This bill was last introduced in the 42nd Parliament, 1st Session, which ended in September 2019.
Bill Morneau Liberal
This bill has received Royal Assent and is now law.
This is from the published bill. The Library of Parliament often publishes better independent summaries.
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.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.
Ziad Aboultaif Conservative Edmonton Manning, AB
Madam Speaker, obviously, I will repeat what my hon. colleague has said: we left a surplus. We operated with a surplus. We had the best economic performance. No one can deny that. In fact, a government that never ever was able to bring facts to the table has no right to say anything or to criticize the position of the past government.
Karen McCrimmon Liberal Kanata—Carleton, ON
Madam Speaker, we have to correct the record. We have to challenge it. We cannot let erroneous statements stand.
We do not measure deficits or surpluses in parts of a year. We can measure deficit months, if the member wants. Let us do that. I will go back, and I will look over the last nine years and discover how many deficit months there were.
There is $150 billion of debt for our grandchildren.
Ziad Aboultaif Conservative Edmonton Manning, AB
Madam Speaker, the hon. member wants to go back nine years to look into the facts and figures. There is a figure here on the website telling Canadians and the world that we left them with $1 billion. Can you assure that news to us, and make sure that you admit it?
The Assistant Deputy Speaker NDP Carol Hughes
Once again I would like to remind the members that they are to address the questions or comments to the Chair. Resuming debate.
John Nater Conservative Perth—Wellington, ON
Madam Speaker, I am pleased to rise in the House today to speak to Bill C-2, an act to amend the Income Tax Act.
Since this is the first opportunity for me to address the House at some length, I would like to take this opportunity to thank the good people of Perth—Wellington for bestowing on me the honour of serving this House as their member of Parliament. In all I do, I pledge to the good people nothing but my hard work on their behalf.
As all members know, none of us can do this job without the love and support of our family. I am certainly no exception. I could not have gone through this 11-week campaign without the love and support of my wife Justine, who has been ever patient; my darling daughter Ainsley, who was a lot younger when we started the campaign and is growing like a weed; our extended family, my parents Bill and Darlene and my in-laws, John and Laurie; and our countless campaign team members, including people like Keith and Matt, Tim and Tim, Sue, Irene, Cynthia, Lee, and Ross.
The members of that team have all been with me throughout the campaign, working from sun-up to sundown on my behalf and on behalf of the good people of Canada to advance their vision for a more perfect country. They campaigned through all weather conditions, from the heat of the summer to snow our last week in the campaign. They were there with me and with us throughout the campaign.
The great riding of Perth—Wellington comprises a number of municipal organizations. We have seven lower-tier municipalities, two single-tier municipalities, two county governments, and dozens of small towns and villages. During the campaign, we criss-crossed it all. By election day, we had knocked on over 30,000 doors from Harriston to Harmony, Mount Forest to Milverton, from Stratford to Staffa to St. Marys, and all points between.
We heard one consistent message at the doors: families were concerned about the economy and they were looking to the government to extend a helping hand. At every doorstep, in every community hall, in every church basement, and on every main street, voters were not hesitant in expressing their views. They appreciated programs like pension splitting for seniors, income splitting for families, the universal child care benefit, and the first-time homebuyers' tax credit. Each of these initiatives provided targeted tax relief to Canadians who actually needed it.
Now we have a new government, and I think it is important to highlight some of the contrasts between the current government across the way and our previous Conservative government.
When our former Conservative government came to office in 2006, we also introduced a Bill C-2. That bill was the Federal Accountability Act. It strengthened conflict of interest rules, expanded access to information to crown corporations, increased transparency in lobbying activities, and overhauled political financing rules to ban not only corporate donations but union donations as well.
