changes are revenue neutral, we know that the deficits have ballooned significantly since the election, and that even before new spending is promised, we will be running an $18.4 billion deficit in fiscal year 2016-17 and a $15.5 billion deficit in 2017-18. That is again before new spending.

The Minister of Finance had this to say about that:

A less ambitious government might see these conditions as a reason to hide, to make cuts or to be overly cautious. But our government might see that the economic downturn makes our plan to grow the economy even more relevant than it was a few short months ago.

I will say it is a rather strange definition of “ambitious” to leave the cupboard bare for the next generation. Let us define our ambition by how much we leave for the next generation, not how little we leave for it.

The Prime Minister has said that Canada has room to run these massive new deficits because of our relatively low debt-to-GDP ratio at the federal level. It is true that our government left Canada with a low debt-to-GDP ratio. In fact, we left a reduced debt-to-GDP ratio compared to when we first took office. However, the combined federal, provincial, and municipal debt-to-GDP ratio is alarmingly high. It is over 90%. It is in the same ballpark as the debt-to-GDP ratio of the U.S. and the U.K., if we combine federal, provincial, and municipal debt.

We actually do not have room at all to run these massive new reckless deficits. Of course, this large debt-to-GDP ratio is led by the very large deficit and debt here in the province of Ontario. The policies of the Kathleen Wynne government, which I think unfortunately the current government wishes to emulate, have made Ontario the most indebted sub-sovereign borrower on earth. We cannot go in that direction at the federal level as well. We are already significantly weighed down by that combination of federal, provincial, and municipal debt.

Bill C-2 makes tax changes that will have a significant cost to our treasury. By ignoring the value of tax-free savings accounts, they will also have a significant cost to our economy. This bill would cut tax-free savings accounts and lower some taxes while raising others, but it is not revenue neutral. According to the parliamentary budget officer, it would cost the treasury $1.7 billion per year. It is clear that the current government is not sticking to its $10 billion per year deficit commitment. The Liberals have no serious plan to balance the budget in year four. Their tax changes would not be revenue neutral, and estimates are that they will increase instead of lowering the debt-to-GDP ratio. Over the next four years, it is projected that the Liberals will increase the debt more than we did in 10 years. They will increase the debt-to-GDP ratio. They will do it, not because of a financial crisis, but because they have no regard for the importance of planning for the next generation. They are spending today with no regard for the future at all, and, again, certainly making nonsense of their initial budget commitment.

The Liberals said as well that they would cut taxes for the middle class and those hoping to join it. The details do not measure up to that commitment at all. Their proposal is a modest tax reduction for those making between $45,000 a year and $90,000 a year. Individuals making less than $45,000 will get nothing. Families with a combined income approaching $90,000 a year will perhaps get nothing. Whether those people consider themselves middle class or those hoping to join it, they in fact would lose because of the proposed changes. Even individuals at the low end of that tax bracket may be worse off because of the other changes that the current government would bring in with respect to tax-free savings accounts.

Those who will benefit most, as has been pointed out, would be those making over $90,000 per year, perhaps families with a combined income approaching $200,000 a year. That is the reality of these changes. As a member of Parliament, I know I make a good salary, and my wife, as a part-time physician, does as well. With two incomes, each individually less than $200,000 a year, we are in the group that would benefit the most from these proposed changes. However, the fact is that members of Parliament and senators do not need tax cuts. Canadians do—hard-working, middle-class Canadians—and those who are hoping to join it. The rhetoric does not match the reality in this bill, at all. Instead, what the Liberals will do by reducing tax-free savings account limits is to hurt those Canadians who need the help the most.

Here are the real numbers on tax-free savings accounts. Over 65% of tax-free savings account holders make less than $60,000 a year. Almost half of TFSA holders make less than $40,000 a year. Over half of those who currently max out their TFSAs make less than $60,000 per year. The Liberals somehow behave as if those making over $90,000 a year count as middle class for the purposes of their rate cut, but those making less than $60,000 a year for the purposes of tax-free savings accounts count as wealthy. This is a clear paradox in their plan. Why would they cut benefits for those who make less than $60,000, while increasing benefits for those who make more than $90,000 a year?

