This bill is from 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 has also written a full legislative summary of the bill.
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.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-2s:
Erin Weir NDP Regina—Lewvan, SK
Madam Speaker, we are here today debating a tax bill. I would begin by observing that our federal government is faced with a very serious revenue problem. The Conservative members of this House like to pat themselves on the back for the fact that federal tax revenues as a share of gross domestic product are at their lowest level in about half a century.
Erin Weir NDP Regina—Lewvan, SK
They are free to applaud that, Madam Speaker.
Of, course, the flip side of that is that we do not have enough resources to fund important public services and necessary infrastructure. That is one of the main reasons we have a big federal deficit. It is important that if we want to live in a civilized society, we need to have ways of raising the revenue to pay for those services and those infrastructures that we depend on.
What has the government done in terms of generating that needed revenue?
Bill C-2 proposes an additional four percentage points of personal income tax on incomes over $200,000 per year. That is definitely a positive initiative, but it is also a fairly minor initiative. It does not actually raise very much revenue. In fact, it does not even raise enough revenue to pay for the so-called middle-class tax cut that actually goes to what we might call the upper middle class. The maximum benefit is only to people earning more than $90,000 a year. We have this kind of redistribution from the rich to the nearly rich, which is costing the treasury even more money.
We, in the NDP, have suggested that the government might look to the corporate sector as a source of additional revenues to pay for public services.
It is interesting. This morning, the Toronto Star and CBC have come out with a joint investigation that looks into the loss of revenue to offshore tax havens. It notes that all of these tax information exchange agreements that the former Conservative government was very keen to sign have actually made the problem worse.
The goal of these agreements was obviously to achieve greater transparency, to get more information about what was going on in tax havens. However, what the Conservatives did while they were in power was to put in place a policy whereby once a country had signed one of these tax information exchange agreements, there was no more enforcement. Canadian companies could just repatriate profits tax free from those jurisdictions. Far from curtailing offshore tax avoidance, this plethora of tax information exchange agreements has actually made the problem worse. I think that is a problem that we need to be addressing in this House.
I would also like to talk a bit about a specific case of offshore tax avoidance that I think really illustrates the problem.
Cameco is a company that mines uranium in Saskatchewan. In 1999, it signed a deal with its own subsidiary in Zug, Switzerland to sell that uranium to Switzerland at a fixed price of $10 per pound. Switzerland was not the ultimate destination or user of that uranium. The subsidiary in Zug was just reselling it to other jurisdictions around the world at market prices. Of course, the market price of uranium is variable, but it has consistently been quite a bit more than $10 a pound. It is currently around $30 a pound. It was up to as high as $140 a pound in 2007.
The only real effect of this arrangement was to transfer billions of dollars of profits from Canada to this Swiss tax haven. The Canada Revenue Agency has calculated that from 2003 through 2015, that cost the governments of Canada and Saskatchewan more than $2 billion in lost tax revenue.
This is a huge scandal. It first came out in 2013. At that time, I was struck by the fact that Saskatchewan's Conservative MPs and one Liberal MP were totally silent on the matter. Fortunately, we now have some New Democratic MPs from the province who are going to speak up for tax fairness and raise issues like this.
It is very concerning that we have this company that is making huge profits off of Canadian resources and then transferring those profits out of the country, in a very brazen way, in order to avoid paying tax on it.
The good news is that the Canada Revenue Agency has started to pursue this matter. That is the way in which it came out publicly in 2013. However, the news that is a little more concerning is that there has been a real tradition of both Conservative and Liberal governments not actually following through on these cases, and instead signing these deals that let the tax cheats off the hook.
Part of the reason that I want to bring the Cameco case forward in this House is to put it on record, to make sure that the Government of Canada is actually going to follow up on this and not let the company get away with this scam.
I am not alone in this. Earlier this week, an organization called Canadians for Tax Fairness presented a petition signed by more than 36,000 people, calling on Cameco to make these tax payments. There are a lot of people who are concerned about this, and finally they have some Saskatchewan voices in Parliament speaking up for them.
I would also like to touch on the provincial side of this whole question. The tax base to which provincial taxes apply is actually defined by the Government of Canada. When you have a company like Cameco shifting taxable profits out of the country, it is not just the federal government that loses out; it is also the Government of Saskatchewan that is no longer able to collect the appropriate taxes on that money.
This is a pressing concern, because the Government of Saskatchewan is running a huge deficit right now. The Government of Saskatchewan really needs that money to maintain important public programs in our province. This is a critical issue. It has just come to light recently that the small “c” conservative government in Saskatchewan refused to present a budget prior to the recent provincial election because they wanted to conceal the fact that they were running this big deficit.
Now we know there is a huge deficit there, and we know how important it would be for the Province of Saskatchewan to be able to collect fair corporate taxes from the profits generated from our province's resources. It is not just about Cameco. This point is applicable to the whole question of offshore tax avoidance.
If the federal government were to do a better job of preventing this tax avoidance and tax evasion, and actually make sure that the correct amount of profit was subject to federal corporate income tax, that would also mean those profits could be subject to provincial corporate income tax.
