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

[Bill Morneau, Liberal, Minister of Finance]

moved that Bill C-2, an act to amend the Income Tax Act, be read the second time and referred to a committee.

Mr. Speaker and hon. members of this esteemed House, I appreciate the opportunity to discuss the merits of the middle-class tax cut the government introduced in December and that this bill, Bill C-2, would enact.

On January 1 of this year, nine million Canadians received a tax break. Our government was elected on a plan to grow the economy, and these changes are an important first step in that plan.

Our government believes that a strong economy starts with a strong middle class. Canada's middle class has gone too long without a raise, and in challenging economic times, we have taken action to help them.

The global economic downturn has presented some new realities for the Canadian economy. This means that our plan to grow the economy is now more important than ever.

As we pursue this plan, we will continue to keep Canada's debt-to-GDP ratio on a downward track. We will be prudent in our expenditures and will return to a balanced budget by the end of our mandate.

The government's job is to help Canadians succeed. We are lucky to have one of the most highly educated and talented workforces in the world. In order to harness the power of our people to build a stronger and more prosperous country, we need to improve direct support to the middle class and those working hard to join it. The legislation before the House today does just that.

This bill would cut the tax rate on income earned between $45,282 and $90,563 in 2016 by 7% and would introduce a new tax rate of 33% on income earned above $200,000.

The middle-class tax cut and accompanying changes will make the tax system fairer. Specifically, the bill proposes to reduce the second personal income tax rate to 20.5% from 22%, introduce a 33% personal income tax rate on individual taxable income in excess of $200,000, return the tax-free savings account annual contribution to $5,500 from $10,000, and reinstate indexation of the tax-free savings account annual contribution limit.

Let me elaborate on the three points. First, the personal income tax rate changes took effect on January 1 of this year. As I mentioned at the outset of this speech, it is expected that about nine million Canadians will benefit from this measure this year.

Second, in conjunction with this tax cut, the government is introducing a new personal income tax rate of 33% that will apply to individual taxable income in excess of $200,000. We are asking the wealthiest 1% of Canadians to pay a little more to help the middle class and those working hard to join it. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax rates. As with other bracket thresholds, the $200,000 threshold would be indexed to inflation.

Third, the government is returning the tax-free savings account, TFSA, annual contribution limit to $5,500 from $10,000, effective January 1, 2016. Let me reassure all members of the House that this change is not retroactive. The TFSA annual contribution limit for 2015 will remain at $10,000. I should also note that the limit is cumulative and builds over time.

Eliminating the previous government's increase to the TFSA contribution limit is consistent with our objective of creating a tax system that is fair and that helps those who need it most. Keeping the limit at $10,000 would have helped Canada's wealthiest save more while costing the federal treasury hundreds of millions of dollars over the next five years.

We know that only 6.7% of eligible Canadians contributed the maximum in 2013. Doubling it did nothing for the 93.3% of Canadians who could not max out their contributions with the existing limit. Indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time.

While these three elements are what I expect will be discussed during the parliamentary debate, I would like to highlight some of the other measures that are included in today's legislation.

Today's bill proposes to change the current flat top-rate taxation rules applicable to trusts to use the new rate of 33%.

The bill sets the tax on split income to the new rate of 33%.

The bill amends the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate.

The bill increases the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the proposed new 33% personal income tax rate.

The measures included in this legislation are a priority for this government. However, there are many unique issues that confront Canadians today. That is why reaching out and listening to Canadians is so important. We have a plan to grow the economy, and we need the input of Canadians to learn how to best implement our plan in their cities and communities.

Over the past few weeks, my parliamentary secretary and I have heard from Canadians about what we can do to help the middle class right across the country.

We asked Canadians directly how the government can support them and grow the economy. We met with people from all walks of life: business leaders, farmers, small-business owners, members of our indigenous communities, and community leaders. I also engaged with students by holding a Google hangout and two Facebook live events that attracted a total audience of more than 80,000 Canadians. I am encouraged that young Canadians have found new reasons to become engaged with their government. Our goal is to listen and engage with Canadians on the issues that are important to them, and it has, to date, been a very successful endeavour.

As part of these consultations, I was pleased to have spoken to the member for Milton and the member for Rimouski-Neigette—Témiscouata—Les Basques, my colleagues across the aisle, and I assure the House that their input will be thoughtfully considered.

Although we are both back in Ottawa now, these consultations continue online. Since the opening of the online consultations, we have already reached over 150,000 Canadians and have received over 3,000 submissions, in fact 3,400 submissions as of today, from Canadian individuals and groups, more than twice the submissions, almost three times the submissions, in fact, received last year under the previous government.

It was especially important for me to hear from Canadians about the effect the economic situation is having on them. The stories I have heard have reaffirmed for me the importance of our plan to grow the economy in the short, medium, and long term.

Collaboration is a critical element of our plan to deliver real change in a way that takes into account the priorities and opinions of Canadians. As we implement our plan, we will continue to be open and transparent every step of the way.

This legislation is an important first step to help strengthen the middle class. It puts more money in the pockets of Canadians to save, to invest, and to grow the economy, but it is just a first step. In budget 2016, the government will introduce a new Canada child benefit that will lift hundreds of thousands of Canadian children out of poverty and will help nine in 10 Canadian families with children to be better off. It will replace the universal child care benefit, which is not tied to income, and it will simplify and consolidate existing child benefits while ensuring that help is targeted at those who need it most.

Taken together, the measures we intend to introduce will help grow our economy to the benefit of all Canadians. The government will invest in our economy, in our communities, and in Canadians themselves. We will make transformative investments in infrastructure that will increase the productive capacity of our economy while improving the day-to-day lives of Canadians.

After 10 years of weak growth, we have an ambitious economic agenda to grow the economy and the mandate to implement it. It started in December with this middle-class tax cut and will continue with the introduction of the Canada child benefit and our historic investments in infrastructure over the next decade.

I encourage all members to support this legislation and to help us deliver on our plan to support the middle class and those working hard to join it.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, I appreciate my hon. colleague's speech.

The government has gone online and solicited feedback from across Canada, from coast to coast to coast—we have heard that over and over again, using numbers such as 80,000 and 150,000.

We know that social media and online surveys can come from all over. Does the government have the geographic data, riding-specific, where this information is coming from?

Also, would the member opposite tell us whether there has been any outside feedback from across the borders and whether the government can substantiate the data and its geographic sources, which it is reporting today?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Speaker, I first want to thank the hon. member for his question. I think it is an important question.

We campaigned on a commitment to have an open and transparent government. We campaigned with the commitment to listen to Canadians and to make sure we understand their views.

It was in that spirit that we took it upon ourselves to have pre-budget consultations that would be more extensive than ever before in this country. We went, as was mentioned, from coast to coast to coast. My parliamentary secretary and I started on the east coast of Canada and moved to the west coast of Canada. We made a clear objective, and we satisfied that objective of meeting with people not only from different regions across the country but from different sectors. We met with small business people. We met with farmers. We met with people from rural and urban environments. We met with chambers of commerce. We met with first nation groups. We really endeavoured to ensure that we could hear from as many people as possible.

More important, we engaged with Canadians in ways in which they wanted to be engaged; so, we had in-person consultations with people, and we also, as mentioned, had engagement over online methodology, which has not been used in the past.

An enormous outpouring of interest came. As I mentioned, 80,000 people actually listened in on our sessions online, but 150,000 people have now gone further than that and look at and clicked on them. Of importance is the number 3,400, which is the submissions from all across Canada. That is a very important number. As I mentioned, it is almost three times the amount received last year. As I said, those submissions have been from all parts of Canada, all different sectors.

We have endeavoured to make sure we have listened to Canadians and—

[The Deputy Speaker, Conservative, Bruce Stanton]

Order, please.

Questions and comments.

The hon. member for Rimouski-Neigette—Témiscouata—Les Basques.

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

Mr. Speaker, I would like to congratulate the Minister of Finance on his appointment. We have talked on a few occasions, and I am looking forward to working with him over the next few years.

I would like to begin with some comments on the much-touted middle-class tax cut. That is what the government is calling it. There are various ways to define the middle class. One way is based on median income, which divides Canadians into two equal groups, half earning income above that amount and half below. In Canada, the median income is about $31,000. If we were to expand that definition and include everyone who is not part of the poorest 20% or the wealthiest 20%, the range would be from $20,000 to about $60,000 per year.

The Liberals' proposed tax cut, the so-called middle-class tax cut, excludes virtually all incomes under $89,000. An individual earning between $43,000 and $57,000 would get only about $26 on average. Basically, this tax cut takes money away from the richest 1% and gives it back, more or less, to the richest 20%, leaving most of the 80% who earn less out in the cold.

My question is simple. What is the Liberal government's definition of the middle class?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Speaker, I would first like to thank the member for Rimouski-Neigette—Témiscouata—Les Basques for his important question.

Our tax cut for the middle class is a first step, one that we think is very important. With this first step, we will be helping nine million Canadians by lowering taxes, leaving more money in their pockets.

This is only the first step, because we know that other measures need to be introduced to help the most vulnerable Canadians. That is why, in our 2016 budget, we will introduce our second step, which is the Canada child benefit. That will be a very important step for the most vulnerable Canadians, and it will help nine out of 10 families with children.

What matters, I think, is that this measure is going to help hundreds of thousands of children currently living in poverty. This means that we can help families and children living in poverty, and at the same time, this will also help the economy. Thanks to these measures, those who are the most vulnerable and the middle class will have more money to spend, which will stimulate the economy.

[Anita Vandenbeld, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, I would like to thank the hon. Minister of Finance for reaching out and listening to Canadians and for introducing this important bill.

In my riding of Ottawa West—Nepean, we have a number of middle-class families who are struggling with child care expenses, trying to pay the bills, and trying to put away a bit for their own retirement. We have the sandwich generation, people who have grown children who have either moved back home or never left home because of youth unemployment, and they are also in some cases taking care of their aging parents.

Could the minister please tell us what other initiatives Canadians can expect in support of the middle class and those working hard to join it?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Speaker, I would like to thank the member for Ottawa West—Nepean for her question. It provides me with an opportunity to reinforce the importance of both this first step and some other steps that we are taking to help Canadians who are struggling to get by or who have not had a raise for many years.

First and foremost, this first plan is critically important. Nine million Canadians would have more money in their pockets this year as a result of this reduction in taxes. It is a critical first step, one that would aid those families who have found that their net after-tax income has been stagnant for a long time.

However, we are not going to stop there. We plan, in budget 2016, on making a very important step toward helping our economy to grow. We know that economic growth is the thing that is most important for families who are struggling to raise their children. We plan on investing in infrastructure across this country—infrastructure that can be started quickly, in many cases—to make a long-term, productive impact on our country. We know that is what is critically important, not only for middle-class families today but for their children and grandchildren. If we can make investments that would make a difference for them, it is critically important.

We will also be making investments for those people in our economy who are vulnerable and challenged, like those people from our indigenous communities and those who are most vulnerable, so that they too—

[The Deputy Speaker, Conservative, Bruce Stanton]

Order, please. We have time for a brief question and answer.

The hon. member for Pierre-Boucher—Les Patriotes—Verchères.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, I do not quite understand the Minister of Finance's plan or his explanation as to why this bill was introduced. When we look at the notice of ways and means motion and the measures it includes, we see that most of the measures that apply to taxpayers will not come into effect before they have to complete their income tax returns in April 2017. Accordingly, those measures could have been included in the upcoming budget.

Why did the government decide to do this so hastily right away, in a bill that was introduced so quickly? Was it merely to score political points?

[Bill Morneau, Liberal, Toronto Centre, ON]

Mr. Speaker, we believe it is critically important that we are open and transparent with Canadians. We also believe it is very important that we help Canadians understand their tax situation. Therefore, in introducing this measure early, we enabled people to have a good understanding of what their 2016 tax situation is.

Tax reductions start at the beginning of the year. This allows employers to actually manage their deduction process.

Tax-free savings accounts start at the beginning of the year. This allows people to plan for their financial situation.

We believe it was critically important to get this out so that people could understand their position and plan accordingly.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Mr. Speaker, it is a pleasure to rise in the House today. Having listened to the finance minister's comments, I will set aside my initial speech to respond to a couple of those comments.

The minister commented on how the middle-class tax cut would be revolutionary for Canadians. Finance Canada estimates this to be $6.34 a week in tax relief to middle-class Canadians. That is less than $1 a day. In the minds of the finance minister and the Liberals, $6.34 a week is revolutionary.

Today I will divide my speech into separate parts. In the first part I will talk about tax-free savings accounts. In the second part I will talk about the housing market in Canada relative to what tax-free savings accounts provide for individuals. The third part will deal with the middle-class tax cut. However. I could not resist the opportunity to put it in actual numbers that everyday Canadians could understand because the finance minister relied so heavily on it in his speech. Again , it would be $6.34 a week, less than $1 a day. I will then go on to talk a bit about how this would affect Canada under the current economic situation, gathering momentum toward what I will call the fiscal mess and who will pay for it.

I will wrap up my remarks with a general comment about understanding what the Liberal tax plan is really all about.

Throughout my speech today, I hope to cut through the rhetoric that we hear coming time and time again from the new government and talk in terms of real life through the eyes of hard-working Canadians, people like my constituents, who come from largely working-class families. My community of Brantford was born out of industry, hard work, and immigrants, who have worked two or three jobs to raise their families. It is not the most affluent community in the country, but it is the most resilient and one of the most hard-working. I like to describe its makeup as one of the most opportunistic and humble communities in the country.

Not all members in the House were around when the late Jim Flaherty first unveiled the tax-free saving account, but I remember it quite vividly as a historic occasion. I will take this opportunity to remind the House just how popular and widely celebrated this savings vehicle was and is today.

Experts from across the board were unanimous. Tax-free savings accounts represented the most revolutionary savings vehicle since the registered retirement savings plans of over 50 years ago. These accounts were an enormous step forward for the middle class to support a wide array of their financial goals, including but not limited to saving for school, their children's futures, a home, or a comfortable retirement.

The strength of tax-free savings accounts is that when the money is withdrawn, it carries no tax penalties. It is basically tax-free just as the name of it suggests. Another major strength is that tax-free savings accounts offer enormous flexibility, which was lacking in RRSPs. According to experts, tax-free savings accounts can fill any number of short-term and long-term savings goals. Unlike the RRSP, money in a TFSA can be used as collateral, while at the same time, investments in TFSAs are not counted as income to qualify for government benefits or pension supplements that carry a means test. Again, they are not to penalize the most vulnerable people in our society but to add to the free choice of how Canadians can save.

Experts in retirement planning are unanimous that the tax-free savings accounts are a valuable tool to reach personal retirement goals. Our government's efforts to continue growing this revolutionary savings tool represented a major step forward for middle-class Canadians, in particular, Canadians saving for their retirement.

The new government's approach to retirement savings is completely off base. On one hand, it supports the wrong-headed approach of the Government of Ontario to force all workers into a new government-sponsored pension scheme that will cut take-home pay and foist upon and force employers to cut jobs or go out of business in some cases. On the other hand, the Liberals would cut a widely-acclaimed revolutionary savings tool designed to support Canadians in whatever their own unique savings goals might be.

Tax-free savings accounts have been so popular in our country since the beginning, that over 11 million Canadians have opened accounts. However, the Liberals have have said that only the rich can afford to put more into tax-free savings plans, and this, again, is absolutely false. It is an argument that is ignorant to the real cost of saving for a home or retirement, and it is an argument that is not supported by the facts.

I will allude to the speech from the Minister of Finance. I appreciate him coming into the House and explaining the platitudes of all of this, and repeating the rhetoric of the election campaign, but let us hit the facts. The facts are, as I have mentioned, that 11 million Canadians opened tax-free savings accounts. In 2013, people earning less than $80,000 a year accounted for 80% of TFSA holders, and 60% of the individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000. Those are the facts. I did not hear this from the Minister of Finance.

Our motivation in doubling tax-free savings accounts was to build on the momentum of this incredible savings tool for middle-class Canadians in order to give them greater incentive to save and provide retirees with a higher rate of tax-free income. However, this is where we get into the argument of whether the government should be involved in making those decisions, or should individuals. We believe individuals should make those decisions, not the government.

Our motivation in doubling tax-free savings accounts was to build on this momentum. The Liberals' motivation in cutting tax-free savings accounts appears to be nothing more than looking for ways to fund a Liberal spending spree.

I will give credit to the Minister of Finance this morning. He did mention in his speech the fact that had the new limits for tax-free savings accounts been honoured as positive changes, the government revenues would have gone down, a concern by the Liberal government that this takes revenue away from the federal government, instead of thinking about middle-class working Canadians on the ground trying to save for their future and their children's future.

Cutting back tax-free savings accounts may support the Liberals in their plans for massive spending and big-government programs, but it certainly does not support the millions of middle-class Canadians who are working hard to save for their future.

I would like to move to what I believe to be at the heart of what middle-class Canadians desire. I am very familiar with this because I spent my life in this industry, building houses for individuals. This is in regard to the mortgage changes that the Minister of Finance brought out very suddenly and unannounced, without consultation. We have a clear example of how the Liberals are repairing their fiscal plans really on the back of a napkin, without thinking about the long-term financial consequences for Canadian families.

Last month, out of nowhere, the Minister of Finance announced new mandatory minimum down payments on home purchases. We know that buying a home is the most important financial decision most Canadians will ever make and that achieving home ownership is a bedrock issue when we are talking about supporting the middle class. Therefore, one might expect that the finance minister would actually consult with those who know the housing market best before making a massive change, doubling the minimum down payment on some homes.

For example, the Canadian Real Estate Association is Canada's top source of accurate, up-to-date information on statistics on the Canadian real estate market. I know it would have been delighted to have offered its input to the minister on the minister's mortgage changes and would have been eager to work with the new government on issues like housing affordability. Yet it was not consulted.

The Canadian Home Builders' Association employs 800,000 people in the country. It builds approximately 200,000 new homes every year for Canadians. It has such a huge multiplier of economic benefit and spinoff to it, 10 times whatever the value of spending is on housing. It was not consulted.

The minister said that he made these changes to cool the Vancouver and Toronto housing markets. If he had taken the time to consult, he would have realized there were actually eight major Canadian housing markets where the average home price was already more than $500,000.

The Liberals say they support the middle class. However, with a stroke of a pen, the finance minister has made it harder for young people and families to achieve home ownership in places like the Fraser Valley, Victoria, Milton, Mississauga, Markham, Calgary, and Fort McMurray. He has cut many families out of the housing market altogether. He is telling millions of young families that they will now have to save at least $10,000 to achieve home ownership. At the same time, he is cutting the tax-free savings account in half to $5,500.

We have a government on one hand telling us that average Canadians cannot afford to put away $10,000. On the other hand, it is telling us that Canadians have to save $10,000 to buy their new homes. This is just one example of why cutting the tax-free savings account, a revolutionary savings tool, will hurt middle-class Canadians.

There was much in the finance minister's speech about the middle-class tax cut, so let me address that as the third section of my speech today.

Another core part of Bill C-2 is the government's changes to Canada's middle and upper-class tax brackets. What was supposed to be a simple change to the tax code has created a long-term financial mess for Canada. It is worth noting that the tax changes before us would not have anywhere near the impact the Liberals have promised.

The Liberal tax cut most benefits those in the high end of the second highest tax bracket. Those who make close to $200,00 would benefit the most. In fact, the PBO says that the reduction in the second tax bracket will benefit the top 30% of income earners in the country. Those are facts from the Parliamentary Budget Officer. They are not my comments, not my party's comments, not the opposition's comments, but the government's objective overseer of all things economic. For the average Canadian family, this means very little. Based on the finance department's own estimates, and I mentioned this before, the new Liberal tax plan amounts to, on average, $6.34 a week for those who qualify.

Even more troubling is how these tax changes add to a growing trend of this new Liberal government that it cannot get a handle on its baseline numbers.

We had this yesterday in the House of Commons during question period. Actually, it began on Tuesday in the House of Commons during question period, when the Parliamentary Secretary to the Minister of Finance stood up in this House and wilfully misled the House in making a statement that the previous Conservative government left this country in a deficit position. In fact, the finance department and the PBO have put online for all Canadians to see the actual facts and the numbers, where we left the government with a surplus of $600 million. All Canadians can go online to see that if they choose.

Again, those are not the opposition's numbers. Those are the baseline numbers on which the government came to power and had to deal with on day one, a $600 million surplus, not a deficit.

The tax changes we have before us today are not what the Liberals campaigned on. They promised that the tax cuts would be part of a plan that holds the deficit to $10 billion, a promise that they have already thrown out the window, and they campaigned on a commitment. This is the one that is so vivid in many Canadians' minds, the commitment that the tax cuts would be revenue neutral.

The new Prime Minister went across the country and said, “We'll take the money from the rich and we'll give it to the middle class for the income tax cuts, and do not worry, it will not come out of the Treasury. It will be a revenue-neutral deal.” The Prime Minister repeatedly and directly stated that he would introduce, and I quote, a $3-billion tax cut for the middle class paid for by a $3-billion increase on high-income earners. However, the Liberals got their numbers completely wrong, and this tax cut will not be revenue-neutral, not even close.

By the Minister of Finance's own admission, there will be a revenue shortfall of over $1 billion. This is money that will be taken from the Treasury, another $1 billion, plus. In fact, some of the objective observers and economists have looked at it, and I will give the House these numbers. The Institute for Research on Public Policy says the shortfall will be even greater, creating a revenue gap of closer to $1.5 billion, and the C.D. Howe Institute, which the Minister of Finance once chaired, said the Liberal plan will fall short by nearly $2 billion.

Where is that money coming from? It is coming from existing revenues, that puts us into a further deficit, so it already looks as though we are projecting a larger deficit.

I will wrap up by saying that Canadians are concerned and worried about how quickly the Liberals have managed to put the country into a financial hole. Their bad math and the faulty projections behind the measures in Bill C-2 help illustrate why.

Finally, I would like to move an amendment. I move:

That the motion be amended by deleting all the words after the word “That” and substituting the following: “this House. declines to give second reading to Bill C-2, An Act to amend the Income Tax Act, since the principle of the Bill: (a) fails to address the fact, as stated by the Office of the Parliamentary Budget Officer, that the proposals contained therein will not be revenue-neutral, as promised by the government; (b) will drastically impede the ability of Canadians to save, by reducing contribution limits for Tax-Free Savings Accounts; (c) will plunge the country further into deficit than what was originally accounted for; (d) will not sufficiently stimulate the economy; (e) lacks concrete, targeted plans to stimulate economic innovation; and (f) will have a negative impact on Canadians across the socioeconomic spectrum.”

[The Deputy Speaker, Conservative, Bruce Stanton]

The reasoned amendment is admissible.

Before we go to questions and comments, I noted, in the remarks by the hon. member for Brantford—Brant the use of the term “wilfully misled” in reference to comments by the finance minister. Such expressions are usually considered unparliamentary and I wonder if the hon. member for Brantford—Brant might choose to withdraw that comment or rephrase it.

[Phil McColeman, Conservative, Brantford—Brant, ON]

I will choose to withdraw those comments, Mr. Speaker, and I apologize. I was not aware that those words were unparliamentary.

[The Deputy Speaker, Conservative, Bruce Stanton]

I thank the hon. member for the correction.