Again, this bill will drive a stake through the Liberals' election commitments. They promised to run three modest deficits of $10 billion, balance the budget after that, and ensure that tax changes are revenue neutral. That was and is nonsense. They promised to cut taxes for, in their words, the middle class and those hoping to join it, and to pay for those tax cuts with tax increases on higher-income Canadian. Again, if we look at the numbers, clearly this is total nonsense.

Those of us who are on the Conservative side of the House, and even our colleagues in the NDP, have convictions. We stick to them and we try to advance them. However, it is clear that the current Liberal government already has no regard for its platform. The Liberals have broken more promises in a mere four months than we did in 10 years. Shame on them for that.

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

Mr. Speaker, a few phrases come to my mind, and one of them is “You have to be kidding.”

It was just a couple of weeks ago that I was at a local restaurant, and someone said to me that the new Prime Minister, in his first 100 days, has accomplished more toward making our society a better place to live than the previous prime minister did in his entire 10 years. I do not know where the member gets off with the comments that he is making.

Let me ask the member a question. We talked about an election platform. He seemed to be focused on that. Let us take a look at what Bill C-2 does. It fulfills a major party platform. It will in fact give money to Canada's middle class. This bill is a promise kept. That is something that was promised in the platform. It said that we were going to give an increase to Canada's wealthiest, that 1%. Again, it is a promise that is being kept.

Let us not give up hope. There is more coming on March 22. It is going to give that much more in terms of Canada's middle class and those aspiring to be a part of the middle class, through the Canada child benefit program. We have seen the greatest redistribution of income inequality in trying to address that issue in the last 120-plus days.

Let us be a little more patient. There is a lot more to come. Would the member not recognize, at the very least, that the government has done more for the Canadian middle class than the previous government did in the previous 10 years?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, the hon. member, as well as other members, has alluded to surprises in the budget.

Frankly, we have had quite enough surprises from the government already. It is great to hear the anecdote about the member going to a restaurant and finding someone there who agrees with him. However, we need to look at the numbers and the facts.

I talked about numbers with regard to inequality and the tax changes. The Liberals have trouble with this. They have trouble with the numbers. It is clear from their budget policy that they have trouble with the numbers. Those who benefit from the tax changes are those making between $45,282 and $90,563. They are the only ones who will get a tax cut. Those making less than that $45,000 mark will pay more because they lose the benefit of the tax-free savings accounts.

This bill benefits members of Parliament who make less than $200,000 but more than $90,000 a year. It benefits other people in that higher-income category. It does not benefit those who need it the most. These are the lines that the Liberals have, but they simply do not match up with the reality of the numbers.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I thank the member for Sherwood Park—Fort Saskatchewan for introducing the concept of intergenerational mobility into this debate, and I would agree that that is a very important measure of equality of opportunity. Certainly we would not aspire to have a country in which someone could become prime minister largely on the strength of their father having been prime minister.

One of the threats to intergenerational mobility is inheritance. A concern that I would express about tax-free savings accounts is that they could aggravate the amount of wealth that is conferred based on heredity. Not only will people be able to accumulate wealth over the years, but the Conservatives would like them to accumulate much more wealth tax-free.

I wonder if the member for Sherwood Park—Fort Saskatchewan shares this concern about intergenerational inequity being aggravated by tax-free savings accounts.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it certainly is always a pleasure to engage in dialogue with this member, an experienced debater and someone who has a good understanding of economics, although it has clearly led him to take a wrong turn at some point.

