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

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

Mr. Speaker, I thank the member for his kind words and obviously there is a lot of meat there.

Let me go in reverse order and see if I can get to the second point. I already addressed the issues around TFSAs.

On the question of infrastructure and whether it is good for the next generation, infrastructure is used over an extended period of time. The issue is that the next generation will have to invest in new infrastructure. We will never stop needing to spend money on infrastructure.

We have to spend on it now for the future, but future generations will have to continue to spend money on the maintenance of existing infrastructure and on new infrastructure. The analogy made by some is, well, would we not go into debt to get a mortgage because we would use the house for a long time? If we had to buy the equivalent of a house every year, we probably would not take out a mortgage. If we took out a mortgage, we would not have money to buy the house in the next year and the next year after that. That is kind of where the analogy falls down.

The other issue with the government's budget, and I encourage Canadians to look at the chart on page 91 of the budget which lays out what is infrastructure, is that the debt the government is accumulating here, much of it is not for traditional infrastructure. It is not for building that bridge or road that will exist for a long time. Child care is even included on the page 91 grid on infrastructure.

Obviously taking care of children is important. There is a role for government in providing direct support to parents for child care, but I do not think—

[The Deputy Speaker, Bruce Stanton]

Order, please. I know we have 10 minutes for questions and comments, but I do note there are other members interested in posing questions.

The hon. member for Central Okanagan—Similkameen—Nicola.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I certainly agree with the member that any debt spent on infrastructure really should follow an economic framework of whether it makes our society more productive. It should not just simply be money out the door, and a hope that we will see a proper return.

Could the member maybe discuss the importance of ensuring there is good value for taxpayer money, and maybe give some thoughts about what things he will be looking at as the government moves forward on its plans in this area?

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

Mr. Speaker, I will try not to take up the rest of the 10 minutes with my response. Members know me not to be too verbose in the House, I am sure. I heard the member for Winnipeg North laugh at that, which is particularly funny.

With regard to the point about getting taxpayers value for money, it is particularly important, when we talk about something being infrastructure, to ensure that it actually is infrastructure. It is not because there are not important things that we should spend money on that are outside the category of infrastructure, but because there are specific economic arguments that one could make for deficit in the context of infrastructure that simply do not apply in other cases. The government is spending far more this year in terms of its deficit than its total spending on infrastructure. Therefore, it is pretty clear that there is a disconnect here. Again, as I was saying as we wrapped up, child care just is not infrastructure.

I want to quickly come back to the parliamentary secretary's question about lower income people not having money to put in their TFSAs. Again, I think some Canadians who are on the lower income end work very hard to save that much. It may not be most who can approach that maximum, but even someone who would have saved $6,000 or $7,000 a year would be losing out because of reducing the cap. More to the point, those wealthier Canadians, as I explained in my speech in some detail, are more likely to use RRSPs as opposed to TFSAs for a saving vehicle. We should do everything we can to expand TFSAs precisely because of the sort of differential positive impacts on those who are in the middle and lower income end.

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

Mr. Speaker, I can assure the member that I was not laughing at him. However, it is with pride that I stand today to comment on Bill C-2, in a special shirt with a unique-looking tie in celebration of Ukraine heritage.

The fact is that this is an implementation bill that ultimately will see thousands, in fact, millions of Canadians get a tax cut. I say it in that fashion, because the Conservatives who I have known over the years, generally speaking, vote in favour of tax cuts.

The types of tax cuts we are giving are going to Canada's middle class, such as teachers, firefighters, factory workers, and health care providers. They are part of Canada's hard-working middle class, and they would be getting a substantial tax cut, hundreds of millions of dollars in tax cuts.

Could the member explain to all those middle-class workers why the Conservative Party is voting against giving them a tax break? The member should recognize that the Conservatives are also voting against giving a special tax increase to those who make in excess of $200,000. This bill would ensure more income equality. Why would he vote against it?

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

Mr. Speaker, I always appreciate the interventions from my friend across the way.

Let me be clear that this is a tax change. It is a tax cut for some and an increase for others. However, the government is not clear on who the “some” and who the “others” are. It is like robbing Peter to save Paul without a great degree of clarity about which one is Peter and which one is Paul. Those making less than $45,000 a year, who are more likely to use TFSAs, would be worse off under this measure. Future generations would be worse off under this measure.

We are all going to vote on this at some point, and the parliamentary secretary needs to be clear about who the benefits go to. Someone making $100,000 a year and not using tax-free savings accounts is a bit better off. If people are in the middle of that bracket using a TFSA, then they are either worse off or neutral. However, if someone is on the low end, then one would definitely not be better off.

When we have these kinds of tax changes, reducing some and raising other brackets, we need to have a clear idea of what we are doing. We need to have a clear idea of why, rather than simply shifting things around perhaps, arguably, just for the sake of shifting.

[The Deputy Speaker, Bruce Stanton]

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

The House resumed from May 19, consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the third time and passed.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Madam Speaker, I am honoured to stand to speak to Bill C-2 once again, and about some of the implications it will have when the bill moves forward.