Questions and comments, the hon. Parliamentary Secretary to the Prime Minister.

[Peter Schiefke, Liberal, Parliamentary Secretary to the Prime Minister (Youth)]

Mr. Speaker, I would like some clarification, because I am somewhat confused. In my colleague's remarks, he spoke about the fact that many Canadians across the country are having a hard time making ends meet. It is something that all of us in the House recognize and understand. Yet he denigrated the fact that the government would like to put hundreds of dollars back in the pockets of families who need it most, while at the same time mentioning that the limit of the tax-free savings account before the Liberals took power was at a level where only 7%, as the Minister of Finance pointed out, could actually use the full amount.

My question is this. How does he justify to struggling Canadians the fact that he does not see the importance of putting hundreds of dollars back in the pockets of Canadians who need it most and yet wants to keep in place a system that only 7% of Canadians could take advantage of?

[Phil McColeman, Conservative, Brantford—Brant, ON]

Mr. Speaker, I think the member completely misconstrued what I was talking about in making the comparison that he made.

First, let me say again, which I have said over and over again, what this actually means to the average person in the middle class is $6.43 a week. The finance minister said this is a significant thing to help people save, invest, and help their financial situation. Conservatives contend and my speech contends that it is not, that it is less than $1 a day. In fact, in the grocery store now, it is less than the cost of one head of cauliflower. That is the current economic situation.

As far as the tax-free saving account goes, the one beauty in how it was designed is that it is cumulative. The member is saying that every year someone must put in the maximum and is using that statistic to skew the numbers. The fact is that the numbers accrue to individuals in this country as a savings account to be used in the future, when economically available to do so, which allows personal choice in their future.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, I know the member is defending the Conservative viewpoint quite well, but I want to make the House aware of a few things.

First, the definition of “median” is the number separating the higher half of a data sample from the lower half. Currently, the median income in Canada is about $31,000, so if we are truly talking about the middle class, $31,000 a year is the number we should really be talking about.

Second, with regard to his comments about the TFSA, I know very few people in my riding with incomes between $30,000 and $40,000 who can afford to put $10,000 a year away.

I would also like to draw the member's attention to the comments made by the parliamentary budget officer last year. The parliamentary budget officer said that by 2060 gains for high-wealth households are projected to be twice the median and 10 times that of low-wealth households. It is the wealthy who will benefit from $10,000 a year, not average Canadians, and that is why New Democrats support the lowering of the TFSA to $5,500. I would appreciate the member's comments in response to the PBO.

[Phil McColeman, Conservative, Brantford—Brant, ON]

Mr. Speaker, I will use the actual numbers that are used by the sources of information for my speech.

I mentioned it at 60% but it is actually 73.2% of the persons in income categories below $60,000 who have placed the maximum in their TFSAs, and who have taken out TFSAs. These numbers can be represented in different ways, but what matters are actual dollars into savings accounts and the number of savings accounts.

My second comment is that I am well aware of median, and above and below, and what this tax plan that the Liberals have brought in does. On the tax break for the middle class, it benefits those who are closest to $200,000 of income. They get the maximum.

I underscore the member's point. The Liberals have completely ignored what most people would consider to be the middle class.

[The Deputy Speaker, Conservative, Bruce Stanton]

The hon. member for Brantford—Brant will have five minutes remaining for questions and comments when the House next resumes debate on the question.

The House resumed consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the second time and referred to a committee.

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

Mr. Speaker, I am very pleased to rise in the House as the NDP's finance critic to debate Bill C-2, which was introduced in December and which is now being debated in the House.

I had the opportunity to ask the Minister of Finance a question earlier today after his opening remarks. Unfortunately, I did not get an adequate answer. I did not get an answer to the fundamental question raised by this bill: how does the Liberal Party define the middle class?

This is a fundamental question, because since the election, the Liberal Party, which now forms the government, has boasted about making tax cuts for that much talked-about middle class. However, as the Parliamentary Budget Officer's report very clearly and succinctly states, the middle class will get nothing from the tax cuts the Liberal government is promising.

With Bill C-2, there is the good and there is the bad. I will start with the bad, and then talk about the good.

Any definition of the middle class must be based on a common definition. One way to define it would be to use the median income, which is $31,000 a year per person in Canada. That means that half of Canadians earn less than $31,000 a year and the other half earns more than $31,000 a year.

Will someone earning the median income benefit from this tax cut? No. In fact, those earning $45,000 or less a year will not benefit at all from the tax cut promised by the Liberals. Even those earning between $45,000 and $90,000 a year will only receive part of what was promised. The devil is in the details. In reality, someone earing $50,000 will probably only receive twenty or thirty dollars.

Taxpayers earning more than $90,000 a year will benefit the most from this tax cut. Even someone who earns $200,000 a year will receive the maximum from this tax cut. An individual would have to earn $210,000 a year before receiving less, due to the new tax bracket, but they would still still receive a large part of this reduction.

If we take this definition of the middle class, whose members earn around $31,000 a year, and exclude all those whose income is among the top 20% and those whose income is among the bottom 20%, then we have a middle class that makes up 60% of the population. The range of income of that middle class would be between $20,000 and $60,000 a year. A very small portion of those people would benefit only slightly from the tax cut.

If we take the median income, people will receive nothing. If we take the income that everyone associates with the middle class, in other words, $45,000, people will receive nothing. Those who will receive the biggest slice of the tax-cut pie are the top 20% income earners. That is not the middle class.

When the ways and means motion was tabled, we made a counter-proposal because if we really want change, and considering that on October 19, Canadians voted for a tax cut for the middle class, then this tax cut has to be given to the middle class.

That is why we proposed a change to the Liberal proposal. Instead of targeting the second tax bracket, as the Liberal government wants to do, we should change the first tax bracket so that a larger portion of the population can benefit from such a tax cut. Our proposal seeks to reduce the first tax bracket from 15% to 14% to ensure that all taxpayers, those who pay income tax, can benefit from this change.

Our proposal seeks to give people earning the median income a tax cut as high as $250 annually, as those people are currently receiving nothing.

Someone who earns $200,000 per year and who will get a tax cut worth about $600 would be forced to pay a portion because of the higher tax rate and the new bracket that we would leave in place.

It is clear that the Liberals' proposal is merely a smokescreen. In his response to my question about the Liberal Party's definition of the middle class, the minister did not answer the question. He simply said that this is just the first step and that the next step is the child benefit. We have not seen that yet. Maybe it will actually be a good thing for families with children, or maybe not—we will see. However, that does not answer my question.

This measure will not really help the middle class at all. A child benefit might help families with children, but it will not do a thing for single people, couples without children or seniors. Any of those people who earn less than $45,000, and especially if they earn less than $90,000, will not benefit at all from the Liberal promises for the middle class, even if their income is lower.

It is important to look at everything the Liberals are proposing. We believe that our proposal would help the middle class much more effectively than the Liberal measure, which, as I said, will benefit only the top 20% of income earners and do very little for everyone else.

I began by talking about the bad, and there is a lot of it, but now I would like to talk about the good, and one key measure that we support in this budget. I am talking about dropping the contribution limit for tax-free savings accounts, or TFSAs, from $10,000 to $5,500. We regard TFSAs as a useful tool for saving, and they should be used for that purpose. However, what the previous Conservative government proposed, raising the contribution limit to $10,000, is very harmful to Canada's public finances and does very little to help taxpayers and investors who want to use that tool.

This is because anyone can open a TFSA, and among those who can afford to do so, only 7% are contributing the maximum at this time. This measure is extremely costly. The numbers speak for themselves. In 2020, if the limit stays at $10,000—and it could even be indexed later on—it is estimated that it will cost the Canadian treasury $2.3 billion, all for a single investment tool that benefits only a small minority of Canadians. In 2030, 10 years later, the lost revenue or tax expenditures are estimated to be $9 billion. In fact, the parliamentary budget officer, whose job it is to study the impact this would have on the Canadian treasury, went as far as to say that in the medium term—I am talking about 2040-50, since the horizon might well extend that far ahead—tax expenditures, which is income lost by the Canadian government, will account for nearly 0.7% of GDP.

I would like to point out that this House is not budging and that previous governments did not budge on the issue of international aid and reaching the target, which was set at 0.7% of GDP under the agreements. The previous government considered it to be too costly to move forward on that. We were never even close to the 0.7% target. According to the parliamentary budget officer, with the TFSA alone we would reach 0.7% of GDP in foregone revenues, those revenues that would no longer be paid to the Canadian government, by 2040-2050. The TFSA is a savings vehicle that we fully support. However, if we were to head in the direction that the Conservative government proposed, it is a measure that could be extremely debilitating for Canada's fiscal capacity and its ability to provide the quality programs and services that Canadians expect.

As I was saying, the TFSA is a beneficial savings vehicle. The $5,500 contribution limit, indexed to inflation in $500 increments when this amount is reached, is quite adequate. Only 7% of Canadians currently contribute the maximum. If we look at just individuals who have already opened a TFSA, only 17% of them contribute the maximum. Increasing the contribution limit will only help the 17% who already contribute the maximum. Thus, this is a very expensive measure that very few people take advantage of.

If I am dwelling on the tax-free savings account, it is probably because outside of the tax cut in Bill C-2, it is the key issue in terms of finances. The TFSA is a useful tool for promoting savings and a tax shelter appreciated by those who use it properly. However, it could also become a means of tax avoidance, and that is what we must prevent.

I say that, because when we are talking about $10,000, which will one day be indexed, a lot of Canadians see the tax-free savings account as an account where they put after-tax money, which will yield non-taxable interest. They can then withdraw that money as they see fit, which is not a bad thing. However, what these people often do not know is that you can put many things other than cash in these accounts. You can put in stocks or financial instruments, and anyone who can afford it can put up to $10,000 in stocks, for example, into a tax-free savings account and enjoy capital gains that will not be taxed within that account.

Right now, 50% of capital gains are taxed, at a rate of about 40%. The TFSA can be an attractive vehicle for those who want to avoid paying tax on capital gains and are able to contribute up to the limit of $10,000, in which case they do not really need to save.

In that sense, the TFSA can be useful for Canadians, and that is why we support it. However, we want to prevent these accounts from becoming a way for people to avoid paying taxes, and that is why we oppose increasing the contribution limit to $10,000. We think that the $5,500 limit is a perfectly adequate way of helping Canadians who want to ensure their future financial security.

Let us remember that there are also other savings vehicles, such as RRSPs. These private savings are one of the main ways to ensure one's financial security. Others include company pensions, the Canada pension plan, the Quebec pension plan, and old age security, which can be supplemented with the guaranteed income supplement.

If we tally the good and bad points that I talked about earlier, it is clear that the Liberals' decision to reduce taxes for the richest 20% and increase them for the richest 1% is not an appropriate measure if the government really wants to help the middle class.

Eventually, under an NDP government, there will be a way to review this decision and really help the middle class. We are extending an olive branch to the government here, because the other thing that could be done is to make the necessary changes in committee so that we can come back to the House and adopt a measure that will really help the middle class.

We are therefore going to resubmit this proposal in committee for review. It is largely based on the excellent work done by the parliamentary budget officer.

Lowering the TFSA limit is extremely important from a tax perspective in order to ensure that the Canadian government can offer these services, function properly, and ultimately, or so we hope, make significant reinvestments in areas where the Conservatives cut funding to the bone or even deeper.

That is why we will support the bill at second reading. We hope the government and its members will be willing to listen in our committee meetings. This would eventually open the door to amending the provision to lower taxes for the richest 20% of Canadians and instead helping 80% of Canadians, many of whom are getting nothing right now. Of course we will support the second measure, which is to lower the contribution limit for TFSAs.

This is the first bill introduced in this new Parliament. I truly hope the government will take a new approach. I think all parliamentarians have already noticed a change in tone and dynamics, which is very much appreciated. However, after four years of hearing meaningless slogans and catchphrases to try to justify things that are simply not supported by the facts, we might still be in for another four long years.

This morning, when the Minister of Finance introduced Bill C-2 and delivered his speech justifying the tax cut, I was hoping he would at least understand or acknowledge the auditing work done by the parliamentary budget officer, but that was not the case.

I wish he would accept a fact that has been proven over and over. The middle class will not benefit from these measures; only the richest 20% will. The facts prove it. The parliamentary budget officer proved it, and we ourselves proved it before the report was released. He wants to stay the course and perpetuate the myth that the middle class will benefit. This is a snow job.

A lot of Canadians are going to be surprised and disappointed when they fill out their income tax returns. They thought they voted for a party, the Liberal Party of Canada, that would give them a tax cut, but they are going to find out that they are not eligible. A good 80% of people will find out that this does not apply to them. I predict some nasty hangovers for them.

I sincerely hope that the government will pay more attention to the opposition parties, especially when we are trying to help by suggesting improvements that should help the government achieve its goals. I would like it to say so publicly.

The most disappointing thing about the Minister of Finance's speech is the fact that he is trying to deal with the problem by sending up yet another smokescreen. We have not yet seen the Canada child tax benefit, which is really just going to be a remix of existing programs. That is still nothing but a promise.

The fact is that only couples with children and single-parent families will benefit from this money. Those people will be happy to get some extra money. Couples without children, singles without children, and seniors, even the poorest of them, even those who earn, say, $45,000, $30,000, $20,000, or $10,000, will get nothing. They will not get a tax cut, nor will they benefit from the Liberals' upcoming measure.

I would like the Liberal government to be consistent, to respect the Canadian public, and to tell the truth about the real impact of the measures it is introducing. This was the government's first opportunity to do so. I think it has missed its opportunity, but it will have another chance in committee. I hope that the government will be listening. If the government continues in this direction, I think that the next four years will be very long and full of hype, catch phrases, and empty rhetoric, but very thin in terms of measures that will truly help Canadians, especially middle-class Canadians and those with such low incomes that they struggle to make ends meet.

I look forward to questions from my colleagues in the House, but I want to reiterate that we will support the bill at second reading, because it maintains the TFSA contribution limit at $5,500, which has considerable tax implications, and we will try to make changes to the bill in committee.

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

Madam Speaker, I listened to the member's comments, and I do not know to what degree he is being fair when talking about the overall picture being portrayed in the legislation we are debating. There is no doubt that, through this legislation, the government is saying that those individuals making in excess of $200,000 a year will be paying a little more. There is no doubt it indicates that millions of Canadians will receive tax breaks in this fiscal year.

If we take into consideration the Canada child benefit program that the member made reference to, there is no doubt that the bill would help put into place a substantial benefit for Canada's middle class. A major part of our party's platform was that we were going to assist and give strength to Canada's middle class. By doing that we would be giving strength to Canada's economy.

When we look at a holistic approach on this particular bill, do the New Democrats feel that overall this is a bill that is worth supporting? It does ensure that there is less inequity overall. There is always room for some improvement in terms of the holistic policy, but in terms of a step forward the, bill does a lot for Canadians. This is something all members of the House should support.

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

Madam Speaker, in fact, the numbers indicate that the bill does a lot for the 20% of Canadians with the highest incomes. It does nothing for 80% of Canadians, who will get little to nothing out of the tax cuts that were promised.

Compare the Liberals' proposal to ours, which seeks to change the first tax bracket in order to help far more people. The median income is around $31,000. People earning that amount have nothing to gain from the tax cut the Liberals promised, but would receive $200 through our proposal. An individual whose income is between $11,000 and $45,000 has nothing to gain from the Liberals' proposal, while they would receive $170 on average from ours.

The parliamentary secretary said that people earning $200,000 will start to pay more. However, under the Liberals' proposal, a person earning $210,000 a year will get a net total of $279. Under our proposal, they would pay an additional $66 in tax.

That is why I think the government is using smoke and mirrors when it talks about the middle class, since the tax cut they are promising does not help the middle class. It does nothing for 80% of the population. It redistributes supplementary income from the top 1% to 20% of the wealthiest Canadians. We do not think this measure helps the middle class.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Madam Speaker, I appreciate the comments from the hon. member. Out of respect, I will not try to say his riding's name, because I will not be able to do that.

I am a new member of Parliament, and I was disappointed by the lack of interest the government across the way has shown. The only member who actually looked up while the member was talking was the member who asked the question. The Minister of Finance did not answer my question either; the Liberals threw out numbers of 80,000 and 150,000. Yesterday, the hon. member for Surrey—Newton said the government went and consulted with six communities across Canada.

My question is about the geographic data of the interest from Canadians and the consultations the government apparently has had with Canadians. That is what is being said. I have a problem with this because the Liberals are throwing these numbers out there and there is no substantive, quantifiable data that tells us where they are getting this data and information from. It can come from social media, online consultation, or anywhere.

My question for my hon. colleague is this. Do you have concern as well that perhaps some of this information and the consultation might be coming from third parties, foreign interests, or foreign parties from across our borders?

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I want to remind the member for Cariboo—Prince George that, when asking his question, he should address it to the Chair and not to individual members.

The hon. member for Rimouski-Neigette—Témiscouata—Les Basques.

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

Madam Speaker, we do have concerns about how the government is conducting its pre-budget consultations. They are not necessarily the same concerns, but the government is holding its own pre-budget consultations, just like the previous Conservative government did. That is perfectly legitimate, but the consultations are limited because they are organized by the government.

We asked the Minister of Finance to have the Standing Committee on Finance hold formal pre-budget consultations. We recognize that there is limited time because the committee has not yet been struck. However, we proposed an intense schedule for the Standing Committee on Finance, which would meet for two or even three weeks, from morning to night if need be, so that each party, including the government, could hold public consultations that would be open to all Canadians. That would provide input other than that sought by the government.

Naturally, if the government organizes its own pre-budget consultations it controls the entire process, including the selection of witnesses. It is important to recognize the role of the Standing Committee on Finance, which has members from the three recognized parties, and to ensure that Canadians in all situations and from all walks of life and all philosophical backgrounds are heard in the House, even if within a shorter period of time. I believe that the Standing Committee on Finance is prepared to do this work. All we need is for the government to agree.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Speaker, I thank the member from Rimouski-Neigette—Témiscouata—Les Basques for his excellent presentation.

I would like to add the comment that we saw, under the Conservatives, Canadian families struggling under an appalling record debt load. Canadian families were carrying, under the Conservatives, the highest and heaviest debt load in our nation's history. That is because the Conservative economic policy is kind of like an oxymoron. It just did not work for Canadians.

The Liberals have been in office 100 days, but that debt load has actually worsened. What they did to deal with the appalling level of debt for Canada's families, particularly middle-class families, was to put in place a measure, as the member said so eloquently, that actually does not help the folks in the middle class at all, the folks who have that average income. The folks earning $40,000 a year are not being helped at all, even though they are dealing with a crisis in health care, fewer and fewer funds available for them and their children, record levels of student debt, and record levels of family debt.

I would like the member to explain to me and Canadians why it is that the Liberals chose to help people earning over $200,000 a year—a stockbroker on Bay Street benefits from this program—but have not chosen to help so many middle-class families that actually need the help and support.

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

Madam Speaker, I would like to thank the member for Burnaby—New Westminster for his question.

I hope that the Liberals will give us an answer to that question. I think that most Canadians will be very disappointed when they file their income tax return because they will not get any of the money promised to them during the election campaign.

Does the government really think that the average voter who heard about a tax cut for the middle class during the election campaign understood that that tax cut would apply only to families that earn $45,000 a year and would be most beneficial to families that earn $89,000 a year? No. Voters thought that there would be a tax cut for the middle class. Many Canadians who consider themselves to be and are in fact part of the middle class are excluded from the measure proposed by the Liberals.

When the Parliamentary Secretary to the Leader of the Government in the House of Commons asked me his question, I answered that only the richest 20% of Canadians would benefit.

When looking at how this would affect couples, Luc Godbout, an eminent tax expert in Quebec, determined that if a couple had an estimated or combined income of $250,000 a year, they could receive a tax break of up to $1,120. However, a couple with a combined income of $75,000 a year, who are arguably part of the middle class, would receive an average of zero to four dollars.

I do not think that the Liberals defined middle class properly. I hope that they will consider the arguments that we have already made and that we will continue to make, as well as the arguments presented by the parliamentary budget officer, so that they can really address the concerns of the middle class.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I did not have a chance the last time I spoke in the House to thank the constituents of Coast of Bays—Central—Notre Dame for putting me back in office. I would like to do that now. The vast majority of them have been doing so for five elections now. I keep testing the limit every time I run out there. Nevertheless, I want to thank them for their generosity and for giving me the opportunity of a lifetime to represent them in the House of Commons in the nation's capital. Indeed, it is the opportunity of a lifetime for all of us to sit in the House of Commons.

I am honoured also to talk about a bill this morning that we talked about much during our campaign. We talked about it as a way of helping the middle class of this country grow Canada's economic engine. We faced challenges as we started the campaign, and the challenges continue to this point. Right now, we have challenges in certain aspects and geographic areas of this country that are certainly unprecedented. I talk of the price of oil and natural gas. I also talk about the fact that many of the provinces also find themselves in a precarious situation given the fact that a lot of their revenues are based on royalties and taxes they collect from this particular sector. We also have a low dollar, something that for many people may produce some opportunities but in other cases could provide many challenges. It too is at an unprecedented level of less than 70¢ to the American dollar now.

I want to talk today about Bill C-2 and some of the measures we hope to bring forward that would provide some tax relief to Canada's middle class. As I said before, the middle class is the economic engine of this country. When I say the middle class is the economic engine of this country, I am talking about the individual talents of those individuals and their ability to provide a living for their families.

For example, in my area of Newfoundland and Labrador the greatest exports right now in dollar value alone would be seafood exports. We also have mining and forestry and many other sectors with great exports. To be honest, one of the greatest and most exciting exports that we have right now in central Newfoundland, the area that I predominantly represent, is the people and their talents.

We do have skilled people in the oil and gas sector but we also have many skilled people in other sectors such as mining. They have a skill and a trade that they export around the world. Each and every week I travel from my home riding to Ottawa or to other parts of the country, I run into people that I have grown up with or I talk to people that I have met in my tenure as a member of Parliament. These people talk to me about the areas where they have been or where they are going, such as Russia, the North Sea, northern Africa, or Alberta, Saskatchewan, and British Columbia right here in Canada. In the field of hydroelectricity, they have travelled to Quebec and Manitoba. It is phenomenal how they do this. They travel vast distances. They go away for weeks at a time then return home and bring that wealth home with them. This a precarious position for them right now given the situation in the oil and gas sector. Some people would say that the reason they have created that value is the oil and gas itself, but I would disagree. What created that value for them was their own talent and ability to adjust to the world markets. On the one hand, I am worried about the price of oil and gas in this country and around the world, but on the other hand I am not worried because of the versatility these individuals have shown over the past while. The majority of them are certainly in that middle-class income bracket.

I am pleased to participate in this important discussion on the government's middle-class tax cut. My objective today is twofold. First, I want to provide the House with a quick assessment of our economic and fiscal situation and, second, I want to tell members why the middle-class tax cut would help grow our economy.

As we embark on an agenda of economic growth and long-term prosperity, there is no doubt that we are facing considerable headwinds as I discussed earlier. Globally we continue to experience what International Monetary Fund Managing Director Christine Lagarde famously called “the new mediocre”. In its latest economic outlook in January, the IMF expects global growth to pick up modestly to 3.4% in 2016 and 3.6% in 2017. This is down point two percentage points for both 2016 and 2017, compared to its October 2015 world economic outlook.