With respect to his comments about intergenerational earnings elasticity, I appreciate his affirmation of the value of that as a metric. It vindicates the approach that our government took. With regard to the issue of tax-free savings accounts and how they operate in the context of inheritance, this is an important point. Tax-free savings accounts are disproportionately used by those on the lower income scale. We know because of the tax treatment of RRSPs versus TFSAs that there is a real incentive for people to use them who are on the lower end in particular. The numbers are clear, and I mentioned them before. Over 65% of tax-free savings account holders make under $60,000 a year. Over half of those who max out their tax-free savings accounts make under $60,000 a year.

We want to see people be able to pass on an inheritance to the next generation. We see value in that. However, given the disproportionate use of tax-free savings accounts by middle and low-income Canadians, the advantageous tax treatment of them in the context of inheritance is a pro-equality measure. That is why we support maintaining and enhancing the tax-free savings accounts.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, I rise in the House today to discuss Bill C-2, an act to amend the Income Tax or, as I like to call it, the Liberals' tax cut in name only.

There are many things to be said about this bill. For starters, the tax cut, while sounding good in a press release, is nothing more than a PR ploy. I want to first note the fact that this tax break is another in a string of broken promises by the Liberals. I recall the warm summer months, and I do recall the warmth fondly being here, and the beginning of a long and growing election. One of the promises made by the government was that the new tax plan, a plan that would cut taxes for the middle class, would be made revenue neutral through a tax hike on the wealthy. The wealthy were defined as those who make $200,000 or more. However, surprise, the tax plan is not revenue neutral, and in fact will cost Canadian taxpayers well over $1 billion per year, year after year.

The finance minister himself conceded that the plan will leave a staggering $1-billion annual hole behind, and this is from the head of the government's finance department. Further, a report from the parliamentary budget officer estimates the cost to be close to $1.7 billion per year, adding almost $9 billion in debt over the next six years. This broken promise proves that the government's plan was grossly miscalculated. It is clear that for the Liberals, numbers are a challenging thing to deal with.

This tax plan would completely eliminate the $1 billion surplus that the previous Conservative government left behind, as confirmed by the “Fiscal Monitor” in Finance Canada. I would normally favour tax cuts, but what Canadians are getting is a future tax hike. It is a tax cut being paid for by deficit spending. By borrowing more money to pay for this tax cut, the government is slightly reducing what individual taxpayers are paying now, in exchange for a future hike in taxes. This hike in taxes will surpass the small decrease they are receiving now. It is akin to taking out a bank loan and thinking that the money is an increase in income. It is not. Interest payments on the money borrowed to finance a $9-billion deficit over the next six years will add millions upon millions of extra dollars to what the government owes, which in turn means more money that the taxpayer will be forced to pay.

This tax cut simply does not make sense. Why pay a little less now for a larger tax hike later? In the world of the Liberals, we do so because it makes the government look good. It makes it look like it is saving Canadians money, when in reality it is sticking it to future taxpayers. This so-called middle-class tax cut amounts to savings of mere pennies a day at the lower end of the income scale, rising up to a whole $3 a day of savings at the top end.

What would it offer those making below $45,000 a year? It will offer nothing. There are 17-million Canadian taxpayers who make less than $45,000 a year and will receive absolutely nothing from this tax cut. Sixty-six per cent of all Canadian tax filers will get nothing from this tax cut. There are 338 members of Parliament in the House who will benefit from this tax cut, but not those below $45,000 a year. It is not often that I agree with my NDP colleagues, but, like them, I question how the Liberal government could overlook 66% of Canadians who make less than $45,000 a year and will receive nothing but higher debt from this tax cut. This is not a middle-class tax cut paid for by the 1%. It is simply cynical Liberal rhetoric used solely for election purposes.

It is not just the fact that this tax cut is nothing but a phony one; it includes much more than that. This bill would effectively slash the savings vehicle that gives those with low to medium-income levels a chance to get ahead. The bill would slash the tax-free savings account from $10,000 to $5,500. We Conservatives understand the importance of saving and investing. Frankly, our tax system is often a disincentive to the lower middle-class income earners when it comes to saving. The tax code would treat interest and income from savings as yet another lucrative pool of money that the government could get its hands on.