It is great that we are in the House today debating the bill, because there are many things Canadians need to know about it, and that we as the official opposition have to bring to the attention of the government.

Today I want to start with the tax-free savings account. The current Liberal government has proposed a reduction in the maximum annual amounts Canadians can invest in these accounts. We know this is a tool that has been working for Canadians. Unfortunately, the government does not, on the false pretence that doubling the tax-free savings account only benefits the highest-earning Canadians, rather than just the middle class.

As we talk about this today, we are looking at all of these proposed middle-class tax hikes that we will be seeing for the middle class and for all Canadians.

Madam Speaker, I will be splitting my time with the member for Central Okanagan—Similkameen—Nicola. We probably know him as the member of Parliament for the “free the beer” campaign, another great campaign we have done.

I am here to talk about the tax-free savings account and the proposal of the Minister of Finance to move forward with the CPP contributions that the government will be inflicting on all Canadians, especially future generations.

The Liberals proposed middle-class tax cuts, reducing it to 20.5%. It really does sound good when they say they are cutting taxes for the middle class. However, they are forgetting to tell Canadians about all the other things they are going to do. We heard the Minister of Environment in the House this week talking about the carbon tax. We have to recognize that they are going to say they will be reducing taxes for the middle class in order to create more opportunities, provide better savings, and more opportunities for families, but they are not talking about all of these other things they are also proposing.

I am a resident of Ontario. We are already going to see gas prices go up 4¢ a litre, because it was proposed by the Ontario Liberal government. Now we see our federal Liberal government also proposing a carbon tax, a CPP tax, and all these other things. Therefore, although they talk about a middle-class tax bracket at 20.5%, they are not letting all Canadians know that they are actually taxing us in other forms. It really is very unfortunate that they are saying one thing but doing another.

We are not decreasing the taxes when we have backdoor amendments changing the current tax system. For those people living in Ontario, where we see horrible job creation and much unemployment, much like Alberta with the non-support in our energy sector, not only are Canadians not going to have jobs, but they will be paying more, even at the gas pumps. They are going to be paying more in the grocery stores, because we see governments taxing Canadians, whether they are in Ontario, or anywhere in Canada. I have huge concerns about this.

We talked about the tax-free savings account, which is a vehicle for Canadians to save money. Our Conservative government increased it because we had Canadians saying this was a great vehicle for saving money. By introducing a new threshold for what they could save it gave them the opportunity. Many times, we will hear the government say people are not maximizing it. Now, what it is proposing is nannifying what we are doing in Canada by introducing Canada pension plan increases.

We have a vehicle that currently works, the tax-free savings account, which allows Canadians to save responsibly, and many Canadians are doing so. However, now the Minister of Finance will be touring later on this month, trying to get all of the provinces on board to increase our CPP contributions. We have to recognize that that is not only a vehicle for savings. At the same time, it is a huge burden on small businesses. Those small businesses were looking forward to a decrease in their small business tax. However, the government will not be fulfilling that promise either.

Therefore, what the government will be doing is taking the tax-free savings accounts, which allow Canadians to make the choice on how they want to save their money, and instead introducing a new tax on Canadians and employers through the Canada pension plan, as a nanny state tax.

What is this going to do? We know that when students come out of university, they have high debts. It is something that we should be aware of as Canadians. We are asking our students to go out there and get the proper education they need so that they can make sure they have a brilliant future. They come out of those schools with debt and when they get their first job, not only are they going to have to contribute to the CPP but they will have to double those contributions. We are looking at an additional $3,000 out of their pockets to be put into the CPP.

As a parent, I have no problem because I believe that it is very important for people to save for their future. However, at the same time, what we are doing is having them save for retirement when they can take that money and put it into their student debt, put it into a tax-free savings account, or into the first-time homebuyers plan under the RRSPs and put that money toward their first home. What we have now done is taken away all of those opportunities for Canadians and, as a government, we are saying, “You must put it into the Canada pension plan.”

Although I think saving for retirement is very important, we have to recognize that this is the Canada pension plan. It does not help our current seniors, those seniors who we say are the most vulnerable. It will just be an additional tax. For those students who have come out of Carleton University with these enormous debts, we will see another tax on them. The opportunity for them to save their own money for what they choose is being removed by the current government. These are things that I am extremely concerned with.

The government has talked many times about deficit spending in its campaign promises. I want to talk about the middle class. The middle class we are talking about today will be that group of people, these young families who are currently the middle class, who will wind up with a huge debt. Whether it is the debt from the deficit or from the new CPP contributions or the debt they will have because we will be taking this carbon tax money, will we be using it properly? Those are some huge concerns I have.

I am very much an environmentally friendly person. However, I believe in the stewardship of our land. I think we need to ensure that we recognize that if we are taxing people, this money will actually reduce costs or, as the Liberals are saying, the man-made climate change, or will we just be taking that money and putting it into general revenues and pet projects. Unfortunately, I see the latter, the pet projects, truly being the focus of this climate change plan.