Though the recent performance of the U.S. economy is encouraging, the European and Chinese economies are cause for concern. We have seen this happen in Europe now for the past seven years and most recently with the Chinese economy. Although China's GDP is very large and is still growing, it is not growing as much as it did in the past four to five years. Many if not all of of us here have experienced the benefit of global trade and have had conversations with people in business in our ridings who deal with many Chinese companies. Members, of course, know of what I speak.

As I mentioned earlier, global crude oil prices remain at less than half of what they were in mid-2014 due to persistent global oversupply and softening demand. What is happening beyond our borders has real and tangible consequences for us all.

In Canada, our economic performance in the first half of 2015 was poor, mainly due to the collapse of oil prices in 2014. Consider this. Last April, just to put some numbers on this, the government projected an oil price of $71 a barrel by the end of this year. As I speak, oil is now trading at about $30 a barrel, less than half the projected price. As I mentioned earlier, coming from Newfoundland and Labrador, I know how we are hit directly and indirectly by the resulting large hole in our provincial budget. We are directly hit, of course, because our offshore exploration has diminished and it is our offshore supply that directly benefits us in the way of royalties and taxation for our province, and indirectly through the employment that it creates, including for individuals who travel around the world in this particular sector.

We know that growth will be lower than was expected in the last budget projections. This has important implications for our currency and our fiscal situation. The good news is that real GDP growth resumed in the third quarter of 2015. The IMF, it its latest economic outlook released January 19, expects growth in Canada to pick up over the next two years in relation to 2015. We also maintain an enviable position of having a low debt-to-GDP ratio, abundant natural resources, and one of the most educated, intelligent workforces in the world.

Our policies will strike a balance between fiscal responsibility and controlled investments that promote economic growth. One of the most important components of this is restoring middle-class economic progress, which is, as we all know, the backbone of our economy and has been since our inception for close to 150 years now.

This is why one of the government's first orders of business back in December when we arrived was to table a notice of a ways and means motion to cut taxes for the middle class. This was the right thing to do for our economy. The proposed middle-class tax cut and accompanying proposals will help make the tax system fair so that all Canadians have the opportunity to succeed and prosper.

Specifically, Bill C-2 proposes, first, to reduce the second personal income tax rate to 20.5% from 22%; second, to introduce a 33% personal income tax rate on individual taxable income in excess of $200,000; and third, to return the tax-free savings account annual contribution limit to $5,500 from $10,000 and reinstate indexation of the TFSA annual contribution limit.

I will expand on the three points.

The first one is the reduction of the the middle-income tax bracket, which is taking effect January 1. It is expected that about nine million Canadians will benefit from this measure in 2016. Single individuals will see an average tax reduction of $330 per year, and couples will see an average tax reduction of $540 per year.

Second, the government is introducing a new personal income tax rate of 33% that will apply to individual taxable income in excess of $200,000 per year. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax rates. As with other bracket thresholds, the $200,000 threshold will be indexed to inflation.

Third, the government is returning the tax-free savings account annual contribution limit to $5,500 from $10,000, effective January 1, 2016.

These are some of the issues that we discussed during the campaign, including my colleague for Cape Breton—Canso. He was just here and talked incessantly about how wonderful his riding is and how hard it is for him to get around his large riding. He likes to talk about all these new policies we are bringing in to help the middle class in that beautiful area known as Cape Breton.

I can reassure members that the change to the TFSA is not retroactive. The TFSA annual contribution limit for 2015 will remain at $10,000. However, returning the TFSA annual contribution limit to $5,500 is consistent with the government's objective of making the tax system fairer and helping those who need it the most. When combined with other registered savings plans, which we are all familiar with, the $5,500 TFSA annual contribution limit will permit most individuals to meet their ongoing savings needs in a tax efficient manner.

Indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time. This is referring to the consumer price index and how we will tie the limits to the increase in inflation.

Finally, before I conclude, I would like to highlight some of the other measures that are included in today's legislation, Bill C-2.

The bill proposes to change the current flat top rate of taxation rules applicable to trusts to a new rate of 33%, which is in line with the 33% tax rate as we proposed. The bill proposes to set the tax on split income to the new rate of 33%. It would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate. Finally, it would increase the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the proposed new 33% personal income tax rate.

Also, the government will introduce proposals in the upcoming budget to create a new Canada child benefit, which will take all of the benefits and put them into one tax-free Canada child benefit. This is something that has been talked about in my riding for quite some time. The biggest complaints were about benefits from government that suffered from tax clawbacks, which affected all benefits no matter what they were. We have now put forward this Canada child benefit that puts the tax aside for the sake of and benefit of our families. I look forward to the budget in the spring to talk about this.

Of course, nowadays there is an added pressure regarding things such as child care and child spending. Therefore, this is one of the proposals I look forward to in the upcoming budget that we talked about in the campaign, which Canadians overwhelmingly accepted as a way of financially helping themselves during their child-rearing years.

All these initiatives demonstrate that our sights are clearly set on the future. This legislation will help strengthen the middle class by putting more money in the pockets of Canadians to save, invest, and grow the economy. More broadly, it will help grow our economy in the context of a difficult global economic climate so that all Canadians benefit.

I heard some of the debate earlier, and I appreciate some of the concerns the opposition put forward. Of course, we have taken a strategic approach to provide a benefit to middle-class Canadians, especially those facing tough times.

To address these tough times in the future, I look forward to the budget, as I mentioned earlier, with things such as the Canada child benefit, which I think will enhance a way of life for those bringing up children now. For those who are suddenly unemployed, the situation is very difficult. As we deal with the situation in the next few months and certainly within the next few years, my colleagues, no matter what party they belong to, would certainly agree with me that we have challenging times ahead.

Again, for those provinces dependent on revenues from the oil and gas sector, and I speak of Alberta, Saskatchewan, and my own province of Newfoundland and Labrador, there are difficulties ahead, certainly when it comes to social programs. There will certainly be added pressure, but we believe that measures taken, such as those contained in BillC-2 and in the upcoming budget, will help to alleviate some of those concerns.

For the budget coming up, consultations are going ahead. I would advise all members to conduct consultations in their ridings, as I will. It is a perfect opportunity to get back to our ridings as members of Parliament. I am travelling to 15 communities in an area the size of Germany. I wish all members the best, because I know that travel can be very taxing on our families, but it is certainly worth it.

In my situation, I know what I will hear. I will hear a lot about the resource sector. I am going to hear a lot about the challenges that lie ahead but also about things like skilled trades and infrastructure spending to help spark the economy and to help communities deal with transit and their future investments.

I will leave it at that for now. I look forward to the questions and comments from my hon. colleagues.

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

Madam Speaker, part of the frustrating part of this, as a middle-class Canadian myself, is to hear the arguments of the Minister of Finance and to hear the arguments of the hon. member, as though somehow they are giving a gift to the middle class.

David Macdonald, who is a senior economist with the Canadian Centre for Policy and Alternatives, broke it down. The reality is that for those Canadians making $48,000 to $52,0000 a year, the average saving will be about $51 a year, or as my hon. colleague for Brantford—Brant said, about $6 a week, roughly, or less than that, in fact. From $62,000 to $78,000, it will be $117 a year. He classifies what comes as the next level as the upper middle class. Those making $124,000 to $166,000 will gain $521 a year, and then from $166,000 to $211,000, it will be $813.

In the meantime, Canadians earning over $211,000, granted, will see a tax increase of $2,912, but in fact, it is a shell game. It is a shell game the Liberals are putting over on Canadians, because the Parliamentary Budget Officer himself said that there would be an $8.9 billion revenue deficit within six years.

We are providing tax breaks to Canadians now. Will the member tell us how Canadians will pay for this going forward, with the debt and deficits that will be created as a result?

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I am assuming that my hon. colleague is new to the House. I have yet to hear a Conservative talk about the drawbacks of a particular tax break. That is a new one to me. Nevertheless, I will address the issue at hand.

During the campaign, we talked about how the tax savings measures we are talking about are a benefit, as most economists would say, to the middle class. I would like to remind him that the Canada child benefit is going to provide a great benefit to all Canadians with young families, as we talked about earlier.

The Conservatives continue to brag about the 2% off the GST. I was wondering if perhaps my hon. colleague would like to stand now and talk about the benefit that provided.

We are talking about thousands of people being lifted out of poverty, despite the numbers he puts out there.

In this particular situation, this is a great way for us to begin to invest in the middle class by providing the tax relief contained in Bill C-2 and by providing the benefits we will announce in the budget. I guess the overall answer for that is to stay tuned.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, this will interest my hon. colleague, who I have known for many years. He is a very likable fellow and a decent guy. I feel bad for him that he is having to do this job, which is the Liberal attempt to treat Canadians like they are rubes at a country fair.

When the Prime Minister talks about the middle class, who is he talking about? He is not talking about the 18 million people who pay taxes.

My hon. colleague says the Liberals are worried about people who are facing tougher times, and I am looking at who will benefit from this and who will not. If people are in the top 30%, they will make out like bandits. If people are in the top 10%, they are going to love these guys.

However, if people are getting by as office workers, there will be zero dollars for them. A hairstylist earning $27,000 a year will get nothing. A social worker earning $43,000 a year will get nothing. A fish plant worker in Newfoundland will get zero dollars. A cashier will get zero dollars. Are these people not working hard?

However, if someone is a parliamentary secretary, thumbs up. If someone is a member of Parliament, thumbs up. If someone is a bank manager, thumbs up.

The question for the Liberals is to be honest. When they are using this shield of the middle class, they should at least have the decency to say that it is for the people who are doing quite well, thanks very much, and the rest of the hard-working Canadians who pay their taxes and do their jobs are the ones being left behind by the government.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I find it hard to believe. I have known the member for quite some time. I do not recall him actually being so down on all of the incentives that were brought in before.

In this particular situation, what he is talking about is a situation we have discussed before. He has supported many of the measures in the past. My understanding is that he is now supporting this particular measure going to second reading. If the rubes are making out in the market, I am not quite sure why New Democrats would want to support these particular rubes going forward. Nevertheless, they are.

He talked about the middle class in the election. I heard him do it during the campaign. I cannot imagine the reason his protestations are so loud about this particular bill that he has now decided to support at second reading. I would suggest that the hon. member come forward on this more constructively. I have always known him to be a constructive person.

Nevertheless, I would point to the facts about how many people will benefit.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Madam Speaker, the members opposite are geographically well positioned, because prior to the last election, all of them together seemed to prefer a program that sent cheques to millionaires through their universal benefits and a program that, surveys showed, three out of 10 Canadian families did not need.

What we have here is an example of the difference between equality, which is a good value, and equity, which means that one focuses one's resources on the people who actually need it.

I am wondering if my hon. colleague can enhance this notion of equity.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, it is a valid point by my hon. colleague from British Columbia.

We talked earlier, throughout the campaign and until now, about how the investment in benefits and tax incentives are targeted toward those who will benefit the most. That is why, when we discussed the TFSA issue and reducing the limit from $10,000 to $5,500, the whole point was that more people would maximize it. We can use those savings to give benefits to others who will also leverage that. That is the whole point of what we have been doing.

We talked about the child care benefit. The Canada child benefit contains two things targeted towards those who need it most. Second, it is tax free. That is what we talked about during the campaign.

We received the mandate to put that forward for those very reasons. People said to us, yes, we believe it is the right investment to make and not iin cases where we would be providing a benefit for those who need it the least.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, it is interesting listening to the member opposite talk about their strategic approach. I think I stand for all of the opposition parties when we ask the government to show Canadians what its plan is. We have yet to see it. We have yet to hear any actual questions answered.

Earlier this morning, the Minister of Finance stood and said that indeed, the Conservative government left this country in a state of flux.

The document I am looking at right now, the “Fiscal Monitor”, which is a publication of the Department of Finance, states that as of November 2015, there was a budgetary surplus of $1 billion.

My question for the member opposite is this: Did the Minister of Finance just misread his cue cards?

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I first came here in 2004. In 2006, when the Conservatives took over, we handed them a multibillion dollar surplus, which just ran through the cracks and madly off in all directions over the following six years. Trust me, I was here during the deficit years.

I would like to remind the member that whatever he talks about now is some fictional type of surplus. Trust me, it was fiddled away in the last 10 years of their existence.

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

Mr. Speaker, today I will be sharing my time with the hon. member for Dauphin—Swan River—Neepawa.

I am honoured to rise today to speak on Bill C-2. This is my maiden speech, and I wish to start by thanking the people of Elgin—Middlesex—London for giving me the opportunity to represent them in the House of Commons for the next four years.

I would not be here if not for the amazing volunteers and friends, but most of all my incredible family. To start, I know that as I speak today my mom and dad are watching these proceedings. I would like to thank my parents, Patricia and Harold Martyn, for all of the opportunities and support they have always given me. As the daughter of people who farm turkeys and pigs, I understand hard work and commitment, and I thank them for instilling these values in me. Whoever thought the girl from Sparta would be sitting in the House of Commons.

To my siblings who have always held me accountable, and doing so with love, a huge thanks for believing in me: Linda, Ann, Paul, and my in-laws, Greg, Scott, Trish, Lisa, Pete, and David. I thank them all. To Sandra and Bill, a.k.a. Nana and Pops, who have always been there for me, I love them both.

Making this decision to get into federal politics was not an easy decision, but I truly had a head start. My mentor and former boss, Joe Preston sat across this aisle from 2004 to 2015. “Trust me” was a common phrase used daily in our discussions. Today I would like to thank Joe for encouraging me. Without his support, this would not have been possible.

Now for the hard part, naming the people I miss every day as I serve this amazing country: Dakota, Garrett, Marissa, Hannah, and Christian. I hope from this new chapter of my life they will realize that anything is possible, will believe in themselves, and surround themselves with good people. I cannot wait to see what the future holds for them.

Finally, to Michael, my better half, the guy from band camp whom I married, I miss our evening walks, but I am definitely thankful for Facetime, or this journey would never have been possible. Although we are 640 kilometres apart, he is always with me. I believe in him, just as much as he believes in me, and I look forward to kicking off our bucket list in the next 20 years.

Elgin—Middlesex—London is an incredible riding. It is filled with beautiful lake harbours, rich agricultural land, small and large vibrant businesses, but most of all, great people. The volunteers not only on my campaign but throughout this riding helped mold me and educate me.

I would like to personally thank all the people who got me here, including Brian, Fran, Francine, Marci, Whitney, Jeff, Jen, Betty, Ena, Blake, Bob, Mae, Terry, Reinhardt, Dan, Shirley, Dean, Bridget, Melissa, and all the residents on Crescent Ave. I thought if I went fast, no one would know if I missed them. I send a special thanks to Ninja Turtle Noah, Maddie, Lauren, and Sarah.

To the ladies in the office, Cathy, Kaylie, Jena, and Kim, knowing that they are a part of the team makes me confident that Elgin—Middlesex—London is in good hands.

It is with all of these wonderful Canadians in mind that I stand in the House to oppose the proposed alterations to the Income Tax Act. Canadians have utilized the tax-free savings account since its introduction in 2009. This program has provided Canadians with incentives to develop attitudes of economic responsibility.

TFSAs are helpful tools for Canadians who are seeking to save or are preparing for unforeseen economic vulnerability, a tool used by many of my constituents in Elgin—Middlesex—London, both young and old.

The current Liberal government has proposed a reduction in the maximum amount of funds that Canadians can invest in these accounts per year. Unfortunately, the government does this on the false pretence that doubling of the TFSAs only benefits the highest earning Canadians rather than just the middle class.

On the contrary, statistics demonstrate that this investment tool is utilized by many middle-class Canadians. Half of those holding TFSAs earn less than $42,000 a year. In fact, 60% of Canadians who take advantage of the TFSA's limit earn $60,000 or less a year. What is more, in 2015, 600,000 Canadian seniors invested in TFSAs, maximizing their yearly deposits while earning less than $60,000 a year.

CARP, Canada's association for the fifty-plus, was in favour of increasing the limit the TFSAs to help seniors form fiscally responsible plans for the future. When the Conservatives raised the limit on TFSAs, the majority of Canadians supported that decision. Lowering the limit on TFSAs will do absolutely nothing for the low-income families, including financially burdened Canadians, to which the government must remain accountable.

The proposed changes in Bill C-2 will negatively affect Canadians by noticeably reducing their incentive to save for the future, creating a heavier reliance on government support during financial crises. Further, it will limit the choice of Canadians.

Why put up roadblocks for people who want to engage in responsible saving practices? Why remove the sensible avenue for saving, which costs the government very little?

Bill C-2 would do more than limit the choices available to the middle class. It would also reduce the amount of attention given to the vulnerable people in Canadian society. Instead of worrying about nitpicking a program that already works for Canadians, the Liberal government should be seeking out programs and initiatives that would actually aid in giving a hand up to this country's most vulnerable people.

The current government needs to continue to support programs such as the housing first initiative, which was undertaken by the previous Conservative government. This initiative was directly aimed at ending homelessness by identifying those most desperate in Canadian society and ensuring they were given a real opportunity for self-advancement. By seeking out these programs, the current government would have the ability to ensure that its efforts to end social issues do not go a mile wide and an inch deep. Spending well, rather than just spending, is the key to improving social issues today. Unfortunately, spending responsibly does not seem to be the current government's strongest attribute.

These tax cuts are aimed at making the public feel better about Canada's current position during this time of economic uncertainty. However, these cuts are not enough to provide true relief for Canadians being affected by the dipping dollar. It will take much more than just tax cuts to regrow the Canadian economy. This remedy is a mere surface solution to a much more serious problem.

Even more indicative of the Liberals' spending habits are the alterations to revenue that Bill C-2 would cause. Originally, the Liberals claimed that their new tax programs, including the lowering of the ceiling of the TFSA, would be revenue neutral. However, the tax bracket changes contained in this bill would actually cost the government $8.9 billion in the next six years. Since the government failed to accurately project and report these financial results, why should we trust the Liberals' promises that they will aid Canadians in the long run?

My constituents in Elgin—Middlesex—London have addressed this issue to me personally and are concerned about these changes. All age groups from all tax brackets have been using this method of saving their money for the future. Young adults have been putting their money away through TFSAs to invest in new homes, families have been using it to invest in their children's education, and many have been using it as retirement tool.

As the official critic for families, children, and social development, I can assure members that I have spoken to many constituents and Canadians who want to see the ceiling of the TFSA contributions remain at $10,000 per year.

I look forward to continuing to hear from my constituents in the great riding of Elgin—Middlesex—London and to working with all Canadians in my new role. I would like to thank this House and my hon. colleagues for indulging me and for the opportunity to speak to this very important piece of legislation that would affect all Canadians.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Madam Speaker, I welcome my colleague across the floor to the House of Commons and note that, unlike me, she was not present in the last session of Parliament. She talked about false projections. I am just going to read back, from the 2015 budget, the projections that the other side of the House made as they relate to the economic circumstances in which we now find ourselves.

The Conservatives projected a 3.1% growth in GDP. That was the foundation of their budget. They projected growth this year of 2.2%, and from that they said they would therefore have a surplus. We now know that growth is at 1.2%. That is the misguided financial capacity of the previous government, with which we are now dealing.

However, the other reference that was made here, beyond the false projections of the previous government and the false projections of a surplus, is this. Your government has been withdrawing the funding agreements for social housing in this country over the last three years consistently, and in doing so, as you reduced it from $2.1 billion to $1.9 billion to $1.7 billion, you have been directly putting people in subsidized housing out on the street. How can you stand here and say that your government had a humanitarian approach—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Order, please. I would like to remind the member that he is to address his questions to the Chair and not to individual members.

The hon. member for Elgin—Middlesex—London.

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

Madam Speaker, although I did not sit in the House of Commons, I am a Canadian who watched what happened in the House of Commons, and as well, I worked for a previous MP for 11 years. I have worked with constituents and I have worked with Canadians.

As the critic for families, children, and social development, I have taken it upon myself to do pre-budget consultations. Through them, I have had the opportunity to speak to many people regarding homelessness as well as affordable housing. One thing that I continue to hear back in meetings and briefings and through the ESDC is that housing first, the initiative we put forward for homelessness, works. That is why today I continue to ask the Liberal government to ensure that our vulnerable people be cared for with programs like this, which our Conservative government introduced and which had excellent benefits.

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

Madam Speaker, some members today have already done a good job of elucidating how odd it is to have a so-called strategy for the middle class that especially targets and benefits people making well into six figures. It is a strange definition of the middle class. There have been some allusions by members opposite, as well, as to how it is meant to help.

One of the big struggles for the middle class right now is job loss. We have seen that across the country from coast to coast to coast. Would the member agree that it would have been a better prioritization and better for the economy to put the same priority, which the Liberals have put on these tax cuts to help Canadians who overwhelmingly earn six figures already, on amending and fixing what is broken with EI? That would ensure that workers who are getting laid off right now across the country could access EI when they need it. Also would it have been a better prioritization and better for the economy to help people living on CPP, who are not getting enough money, and put money into their hands right now—the ones who really need it and would spend it—instead of people making over $100,000 a year? I would like to hear her thoughts on that.

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

Madam Speaker, I truly respect where the member is coming from. I myself have worked for 11 years for a member of Parliament and have worked for all Canadians. I believe that job creation is the number one thing that we need to continue to focus on, to help our country. Yes, we must help our seniors. We must help those who are the most vulnerable. Job creation is one of the biggest things and should be our priority in doing so.

When it comes to CPP, that is a very important program. I will continue to support the Canada pension plan, allowing people to put it into their investments. However, I also think that investments made into the tax-free savings account are an excellent way for seniors to save as well. It does not just need to be the government that assists them with saving; it allows all Canadians to have accountability and choices as to how they wish to save their money.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

Mr. Speaker, I have already committed the cardinal error of public speaking, which is following a terrific speech. I want to thank my colleague for her wonderful maiden speech. She is a welcomed addition to the Conservative family in the House. I think we will all have to run like crazy to keep up with her, and that is a good thing.

Before I talk about the subject at hand, I would like to refer to something that came up in question period, which quite vexed me.

The member for Prince Albert talked about Ukraine and said that the government was crying crocodile tears for Ukraine. I remember in November 2014, I had the honour of accompanying the then prime minister to the G20 meeting in Brisbane, Australia. At that particular meeting, the prime minister had to shake hands with Vladimir Putin. He said to Mr. Putin, “...I'll shake your hand...”, and then he looked him right in the eye and said, “You need to get out of Ukraine”.

Imagine those on the other side, with the leader they have, ever doing such a thing, standing up for Canada, standing up for principle. He would probably want to take a selfie.

As well, the other side downplays the human tragedy that is occurring because of the economic downturn. Often anecdotes and personal experiences are as important or more important than numbers and statistics.

There is a gas station just outside of Winnipeg that I stop at when I drive back and forth between Winnipeg and my constituency. I chat with the proprietor. We have become friends. We were talking about the low price of gas and he was quite worried about it. I asked him why. He said that every day there would be a person or a family stop at the gas station. These people were heading back home to the Maritimes. With the Alberta economy collapsing, they have lost just about everything and their only alternative is to return to the Maritimes. The Maritimes are a wonderful part of the world to be sure, but they are economically stressed. However, these people have to pack up everything, leave secure, well-paying jobs, and go back home to live with mom and dad, trying to rebuild their lives.