Now, let us fast-forward a decade and here we are with another Bill C-2. However, let us make no mistake. This bill is nothing but smoke and mirrors in an effort to implement a misguided and misleading Liberal campaign promise. Under the provisions of this Bill C-2, the most benefits would go to those people making a significant amount of money. Those making over $100,000 a year would be quite happy with the measures that would be brought forward in Bill C-2. However, for those families who are struggling, for those families in Perth—Wellington who are trying to get by on $40,000 or $45,000 a year, this bill would do absolutely nothing.
I said, when I was first elected to this place, that I would try to work collaboratively and co-operatively with all members of this House, but I simply cannot support a measure that is not in the best interests of my constituents. Let us look at my riding of Perth—Wellington and the people who have given me the honour of representing them. Under the provisions of this Liberal bill, as many as 84,000 of my constituents would see no benefit from the bill. Nearly 80% of the residents of my riding would have no tangible benefit from Bill C-2. That is why I am voting against it and why I think all members on this side of the House will be voting against it. We understand that we need to make bills and policy in the best interests of our constituents who have sent us here to speak on their behalf.
My riding is overwhelmingly made up of middle-class Canadians. They are people like Steve and Bettie from Listowel who have three children and are trying to save for their children's education and pay their bills. This bill would do nothing for them, but it would give people making $200,000 a significant tax break. This is wrong.
What is more, Canadians were told during the election campaign that these measures would be revenue neutral. We have found out that this simply is not the case. The parliamentary budget officer said that these Liberal measures would actually add $1.7 billion to the structural deficit that Canada's new Minister of Finance is quickly building.
Where will this $1.7 billion come from? Will the Liberals cut the tax credit for first-time homebuyers? Will they cut the tax credits for families who put their kids in sports and artistic activities? Will they cut tax credits for students or apprentices? We simply do not know, because they have not told us.
It is not just income taxes. Bill C-2 would reduce the contribution limit for tax-free savings accounts for more hard-working Canadian families and seniors. TFSAs have quickly become one of the most effective and popular savings tools. They allow families to save more for a rainy day, whether it is a down payment on a new home, money to make much-needed renovations to their existing home, or to plan for their retirement.
Do not just take my word on it. Experts in the business community recognize the value of a higher contribution limit for the TFSA. In fact, one chief actuary from a well-respected HR firm said, “I think it’s really quite a positive move for retirement security in general...”. Who said that? It was the chief actuary from the Toronto based HR firm Morneau Shepell. I would encourage our finance minister to perhaps talk to his former colleagues about the benefits of the TFSA and the increase in contribution limits for all families.
During this past election, I spoke often about TFSAs and often got the most positive response from young people, those who recognized this was an effective tool for them to save for their future. It is ironic that the Liberal government, which claims to represent the millennial generation, would rather give millennials a selfie than an effective and worthwhile savings tool.
In December, I received an email from a constituent, Tyler, from Mount Forest. He told me the reduction in the TFSA limit would personally affect his ability to save for the future. This is simply not right.
Bill C-2 does nothing to provide meaningful tax relief to the Canadians who actually need it. It leaves way too many Canadians out in the cold. That is why I am proud to vote against the bill and in favour of my constituents in Perth—Wellington who will not benefit from it.
Joël Lightbound Liberal Louis-Hébert, QC
Madam Speaker, the hon. member across the aisle mentioned income splitting for families as a measure that helps Canadians who need it the most. However, in March of last year, the Parliamentary Budget Office declared that income splitting for families would only benefit 15% of Canadians, those who needed it the least.
He also mentioned the TFSA and that he had millennials tell him how the reduction in contributions would affect them. I do not know many millennials who contribute $10,000 a year to their TFSAs. In fact, I do not know of any.
How many of his constituents would have been helped by income splitting for families when the Parliamentary Budget Officer stated clearly that it would only benefit 15% of the richest Canadians?
John Nater Conservative Perth—Wellington, ON
Madam Speaker, as I said in my speech, my team and I knocked on over 30,000 doors and income splitting for families was the most common issue raised at the doorstep. They saw it supporting their families. They saw it as a worthwhile mechanism to put more money into their pockets and the pockets of their families.