We have this new carbon tax that has now been introduced in the province of Ontario. We will see one at the federal level as well. Average Canadians, the people who will have to pay for this huge deficit in 2016, this line of credit or the 2016 budget, will just see huge debts that they will have to pay. That is a very large concern for me. As I said, I am parent and I have three children currently in post-secondary education. I recognize the costs of education. I am very fortunate to be able to assist with some of those expenses. Not all families can do that. What we have done is once again crippled the middle class by introducing so many different factors in this.

Going back to the tax-free savings account, this is a vehicle, as we have said, and as the government has said many times, to maximize contributions. This party on this side, the official opposition, sees this is an excellent vehicle for people to save money. It gives them the opportunity to put in maximum contributions. Instead, we are rolling that back. We have different institutions and different organizations throughout Canada saying, “We appreciate that increase and we think that's what needs to be done.” Instead, we see a government that is planning on taxing Canadians—tax, tax, tax, and spend, spend, spend. As we go through this, the bottom line is that we are trying to tax ourselves to prosperity. That is not what we should do. We are taking all of this money from hard-working Canadians and we will be taxing them more and more.

Unfortunately, now that the Liberal government has come into office after it had its great campaign, all it is doing is crippling our middle class and our seniors, and it has only short-term plans. I hope that when the Liberals look at this they will recognize that we need to do better, and we can do better. I hope that they look at and review all of the documents that they have put forward.

[Steven MacKinnon, Liberal, Gatineau, QC]

Madam Speaker, I thank my colleague opposite for her speech, but I have to say that I am perplexed to hear a Conservative Party member speak against a bill that reduces the tax burden and cuts taxes for the middle class. With respect to the TFSA, obviously I do not know her constituents as well as I know the people of Gatineau, but I know that those of my constituents who earn middle-class incomes are much happier about what we are doing, which is putting money back in their pockets. Nine million Canadians, including a lot of people in Gatineau, are getting a tax cut instead of a TFSA that they cannot afford to put $11,000 in every year. Can my colleague tell me if the people in her riding would rather have money in their pockets thanks to a middle-class tax cut or the opportunity to put money in a TFSA, which is not really an option for them given their income?

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Madam Speaker, the bottom line is, the Liberals are saying one thing and doing another. They are introducing a tax cut for our middle class at 20.5% and they are increasing a carbon tax. They are increasing a variety of other things. These are concerns I have, because it looks great on paper until we see all of the other pages talking about all the other taxes they will impose. Whether it is today or tomorrow, we know the government will tax us.

The bottom line is, we cannot spend our way to growth and we cannot tax our way to prosperity. That is exactly what the government is doing.

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

Madam Speaker, I think my colleague did a very good job of pointing out that we have a policy choice. On the one hand, we can allow individuals to save more of their own money or on the other hand, we can have the government take that money and put it into this new, expanded pension concept the government has.

Maybe the member could talk a little bit more about the benefits of giving individuals choice and control over their own money versus giving government control of that money.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Madam Speaker, the hon. member is absolutely right, we want to give Canadians choices.

One of the biggest things we see with the CPP mandate that the Liberals are coming out with and will be announcing is that it will not only hurt small businesses, it will also reduce jobs, because businesses will not be able to afford to have more employees.

The tax-free savings account is a great vehicle to allow Canadians to save their money. They put the money they have earned into a vehicle so that when they need the money, it is available to them, whether it is purchasing their first home, whether it is going on a vacation, if they can afford to do so, or whether it is saving for their children's future so that they can send them off to college or university, that money is there for them, and it is not under nanny state of this Liberal government.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, we will have plenty of opportunities to debate the Canada pension plan. The Conservatives are making the same arguments they have been making since 1965. However, getting back to the debate and this bill, my colleague from Gatineau made two points. The first is that this will help the middle class, and the second is that nine million Canadians will benefit. I have news for him. If nine million people are benefiting, that means more than 17 million, maybe even 18 million, will get nothing at all from this tax cut, which, by the way, will apply only to people who earn at least $23 per hour at full-time jobs. I would like my colleague to comment on this tax cut for what I would call the pseudo-middle class, because it seems that this government's definition of “middle class” is not what most people would consider the middle class.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Madam Speaker, It has been fantastic serving with the hon. member and learning from him as he speaks in the House.

I really do appreciate that question because my children are that middle class. My son, who is 22 years of age, will be moving into his own apartment this weekend, and I am very excited for him. However, when I look at his budget and show him how he has to move forward, he makes $13.50 an hour, and he is not part of this middle-class tax cut, so mummy will be setting up his apartment and trying to help him out.

This is exactly a pseudo-middle class. The Liberals are not helping those people who are most vulnerable. Canadian parents such as myself are trying to help them forward, because what the Liberals are saying they are doing for the most vulnerable is not happening.