The Liberal and NDP war on the resource industries is a war on rural communities as well. These have real and dire human consequences that we lose sight of at our peril.

On the topic at hand, I would like to point out that the Conservative approach is very much one of encouraging personal growth and development through our taxation and financial policy systems. Our goal is to ensure that people are as independent as they possibly can be, that they have fulfilled their ambitions, and that they are allowed to chart their lives in a way they choose. Government policies can encourage that kind of independence or can discourage it.

As Conservatives, we firmly believe that government's role is to enable self-sufficiency and reduce the reliance on government so people can chart their own course, and TFSAs are exactly in that mould.

I hate to say it, but I think it is true, and the record bears it out, that both the Liberals and the NDP on the other hand want more people dependent on government, and I am not sure why. The policies and programs that Liberal and NDP governments have put in place at both the provincial and federal levels across the country result in more and more people becoming dependent upon government. The creation of that kind of dependence, in my view, creates grave problems for society.

Canadians have a lot of pride, and charting one's own path in life enhances that pride. Government has a role to provide mostly a hand up as opposed to only a hand out.

Again, I would like to bring in the personal here. When we brought in our last budget with income splitting, the universal child care benefit, and all those great benefits for families, I received an email from a single mother from the town of Swan River in my constituency, from Ms. Mackenzie Danard, and she gave me permission to use her name.

She wrote to us to thank us for our tax policies. Keep in mind, this is a single mother on a very low income. She wrote, “This helps a lot for single parents”. She also added, “Thank you for helping us raise our children”. So much for the idea that Conservative budgets are for the rich. As I said in my speech yesterday, Conservative members of Parliament are the party for the working people of the country. No one should ever forget that.

TFSAs, tax-free savings accounts, are exactly in line with our philosophy of promoting independence. Again, I am not one who thinks government does not have a role in society. It certainly does. I have never been shy to encourage the spending of government resources on projects and programs that help people. We certainly need tax resources to ensure the health of our society, but they should be kept at a minimum.

The tax-free savings account is kind of a companion to the RRSP. It helps people to become independent. TFSAs are open to all citizens over 18. Let us contrast this with the Canada penson plan. Many members opposite want to see the Canada pension plan contributions increase.

The Canada pension plan, in and of itself, is a pretty good program. However, it is a matter of degree. TFSAs are complementary to the Canada pension plan. Unlike the Canada pension plan, tax-free savings accounts introduce choice in how one invests their money. They also accumulate in one's own personal account. If people contribute to CPP, even an added CPP, and they unfortunately happen to pass on before the eligibility date, there is nothing left for the family. At least with a TFSA a legacy is left that can be passed on to the next generation.

The attacks on the tax-free saving plan are completely unwarranted. My colleague who spoke before me listed chapter and verse the number of groups across the country, including seniors groups. I am in the over 60 club, if the truth be known . My generation is strongly supportive of the approach our government put in place.

I would like to go to the personal about TFSAs. On May 13, 2015, in Hansard, I quoted a constituent of mine who sent me an email. She gave me permission to use her name. Ms. Wendy McDonald is a hard-working wife from Newdale, Manitoba. Her husband farms, and they have children. They were visiting in Ottawa. They said:

The reason we were able to afford our trip to Ottawa was due to our income tax refund, which was larger than expected due to income splitting law...our family chooses to put the child care benefit money we receive directly into RESP for our 2 children, and I will be one of the Canadians that will benefit from the increased allowance on TFSA accounts because saving is important to me and allows me to be fiscally responsible in my own household

This is a family, the McDonalds from Newdale, that is charting its own course in life. These people are independent, saving money for their kids and for their retirement, using the tools our government put in place. These are tools the new government is trying to take away.

My last point is in regard to the so-called tax hike on the wealthy. A typical Liberal, NDP trait is to always penalize success, always envious of people who do well, always thinking that people who succeed in life are just lucky. Most people succeed in life because of hard work and governments should have policies in place that support and reward hard work.

I have The Fiscal Monitor from the Department of Finance. It is very clear. For the April to November 2015 period of the 2015-16 fiscal year, the government posted a budgetary surplus of $1 billion. What could be clearer than that? Our government left a financial legacy of which I am very proud. It is a government that I was certainly proud to be a part of, and in four short years we will be back.

[Karen McCrimmon, Liberal, Kanata—Carleton, ON]

Mrs. Speaker, it is important that we all understand the fiscal situation we are in at the present time. The previous government had six consecutive deficit budgets from 2008 to 2014. We do not count deficits in half-year portions. We count a budget year as a budget year, and every indication is that 2014-15 will also be a budget deficit.

The previous government added $150 billion in additional debt to our national debt. It oversaw the loss of 400,000 good-paying jobs in manufacturing and heavy industry and now a further 70,000 in the oil sector. The previous government made a mess of our economic system.

We have a lot of work to do. We have committed to doing that work, and we are going to do it for the majority of Canadians.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

Some mess, Madam Speaker. The OECD consistently rated Canada as having the best economy in the world under our government.

I was part of the minority government for a little while, back in the day of the so-called deficits the member talked about. We heard a lot of whining from the Liberals' and the NDP in those minority years. Their basic complaint was that we did not spend enough.

Paul Wells wrote an article in NewswatchCanada. In a quick summary, he said said that in this government's first 100 days,

some patterns have been set; Ministers talk to media anonymously, afraid to be quoted; trouble abounds and surrounds; from free-falling oil to terrorism, to shots in feet, the Liberal Govt faces both external and self-inflicted woes.

Has the government melted down so fast in so short a time? I do not think so.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, my hon. colleague is defending the Conservative viewpoint quite well. He has made some interesting comments about what the Liberals and the NDP think about hard work.

I will bring the tone of debate up a bit.

Would my colleague support our notion to reward hard work by supporting an increase of the federal minimum wage to $15 an hour? When I worked as a constituency assistant to a member of Parliament for seven years, I met so many families who were working way more than 40 hours a week just to get by. They cannot do it on the provincial minimum wage.

Would my colleague join us in supporting some real leadership with a federal minimum wage of $15 an hour so that Canadians who are working can get ahead?

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

Madam Speaker, I appreciate the member's sentiments, but I do not appreciate his lack of understanding of economics.

Study after study has shown that as minimum wages rise, jobs are lost. All one has to do these days is go to a supermarket and see the automated checkouts that are in place. They are there for a reason.

A government needs to put in place policies and programs that would enhance the natural resources sector and create those high-paying jobs that under the Liberal government are sadly being lost by the thousands.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, I listened to the Liberals across the way, especially the member from Toronto, who is trying to play a shell game with where we are at financially, especially when the Conservatives handed over the government to the Liberals. I do not see how they can keep playing that game. We see documents even today. It is obviously a $1 billion surplus. That is what you received. That is the fact of the matter. Yet members in your government across the way are still trying to hide behind this shell game and are trying to say something different.

I would like the member to clarify something for me. Were we in surplus or deficit after the last election?

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I want to just remind the member that he is to address his questions to the chair and not directly to the government. When you are speaking you cannot say “your government” and point at them.

[Robert Sopuck, Conservative, Dauphin—Swan River—Neepawa, MB]

Madam Speaker, our financial plan worked perfectly. In 2008, we did what we had to do, with the concurrence of the other parties. We spent on infrastructure. The plan by the late Jim Flaherty, the finance minister at the time, was at that point to gradually reduce the deficit. In 2014-15, the deficit was to be at zero or we were going to be in a small surplus. That plan worked to perfection. That is exactly what happened. The member could look at the graph and at the “Fiscal Monitor” from the Department of Finance today, in black and white. We left the Liberal government a surplus.

[Karina Gould, Liberal, Parliamentary Secretary to the Minister of International Development]

Madam Speaker, I will be sharing my time today with my colleague, the member for Honoré-Mercier.

Madam Speaker, I am honoured to be able to take this opportunity to speak about the government's middle-class tax cut, a tax cut that would provide needed tax relief to nine million Canadians.

First, I would like to elaborate on our government's ambitious economic agenda that sets Canada on the path of economic growth.

No one will be surprised to hear me say that the Canadian economy is going through a difficult period, some regions more than others. While there are encouraging signs with our biggest trading partner, the United States, which is facing an upswing in its economy in 2016, there remain concerns that slower growth in certain emerging markets such as China has the potential to stifle prosperity. Also, the Bank of Canada revised downward its economic forecast twice over the last 12 months and undertook two rounds of interest rate easing.

Nevertheless, in the face of this real challenge, there is a real opportunity to put in place the conditions to create long-term growth, growth that will create good jobs and help our middle class prosper, the lifeblood of our economy. Indeed, the good news is that we were elected on a plan to grow the economy, and we have already started.

In December, we introduced the middle-class tax cut. This amendment to the Income Tax Act is what we are to discuss in the House today.

After 10 years of weak growth, our government is redoubling its efforts to ensure that Canada is poised and prepared to compete and succeed in these challenging economic times. However, it is clear that we cannot go at it alone. It means that we need collaboration.

A key component of our plan is to work closely with provincial and municipal governments to deliver results for Canadians. From infrastructure projects to responsible environmental stewardship, we are providing needed leadership. Our government will work in a renewed spirit of collaboration with our provincial and municipal partners. That work has already begun, with the first ministers' meeting held by our Prime Minister shortly after our government was sworn in, as well as by the finance ministers' meeting just before the Christmas holidays.

Our priority is to implement our agenda while pursuing a responsible fiscal plan suited to the challenging economic times. Indeed, we fully intend that our plan for economic growth will benefit all Canadians through targeted investments.

Let me reassure members that our government is not daunted by the challenges before us. We are cognizant of our fiscal realities and we know that our plan is more important than ever. We will work together with both the private sector and our provincial and municipal counterparts to advance our shared priorities across a range of fronts. Some of these areas include making targeted investments in public infrastructure that will grow the economy, get Canadians moving, and open up more cost-efficient trade options for our exporters, with the focus on public transit, green infrastructure, and social infrastructure.

Working together with all of the provinces and territories for a cleaner environment and to fight climate change, Canada has a plan to invest additional funds each year in clean technology producers so they can tackle Canada's most pressing environmental challenges and create more opportunities for Canadian workers. The government will also invest to support innovation and the use of clean technologies in the natural resources sector.

As our Prime Minister has emphasized, a strong economy and healthy environment go hand in hand. We are committed to leaving our children and grandchildren with a more sustainable and prosperous country.

The government's plan will be realistic, sustainable, prudent, and transparent. The plan will also include further details on measures that are intended to steer Canada toward a more prosperous, inclusive, and sustainable economic future.

Before turning to the contents of Bill C-2, I would like to mention that the government's plan includes proposals to create a new Canada child benefit. We aim to have payments under the new Canada child benefit begin in July 2016. The proposed Canada child benefit would simplify and consolidate existing child benefits. It would replace the universal child care benefit, which is not income-tested. The new Canada child benefit would be better targeted to those who need it most.

Our government will also be working collaboratively to implement the Canada child benefit, which will lift hundreds of thousands of Canadian children out of poverty and place them on a surer footing for a brighter future.

We are committed to a strong and growing middle class. We want to ensure that all Canadians have a fair and real chance to succeed. The legislation before the House today takes an important first step in this direction. Bill C-2 would cut the tax rate on income earned between $45,000 and $90,000 in 2016 to 20.5% from 22% and introduce a new tax rate of 33% on income in excess of 200,000. As of January 1, the government is putting more money in the pockets of about nine million Canadians each year through our middle-class tax cut. This is the smart and fair thing to do.

Recently, the Minister of Finance and the parliamentary secretary travelled across the country asking Canadians directly what our government can do to better support the middle class. They met with indigenous leaders, business leaders, cultural leaders, with the intent of putting Canadians' views front and centre and engaging in discussions to find practical solutions to the challenges and opportunities they are facing. These pre-budget consultations continue online. The response rate and comments received have been tremendous. With over 146,000 Canadians reached to date, this has been the largest pre-budget consultation on record.

Through these consultations, Canadians confirmed that they want a government that delivers on strengthening the middle class and helping those working hard to join it. The measures in this bill would help strengthen the middle class. That is a priority for the Government of Canada.

During the pre-budget consultations, it also became increasingly clear that Canada's economic outlook has changed since the election. This only reaffirmed the government's commitment to the path we were elected to follow, but, more importantly, by engaging with Canadians we have been able to consider new perspectives and refine our plans to be included in the future federal budget.

The government's approach to consultations recognizes that collaboration is essential to delivering real change. The government has committed to and already demonstrated its willingness to listen, engage, and collaborate with members from all parties to identify ways to find solutions and avoid escalating conflicts unnecessarily. Given what we have already heard from Canadians and many members of other parties, I look forward to discussing and debating how best to serve Canadians.

The tax relief proposal in this legislation would help millions of Canadians. It would give middle-class Canadians more money in their pockets to spend, invest, and grow the economy. I encourage all members of the House to vote for this important legislation.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Speaker, the majority of TFSA accounts belong to low- and middle-income earners. In fact, two-thirds of TFSAs are held by tax filers with incomes of less than $60,000. How does the member opposite expect these Canadians to save for their future amid rising living costs?

[Karina Gould, Liberal, Burlington, ON]

Madam Speaker, I was knocking on doors for over a year and a half leading up to the election and if one thing became increasingly clear, it is that many people who are maxing out their TFSAs are not people who have incomes of $60,000 or less. Our middle-class tax cut will put money directly into the pockets of people in that bracket, giving them more money to put into savings if they so choose, if they need to, or to spend on making sure that the cost of living is more affordable for them and they can truly meet their needs.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, an income tax reduction for the middle class should benefit a larger portion of Canadians. My riding is seeing an increase of seniors facing poverty and, in some cases, facing homelessness for the first time. I spoke with a senior who is now renting her living room to make ends meet.

Why is this tax reduction not benefiting seniors who need it most?

[Karina Gould, Liberal, Burlington, ON]

Madam Speaker, I have also had a discussion with many seniors in my riding who are facing enormous financial pressures. This is something that our government has acknowledged during the campaign and will be working toward.

However, today we are discussing the middle-class tax cut and an even larger group, the nine million Canadians who will see a real impact on their bottom line. This is something we can be proud of. This is something we can all share and can work toward as the first step of our platform for encouraging more Canadians to be able to join the middle class.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Madam Speaker, I appreciate the opportunity to rise in the House and ask this question of the hon. colleague across the way.

Again, the government continues with confusion and a shell game that is really challenging Canadians and the official opposition to find a plan. Could the member opposite please tell us the communities the government has gone into to consult Canadians and where the data on those consultations is coming from? Now we hear that 146,000 people were consulted, not 150,000. Where is that data coming from, from what geographic areas, and is it even Canadian data?

What does the plan call for in communities such as mine, Williams Laks, Prince George, Quesnel, Vanderhoof? Why can we not have a high-speed transit line?

It is a resource development community. Softwood lumber, mining, oil and gas, these are what matter.

[Karina Gould, Liberal, Burlington, ON]

Madam Speaker, I reiterate that the Government of Canada is the government of all of Canada and that when we think about consultations, we think about consulting the entire country. When we talk about 146,000 Canadians, those are the Canadians who have participated online in the Ministry of Finance's pre-budget consultation.

I invite, as I did in my speech, all members of the House to participate in that consultation, because we are here to work together. Our bottom line is to make sure that the bottom line of all Canadians is better.

[Chris Bittle, Liberal, St. Catharines, ON]

Madam Speaker, over the last 30 years, the middle class has been struggling. My home riding of St. Catharines historically has always been strongest when the middle class is strongest, like so many ridings across Ontario and across Canada. Is a middle-class tax cut not an excellent first step toward dealing with income inequality? Could the member advise us what the government's plan is going forward?

[Karina Gould, Liberal, Burlington, ON]

Madam Speaker, I agree with my colleague. I think this is an excellent first step to addressing the income gap that we have in this country. It is the first step in ensuring that middle-class Canadians have more money in their pocket. As well, we will be introducing the Canada child benefit and other measures moving forward.

[Pablo Rodriguez, Liberal, Parliamentary Secretary to the Minister of Infrastructure and Communities]

Madam Speaker, I would like to congratulate my colleague on her excellent speech.

I am pleased to participate in this debate on the middle-class tax cut that we announced in December. It is an important Government of Canada measure for Canadians.

I want to do two things today. First, I would like to give a brief overview of our economic and fiscal situation. Then, I will explain why the middle-class tax cut will help grow our economy.

There is no doubt that, as we begin to put our plan for economic growth and long-term prosperity into action, we are up against fierce headwinds. As we all know, we are still dealing with very difficult economic conditions.

In its January economic outlook, the International Monetary Fund, the IMF, projects that global growth will pick up modestly to 3.4% in 2016 and 3.6% in 2017. The IMF's October 2015 outlook for 2016 and 2017 was 0.2 percentage points higher. We all know that is not good news.

Although American economic performance is encouraging, and we are all thrilled about it, the European and Chinese economies remain a serious cause for concern. Global crude oil prices remain at less than half of what they were in mid-2014, mainly due to persistent oversupply and softening demand.

Clearly, what happens outside our borders has real and very serious consequences here at home. In Canada, our economic performance in the first half of 2015 was weak, and that was largely due to the collapse of oil prices in 2014. I will leave it to my colleagues to judge for themselves. Last April the federal government forecast that the price of oil would be approximately $71 U.S. a barrel by the end of the year. Right now, oil is trading at about $30 a barrel, which is a huge difference. We now know that growth will be weaker than what was forecast in the last budget projections.

The economic situation is therefore much more difficult than the previous government predicted. This will of course have important implications for our currency and our fiscal situation.

However, there is also some good news. The gross domestic product, or real GDP, growth resumed in the third quarter of 2015. In its economic outlook released on January 19, the IMF projects that growth in Canada will pick up over the next two years in relation to 2015. We are also in an enviable position because of our low debt-to-GDP ratio, not to mention our wealth of natural resources, or the fact that we have an extraordinarily skilled workforce, compared to what we see around the world.

A focal point of our economic agenda is to put the debt-to-GDP ratio on a downward track. In the end, we also want to return to a balanced budget, which is extremely important to us. To achieve these goals, our policies will strike a balance between fiscal responsibility and controlled investments that promote economic growth.

One of the most important elements is to restore economic growth to the middle class, which is the backbone and the heart of our economy. That is why one of the first items on the government's agenda was to table a notice of ways and means motion to cut taxes for the middle class. This is the right thing to do and it is what we are doing.

The tax cut for the middle class and the accompanying proposals will make the tax system fairer and help Canadians succeed and prosper. Let us look more closely at what we are proposing. Specifically, the bill introduces the following measures: first, we will reduce the second personal income tax rate from 22% to 20.5%. Then, we will introduce a 33% personal income tax rate on individual taxable income exceeding $200,000 a year. Lastly, we will also lower the contribution limit for the tax-free savings account, the famous TFSA, from $10,000 to $5,500 and reinstate indexation of the annual contribution limit.

I would quickly like to explain these three points.

First, I will talk about the changes to personal income tax rates. The changes came into effect on January 1, and this measure is expected to benefit approximately nine million Canadians in 2016. For example, single individuals will see an average tax reduction of $330 a year. Couples can expect an average tax reduction of $540 a year.

Second, as I mentioned, the government adopted a new personal income tax rate of 33% that will apply to people who earn over $200,000 a year. That means that only those with the highest incomes will have to pay more taxes. Period. Like the other tax bracket thresholds, the $200,000 threshold will be indexed to inflation.

Third, the government dropped the TFSA annual contribution limit from $10,000 back down to $5,500 as of January 1, 2016.

However, to reassure those who are wondering, this change is not retroactive. The TFSA contribution limit for 2015 will remain at $10,000.

Restoring the annual contribution limit to $5,500 is consistent with the government's objective to make the tax system fairer and help those who need it most.

Combined with other registered savings plans, a TFSA with an annual contribution limit of $5,500 will enable most individuals to meet their ongoing savings needs in a tax-efficient manner.

The indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time.

Before closing, I want to highlight some other measures included in today's bill, because I think they are very important.

Today's bill proposes to change the current flat top-rate taxation rules applicable to trusts to use the new rate of 33%.

The bill would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate.

I could go on, but it is clear that the Government of Canada is committed to helping the middle class in a practical way, through this bill and other bills that will strengthen our economy, create jobs, and ensure that Canada has a better future.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Madam Speaker, I thank my colleague for his speech.

I invite him to come visit the regions, because there is theory, and then there is practice. If the government truly wants to move our economy forward, it could let the Economic Development Agency of Canada for the Regions of Quebec make the announcements it has had prepared since October. If we include the election period, officials at the Economic Development Agency of Canada for the Regions of Quebec have been waiting to get files signed for six months. There is currently no minister who can sign these files.

Is my colleague prepared to consult his own government, sign files, and make announcements? This is very important.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Madam Speaker, I want to reassure my colleague. I travel to the regions regularly. Last year, I went to his riding at least 12 times. I know the riding well and I am rather fond of it.

As I said earlier, the government is going to do what it takes to help the economy and Canadians. This will be done through the various departments and, of course, through the excellent work CED does in his riding and all across Quebec.

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

Madam Speaker, I thank my colleague from Honoré-Mercier for his speech.

I find it interesting that the Liberals keep saying that we must give back to those in need. They are alluding to the TFSA, among other things, but also the tax cut they promised for the middle class. I have been trying since this morning to figure out what exactly the Liberals mean by the middle class.

We know that people earning $45,000 a year will not get a cent from this tax cut and that people earning $210,000 a year will get a $283 tax cut. In fact, as my colleague from Timmins—James Bay said, a parliamentary secretary will get the full tax cut, but a hairdresser or office employee will get nothing.

The Liberals respond by talking about their child tax benefit, which will benefit only families with children and not single people or seniors.

I will repeat my question: what is the Liberals' definition of middle class?

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Madam Speaker, I invite my colleague to read the Liberal Party platform, which is an excellent platform that we were able to promote for over 80 days, thanks to the previous Conservative government. That was the longest election campaign in the history of Canada.

In that platform, my colleague would see not only the middle-class tax cuts and—my colleague will be happy to hear this—an additional benefit for families with children, but also investments in social infrastructure that will create more social housing, which will help seniors live in dignity.

The Liberal plan is about more than just a tax cut for the middle class. It is a global plan that includes tax cuts, benefits for families with young children, and infrastructure programs. That is what is needed to ensure that Canadians are better off in this century.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Madam Speaker, I heard reference from a member opposite about the need to tour the member's home province to inspect and understand a deficiency in infrastructure spending.

Is the parliamentary secretary aware that in the previous year the former government promised $1.5 billion in expenditures under the Canada build fund to Quebec, but according to records that have now been tabled with the House, zero dollars were actually signed in agreement?

In other words, the surplus that the Conservatives like to pretend happened within the six month period, is entirely predicated on large promises, in this case, $1.5 billion to the province of Quebec, but zero dollars in agreements of cost shared infrastructure programs, as they complain about unemployment. They spent zero dollars in Quebec last year.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Madam Speaker, I commend my colleague, who has a great deal of expertise with regard to infrastructure and the municipalities.

Unlike the Conservative government, we do not see infrastructure as an expense, but as an investment in our future generations and the environment. I therefore commend my colleague for the work that he has done, and I hope that the Conservatives will learn from what we are going to do about infrastructure.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Speaker, I would like to welcome two of my constituents visiting from Edmonton.