It allows families to make decisions on how best to raise their kids and how best to provide for their families, whether one parent stays at home, whether a father or mother, or whether one parent goes to work on a part-time basis. It allows them to decide how they will raise their families. It gives them the option, rather than the government telling them the option.
In terms of the TFSA, we need to remember as well that this contribution room does not disappear. Millennials recognize that they are 40 years away from retirement and that the room in the TFSA will never disappear. It gives the option for them to contribute years down the road, to withdraw and re-contribute again.
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Madam Speaker, I was glad to hear the member talk about the less advantaged folks in Canadian society who would not get anything from the bill. I am glad to see he will join me in recognizing that Liberal MPs are basically giving themselves the maximum tax benefit.
One of the duties of the opposition is to also offer proposals. Therefore, will he join us in lowering the first income tax bracket from 15% to 14%?
John Nater Conservative Perth—Wellington, ON
Madam Speaker, I am a Conservative. I believe in lowering taxes. Therefore, it is worthwhile to look at all opportunities to lower taxes for hard-working Canadians and those who actually need it, lower income Canadians, not the wealthy, as the Liberals across the way would do.
The Assistant Deputy Speaker NDP Carol Hughes
The member will have two minutes and 10 seconds remaining in questions and comments at the next sitting of the House.
It being 2:30 p.m., this House stands adjourned until Monday at 11 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 2:30 p.m.)
The House resumed from January 29 consideration of the motion that Bill C-2, an act to amend the Income Tax Act and of the amendment, be read the second time and referred to a committee.
Salma Zahid Liberal Scarborough Centre, ON
Mr. Speaker, I will be sharing my time with the hon. member for Saint Boniface—Saint Vital.
I rise in the House today support of Bill C-2, an act to amend the Income Tax Act, or as I prefer to call it, an act to finally give a helping hand to middle-class families and those hoping to join the middle class.
Our government believes in listening to the people. For years, Canadians have been telling us one thing loud and clear: they need a hand. Middle-class families have increasingly been struggling to make ends meet. Too many families are having to make difficult choices: should they pay the rent or put food on the table; should they save money for their children's education or save for a secure and comfortable retirement; do they buy a new suit for their job interview or a birthday present for their son. These are not easy choices and they are causing stress and hardship for so many families.
I have the privilege of representing the riding of Scarborough Centre. We are a community of middle-class families. Scarborough families are exactly the sort of families that we need to be helping. We need to help families like one I met when knocking on doors in Scarborough last summer. I spoke with a mother outside her door in an apartment tower who told me how her husband was working full time at a warehouse and she worked nights in the service industry. They hardly got to see each other. Still, each cheque did not go quite far enough. She was trying to find a second job so they could keep up with the bills. However, she was worried about who would take care of her two young daughters while she was away. Like so many families I met, they are struggling with bills that are always going up and income that is not keeping pace.
Middle-class families are the backbone of our country. These are hard-working families willing to put in the long hours and make the sacrifices necessary to build a better life for their children. They value hard work and are instilling those values in the next generation. However, middle-class families have gone without a raise for too long. It is time we take action to help them.
I was honoured to stand with the Prime Minister at a grocery store in the Leaside neighbourhood of Toronto last fall when he promised the first act of a Liberal government would be to lower taxes for middle-class families. I am pleased to say, that promise made is a promise kept. That is Bill C-2.
As of January 1, nine million Canadians will be receiving tax relief. Bill C-2 amends the Income Tax Act to reduce the second personal income tax rate from 22% to 20.5%. It also creates a new personal marginal tax rate of 33% for taxable income in excess of $200,000. What does that mean? It means that in order to help those who need help the most we are asking the wealthiest to give just a little more.