The TFSA limit at $5,500 a year and then at $10,000 a year was fair. It allowed for both lower and middle-class income earners to save without worrying that the gains made from interest or rising stock values would be washed away by taxes. Doubling the TFSA was a chance for those at the bottom of the economic rungs to climb up. However, never let a good program that benefits Canadians get in the way of the Liberals' chance to play politics for their own gain.

Let me quote from the Liberal website, which is still up, about TFSA. It states that TFSAs are “tax breaks for the wealthy — like the doubling of the TFSA limit, which does nothing for the middle class.” Yet, 73% of those who maxed out their TFSAs in 2013-14 were making less than $80,000 per year. Sixty per cent of those who maxed out their TFSAs made less than $60,000 per year.

What about those horrid one-percenters who the Liberals claim were the biggest benefactors of the TFSAs? Just 5% who maxed out their TFSAs were from this despicable 1%.

The government is trying to change the ability of Canadians to save for their future. Through Bill C-2, Liberals are now saying that those in the middle class should in fact pay more taxes on the money that they save. Rather than giving low- and middle-class income earners the freedom to save up to $10,000 a year, Liberals are saying that $5,500 is a proper amount. If one is able to save more, then clearly one is rich enough to pay more taxes, yet 60% of Canadians who maxed out their TFSAs make less than $60,000 a year. Still they are told it is a tax break for the wealthy, so they are not allowed to save more, tax free.

This has affected many Canadians who have come to rely on these savings accounts in planning for their future: students saving for higher education; families saving to start a family or for a down payment on a house; entrepreneurs saving for a business; parents saving for their children; and, more importantly, seniors saving to stretch their savings into retirement. These changes will make life less affordable for these Canadians who are trying to save for their vulnerable years. This will be the Liberal legacy: taking away opportunity for wealth generation for Canadians.

The bill embodies the Liberal ideology of higher taxes, higher debt, and higher deficits. It highlights the financial illiteracy of the current government. To Liberals, debt and deficit are great things. Taxing people more is a great thing. This is in stark contrast to what our previous Conservative government did.

Under our leadership, Canada was prosperous, with the wealthiest middle class in the world. Canada was an island of stability in a turbulent world. We had a proud legacy of tax fairness and cutting taxes. When in office, our Conservative government reduced taxes more than 140 times, bringing the federal tax burden to the lowest level it has been in 50 years. To put it in perspective, the Maple Leafs were still winning Stanley Cups the last time the tax burden was this low. We did this through measures that were targeted and responsible. We did it while ensuring that when taxes were cut, they were cut for good. It is not like what the current Liberal government is doing, which is cutting today with more to pay in the future.

All in all, the bill is simply irresponsible. It would put an even bigger hole in our budget, pile on more debt for future generations, and cost Canadians more in the long run. It would also take away the economic freedom of Canadians to be able to save and invest in their already taxed hard-earned money, tax free.

It is for these reasons I will not be voting in favour of the bill.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I rise to address this member, largely because I missed the chance during questions in the last round to ask a question of one of his Conservative colleagues, who suggested that there have been many Liberal promises broken.

I will leave the Liberals to defend their own promises, but I did want to ask the member if the current Conservative caucus has any explanation for the fact that the Conservative promises of the 2000 election campaign included not taxing income trusts, which was broken on October 31, 2006; a very substantial commitment to reduce wait times in our medical system, which was also a promise broken; a very specific promise to bring in measures on ethics and a bill on ethics with over 60 specific promises, most of which were broken; as well as a plan not to touch our pension ages of retirement.

Now that is just the 2006 election campaign promises of the Conservatives. I could go through the 2008 broken promises and the 2011 broken promises, but I do not have enough time in one question.