I will be splitting my time with the hon. member for Perth—Wellington.

The bill we are discussing today proposes to amend the Income Tax Act. It would reduce the second lowest personal income tax rate from 22% to 20.5%, and introduce a new personal marginal tax rate at 33% for taxable income in excess of $200,000. Additionally, it would amend the act to reduce the annual contribution for tax-free savings accounts from $10,000 to its previous level with indexation of $5,500.

The question that must be asked is this. Why make these changes? Are they for the good of the country or are they political posturing?

Underlying the proposed legislation are opinions that investment in the middle class is the best way to generate economic growth and development, and that TFSAs disproportionally benefit wealthier Canadians. Quite simply, that is wrong.

These income tax changes would not be revenue neutral, as the member opposite claimed when the change was an election promise. These changes would plunge the country further into deficit spending.

As a father, I have worked hard to teach my children about the importance of living within our means and to be careful with their money. It may be a cliché, but I have told them that money does not grow on trees. By implementing these proposed changes, we would be sending my sons the opposite message. We would saying that being fiscally responsible does not matter.

Tax breaks for the middle class are not in themselves sufficient to stimulate the economy. We cannot spend our way to growth, and we cannot increase tax our to prosperity. What is needed is an economic plan, not politically motivated and hastily conceived legislation. By increasing government debt, these changes would negatively impact all Canadians. The bill lacks a concrete, targeted plan to stimulate economic innovation. In effect, it ignores the pressing need to develop these initiatives.

The Parliamentary Budget Officer is quite clear that these changes are not a revenue neutral election promise, but a drain on the public purse. According to PBO research, the bill's proposed income tax bracket changes would lower government revenues by $8.9 billion over six years. This may not be important to those who believe the budget will balance itself. However, for those of us who live in the real world, numbers matter.

Based on Finance Canada's estimates, the new Liberal tax plan amounts to an average $6.34 a week extra for those individuals who qualify. We know this small tax break is not enough to grow our economy. Nor does throwing money at the middle class stimulate growth and innovation. Perhaps the government should be less worried about the income tax and focus on creating jobs so more people will be paying in.

The Liberal tax plan would raise taxes on higher-income earners, those who traditionally create jobs and grow our overall economy. By increasing taxes on these job creators, we are discouraging success and are punishing those who have done well for themselves.

The lack of transparency surrounding the cost of these changes is cause for serious concern. Canadians have the right to know how the taxation system impacts them and the country. This is not just about the present, but about the future of Canada.

The PBO's financial calculation drew from behavioural considerations of how people at different income levels might respond to the tax changes. It included taking steps toward lowering tax payments. Other reports have pointed to a high likelihood of brain drain for professionals in the upper tax bracket. People may choose to leave Canada for employment elsewhere rather than pay high taxes.

Apparently, the current government could not anticipate that. When facing a tax hike, some people will work to find ways to reduce their taxes. That is simple human nature.

In popular debate, in the media, and in academic research, a brain drain out of Canada is cited as a very real possibility and a logical outcome to these changes. Most doctors, lawyers, and other skilled professionals are found in the upper tax brackets, and their departure could be very dangerous for Canada.

Tax avoidance through reporting less income, using tax planning techniques to reduce the tax burden, working fewer hours, or even not seeking job promotions are very real possibilities.

Progressive income taxes like this reduce the return on education, since high incomes are associated with high levels of education. Such taxes reduce the incentive to build human capital.

The consensus among experts is that taxes on both corporate and personal income are particularly harmful to economic growth, as economic growth ultimately comes from production, innovation, and risk-taking.

Tax-free savings accounts are effective saving tools for all Canadians. They can be used to reduce economic vulnerability and dependence upon government. Limiting their usage will negatively impact Canadians across the socio-economic spectrum. It is not only the rich who open TFSAs but Canadians of all ages and all walks of life. Moreover, limiting the potential for TFSA contributions would result in greater vulnerability and dependence of Canadians. TFSAs are used widely by many Canadians. Thus, these policies affect an extremely wide variety of citizens.

According to the Parliamentary Budget Officer, Canadians have the largest personal debt of any G7 country. I find it strange that any Canadian government would introduce measures that would discourage savings, yet in reducing the tax-free savings account limits, the government has done just that instead of encouraging thriftiness, living within one's means, and saving for a rainy day.

The current government wants to spend its way out of debt. Two and two does not add up to five, and wishing it were so does not make it so.

For many years I was a businessman, owning and operating a number of small businesses. I can assure members that a business with spending that consistently exceeds revenue does not stay open very long.

As custodians of the taxpayers' hard-earned funds, it is our responsibility to act responsibly, not recklessly, with the nation's finances.

These new measures will affect all taxpayers as governments move deeper into deficit and the national debt grows increasingly larger. Someone at some point will be called upon to foot the bill. When our children and grandchildren are struggling to maintain essential services and climb out from under a mountain of government debt, they will be asking why we failed to act in a responsible fashion. What will we tell them? Will we tell them that we truly believed budgets would balance themselves?

For the good of Canada, this bill needs to be defeated.

[Pablo Rodriguez, Liberal, Parliamentary Secretary to the Minister of Infrastructure and Communities]

Madam Speaker, when Mr. Mulroney's Conservative government lost the election in 1993, it left a $42.5-billion deficit. We had to deal with that situation. When Paul Martin's government was defeated, we left the Conservatives a $13.2-billion surplus. Nine years later, the Conservatives are again wreaking havoc, and once again, we are going to have to deal with their deficit.

Will we always have to come behind and clean up your mess?

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Order, please. I hope the member was not referring to me, that you were trying to clean up my mess. Therefore, I would again remind the member to address questions to the Chair.

The hon. member for Edmonton Manning.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Speaker, the members opposite sound as if they are the gods of saving and leaving money for others, while we know their history very well.

They keep referring to the past. They keep referring to what governments have done. They were never able to tell us, not in 100 days, what the complete plan is. What is it they are trying to do?

We would like to hear from them what the plan is, in dollars and cents.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, I find it fascinating how the Conservatives always speak on behalf of their grandchildren. It is about the debt we are going to leave to our grandchildren, how we have to stand up and fight for our grandchildren.

That was a government that ridiculed the Canada pension plan day after day in the House. Even today they are telling us that the TFSAs are better than the Canada pension plan. They are telling their grandchildren that if they make a lot of money they do not need to worry, but hard-working Canadians without defined pension plans are on their own.

This has been the operating culture, to undermine and attack pension systems in our country while we have an ongoing pension crisis. I do not know what world my colleague lives in, but wherever I go I am meeting people in their fifties who are telling me that they do not have enough money to retire, that the Canada pension plan is not sufficient, and that they do not have the company pension plan that existed before. They are asking how they are going to get by.

The member is hiding behind his grandchildren. When was the last time the Tories ever looked to anything for the future?

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Speaker, all members should worry about their grandchildren.

By the way, as proud Conservatives, we do spend based on what we make. We make money, then we can spend money. We do not spend out of the pocket of the future generations. Our grandchildren matter to us.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Madam Speaker, again, I have more of a comment.

For our hon. colleagues across the way, I just want to make note of the document we are referring to, which as of about an hour ago was still on the Department of Finance's website. It is one of its documents, “The Fiscal Monitor”, a publication of the Department of Finance, as of November 2015. The Conservative government left Canada with a $1 billion surplus.

The question I have is this. Is it misinformation, is it confusion within the ministry of finance, or did the Minister of Finance just misread his cue cards from the PMO?

[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?

[Salma Zahid, Liberal, Scarborough Centre, ON]

Madam Speaker, I would advise the hon. member that it is important to look at our government's agenda to support middle-class families and grow Canada's economy in its totality.

These tax changes and the coming Canada child benefit will benefit nine out of ten Canadian families. According to the parliamentary budget officer, more than 315,000 children will be lifted out of poverty.

Historic infrastructure benefits are coming. By investing in transit, we will make it easier for families without a car to get to work. Investments in social infrastructure are coming. New senior centres, community centres, and child care facilities will help ensure families can go to work knowing their children and their elderly parents are cared for.

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

Madam Speaker, I think it is very clear. Never before, at least from my perspective, has a Prime Minister been so committed to assisting the middle class.

Contrary to what the Conservatives and New Democrats might want to talk about, the reality is that the middle class in Canada is a focus of this Liberal government.

The member has already talked about the child benefit program, which will enhance the wealth of the middle class. The tax cut in this legislation will enhance the wealth of the middle class. Would she not agree that the Government of Canada, more so than in the last two decades plus, is actually seeing the middle class as a strong component, and that by enhancing the middle class, we will have a healthier economy in the long run?

[Salma Zahid, Liberal, Scarborough Centre, ON]

Madam Speaker, yes, I agree. The middle class in this country has been ignored for a very long time. We all have to recognize that the middle class is the backbone of any economy. When people in the middle class have more money in their pockets, they will spend that money to invest and grow the economy.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

Madam Speaker, it is a pleasure to add my voice to today's discussion on the government's middle-income tax cut, which we introduced in December 2015.

Before I touch on the legislation, I will begin by taking a few moments to extend my congratulations to the Minister of Finance and his parliamentary secretary for pursuing one of the most comprehensive pre-budget consultations in recent history.

The 2016 pre-budget consultations began when the Minister of Finance held a Google hangout with eight Canadian universities on January 6 to get the views of students and faculty on how to best grow the economy. On January 11, the minister and his parliamentary secretary struck out on a six-day tour in an effort to speak to as many Canadians as possible. They hosted upwards of 26 separate meetings and round tables with stakeholders and Canadians across the country, beginning in Halifax.

In addition to these meetings, the minister spoke to full-capacity crowds at the Halifax Chamber of Commerce, the Montreal Council on Foreign Relations, and the Surrey Board of Trade, with a total attendance of well over 1,500 people.

For those Canadians who have not been able to make it out to meet the minister and the parliamentary secretary personally, they can continue to share their ideas and comments through various online channels, such as the Your Money Matters Facebook page and hashtag #pbc16.

Through our pre-budget consultations, we are engaging with Canadians, looking for input on how the federal government can best support the middle class and those working hard to join it, meet infrastructure needs and help grow the economy, protect the environment and meet local needs, as well as ensure that the most vulnerable do not get left behind. It is an ambitious list, to say the least, but one that respects Canadian values of honesty, hard work, and fiscal prudence.

I would like to thank all those who have and will contribute to the pre-budget consultations, whether in person or online. This input will be vital to ensuring that Canadians can direct and focus the decisions that our federal government can make. More importantly, Canadians will be able to see their contributions when the 2016 budget is tabled.

I want to assure Canadians that we are listening and we hope that this renewed interest by Canadians will make a better country for all of us; for our families and for our communities. We are hearing that Canadians want to push forward with our plan to grow the economy, strengthen the middle class, and help the vulnerable.

We have a clear mandate, and expectations are high. First and foremost, we are here to serve Canadians. They expect us to implement our ambitious economic agenda. They want a government that is open to the world. They want a more transparent government.

No one will be surprised to hear me say that the economy is going through a very difficult period. However, in the face of this real challenge, there is also real opportunity to put in place the conditions to create long-term growth that will create good jobs and help our middle class—the lifeblood of our economy—prosper. The plan for growth is more important now than ever.

The good news is that we have a plan to grow the economy, and we have already begun to implement the plan: we introduced the middle-class tax cut in December and tabled Bill C-2.

As of January 1, the middle-class tax cut is putting more money in the pockets of nine million Canadians each year. We are focused on smart investments that promote economic growth while maintaining a commitment to fiscal responsibility. We will improve economic prospects for our middle class, which is the backbone of our economy. We simply cannot call ourselves prosperous as a country if our middle class is struggling. This is why Bill C-2 is so important to Canadians.

I will now touch on the specifics.

Our middle-class tax cut and accompanying proposals would help make the tax system fairer by reducing the second personal income tax rate to 20.5% from 22%; introducing a 33% personal income tax rate on individual taxable income in excess of $200,000; returning the tax-free savings account, TFSA, annual contribution to $5,500 from $10,000; and reinstating indexation of the TFSA annual contribution limit.

We expect nine million Canadians will benefit from the reduction of the personal income tax rates, which are to take effect on January 1 of this year. Single individuals would see an annual tax reduction of $330 per year, and couples would see an average tax reduction of $540 every year. This measure would put more money in the pockets of Canadians to save, to invest, and to grow the economy.

In addition, the government is introducing a new personal income tax rate of 33% that would apply to individual taxable income in excess of $200,000. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax. As with other bracket thresholds, the $200,000 threshold would be indexed to inflation.

Finally, the government is returning the tax-free savings account annual contribution limit to $5,500 from $10,000 effective January 1 of this year. Returning the TFSA annual contribution to $5,500 is consistent with the government's objective of making the tax system fairer and helping those who need it most. When combined with other registered savings plans, a $5,500 TFSA annual contribution limit would permit most individuals to meet their ongoing savings needs in a tax-effective manner. Indexation of a TFSA annual contribution limit would be reinstated so that the annual limit maintains real value over time.

Finally, let me quickly review some of the other measures that are included in today's legislation.

The bill proposes to change the current flat top taxation rules applicable to trusts to use the new 33% tax rate. It proposes to set the tax on split income to the new rate of 33%. It would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate. Finally, the bill would increase the special refundable tax and the related refund rate imposed on the investment income of private corporations to reflect the proposed new 33% personal income tax rate.

There has never been a better time to make targeted investments to support economic growth in this country. We are confident that our plan will accomplish this, and that is one reason why I am optimistic about our prospects going forward. Given that, I encourage all members to support this legislation.

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

Madam Speaker, the Liberals ran on a promise that there was going to be a revenue-neutral change. They were going to take from the rich and give to the middle class. It has become clear that this revenue-neutral change is going to be anything but. It shows poor math. We are looking at $1.4 billion, give or take—quite a few hundred million dollars. This is not temporary stimulus. It is not something that will happen just one time. It would add to the structural deficit of the government.

Does the member believe it is fair for his grandchildren to pay the Liberals' debt, which they will accumulate, for a tax cut that was given based on poor math?

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

Madam Speaker, that is quite interesting coming from a member of a government that ran seven consecutive operating deficits in a row.

The Liberal government ran on a plan to help our middle class. This is the first step of that plan, a middle-class income tax cut. The plan includes an enhanced, more generous, and tax-free Canada child benefit, which would raise 300,000 children out of poverty, which is excellent. The plan includes a 10% increase to the guaranteed income supplement. This would give one million of our most vulnerable seniors up to $1,000 more each year. I am very proud of this initiative.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Madam Speaker, according to the Parliamentary Budget Officer, it is estimated that 17.9 million Canadians who will file income tax returns in 2016 fall within the first tax bracket of $45,282 or less. They are going to get nothing out of this tax break.

What do the Liberals define as the average income for the middle class? How do they classify those Canadians earning less than $45,000? I would like to hear from the hon. member.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

Madam Speaker, it is certainly not up to me as an individual to define who is middle class and who is not. However, I can give the member some facts. Canadians who earn between $45,000 and $90,000 in 2016 would receive a 7% reduction on the taxes they pay. Their tax rate would fall from 22.5% to 20.5%, a 7% reduction. That would put $350 in the pockets of nine million Canadians in 2016.

In addition to that, we would roll out a more generous, targeted, and tax-free Canada child benefit that would raise 300,000 children out of poverty, an initiative that the NDP did not support.

[John Oliver, Liberal, Oakville, ON]

Madam Speaker, I want to congratulate the hon. member on his address.

The previous government's plan to nearly double the contribution limit to the tax-free savings accounts would have helped Canada's wealthiest save more, while costing the federal treasury several hundreds of millions of dollars over the next five years—tens of billions of dollars over the longer term—while only 6.7% of eligible Canadians were able to make the maximum contribution in 2013.

Could the member share with us the fairness of the Liberal plan for the tax free savings account?

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

Madam Speaker, the member is absolutely right that the range of people who would benefit from the doubling of the TFSA contribution limit was simply not wide enough.

We proposed a plan based on a middle-income tax cut; we proposed a plan based on a more generous, enhanced, and tax-free Canada child benefit; and we proposed a plan that included a 10% increase to the guaranteed income supplement, which would benefit a million older Canadians. On October 19, 2015, Canadians endorsed that plan.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, it is a pleasure to rise in the House to speak on behalf of my constituents in Battle River—Crowfoot. Battle River—Crowfoot is a new constituency. The boundaries changed in the last election, and I am fortunate enough to represent a new northern section. I want to thank them for their support in the last election. I pledge to work very hard for them in Ottawa.

I also want to thank my election campaign team and long-term supporters. In six elections, they were ready to campaign and help out, not just in my riding but around the country. Obviously I want to thank my family. I want to thank my wife Darlene and our children, Kristen and Ryan, and Kristen's husband Matthew for their love and support over the many years of doing this. I know all members know that without the support of their families and those they love most, they would be unable to do this. Whether it is my immediate family, my parents, or others, I want to thank them.

We are debating the Liberal government's destructive tax plan for all Canadians, including the middle class. It tears down many of the efforts that were developed to help families and workers, to ensure that taxes remained low for all Canadians, that there were balanced budgets, and that jobs were created for Canadians. These measures are affected by part of Bill C-2. The former government ensured that economic growth for Canada's economy was a priority.

I neglected to inform you, Madam Speaker, that I will be splitting my time with the member for Renfrew—Nipissing—Pembroke.

Since this bill was tabled in December of last year, we are very aware that the numbers of the Liberals simply do not add up. The Liberals' assault on higher income earners will not work. This is a tax hike on those who traditionally create jobs and grow our overall economy. It is a tax increase on professionals and on the educated. It is a tax increase on those who work hard and succeed.

By increasing taxes on job creators, we would be discouraging their success and jobs for Canadians with the passage of this bill. Canada's higher income earners would immediately launch many measures to protect themselves from paying such high taxes. The Liberals will not realize the rise in tax revenue that they are counting on to finance their small increase in benefits to the middle class on which the bill is supposed to deliver.

Not only are the high income earners going to task their accountants with pursuing and implementing measures that will ultimately prevent them from paying higher tax increases, but some of them will abandon their lucrative endeavours in Canada to reduce their incomes so they do not have to pay the increase. They will move their projects, in some cases offshore, Canadians will lose jobs, investors will follow these business leaders to their new locations, and Canada will lose investments.

We have seen this under former Liberal governments. When I ran in the elections in 2000 and 2004 as a new young MP coming in, like many here today, the top issue of the day was what we called the brain drain. We asked ourselves what we would do to bring back Canada's young, to bring back those who had moved to the states or Europe with their potential futures. What would we do to solve the brain drain? Economists are again predicting significant brain drain from Canada as the result of Bill C-2.

The federal government will not have the tax revenues to fund the schemes put forward by Bill C-2. The worst part of Bill C-2 for my constituents is the reduction of the annual contribution limit for the tax-free savings account, from $10,000 at its previous level to $5,500 starting January 1 this year.

Right now many families are experiencing the pain of unemployment. Many of my constituents work for companies that service the oil patch, and their lives are being disrupted. Households are being disrupted. Savings are being used in an attempt, in some cases, to save family homes, or to make the next payment.

TFSAs have been a very effective tool for all Canadians, young and old. Tax-free savings accounts are being cashed in by many constituents of mine in Alberta right now. Families are using their tax-free savings accounts to try to reduce their economic vulnerability to the oil price and also, in some cases, to their pending unemployment.

Meanwhile, the Liberal government is refusing to help get our petroleum products to seawater ports so we can export our products to our customers who are waiting and wanting to buy our products. When that happens, unemployment climbs. We are seeing that right now.

Any family that is not suffering significant loss of jobs is looking to save whatever amount of money it can. Families are saving now for the coming hard times they know will happen under the Liberal government.

The Liberals have promised numerous budgetary deficits that will expand our nation's debt and ultimately lead to higher taxes. In other parts of Canada, places not yet suffering from the downturn in the oil patch, some Canadians are still managing to put money into their retirement funds.

Many Canadians are saving as much as they can. Many Canadians are simply trying to park their savings, because they know that the downstream effects of the current downturn in Canada's energy sector will soon hit them in their pocketbooks.

We found out just a couple of days ago that Japan adopted a negative interest rate policy. Now where money is being held in the bank, it is now looking at ways of taxing it. In an uncertain climate there, people are sitting on their savings.

The loss in federal revenue from the oil patch in the coming years is going to affect Canada. Make no mistake, it will affect how the Liberal government will operate. It will affect how the Governor of the Bank of Canada sets rates. It will affect all Canadians, in the rural parts of Canada, in big cities, and in the remote areas of Canada.

Already, after three or four months, Canadians have no faith that the government will help the people in business in Canada's once-prosperous sector. They know about the coming hard times their families will suffer during the failure of the Liberal plans. They know they will see massive amounts of tax dollars that the federal government does not have being spent on misguided efforts, job creation efforts, and token attempts at diversifying local economies. The way the Liberals will deliver on those is yet to be seen. We are still waiting for a budget.

All I know is that Canadians are disappointed with a lack of action from the government. Many Canadians know that the Liberal government is in serious trouble. Based on Finance Canada's estimates, the new Liberal tax plan amounts to an average of an $6.34 per week for those individuals who qualify. Canadians feel betrayed; $6.34 to the middle class, and yet taxing those who are job creators.

We know this small tax break is not enough to stimulate our economy. Nor will throwing money at the middle class stimulate growth and innovation. It does not help create jobs. We have not seen anything from the government that is going to help with innovation, investing back into companies, or anything that is going to help create jobs.

Our Conservative government reduced taxes more than 140 times. This modification to the income tax rate that the Liberals are bringing forward is not significant tax relief and it comes with a high price tag in deficit financing. The policies of the government will be economically destructive. We know it will be for many decades down the road.

The Minister of Finance has already conceded that this tax plan is not revenue-neutral. In Bill C-2, it will plunge the Government of Canada further into deficits and debt. I guess that is what the Liberals deliver on. This is debt that will eventually put our social programs at risk, a debt that our children and our grandchildren will have to pay off. This bill fails.

Consequently, in representing my constituents, I will be voting against Bill C-2.

[Fayçal El-Khoury, Liberal, Laval—Les Îles, QC]

Madam Speaker, I am puzzled. The member says that this government is attacking those who have higher revenue and that this will disrupt the creation of jobs. The opposite is true. He knows very well that our massive investment in green infrastructure, in technology, and in social housing is what will stimulate the economy and create jobs. That is exactly what this government will do.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, we have an oil sector that is reeling under added environmental red tape. We have an oil sector, one of the largest contributors to our economy, struggling under a New Democratic Party in Alberta. We have a sector that is the job creators. The hon. member tells the oil sector that it should not worry about it, that the government will invest in green energy. That is not much solace for the people who are left with house payments and are now on the unemployment line.

That is wonderful. The former government invested in that, as well. However, I guess it is the Liberal way to turn its back on the gas and oil sector, the energy sector, and say, as the member said, that it will invest in green energy and social housing to help people when they are unemployed.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, I welcome my friend back. I very much echo his sentiments and words to our families and supporters who enable us to be in this place and to speak on behalf of the good people in our constituencies.

It is somewhat ironic to hear Conservatives criticize and lecture Liberals about running big deficits and debts. The Conservatives left government having run more than $150 billion in the hole and all we got for it was a loss of half a million manufacturing jobs in Canada. Canadians will continue to pay that bill for a while.