I think almost all provincial governments are in deficit right now, and one of the best things this Parliament could do to help our provincial governments generate the revenues they need for health care, education, and social services would be to get our tax system in order. It wants to make sure that appropriate reporting is being done, so that not only do we have adequate revenues for the federal government, but so that our provincial counterparts can fund their operations in an appropriate way as well.
We are facing a huge revenue problem in this country. We have tax rates at historic lows, which are not sufficient to fund the important services and necessary infrastructure on which Canadians rely. Why is this happening? Obviously, one of the problems is that the general corporate tax rate has been cut. As my colleague pointed out, that has led to a huge loss of revenue and has not produced investment in our economy.
The other issue is that whatever the tax rate, it is not actually being applied because of these offshore tax schemes, which were aggravated by the recent Conservative government, of which Cameco in Saskatchewan is a particularly egregious example. We need to focus on this problem and come up with concrete solutions to collect appropriate revenues.
Ziad Aboultaif Conservative Edmonton Manning, AB
Madam Speaker, the plan for those with over $200,000 in income was supposed to be to raise votes not to raise revenue. Does the hon. member agree with that?
Erin Weir NDP Regina—Lewvan, SK
Madam Speaker, as I said in my speech, I do believe that this modest tax increase for the very wealthiest Canadians is a good and desirable policy. It will raise some needed revenue, so I certainly think it makes sense.
Where I would agree with the member for Edmonton Manning is that it will not actually raise very much revenue. In fact, it will raise significantly less money than the Liberal government is going to give away through this so-called middle-class tax cut that does not actually go to the middle class.
Therefore, if we are serious about raising revenue, we need to look at the corporate side of the ledger and start reversing corporate tax cuts, as well as closing loopholes and dealing with these offshore tax havens.
Kennedy Stewart NDP Burnaby South, BC
Madam Speaker, I would like to thank my colleague for an excellent speech and, of course, his deep knowledge in this area of tax and revenue.
I wonder if the member could expand on his comments concerning the so-called middle-class tax cut. I wonder if he could expand on why the title does not actually match the measures that are being put forward by the government.
Erin Weir NDP Regina—Lewvan, SK
Madam Speaker, on the Liberal side of the House, I think there might have been some confusion between a middle-class tax cut and the middle tax bracket.
What the government has done is to cut the middle bracket, which actually only applies to incomes in excess of $45,000, and it goes all the way up to incomes of $90,000. Therefore, to receive the maximum benefit from this supposed middle-class tax cut, one would need to be earning an income of more than $90,000 a year, which I believe most Canadians would consider to be certainly the upper middle class. This is the reason I do not think that the title “middle-class tax cut” is very accurate.
Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Madam Speaker, I totally disagree with the member. This middle-class tax cut is going to provide tax relief to over nine million Canadians, hundreds of millions of dollars. We are talking about farmers, teachers, and all sorts of professions.
Why does the member and the NDP choose to disagree in allowing for Canada's middle class, those teachers, manufacturing workers, that hard-working middle class, to have a tax break?
Income Tax ActGovernment Orders
The Assistant Deputy Speaker Carol Hughes
A very brief answer from the member for Regina—Lewvan. However, the member will still have about a minute and a half the next time he speaks on this.
Erin Weir NDP Regina—Lewvan, SK
Madam Speaker, if nine million Canadians are getting some benefit from the tax change, that means that 20-odd million Canadians are getting no benefit at all. Of course, many of those nine million Canadians are not receiving much benefit.
I look forward to debating this matter again after question period.
The House resumed consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the third time and passed.
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
Mr. Speaker, I believe that there were one and a half minutes left in questions and comments.
Income Tax ActGovernment Orders
The Assistant Deputy Speaker Anthony Rota
I have just been informed that technically, yes, that is correct. Normally it is at the discretion of the Speaker, but since it was brought up, we do not want to rob anyone of the opportunity to ask or answer a question.
In a minute and 30 seconds, if the hon. member for Sherwood Park—Fort Saskatchewan wants to ask a very brief question, I am sure he will get a very brief answer from the member for Regina—Lewvan.
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
Mr. Speaker, I always so enjoy asking questions of my friend from Regina—Lewvan.
We heard his perspective on economic policy, but I would encourage him to look not just at economic theory but at economic history. He is from Saskatchewan, and I am from Alberta. I think both of us suffer from provincial government envy, to some extent. For decades, under NDP governments in Saskatchewan that pursued policies that he advocates of bigger government and bigger spending, capital, and more importantly, people left Saskatchewan for Alberta, but now, under the Wall government, the exodus of young people from Saskatchewan has stopped.
Does the member not have to agree that the policies of free enterprise that are now being pursued in Saskatchewan are better and have led to more young people staying in Saskatchewan and being able to get employment there?
Erin Weir NDP Regina—Lewvan, SK
No, Mr. Speaker, I do not have to agree. In fact, I would note that there are many other differences between the two provinces.
For example, the Canadian oil industry really started out in Saskatchewan. It was the discovery of the huge reserve of oil at Leduc in 1947 that caused that industry to shift to Alberta. That was not about government policy; that was about geology.
Also, we see now that with the downturn in commodity prices, both Alberta and Saskatchewan have been hit with layoffs and cuts in investment, and the right-wing policies at the provincial level in Saskatchewan certainly have not saved our province.