We are also reversing the previous government's costly and misguided plan to nearly double the annual contribution limit for tax-free savings accounts. Raising the limit would only help the wealthiest Canadians at a cost of several hundred million dollars over the next five years, while doing nothing to help middle-class families. There are not many families in my riding who could afford to make the maximum $10,000 annual contribution to their TFSA, not when many are more concerned with paying the rent. In fact, in 2013, just 6.7% of eligible Canadians made the maximum TFSA contribution.
Our government was elected to help those who need help the most, and that is exactly what we are going to do.
Our tax changes will benefit over nine million Canadians in 2016. A single person will see an average annual tax savings of $330, and the average couple will save $540 every year. That is money that will help families pay the rent and buy groceries, and it will make it a little easier to put some money away for the future. It is a helping hand for those who need it the most.
Over the holidays I had the opportunity to visit the Scarborough branch of the Salvation Army, and the Dorset Park Community Hub in my great riding of Scarborough Centre. I saw so many young families visiting the food banks. I saw mothers pushing their children in strollers who needed help to put food on the table, and workers and volunteers struggling to keep up with the demand. It makes one's heart break to think those young children would be going hungry.
This is Canada. We can do better, we must do better, and we will do better. Bill C-2 and our middle-class tax cuts are just the beginning. There will be much more to come when the Minister of Finance brings the next budget to this House. A key element will be the new Canada child benefit, which will deliver targeted help to those families who need it the most. When fully implemented, the Canada child benefit will help nine out of 10 Canadian families, and lift hundreds of thousands of children out of poverty. Canada needs a healthy and prosperous middle class. When the middle class succeeds, we all succeed. We are blessed to live in one of the greatest countries in the world. We are blessed with a population that is educated, hard-working, and industrious. If we give them the opportunity to succeed there is nothing they cannot do.
This government was elected on a plan to grow the economy, and we have already started. With the changes to Bill C-2, a fair tax system, which asks the wealthiest among us to pay just a little more while giving help to families who need it the most, is being delivered.
With the upcoming Canada child benefit and our historic investments in transportation and social infrastructure, we are laying the foundation for economic growth and a stronger economy that will allow every Canadian to reach his or her potential to build an even stronger, more prosperous country.
I encourage all hon. members to join me in supporting this important legislation and middle-class families. Let us ensure that Canada's middle class gets the help it deserves.
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Madam Speaker, with the so-called middle-class tax cuts, the extra tax on the wealthiest does not begin to cover what it would cost the the nation as a whole. In fact, in the hole is where we would be. That means the government would have to take money from the rest of us, including the middle class, in order to make up the difference.
My question is this. As my colleague is from Ontario, she would know that the $6.34 increase that this would amount to would not even begin to cover the increase in hydro tax. Could she explain how that $6.34 after it is taxed back would really make a difference when we would have to pay more because of it?
Salma Zahid Liberal Scarborough Centre, ON
Madam Speaker, the tax cuts that we have proposed for Bill C-2 have already started helping nine million Canadians, and together with the Canada child benefit will help nine out of 10 Canadian families.
I am proud to stand with a government that is there to help middle-class families. We are just asking the wealthiest people, 1% of Canadians, to pay a little more.
Matthew Dubé NDP Beloeil—Chambly, QC
Madam Speaker, I appreciate my colleague's comments about the people in her community who need this. She keeps going on and on about how the rich will pay more, but despite the Liberals' promises, the people who need it the most—those who earn less than $45,000 per year—will not see a penny.
During the election campaign, the Liberal Party accused us of dishonesty and said that a federal minimum wage would not help many people. That same Liberal Party promised middle-class tax cuts and more cash in middle-class pockets. The truth is that a vast majority of Canadians identify as middle class and yet will not get a penny because they earn less than $45,000 per year. The median income is around $33,000 or $36,000 per year.
Can my colleague tell me why her party is not supporting the NDP proposal to put a little more cash in those people's pockets, not just the pockets of those who earn between $90,000 and $150,000 per year?