He has some notion or obsession, as the Conservatives did, around the doubling of the TFSA. It was commented on by Joe Oliver, the former finance minister, because we know that doubling balloons the cost to government by multiple billions of dollars within 15 years. When asked, the former finance minister said that it was not for us to worry about, that it was for the prime minister's granddaughter to concern herself with. The former finance minister sometimes struggled with metaphors. The point is that to suggest that we throw the cost down to future generations is a responsible thing for government to do seems the very opposite of the definition of “conservative”, that they should only pay as they go. This is coming from a government that broke with its own traditions and ballooned the debt. Maybe its tradition is to balloon the debt as was done under Mulroney and others.

How can the Conservatives possibly attempt to make this the point of the dagger when arguing against the Liberals? Is the projected debt the Liberals are going to run not high enough, or is it—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Order, please. The hon. member for Battle River—Crowfoot.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, from 2006 to 2008, the Conservative Government of Canada paid down the national debt, paid down just under $40 billion. We lowered the GST. We lowered taxes so investors knew that Canada was the place to do business.

In 2008, the world went into the largest recession since the Great Depression. Around the world governments were investing in infrastructure and stimuli. Our government did the same. With great pride, we invested in infrastructure in our cities and rural areas. Although the member talks about unemployment, 1.1 million net new jobs were created from 2009 to 2015.

It was a massive recession worldwide. It did not start in Canada or begin because of what happened here. However, the government responded.

With respect to the tax-free savings account, we all know, including the finance minister, if we read his book, that the third pillar of pension funds and personal investments for their pension and that is what we need to improve. That was why we brought forward the tax-free savings account. That was why we brought forward the pool registered pension plan. That was why we brought all these measures forward. Through CPP, OAS and GIS, that pillar is strong. We want to ensure—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I want to remind members that if you want to participate, you are to stand up to ask the question and to be respectful when someone else is speaking. I could see that there were many people who wanted to ask questions, so I would remind people to try to keep your questions brief, as well as the answers.

Resuming debate, the hon. member for Renfrew—Nipissing—Pembroke.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, it gives me great pleasure to rise on this occasion as the member of Parliament in the 42nd Parliament of Canada. The people of Renfrew—Nipissing—Pembroke have my sincere gratitude for giving me the honour and the privilege of being their representative in this sixth consecutive election.

Now that the election is over, I renew my pledge that I never forget the people who made this possible, the good people of Renfrew—Nipissing—Pembroke. They can be assured that I will continue to fight for the issues that they tell me are important. As always, I am their servant.

There are many individuals to whom I owe a great debt of gratitude for the confidence they have placed in me, for their hard work, and for the long selfless hours they put in to build a winning streak that has become our standard for successful campaigns.

For the many newly elected MPs who are not aware of the history, the Ottawa Valley became the eastern beachhead of democracy in the year 2000. That marked the beginning of meaningful change as Canadians entered the 21st century, and from the period 2006 and on, a period that will be fondly remembered as the good old days of responsible leadership while today's Conservatives take a short break from government.

I extend my heartfelt thanks to our entire campaign team, my spouse Jamie, and the many hundreds of volunteers who demonstrated what a truly grassroots campaign Ottawa Valley style is really all about.

Before I begin my comments regarding Bill C-2, I want to make it fundamentally clear that the Conservative Party I am proudly a member of stands for lower taxes and less government interference in the daily lives of Canadians. The best anti-poverty program is a job. We do not create employment by taxing, borrowing, and spending more than we can afford.

My constituents support lower taxation. They sent me to Ottawa to reduce government and to fight for lower taxes. Bill C-2 is about a misleading campaign promise that was presented to a distracted public as reducing taxes at the expense of raising taxes for others, when in fact all this does is raise taxes for everyone.

In the case of this so-called middle-class tax cut, it was claimed during the last election that taxes would be reduced on the middle class by asking the wealthiest Canadians to pay more. Canadians have since learned that higher taxes for the wealthiest Canadians will not begin to pay for this campaign promise that is the basis of the legislation before us today. The promise was made without even the most superficial analysis. It was made to get elected.

More from the wealthiest does not go far among the rest of the population. The middle class will end up paying for its own tax cut, plus the interest on billions borrowed to cover the tax change, and to cover successive deficits that were promised by the Liberals, a promise they intend to keep, and more, and that should be meant to be broken.

The mark of Liberal generosity is with other people's money. Deficits are just deferred taxes, which is our children's financial inheritance. The irony is that ample evidence shows that government loses revenue when it targets individuals who can afford to pay for avoidance, including by moving their financial affairs to places like Bermuda, which was the tax haven of choice of the last Liberal prime minister before the current occupant.

The legislation before us today, being introduced as the first finance bill in the opening session of a new Parliament, and before the federal budget, when these tax measures could easily have waited to be included in the next federal budget, is intended to fulfill a signature campaign promise. I get that.

It was former Ontario Conservative Premier Mike Harris who set the bar when it comes to keeping one's election promises, so I understand that a political party does not want to be accused of lying to get elected, which is what a government is doing when it breaks its promises. For the Liberal Party, it would seem, then, that there are two types of campaign promises: those made to get elected and those meant to be broken.

I actually had an individual who worked for a major Canadian chartered bank tell my office that he believed that once elected, the Liberal Party would do what it had always done and break election promises it had made to appeal to those confused between election promises made to get elected and election promises made to be broken. He could not believe that the Liberals would attack the middle class by tampering with TFSAs, which, in his professional estimation, were better than RRSPs as a savings instrument, particularly for seniors, and certainly for young families aspiring to be middle class and saving for their first home.

If the debate about Bill C-2 is actually about helping the middle class, there are many other campaign promises that should be broken.

A measurement of a vibrant middle class in a society is home ownership. A recent study by the Canadian Centre for Economic Analysis has identified those under the age of 45, families with two income earners, who cannot find affordable housing without a long commute as being those most under pressure.

I know a dual-income family in Toronto where both spouses are lawyers, and they are shut out of the housing market, where a starter, fixer-upper home costs $1 million in the neighbourhood where they rent.

TFSAs are being used by young families to save for their first homes. Housing is a need, just like food or water, and if we need it, there is a greater and greater pressure on us to get it, regardless of the cost.

What is occurring at the moment in places like Toronto and Vancouver is not sustainable. The fear in places like my riding of Renfrew—Nipissing—Pembroke, in eastern Ontario, is that eventually, the dream of home ownership that has died in the big cities will start to die in areas like ours, smaller local areas, and that rising taxes, electricity costs, transportation, and other big city problems will also contribute to barriers to home ownership locally.

Take away the dream of home ownership in Canada and we take away the middle class. It is no secret in Ontario that this province is struggling because of a misguided energy policy that has caused the exodus of jobs, fleeing some of the highest electricity prices in North America, to U.S. border states. Lower electricity prices will spur economic activity. Lower energy costs are good for consumers and manufacturers.

Where there was once a burgeoning middle class based on blue collar manufacturing jobs, the decision, in the words PMO principal secretary Gerald Butts puts in the mouth of the Prime Minister, to transition away from manufacturing jobs has cost the middle class dearly in Ontario.

I urge members of the Liberal caucus and the rest of Canada to pay attention to Ontario's problems. The same people who ran the corrupt McGuinty provincial government have fled the sinking provincial ship and are now backroom operators in Ottawa, and they promise to take the entire country down the same deficit-spending, tax-the-rich, let-them-eat-cake attitude that is so toxic in Ontario today.

Focus on the one thing that would really improve the economy and help the middle class: create employment. Avoid the incessant talk about the environment. The greed energy act in Ontario, which was brought in under the guise of helping the environment, caused the loss of tens of thousands of jobs, of good-paying jobs, in Ontario's manufacturing sector.

[Vance Badawey, Liberal, Niagara Centre, ON]

Madam Speaker, I thank the member for a speech that I am sure we are all going to remember.

The current government will strengthen the middle class. We made ourselves very clear during the campaign and in the comments made today. It will benefit nine million more Canadians, who were abandoned by the previous government.

In tandem with these investments, our government would invest in infrastructure and the economy. It would therefore create jobs and new economies and would sustain this and future generational assets by contributing to municipalities the needed funds, which would offset property taxes and water and sewer rates for the middle class. In tandem with the cuts we are speaking of within the bill, we would also be contributing to the economy with residual benefits for other levels of government to offer those savings to the middle class.

How would the member come up with ideas to contribute to overall middle-class savings and more prosperous times for the nine million middle-class Canadians who were abandoned by her government?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, our Conservative government left a surplus, and in less than a month, on his very first road trip to the UN, the Prime Minister spent more than double that surplus. What Canadians have seen is a spend-crazy Prime Minister who has spent through the first surplus in his first days of government.

The contortions we hear from the government benches about the deteriorating condition of finance in Canada makes them worthy of the circus this Parliament will become if we do not start having an adult conversation about the economy, minus the selfies.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, across my riding, people are really struggling. We have patchwork employment, families with multiple part-time jobs, and seniors living off small part-time jobs to supplement their tiny pensions. In fact, many seniors are facing challenges of homelessness, which we have never seen before in our area.

The TFSA contribution at $10,000 is not helping these members of my community. In fact, the increase to the maximum would have deprived the treasury of billions of dollars in the coming years. Do the Conservatives still believe that our grandchildren should pay for their bad decisions?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, the fact is, the government putting the people of Canada into successive deficits that lead to structural debt, as the Liberals are trying to put into law, will indeed drive our youth, our future generations, into irreparable debt.

Lower taxes, less government interference in the daily lives of people, and encouraging economic development is how we will lift everyone out of poverty.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, I thank the member opposite for her speech. It was certainly full of a lot of passion and a lot of partisan rhetoric. However, let me state for the record that they had eight straight deficits, two recessions, and an economy that is absolutely in the tank.

I wonder if the member would probably blame the snowstorms in Atlantic Canada this weekend on the Liberals also.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Madam Speaker, with reference to the cold, the increase in costs due to such related weather in the future is what is going to drive Canadians even further into the hole. We have not even had the budget yet, and already the Liberals are increasing taxes. What we know is that with the architect of the greed energy act of Ontario now calling the shots here in Ottawa, every last Canadian is going to have to pay more down the greed energy alley and be at an even higher deficit.

[Michael Levitt, Liberal, York Centre, ON]

Madam Speaker, before I begin, I would like to mention that I will be splitting my time with the hon. member for Edmonton Centre.

It is my honour to rise in the House today in debate for the first time as the member of Parliament for York Centre. I would like to take this opportunity to thank the residents of my riding for entrusting me with such an important responsibility to speak and vote on their behalf in this chamber. I would also like to thank all the volunteers and supporters, and especially my family, who have been so supportive in sharing the vision that all of us here share for a better, fairer, more prosperous Canada.

I have walked through every neighbourhood and talked to tens of thousands of residents of York Centre. People from all over Canada and around the world call my riding home. What I heard from so many people of all backgrounds was that making ends meet is becoming increasingly difficult. The cost of living is rising faster than incomes. Indeed, middle-class income growth has been and is still stagnant. Middle-class families drive our economy, and right now they are stuck in neutral. That is why I would like to take this time to express my support for the government's middle-class tax cut introduced in December and explain why it would help grow the economy.

As we embark on an agenda of economic growth and long-term prosperity, there is no doubt that we are facing considerable headwinds. Globally, we continue to experience what Christine Lagarde, the International Monetary Fund managing director, famously called the “new mediocre”.

In its latest economic outlook in January, the IMF expected global growth to pick up modestly to 3.4% in 2016 and 3.6% in 2017. This is down 0.2 percentage points from both 2016 and 2017 compared to its October 2015 world economic outlook. Although the recent performance of the U.S. economy is encouraging, the European and Chinese economies are still facing challenges.

Global crude oil prices remain less than half of what they were in mid-2014, reflecting softening demand and a global oil surplus. What is happening beyond our borders has real and tangible consequences for all of us. In Canada, our economic performance in the first half of 2015 was poor, mainly due to the collapse in oil prices in 2014.

Last April the government projected that the price of oil per barrel would reach $71 U.S. by the end of this year. As I speak, oil is trading at less than half that amount. We now know that growth will be lower than was expected in the last budget projections. This, of course, has important implications for our currency and our fiscal situation. The good news is that the IMF, in its latest economic outlook released on January 19, expects growth in Canada to pick up over the next two years relative to 2015. We also maintain an enviable position with a low debt-to-GDP ratio, abundant natural resources, and one of the world's most educated workforces. Keeping our debt-to-GDP ratio on a downward path throughout this government's mandate remains fundamental to our economic vision for Canada, alongside balancing the budget. To achieve this, our policies will strike a balance between fiscal responsibility and controlled investments that result in a smaller debt-to-GDP ratio, which promotes economic growth.

One of the most important components is restoring middle-class economic progress, the backbone of our economy. That is why one of the government's first orders of business was to table a ways and means motion to cut taxes for the middle class. That was the right thing to do and the smart thing to do for our economy.

The proposed middle-class tax cut and accompanying proposals would help make the tax system fairer so that all Canadians would have the opportunity to succeed and prosper.

Specifically, the bill proposes to reduce the second personal income tax rate to 20.5% from 22%, introduce a 33% personal income tax rate on individual taxable income above $200,000, return the tax-free savings account annual contribution limit to $5,500, and reinstate indexation of the TFSA and annual contribution limit.

Let me very quickly expand on these three points.

First, the personal income tax rate changes took effect on January 1. It is expected that about nine million Canadians would benefit from this measure in 2016. Individuals would see an average tax reduction of $330 each year, and couples would see an average tax reduction of $540 each year.

Second, the government is introducing a new personal income tax rate of 33% that would apply to individual taxable incomes above $200,000. This means that only Canada's very top income earners are expected to pay more taxes as a result of the proposed changes. As with other thresholds, the $200,000 tax threshold will be indexed to inflation.

Third, the government will be returning the tax-free savings account annual contribution limit to $5,500, also effective January 1 of this year. Let me reassure all members of the House that the change is not retroactive. The TFSA annual contribution limit for 2015 would remain at $10,000. Returning the TFSA annual contribution limit to $5,500 is consistent with making the tax system fairer and helping those who need it the most. When combined with other registered savings plans, a $5,500 TFSA annual contribution limit gives most individuals the opportunity to meet their ongoing savings needs in a tax-efficient manner. Indexation of the TFSA annual contribution limit would also be reinstated so that the annual limit remains at its real value over time.

Finally, before I conclude, I would like to highlight some of the other measures that are included in today's legislation.

Today's bill proposes to change the current flat top rate taxation rules applicable to trusts to use the new rate of 33%. The bill proposes to set the tax on split income to the new rate of 33%. It would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate, and it would increase the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the new proposed 33% personal income tax rate.

Going forward, the government will introduce proposals in the budget to create a new Canada child benefit payment, which would begin in July of this year. In addition to replacing the universal child care benefit, which is not tied to income, the proposed Canada child tax benefit would simplify and consolidate existing child benefits. It is also targeted to those who need it the most. By simplifying and consolidating these benefits, people will understand how to access and take advantage of them. That is why the tax credit was introduced initially.

All of these initiatives demonstrate that our sights are clearly set on the future. This legislation would strengthen the middle class by putting more money in the pockets of Canadians to save, invest, and grow our economy. More broadly, it would help grow our economy in the context of a difficult global economic climate so that all Canadians can benefit. Therefore, I encourage all members of the House to support this legislation.

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

Madam Speaker, the increased TFSA amounts that our government introduced encouraged people to save and prepare for their own future and their own retirement. The limits or amounts were realistic for the people who could save. Not everyone is able to save through workplace agreements.

Do the member and his government not realize they can reduce the burden on future governments by providing means and encouragement for savings through the increased TFSAs for those who are able to prepare for their own retirement, or will the government choose to discourage personal savings and make far more people reliant on governments of the future?

[Michael Levitt, Liberal, York Centre, ON]

Madam Speaker, our government is reducing the TFSA annual contribution limit because we want to make these types of programs more accessible to all Canadians. We believe that as of 2013, only 6.7% of eligible Canadians maximized their TFSA, and that was at the $5,500 limit. Clearly, increasing the limit to $10,000 will not increase the number of those contributing.

We want to make sure that more Canadians are given the advantage of having tax-efficient savings for the future, and we believe this is the best way to achieve that.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, in my riding, many of my constituents are increasingly frustrated watching logs barged away from our communities. Forestry, a backbone of our riding, has been hit again and again with no commitment to secondary manufacturing. Those good-paying jobs float away and many of my constituents are working more and making less.

The Liberal plan will assure that those making between $89,000 to $200,000 will receive the maximum tax reduction. That will not help most of my constituents. Is this the Liberals' definition of middle class?

[Michael Levitt, Liberal, York Centre, ON]

Madam Speaker, we have been very clear that this is the first phase of a number of actions that will help those striving to reach the middle class. Our Canada child benefit will help numerous Canadians when it is introduced in July. It will certainly bring over 315,000 children out of poverty.

In addition, with regard to the comment made about jobs, a huge part of our plan is infrastructure spending, which will be happening across Canada and which I am certain will benefit many of those in the hon. member's riding as we seek to bring Canada back to economic stability.

[Raj Saini, Liberal, Kitchener Centre, ON]

Madam Speaker, I want to commend the hon. member on an excellent and very thorough analysis of the current economic situation.

Could he enlighten the House why he believes the reduction in the TFSA contribution limit is important?

[Michael Levitt, Liberal, York Centre, ON]

Madam Speaker, when we look at the number of Canadians who were investing in the TFSA and reflect back to 2013, we see that only 6.7% of eligible Canadians maximized their TFSA. We want to ensure that tax-efficient savings programs are available to benefit all Canadians.

Clearly, raising the limit to $10,000 will not make it more accessible to Canadians who are not currently participating, when the maximum is only $5,500. This is something that our government will work on and make sure that all Canadians are getting the benefit of these types of programs.

[Bob Saroya, Conservative, Markham—Unionville, ON]

Madam Speaker, I hear the term “middle class” repeated about 100,000 times a day. It is “middle class, middle class, middle class”. How do the liberals define middle class? Is is $40,000, $50,000, or $60,000 a year?

Would the member tell all Canadians how the Liberals define middle class and who is considered middle class?

[Michael Levitt, Liberal, York Centre, ON]

Madam Speaker, both during the campaign and even just this past weekend when I was back in my riding, the residents of York Centre expressed to me that they need help, hope, and leadership from this government, to help them get back on a sound financial footing, a footing that was not left so sound by the previous Conservative government. Our government is committed to that, and that is what we are doing for Canadians.

[Randy Boissonnault, Liberal, Parliamentary Secretary to the Minister of Canadian Heritage]

Madam Speaker, I have the honour of speaking about the tax cut for the middle class, which will help millions of Canadians. We are determined to strengthen the middle class and help it grow because a strong middle class is key to a healthy economy and gives all Canadians a real and fair chance to succeed.

That is exactly what the bill before the House today will do. This bill reduces the tax rate from 22% to 20.5% for Canadians who earn between $45,282 and $90,563 in 2016. What is more, it introduces a new 33% income tax rate on income over $200,000, in other words, the higher income brackets in Canada.

Effective January 1, the government is making it possible for approximately nine million Canadians to keep more of their income each year. This is the smart thing to do and the measure is fair. Members will have the opportunity to hear more about this from other stakeholders in committee.

We already know that the response to the measures announced in December was favourable. We also know that the tax cut for the second personal income tax bracket will not solve all of the problems Canadians are facing today. That is why the government's commitment to be transparent and consult with Canadians will take on increasing importance. The government is taking this approach because it recognizes that it does not have a monopoly on good ideas.

The minister and the parliamentary secretary recently travelled across the country to talk to Canadians directly about what measures the government could take to help the middle class. They met with indigenous, business and cultural leaders to hear what Canadians had to say and initiate discussions to find practical solutions to the problems they are facing.

In my riding, Edmonton Centre, nine consultations were held on various round table topics in order to gain a clear understanding of what the people of Edmonton are concerned about. National consultations continued online and are still taking place today. The response rate and comments received show that Canadians strongly support the government's efforts. Since the online consultation began, the website has received more than 20,000 visits, and more than 2,500 separate observations have been submitted by individuals and focus groups.

The government also reached out to young Canadians by holding three separate live chat sessions with university students. Those sessions gave the government invaluable insight into the concerns of young Canadians all across the country. A total of 8,000 people participated in the live event on Facebook organized by Dalhousie University, and over 1,000 people have replayed it online.

I am encouraged that young Canadians have found new reasons to become engaged with their government. More than 80,000 people have engaged with us through various live events. That is almost the entire population of Prince George. Throughout the consultation process, Canadians confirmed that they want a government that will strengthen the middle class and help those working hard to join it.

I would love to focus only on the positive things we heard, but that would not reflect all the opinions and comments that were provided. For example, the Canadian Taxpayers Federation shared its concerns over what impact returning the tax-free savings account annual contribution limit to $5,500 might have on individuals' future savings. It does not like the new income tax bracket.

The government respects the opinion of the Canadian Taxpayers Federation, but does not agree that roughly 18% of the almost 11 million Canadians with a TFSA had made the maximum contribution to their accounts by the end of 2013. What is more, the government is reinstating indexation of the TFSA annual contribution limit so that the annual limit maintains its real value over time.

The measures in this bill will contribute to strengthening the middle class. That is the Government of Canada's priority. It has become increasingly clear through the pre-budget consultations that Canada's economic outlook has changed since the election.

This has only bolstered the government's resolve to accomplish what we were elected to do.

What is even more important is that discussions with fellow Canadians have given us new insights and allowed us to fine-tune measures that will be included in the next federal budget. The government's plan will be realistic, sustainable, prudent and transparent. The plan will also include other information on measures that will steer Canada towards a more prosperous, inclusive and sustainable economic future.

The government's plan includes introducing proposals to create a new Canada child benefit. Our objective is to start benefit payments in July 2016. This proposed benefit will simplify and consolidate current child benefits. It will replace the universal child care benefit, which is not income tested. The new child benefit will better target those who need it the most.

The government's approach to consultation recognizes that co-operation is essential in order to have real change. The government undertook to listen to MPs from all parties, have discussions and collaborate with them, and identify solutions in order to prevent the needless escalation of conflict. It has already shown its willingness to do so.

We have already heard from Canadians and many members of other parties, and therefore I look forward to discussing and debating the best way to serve Canadians.

Before my time runs out, I would like to take a minute to speak to the MPs present and Canadians at home today. This bill's proposed tax cut will help millions of Canadians. This tax cut will give middle class Canadians more income to spend and invest, which will result in economic growth. I am eager to hold discussions with my colleagues from all parties in order to find solutions to the problems Canadians are facing. I very much hope that they will support this initiative.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Madam Speaker, my colleague asked a previous member what he termed a very simple question, and I would like to repeat that question because, to the best of my knowledge, that question was not answered, not even in simple terms.

The previous speaker was asked what amount of salary the average middle-class family earns. My colleague spoke quite eloquently, referring to the middle class many times. I would suggest that he probably has some figure in his mind that he could impart to us on this side of the House to tell us the exact range of numbers. I will even give him a break and ask him to give us a range of numbers that would fit middle-class salaries.

[Randy Boissonnault, Liberal, Edmonton Centre, AB]

Madam Speaker, what we are most proud of as a government when it comes to Bill C-2 is the fact that we are giving a break to the middle class across the country and we are going to allow nine million Canadians to have more money in their pockets at the end of the day.

If I may be more precise, we are taking the tax rate for Canadians making between $45,282 and $90,563 from 22% to 20.5%, and we are simply asking Canadians who make more than $200,000 to pay slightly more in tax. That is a progressive way to make sure all Canadians can make ends meet.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, we seem to have picked up on a bit of a theme here today, when time and time again my friends across the way are asked for a simple definition of the middle class. I do not know if cookies are being handed out in the lobby to Liberals who mention the middle class more than anyone else. They like to mention it quite a bit but seem to have some strange difficulty in defining it.

The Prime Minister was asked this question just outside the chamber by the press at one point, and he gave a bit of a ham-fisted answer. He said the definition is those who are able to live on their investments. It was then pointed out to him that people who are retired live on their investments and that might not make them wealthy, so he struggled to find a definition for the middle class. If the entire Liberal budget and this entire bill is somewhat predicated and focused on serving the middle class, in the spirit of openness and transparency, it would do us well for my colleague across the way to simply define it.

I will ask him this as a subsequent question. Once he has defined what the middle class actually is, can he tell us why people earning between $48,000 a year and $62,000 a year are going to receive $50 as a benefit from this Liberal tax scheme, while those earning as much as $211,000 a year will earn 16 times more from this Liberal tax plan? Is that the middle class that Liberals are aiming it: folks earning north of $200,000 a year?

[Randy Boissonnault, Liberal, Edmonton Centre, AB]

Madam Speaker, I am glad the member likes cookies, as do I, although in moderation so I can continue to fit into my suits.

What is important for the debate today is to know that nine million Canadians will benefit more from a Liberal government in office making sure we are helping the middle class make ends meet.

When it comes to our work in December, when it comes to the Canada child benefit, we will help 315,000 children out of poverty through our new child care tax benefit. That is the kind of number and the kind of analysis that warrants the attention of this chamber.

[Stéphane Lauzon, Liberal, Parliamentary Secretary for Sport and Persons with Disabilities]

Madam Speaker, I thank the member for his speech.

When the bill was introduced, my colleague said that we had been clear. We consider the middle class to be people who earn between $45,000 and $90,000 a year. My colleagues across the way seem to be quite taken by that.

Can my colleague talk to us about what we are doing for the less fortunate, about our action plan and about what we have already started doing for those in need?

[Randy Boissonnault, Liberal, Edmonton Centre, AB]

Madam Speaker, I thank my esteemed colleague for his question.

Canadians across the country will see us introduce a wide variety of legislation in the House to help the less fortunate. For example, we will increase the guaranteed income supplement for seniors.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, I will split my time with the member for Cowichan—Malahat—Langford.

Madam Speaker, I join this debate with some enthusiasm. I think we have struck upon something here today in the Liberals' centrepiece in their tax promises to Canadians. Bill C-2 attempts to do two things. One is to address the TFSA, the tax-free savings accounts, and bring the limit back down to $5,500. Two is somewhat regressive changes to the tax code that the Liberals are bringing in after so much talk and time spent on their efforts to help the middle class. The single-best answer we have had from a Liberal today, in an attempt to define the “middle class” is he said that it was not up to him to define it. Then he went on to repeat how much help the Liberals were giving this class of Canadians that Liberals refuse to define.

If anybody else finds that odd and somewhat worrisome, let us look through the tax plan that the Liberals have put forward. Revenue Canada breaks down those filing taxes into five groups: the bottom 20%; second 20%; third 20%; fourth 20%; and up to the very top tier of 20% income earners.

Let us just take the middle group. That is an odd way to define “middle class”, to use the middle group. That group, under this Liberal tax plan, gets very little. Perhaps that is why Liberals do not want to actually define the middle class. If they just keep referring to it over and over again, Canadians who are in the middle class, in fact, might think that the Liberals are talking about them when looking at this tax plan.

Let us look at those Canadians who are earning what might seem as middle-class money. Let us take one group that can be defined and get specific. Those earning between $48,000 and $62,000 get $50 under this Liberal tax plan. Perhaps Liberals do not think those are middle-class Canadians, but I am going to walk out on a limb and say they are. They might think that is nice. However, one increase in energy bills in northern British Columbia will take care of that $50.

Now, those earning quite a bit more, up in the top 20%, let us say, between $166,000 and $211,000, will get more than $800 back, not $50.

Liberals can stand in the House today and argue that somebody making $200,000 a year needs the 800 bucks. I know some of my Conservative colleagues used to make the same arguments, but at least they had the effrontery to do it.

What worries me is that the Liberals continue to reference a group of Canadians without ever defining it, hoping that Canadians might be tricked into thinking that they might be talking about them. When they get their tax returns back they will look at $50 extra and ask what happened to that big middle-class tax help that was meant to come. What happened to that election that we watched week after week where the Prime Minister, who is now being echoed by his MPs here in the House, talked incessantly about the middle class and yet is unwilling, unable to define it? Then, when the proof comes in the pudding, when it is time to actually see what those in the middle-income brackets get out of this, it is little or nothing.

In fact, for 18 million Canadians who will file taxes next year, do members know what they get out of this Liberal tax plan? Nothing. Not a thing.

Liberals says they are helping out so many people. This is actually a trick.

We have to give credit where credit is due. This is something Conservatives used to do. They would throw out a big number and say “We're helping eight million, nine million people. Aren't we wonderful?” They would pull a muscle patting themselves on the back so often. We would say, let us see how that actually proportions out. Is it an equal amount of help across those eight or nine million people? Well, no, of course not. The help sloshes up toward the upper end. It gets better the more you make. That is the way the Canadian tax system works. If the Liberals make the cut that they are proposing to do in Bill C-2, those earning north of $200,000 would see a benefit of close to $815. Those who are not fortunate, not able to earn that kind of money, would see something in the order of $50 or, if they are really unfortunate, nothing.

We have to place this into some context, as some of my Liberal colleagues speaking today have.

The economy is in significant and serious trouble, I would argue, as many have in part, due to previous policies by Conservative and Liberal governments. Over the past decade, we have lost half a million value-added jobs in factories and plants that were good family-supporting jobs. Half a million jobs disappeared over that time and there was not a whisper of worry from the previous government and not much from the Liberals when they sat in opposition. They said this is transition.

I suppose it looked like a cute turn of phrase for the Prime Minister's speech writers when he was in Davos, suggesting that we are known for our resources, but we will leave that behind and we will be known for our resourcefulness, as if somehow those two things do not go together, that being resourceful with our resources should be the primary role and governing directive of any government in a country as wealthy as Canada with our endowment of such natural resources. Somehow the Prime Minister and his speech writers wanted to contradict those two concepts of our economy, that it is no good to be known for our resources, tut-tut, that is where we get our hands dirty. We will be known for our resourcefulness and our creativity. That is something counterpoised.

I live in a resource-dependent part of this country. I would suggest that the Canadian economy, as is being borne witness every day on the stock exchange, is still somewhat reliant on the natural resource sector. I hope the Prime Minister has walked some of this stuff back. Sometimes these cute phrases work so well in the drafting room, until they are put out and real people actually hear them and say, wait a second, is he talking about me? Is he talking about my job in the forestry sector or the mining sector, in the petroleum and gas sector, in the green energy sector? I am being resourceful with our resources and I would like to continue to be. That was not a lot of help.

Now let us talk about something that is good. It is important to be hopeful and optimistic and see where work hard will get us. The rolling back of the TFSA limit from $10,000 to $5,500 is important simply because this exercise that the Conservatives undertook was incredibly expensive to the treasury in a very short period of time. We know that the people who were able to max out at $5,500 a year and certainly people who had $10,000 extra at the end of the year burning a hole in their pocket were not the middle class, were not certainly the lower end of the economy, they were folks of means.

We also know from the finance department's own research on this that with the introduction of the TFSA in 2009, simply another retirement and savings vehicle, retirement rates did not actually increase. If we bring in a new policy and it does not do what it is meant to do, then it is worth reconsidering. The government should be credited for at least doing that. A price tag of $13 billion to the treasury in 15 short years is expensive. If it is not helping retirement as so many of my Conservative colleagues said it would, then this is a problem.

Picking up from a government, as the Liberals are now doing, that blew $150 billion on top of the national debt, lost half a million manufacturing jobs in the process, and left a very fragile and weakened economy, it is very important to define the middle class if we are going to help it. If a doctor cannot actually name the problem, I would be pretty suspicious of any prescription that I got from that doctor. Here we are with Liberal after Liberal getting the term “middle class” in as often as they can, peppering it through their speeches. Yet in very simple direct questioning one after another, the best answer we have had from a Liberal so far is that “it is not my job to define”. Fascinating. I guess it is just a Liberal job to talk about it.

If we are unwilling to define it, that causes a lot of people consternation and here is why.

When we break down and get into the actual details of what the Liberals are proposing, the vast majority of benefit is going to those who need it the least. A vast majority of Canadians, some 18 million tax filers this year, will get nothing from the Liberal government and are only going to be disappointed. Expectations are high. The red team across the way made a lot of promises, cited time and time again how help is on its way. After the many dark years under the previous government, here was a new government coming in that understood the middle class. While the leader did not come from the middle class, he understood what it was to pay electricity bills and pick up the kids from school. They were going to go ahead and bring something in that would actually help Canadians struggling to make ends meet.

When we look at the actual numbers we realize that those at the very top end will get 16 times more benefit out of this Liberal plan than those in the middle, which is an infinite amount more than those at the very bottom.

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

Madam Speaker, I always appreciate comments from my NDP colleague. Having said that, there is a bit of a stretch in what he is trying to portray here.

Within the throne speech and this legislation, the Government of Canada is setting the stage for what will see the middle class do quite well. My colleague seems to be focusing on one aspect of the plan and then embellishing on it, much like he talked about with respect to the manufacturing industry. Truth be known, during the last 10 years we saw an excess of 300,000 jobs lost in that industry. When we were in opposition we fought hard for those positions.

Would the member acknowledge that this is just one part of the overall plan that would see the middle class in Canada supported by this government?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, I do not know if by fighting hard my friend from Winnipeg North means when the Prime Minister, then in opposition, went down to Southwestern Ontario and said these manufacturing jobs are gone and they are not coming back. Is that what he meant by fighting hard? It was closer to half a million jobs that were lost. Math is important when it comes to those value-added sectors that have been so devastated by government policy or lack of enthusiasm.

My friend says I am over-focusing on the centerpiece of the government's bill. If the Liberals did not want a lot of attention on this so-called tax cut for the middle class, then they should not have talked about it so much. If they were going to come out with a plan that would give $800 in tax relief to those earning $200,000 a year and they believe those individuals are the middle class, then they should have said so. If they were going to give $50 to those earning $50,000 a year, then say so.

I am only reading what is in the government's bill. If the member does not like the comments in respect to what is in the bill, then the government should not have written this piece of legislation. It should have brought us a better one, a progressive piece of tax legislation.

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

Madam Speaker, it is not very often that I agree with the member for Skeena—Bulkley Valley but he did raise some important points in this debate today.

We have talked clearly about how the Liberals promised that this would be a revenue-neutral plan, that the rich would pay more and the middle class would pay less. I am going to use an example. Using the member's numbers, if a husband and wife were both members of Parliament they would get a $1,600 tax break. Not only would they be getting a tax break, but it would be going to the debt of our children and grandchildren.

Does the member have some idea as to who is going to ultimately pay this debt that the Liberals will be creating?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, the scenario would greatly benefit those earning quite a bit more. The scenario of a member of Parliament and his or her spouse, a husband and wife, a husband and a husband, a wife and a wife, whatever the scenario might be because it is 2016, is one of our concerns. We raised it around income splitting. When we started to look through the analysis of who would benefit more from this, from the parliamentary budget officer on down, basic flaws were found within the policy design.

Instead of doing nothing for 18 million people, the NDP moved a proposal to what the Liberals have brought forward here. If the Liberals are truly open to helping out Canadians, our single amendment would allow 80% of all Canadians to access some benefit from what the Liberals are proposing. We will see how it works out at committee. Jack Layton used to tell us in this place that it is not just good enough to oppose, we have to propose. The proposal would make what is a bit of a ham-fisted approach of trying to help out middle- and lower-income Canadians into something that would be a lot more equitable. It would help out 80% of all tax filers, particularly those at the lower end. We will see what we get when we get to committee.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I would like to thank the hon. member for Skeena—Bulkley Valley. He has done an amazing job in the House since 2004 on behalf of his constituents, and I will certainly do my best to follow such an amazing performance.

It is an honour to rise again in the House to speak on behalf of my wonderful constituents in Cowichan—Malahat—Langford and to take part in the debate on Bill C-2, An Act to amend the Income Tax Act. As we all know, this bill would make various changes to the Income Tax Act, but today I will concentrate on two of them: the changes to the income tax brackets and to the contribution limit to the tax-free savings account.

The Liberals were elected on the promise of bringing tax relief to the “middle class”. Indeed, the words from the Liberals' campaign website painted a cozy picture for the average middle-class Canadian. Let me just read some of the words: “We will give middle class Canadians a tax break, by making taxes more fair. When middle class Canadians have more money in their pockets to save, invest, and grow the economy, we all benefit”.

[An hon. member]

Hear, hear!

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Yes, it sounds pretty rosy.

Before I get to the crux of the matter with the tax changes, I want to speak first about the tax-free savings account because this is on something that the NDP can agree on with the Liberal Party.

When the Conservatives were in power, we heard time and again that the TFSA was an excellent tool for helping seniors. I know very well from hearing from seniors across my riding that the TFSA contribution limit would be of little help compared to many of the NDP's proposals. It was a step in the right direction to lower the TFSA contribution limit placed by the Conservatives, because the higher limit yields disproportionate benefits to the richest Canadians. The TFSA contribution limit increase would have cost the treasury billions of dollars in the decades to come. In fact, it is estimated that the combined federal–provincial cost would have been $132 billion by the year 2080. Where is that money going to be recouped?

We know that the Conservatives' responses included the point that it was not a problem for the previous prime minister's grandchildren. We heard Joe Oliver's comments on that mentioned in the last speech. However, we in the NDP believe in creating a sustainable future where no one is left behind. The problem lies in what we have seen through many Liberal governments in the past. They acted on some small measures but really did nothing to deal with the issues that middle- and working-class Canadians face. Presently, we are dealing with a very difficult economy. There are lay-offs and the power of our dollar has been shrinking by the week. This is making our already-precarious seniors' living and food insecurity even more insecure.

Now I will speak to the matter that I am looking forward to addressing, the so-called middle-class tax cut.

The Liberals have decided not to use their first piece of legislation, Bill C-2, to deal with our ruined economy but to propose lowering taxes in a way that would not benefit 60% of Canadians. In my riding, if someone earns the average income of $37,000 a year, he or she would receive precisely zero dollars in benefits. We know that the price of vegetables has gone up by 10% in the last year and we have seen a report from the University of Guelph that predicts that food prices will again rise faster than inflation. This price of food disproportionately affects the most vulnerable Canadians and is something that hurts the real middle class in this country. The seniors and indigenous people in my riding are some of the most adversely affected by this drastic price increase. If we get to the people who are lucky enough to get into the middle-class tax bracket, the maximum benefit that many of them would see, as alluded to earlier, is precisely $50. That figure is negated when we take into account the cost of inflation. In fact, that $50 would basically be eaten up by five stalks of cauliflower over the year at the supermarket with the way food prices are going.

It is important for us to point out the contrasts here today. I want to show members some of the figures that we have from Statistics Canada: for the average office worker earning $39,000 a year, the benefit would be zero dollars; for hairstylists earning an average of $27,000, zero dollars; and even the fish plant worker earning $26,000 a year, it would be zero dollars. However, I do want every Liberal member of Parliament to understand they are giving themselves a tax break of $679. Moreover, every parliamentary secretary on the government side is giving themselves a tax break of $679. They are doing it for lawyers, well-paid bankers, and so on. However, for the average middle-class Canadians, they will get precisely zero dollars under the bill.

We have a constituency week coming up next week when we will all get to travel back to our ridings and meet with our communities, which I am very much looking forward to. However, I would love to see how Liberal members of Parliament will explain to the so-called common folk in their riding, the middle-class Canadians, what the real deal is with their tax break, and how they are giving themselves $679 in tax breaks, but for the rest of the people in the riding, precisely zero or $50.

This middle-class tax cut is nothing more than smoke and mirrors. The Liberals have never been able to define precisely what the middle class is, and they have never answered the question. The median income, defined as the halfway point between the higher half of a data sample and the lower half, and probably a good place to define the middle class, is $31,000. However, this group will receive precisely zero dollars.

On the proposal for middle-class tax cuts, the legislation before us would work for families that make between $166,000 to $200,000. They fall among the richest 90% to 95% of Canadians. I believe this action seems to suggest that either the Liberals are not here to help the real middle class or they believe the middle class is people earning the 90th percentile of income.

The cost of helping such a small portion of the richest Canadians will exert an incredible amount of pressure on the government's books. In fact, it is estimated that this tax cut overall will cost our revenue stream $8.9 billion over the next six years. This plan was a piece of election hyperbole that was meant to seem progressive, but is actually detrimental to our middle and working classes.

Liberal governments of the past have been able to flash left and then turn right while they were in power. We in the NDP do not intend to let the Liberals get by without a struggle on that front.

This change is not the way we take care of our most vulnerable population like seniors, let alone the actual middle class. This is not the change that our most vulnerable citizens were looking for.

The NDP is here not just to point out the inconsistencies in the Liberal plan, but to propose alternatives. We will be doing so here and in committee. A progressive opposition will stand for the values of fairness for all instead of an economy rigged for the highest earners. We believe in helping the real middle class, and not just the high-income earners that the Liberals have labelled as the middle class.

We have developed proposals that will fix the Liberal plan, which would make it correspond with their campaign promise to Canadians. We believe that if we lowered the first income tax bracket by 1%, then 83% of taxpayers would benefit from this proposal. This solution would benefit many more Canadians, and the cost difference would be minimal.

We could further minimize the cost to the treasury if Liberals would just agree with the NDP to increase corporate tax rates by just a smidgen more, and ask corporations to pay a little more of their fair share instead of downloading costs onto Canadians.

I will end my speech by quoting a few validators who have studied the bill.

According to the research chair in Taxation and Public Finance at the University of Sherbrooke, couples with a combined income of $250,000 a year would gain about $1,100 in tax cuts, while couples with a combined income of $75,000 a year would get an average of zero to $4.

Finally, Gordon Pape, certainly no friend of the NDP, wrote the following in The Globe and Mail:

Finally, let's consider low-income earners. There are a lot more of them than those who fall into the middle-income category.... The Liberals didn't offer them any relief so the only break they get is from the indexing of the tax brackets.

Pape continues that they “are the ones that really could have used a tax cut but somehow they got lost in the election hyperbole. Too bad.”

[Matt DeCourcey, Liberal, Fredericton, NB]

Madam Speaker, I thank my colleague for his excellent speech this Monday afternoon.

I was disappointed to hear that the member does not agree with the idea of delivering upwards of hundreds of dollars, on average, to nine million Canadians, but I was pleased to hear that he agreed with our rolling back of the TFSA.

I wonder if the member agrees with our plan to deliver real change to Canadians by lifting hundreds of thousands of children out of poverty through the Canada child benefit; if he agrees with the idea of investing at an historic rate in social, green, and public transit infrastructure, which we know lifts the health of people in communities and increases the quality of life and well-being; if he agrees with our leadership in health care, in helping to lower drug costs for Canadians; if he agrees with our leadership on home care delivery; and if he agrees with our resetting the relationship with indigenous Canadians.

Does the member see those as valuable plans that the government and this Parliament can move forward on?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, of course we in the progressive opposition will always stand and and agree with conclusive measures to help those who are most vulnerable, whether it is children, the elderly, or poverty overall.

However, we are debating Bill C-2 today. That is why I am not talking about future plans in the budget. With all of the problems that Canada is facing, Bill C-2 could have been an opportunity to introduce some very worthwhile legislation to tackle problems.

Why did we not have the introduction of legislation to tackle the Employment Insurance Act? Why did we have legislation to reverse some of the harmful legislation of the previous Conservative government?

We could have done something to lift seniors out of poverty. Instead, a tax bill has been introduced that will help wealthy Canadians, not middle-class Canadians.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Madam Speaker, it was great to hear that the member is quite concerned about families and seniors. This is something that I have heard much about at the door.

I have met with seniors groups and have spent time in seniors care facilities. I got to hear a lot about what they had to say. One of the big things they talk about a lot is the availability of doctors. Especially in northern Alberta where I am from, it is difficult to get a family doctor.

The Liberal government has proposed a new tax bracket for the 1% and many of our doctors end up in this 1%. We are concerned about brain drain. Does the member not share my concern that this new tax bracket might cost us these resourceful professionals? Is the member concerned about brain drain, as I am?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I do know a little about doctors, being the son of one. I know, from speaking to my father and many of his colleagues, that they do earn quite a bit of money and have an important skill set, but every single of one of them I spoke to would be happy to pay a little more in taxes if they knew that we had a progressive taxation system that would help the most vulnerable. That is what I would say in answer to the member's question.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, in my riding we have a lot of issues with families struggling with daycare costs and a lack of spaces.

With this tax break, will there be any support for those families?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, the member and I heard that on the doorstep from families looking for child care spots.

This tax break does nothing for them. For a family earning in the neighbourhood of $75,000 a year, that is a combined income. That means there are two individuals earning $35,000 to $38,000. They are not getting anything back.

To touch on the child care issue, we will of course welcome any kind of a benefit for the nation's children. I am a father of three and a half year old twins myself. I understand what it is like to raise kids in this environment.

The issue is the lack of child care spaces, and affordable ones at that.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Madam Speaker, I will start by focusing on exactly what the bill is about. I have listened to opposition members talk about what is not in the bill. Quite often, what is not in the bill is because that is not what the bill is about. We can talk about daycare, pipelines, the need for doctors in remote communities, and we will get to those issues in time, but this bill deals with some specific issues for a couple of reasons.

First, this is an amendment to the Income Tax Act. In order to have it apply to the year in which we want the tax cut to occur, it required us to come back before the new year to get those measures in place ahead of the calendar year. It is a technicality. One of the reasons why it was such a critical priority and why there was speed involved in getting this to the floor of Parliament and off to committee was so it could take place in the calendar year where the relief was expected.

What is the proposal? The proposal focuses on two critical issues. One is a tax cut for a very specific set of incomes, between $45,000 approximately and $91,000 approximately, to reduce taxes for income earners situated in that category. The other thing is to roll back a boutique tax cut that was presented to us last year by the previous government, a tax that does not deliver significant relief to a broad band of Canadians but rather privileges a very specific few in a very specific situation. In order to give us some resources to try to balance the budget and deliver more a general and a more targeted tax relief to very specific groups that we think need it, that very specific measure is needed.

The tax cut is very simple. It is relief for middle-income earners who are quite clearly, in volatile economic times, experiencing extraordinary stress on the incomes they earn. Does it provide income support for all Canadians and, in particular, the lowest income Canadians? No. Other measures are on their way to deliver that sort of tax relief, but we committed to this one in the campaign. In order to get it in place in this calendar year in preparation for this year's budget, it needed to be introduced in a timely way.

It is an important measure, though. It starts to make the tax system fair. One of the complaints we have heard about the previous layer upon layer of tax relief presented to us by the previous government, which it skewed toward more affluent and, quite frankly, Canadians who did well, is that it needs to be changed in order to give people the confidence that the taxes they pay are fair. We started to change the tone of the conversation about tax relief and targeted areas and groups of people who did not feel the previous government's tax relief measures were fair.

The TFSA dynamic is the most obvious one. Yes, a lot of people participate in the program. We are not eliminating the program; we are simply not expanding it. The bulk of the people who participate, in particular, lower income Canadians, do not max out those tax-free savings accounts. The folks who are maxing out the tax-free savings accounts, after all of the year's bills have been paid and all of the taxes and expenses have been addressed, are the ones who have $10,000 lying around to invest into one of these tax-free savings accounts, the folks who tend to be doing very well.

We are simply saying that rather than benefit those who are doing well, let us drive the support to those who are struggling to deliver services to their families and support their communities, and aim those tax breaks at middle income earners.

Quite clearly, this is not the last thing we will do. If the proposal were to do this and nothing else for the next three and a half years other than simply manage the government's finances and programs as they are currently configured, much of the criticisms I have heard in this debate so far and read in the newspapers would be justified.

However, we have also committed to sustaining some of the other components of our campaign platform. For example, the minister has already committed to a review of EI eligibility and processing times. Members have also heard us talk about the need to re-evaluate that program to ensure that the people who pay into the system get the support they need, especially in times when economic volatility creates surges of unemployment, as we see in the province of Alberta right now with the resource sector.

Members have also heard us talk about the need to ensure that CPP is reformed, in particular, for seniors who suddenly find themselves in a situation, as life rolls through and the demographic changes happen to their families, where suddenly two pensioners in a single house with rent is now one pensioner with the same rent.

We believe it is an appropriate reform to start targeting support for single seniors who face particular problems as a way of alleviating poverty in a very defined group of people. These people will not benefit from this tax cut, but will benefit from other measures that we will see defined in the budget that will be presented.

Most important, for the family that was previously described in a speech, a family with children that earns $75,000 collectively within its household, this tax measure does not specifically target relief for that circumstance. However, we have promised to double the child tax benefit, not get rid of it. Instead of taxing it as the previous government had done, we will make it tax free. We made this commitment in the campaign. This specific initiative benefits that group of individuals in a very targeted way and provides the kind of support for lower income Canadians, especially those with children, in a way that will alleviate poverty in particular for children, perhaps the most vulnerable group in that population. That is one of the ways in which the targeted approach by this government, which will be unveiled in the budget, will be rolled out.

We are also talking about a whole series of other measures which do not necessarily put more dollars directly into the pocket of families, but will start to alleviate some of the significant pressures that low-income Canadians are under, such as housing and transportation costs when taken as a bundle. Where I come from, for low-income Canadians and the income group that has been described in the previous speech, this constitutes about 71% of household costs for a typical working family. When we add housing to transportation, close to 71% of the disposable income for a family is sucked into those two categories. If we do not move the yardsticks on those two issues, if we do not deliver better transit and better housing supports right across the full spectrum of housing needs, we will not address the issue that is motivating the call for income support.

If we can get housing and transit costs down, we do support low-income Canadians in a comprehensive, across-the-board way that is direct and meaningful. However, we also put people back to work to earn the incomes they need to pay those bills. It is not enough to simply cut taxes for people if we do not also provide jobs for them to earn the income to pay the taxes. Therefore, we have to look at these things in a holistic manner, and we have in our program.

However, we cannot start building housing in the first week of the new government. There are agreements to be struck and negotiated with the provinces and housing providers. Programs need to be rekindled. Unfortunately the previous government put all of the eggs in one basket. This time I am not talking about the petroleum industry but rather the housing industry.

The focus on chez soi or on housing first, which simply prioritizes rent supplements over a housing construction program, means we are not starting with a robust housing market that allows us to house lower income Canadians effectively. We have to rekindle that program and get it moving forward again. That takes a bit more time than simply introducing a tax measure. Therefore, those provisions will come out and will be seen as part of our infrastructure program.

However, members should make no mistake about it. Our commitment to infrastructure is not just about building stronger communities, better cities, and helping provinces get people back to work. It is also about reconstructing the fabric of our country to provide support for low-income Canadians who need housing and transit support in order to access education, work and services, and move forward with a higher quality of life. Income support is part of it, as is direct support through a rethinking of some of the current programs that support low-income Canadians, in particular CPP and EI. Employment programs that deliver the infrastructure to create much stronger urban and infrastructure fabric is part of it. It also delivers the work we need to see Canadians get back to supporting themselves, and moving the whole agenda forward as a complete comprehensive package.

That is the campaign platform, but it is also the agenda of our government. We will not see all of it in the first 10 weeks of a new government. It takes time to bring partnerships together to make those things a reality, in particular in housing and transit. It is not a question of just simply cutting a cheque and seeing a transit program get built overnight. Programs take time. Unfortunately, in many of these instances we are starting from a standstill. Nowhere is that more obvious than in the resettlement of refugees from Syria.

I heard a question last week from a member across the way with respect to why there was no housing available for all refugees. The reason there is no housing available is because the previous government had virtually no housing program.

As a result of that, 25,000 people cannot be housed overnight. It takes time to fund the housing, approve the housing, and then ensure the houses are built in the right places where people will be able to use them. We are moving forward on those programs in a comprehensive, steady way, but it is not the thing that is done first. It is one of the things that is done as part of a comprehensive package that will be contained in the budget.

While members of the House may be frustrated that Liberals are saying many of the answers to the questions lie in the budget, which will be presented in weeks, not months, to the House, as part of a comprehensive strategy toward those issues which are not addressed directly by the current bill in front of us, that is the reality. We have only been governing for about 10 or 11 weeks. That is just short of the length of the campaign. Think about it. The entire election campaign was 78 days and we have only been in power for close to 100 days. A bit of patience, as we move toward our first budget, is in the order.

However, as I said, this bill requires being introduced ahead of the calendar year to ensure it is in place to accommodate the changes to the tax code that are required, and the changes are very specific. The changes in the bill are designed to support middle-income earners who earn between $45,000 and $91,000, approximately, to reduce their tax rate by about 7% and, in doing so, to give some relief to a very critical part of the population struggling right now with inflation, increased housing costs, and other dynamics that are putting pressure on household budgets.

To criticize the bill for what is not in it misses the point. Many of the questions, debates, and speeches need to be more finely attuned to the budget debate than to this one. That needs to be said. As I sit here and listen to all the criticism being thrown at the bill, it is not actually about the substance of the bill. It is hard to answer and say that this bill should do x, y, and z when it is quite clearly designed to one very specific thing.

I have heard criticism that the amount of money being provided. Some members favour much deeper tax cuts. I have heard others in the opposition say that the support is not deep enough. Finding a balance in troubled and volatile economic times is something that we will all have to work very hard to articulate and achieve. We cannot solve the complexity of the problems that have been presented to us with one-size-fits-all, magic bullet solutions.

The complete list of programs which I have just described is forthcoming. They can be seen in the Liberal campaign platform and ministers have talked about them in the House as they have answered questions of the opposition. That is the totality of our approach. That is the holistic in which way we hope to not only grow the middle class but create a stronger economic platform for our country to thrive, and with the investments that we are talking about, not just build back the capacity of the middle class to thrive and move forward, but to ensure our partners in municipal and provincial governments have the capacity to also make investments and do the other things required to strengthen the Canadian economy and diversify it so it does not enter these periods of volatility quite as vulnerably as it has in the past year.

Things like investments in housing, the environment, social infrastructure, and transportation and transit are, again, part of the larger agenda: to strengthen the middle class with job creation, sustain the capacity of the middle class with tax cuts and reforms to programs which sustain their ability to participate in a strong and valued way, but, at the same time, also ensure we keep an eye on poverty.

I appreciate the comments, concerns, and issues that have been raised around poverty, poverty within the aboriginal, first nations, Métis, and Inuit communities, both on and off reserve, in particular, in urban settings, which concerns the riding I represent. I appreciate the focus on seniors who are struggling as private pensions sometimes become fragile and public pensions do not keep pace with some of the cost pressures that are arising. As we move toward demographic changes, we will have many more seniors in vulnerable situations moving forward. I understand there is a need to act there.

In particular, child poverty was something which the House committed to eliminate, but has not. If members look at the riding that I represent, there are more poor children within an hour of the downtown core of Toronto than there are in all of Atlantic Canada combined. These are serious issues that we have to solve. Will this bill, in and of itself, solve those specific issues immediately? Of course not. One would be crazy to think so. We have to get to those issues as part of the larger budget process and throughout the mandate of this government. However, this is the first step we are taking to provide very specific and targeted tax relief to a very defined group of people in our country.

Rest assured that there is more to come as we start the project of building back the size, capacity, and health of the middle class in our country.

I want to end by talking about how housing fits into this, because it is critical. The debate cannot just begin and end with a simple tax cut. We need to start delivering across the full spectrum of housing needs in the country. This is an issue that will actually define whether or not we succeed in rebuilding the middle class and giving it the strength it needs.

It is not just about affordable housing. It is about housing affordability. There are housing markets in our country where a sudden housing correction, a sudden spike in mortgage payments, or a drop in equity in people's households would create poverty the likes of which our country has not seen for decades. We need to manage the full spectrum of housing needs in the country. We need to ensure a way to get from the street into a shelter, from the shelter into affordable housing, from affordable housing into home ownership, and from there, on a path to the middle class.

The housing strategies that we will hear in the House are, to me, fundamentally the most important conversation we are going to have about alleviating poverty and strengthening the middle class. If we do not get to that conversation, if we get hung up on simply measuring the percentages of tax cuts, the size of the deficit, and the size of the debt as it moves forward, if all we do is focus on the numbers and not focus on the actual living conditions of Canadians right across the housing spectrum in the country, we will never solve these issues. Therefore, in the weeks and months ahead, what we need to focus on, as we build capacity of the middle class, is creating the housing required to accommodate aspirations to middle class in the country. We have to do that. If we fail to do that, this Parliament and this debate will have been for nothing. We can cut taxes all we want, but if the quality of life does not change and the capacity to move forward as an individual or a community does not get shifted, nothing will have been achieved.

Housing lies at the heart of it. Housing is no longer just a wealth transfer, and it cannot be. It is also about protecting middle-class investments. It has to be about making sure low-income Canadians have a place to thrive, and vulnerable Canadians are sheltered and protected properly.

However, we also have to look at it as a tool that solves most of the other challenges we face in the country. It is the tool we need to solve some of our energy crisis and climate change dynamics. It is the tool we need to use to deal with child poverty. It is an important tool in making sure aboriginal—first nations, Inuit, and Metis—Canadians have access to stable and thriving life opportunities.

Housing is the solution, and that is where we are going to have the most complex debate. That is where many of the issues that are defined are going to have the most impact, because if we can get that piece right—the tax cuts we talked about, the changes to unemployment insurance, the changes to CPP, and the changes to the way we support vulnerable Canadians—if we have the platform for their lives solidified and protected and moved forward as a federal agenda, we are going to achieve great things in this Parliament.

It starts with this tax cut for technical reasons, and perhaps symbolic reasons, but the entire program is what is about to be presented in the next budget. The entire program is what we will be debating over the next three to four years. Many of the questions that have been raised, which are important questions, will be directly addressed in those days to come. However, in the meantime, this is the first step. I look forward to members' support, and I look forward to members' questions.

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

Madam Speaker, the hon. member has said we should focus on the bill. I am going to do just that. I want to focus specifically on what the bill would do. It is going to give him, as a member of Parliament, a so-called middle-class tax break in the range of $600 to $800, which he would receive.

This would add to the debt of our country, because the Liberals' math is wrong. They said that the rich paying more—those earning over $200,000—would result in a revenue-neutral middle-class tax cut. However, that is wrong. It is wrong by $1.2 billion to $1.4 billion. He is going to accept another $600 to $800 in his pocket at the expense of future generations and his grandchildren.

As someone who regularly stands up in the House and speaks about affordable housing and poverty, how can he stand up and vote for this particular bill?

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Madam Speaker, the bill also proposes a significant increase to people earning over $200,000 a year, and that is part of the way it is paid for.

All tax cuts benefit some people to the disadvantage of others. That is the way taxes are built. We are trying to shift the tax system back into a fairer structure. People whose income passes through the bracket of $45,000 to $91,000 benefit. All of us who are in that situation benefit.

The hope is that, through that, we invest back into the economy by spending, that we generate economic activity, and in doing so we start to lift up the economy, providing jobs and opportunities for others.

As I said, if this was the only measure we took and the only focus we provided in the next four years, the member's criticism would be legitimate. However, this is the first initiative of a basket of initiatives to try to make the tax system fairer and, in making it fairer, to deliver confidence to the Canadian people both that the middle class is being rebuilt and that our other pressing needs, those of lower-income Canadians, are now in a position to be addressed specifically.

Some of us benefit, of course. It is an easy criticism to make. However, at the end of the day, when the totality of all the measures is put in place, what we are going to see is equity returned to the tax system. That is what the bill seeks to do, although as a first step, it does expose itself to that criticism.

[Matthew Dubé, NDP, Beloeil—Chambly, QC]

Madam Speaker, considering how much we heard about these tax cuts over the campaign, it is a pretty bad sell when the government is pitching a budget that has not even been presented yet to justify the tax cuts. That is what the member has been doing for the past 20 minutes.

The fact is that the member has asked to hear criticisms of the substance of the bill. That is what the New Democrats have been doing all morning, since the debate started. We have been asking the government why it will not make a simple modification to the change to the tax code to make sure that people earning less than $45,000 actually get something, and that includes medium-income earners of $31,000. Right now they are getting nothing at all.

Is the member perhaps embarrassed by that? Is that why he spent all his time talking about a budget that has not even been tabled?

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Madam Speaker, the question as presented by that inquiry is quite a simple one. What is the best way to provide support for the lowest of income earners in this country? Is it tax relief or other programs that deliver resources straight to their pocket?

We believe the changes we are bringing to the child tax credit, the changes we are bringing to EI eligibility, and the changes we are talking about around CPP—the changes we are talking about in totality—are our best approach, and I think it is the best approach and the approach supported by the majority of Canadian voters, the approach to deliver relief to poverty in this country.

I do not disagree with the goal that was stated in the question. What we disagree with is the strategy. I do not believe that cutting taxes for low-income earners is the quickest, best, or most sustainable way to prevent poverty and to build opportunities for people in low incomes to move into stable, middle-class earning capacities.

It is a difference in strategy, but it is not a difference in terms of goals.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Madam Speaker, I am pleased to ask my colleague a question about his presentation. I was very impressed by all the details he provided about our platform. Over the next four years, our platform will certainly allow Canadians to benefit tremendously from the changes that will be made during this time.

The opposition has indicated a number of times that we should raise taxes on small businesses. As we know, and as my colleague explained so well in his speech, the government wants to invest in Canada and Canadians, not raise taxes, as that would slow down the economy. I would like my colleague to say a few words about that.

I would also like my colleague to talk about the importance of raising taxes on the wealthiest Canadians by 5%. Why does my colleague think that we are the only party calling on the rich to help less fortunate Canadians?

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Madam Speaker, I will deal with the question specifically in English, and I apologize.

The move we have made to double the summer employment program is a very interesting one. We could have, perhaps, chosen to raise minimum wages for a very small percentage of federal workers and try to pretend that we are helping young people get work by paying them better even though it is not as broad-based an approach as possible.

However, in doubling the summer employment program and ensuring small businesses are eligible and by not raising their taxes, we would give businesses the capacity to hire. By assisting in the hiring, doubling the grants, and putting more money into the system so more students can be hired, we see it as a comprehensive way to get at one of the groups that have the most difficulty getting employment, one of the groups suffering from low employment, wages, and opportunities: youth.

There are other ways to approach these programs that are contained within our platform, and they are part and parcel with a holistic approach to alleviating poverty, building a strong middle class, and delivering a different approach than perhaps enunciated by some of our members opposite. It is not that raising minimum wages is a bad idea, and I do not think we criticized the idea. The question is this. When we have limited resources and we are in volatile economic times, what is the way we can have the biggest, most direct impact and work with the partners in the economy to deliver results? We would not raise taxes on small businesses or on large corporations; we would leave those dollars in the economy. However, then we would direct activity toward full employment, in particular for young people in this country, as a way of moving this country forward together. It is a different approach, but it is the right approach, and the electors certainly supported it.

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

Madam Speaker, I wish we could reframe this debate. Starting during the election campaign, both the New Democrats and the Liberals were in a stampede to embrace the middle class. I am hoping this is really coded language for addressing inequity. I hope it is really about the inequality by which the wealthiest 0.002% of Canadians have more wealth than the bottom 34% of Canadians. I hope we are really talking about, as the parliamentary secretary suggested, a suite of measures.

However, I do not think we can measure it against how well the middle class works. I do not think any economist has a definition of what middle class means. We do know what inequality means, and it means the poorest fall behind and the billionaires make more. That would take a whole lot more than what we see before us in Bill C-2.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Madam Speaker, I share the analysis, quite frankly. Our language may differ but, again as I said in the speech, our goals are the same.

It is about inequality. It is why there is a proposal for a tax increase on the top 1% of wage earners contained in this bill. It is why it would shift the TFSA. Instead of maximizing the capacity in terms of people's contributions to it, it would sustain it at its current level because we see it as an effective tool, but we do not see it as a one-size-fits-all cure-all for some of the challenges.

Alleviating poverty, getting people in low-income situations on a path to middle-class existence, growing the capacity and the size of the middle class, and creating fairness in our society are the goals of our government. This particular bill addresses one particular strategy: income tax for a very specific group of people who have income. However, in dealing with lower-income Canadians or those on social assistance, a whole different approach is required. Cutting taxes for a single senior on CPP would not deliver opportunities or support. Boosting CPP would, and we will see measures addressed specifically to that group as part of a larger equity agenda as our budget unfolds in the weeks and days ahead.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, I would like to advise you that I will be sharing my time with the member for Barrie—Springwater—Oro-Medonte, and I would like to take this opportunity to congratulate him on his election to the House.

This is the first time I have had the opportunity to rise to speak in the 42nd Parliament. Therefore, first, I would like to thank the constituents of my beautiful riding of Haldimand—Norfolk for electing me for my fifth term and for trusting me once again to represent them here in Ottawa.

I would like to acknowledge the team of volunteers in my community who worked so very hard each and every day over that 11-week period. Without them, I know that I would not be here today.

I would also like to congratulate my colleagues on all sides of the House for their election, and I look forward to working with them over the coming years.

I am incredibly proud to call the riding Haldimand—Norfolk my home, and I will continue to work hard to be the strong Conservative voice my constituents have asked for in Ottawa. I will fight to make our riding an even more wonderful place in which to live, work, and raise a family.

Haldimand—Norfolk is full of hard-working individuals who know the value of a dollar. Our Conservative government always believed that Canadians' money belonged to them and that they know what is best for themselves and their families.

Canadians in all income groups have seen their take-home incomes rise since 2006. The federal tax burden is at its lowest in over 50 years, thanks to our then Conservative government and the more than 180 tax cuts we made. These tax reductions gave Canadians the flexibility to make choices that were right for them to help build a solid foundation for their future economic growth and a higher standard of living for themselves and their children.

Canadians at all levels are benefiting from that tax relief, with low and middle-class Canadian families receiving proportionately greater benefits. More than one million low-income Canadians were removed from the federal tax rolls altogether due to our Conservative government's tax policies. We significantly improved the lives of Canadians, while at the same time, we kept our promise to balance the budget and stay fiscally responsible.

As we all know, the current Liberal government made it clear in its platform that it would be taking the surplus the previous government left it and would be entering into multi-year deficits. One of the problems with that is that there was once a promise to keep the deficit to $10 billion, which has now ballooned to $20 billion or possibly even $30 billion.

Every week we hear more holes in the Liberal costing of their platform. More recently, the Parliamentary Budget Officer contradicted the Liberals' claim of a cost-neutral tax increase to Canadians.

It is clear to Canadians that there is one party that will always look out for hard-working taxpayers, and that, of course, is the Conservative Party.

Among the multitude of tax-relief measures our government introduced, perhaps the most popular was the tax-free savings account, or TFSA. The TFSA is the most important new savings vehicle introduced in Canada since the RRSP was introduced more than 50 years ago.

Available since its introduction by our Conservative government in 2009, the TFSA is a flexible, registered general purpose savings vehicle that allows Canadians age 18 or older to earn tax-free investment income. I should point out that this is a voluntary procedure.

Millions of Canadians have taken advantage of the very popular TFSA. They are an excellent way for Canadians to save tax free and to have the money available for their own personal needs.

As a matter of fact, according to Revenue Canada, as of the end of 2013, nearly 11 million individuals, that is roughly one in three Canadians, had opened TFSAs, and the value of the total assets held in those TFSAs was nearly $120 billion.

The TFSA gives Canadians the flexibility to save for purchases like a new home or car, to start a business, or to save for retirement. Many Canadians have maxed out the old $5,500 limit, and many would contribute more if allowed. Our Conservative government made that possible when we raised the maximum contribution limit to $10,000, effective 2015 and for subsequent years.

The opposition claims that TFSAs only benefit the rich. That is blatantly false. In fact, at the end of 2013, individuals with annual incomes of less than $80,000 accounted for more than 80% of all TFSA holders, and about half of TFSA holders had annual incomes of less than $42,000. About 1.9 million individuals have contributed the maximum amount to their TFSAs. About 46% of these individuals were seniors, and over 70% were aged 55 and older. Roughly 60% of the individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000.

Many seniors in my beautiful riding of Haldimand--Norfolk have shared their concerns with me about the changes proposed by the new Liberal government. Some retirees on fixed incomes struggle to save for their future, and the TFSA, with its limit increase, was one way to make that easier.

The fact is that Canadians are living longer than ever, which is great news for all of us. Since 2006, seniors have been benefiting from important money-saving measures such as pension income splitting and tax-free savings accounts. As of the end of 2013, close to 2.7 million seniors had TFSAs.

The previous government understood that Canadian society thrives in a low-tax environment. It is a shame that the Liberal government is opposed to the enhancements made to the tax-free savings account. They do not realize the benefits it would bring to Canadians across the country. Unlike the prudent fiscal approach the Conservatives took, the Liberals fundamentally believe in irresponsibly high taxes, recklessly high spending, and what seems to be an aspiration toward structural deficits.

Through Bill C-2, the government would significantly cut back on the amount individuals can contribute to their TFSAs, in spite of the fact that all data shows that those in the middle- and low-income classes are far more likely to use their TFSAs. Meanwhile, the new tax changes the government is trying to bring in would provide absolutely no tax relief to those earning less than $45,000 a year. Instead, many low-income people who are using TFSAs would now be worse off under this new Liberal government's proposed plan.

Our government fulfilled its commitment of doubling the TFSA contribution limit to $10,000, something that was helpful to all Canadians, young and old. The Liberal government should be encouraging responsibility in saving, regardless of how irresponsibly it chooses to run the nation's finances.

The Liberals promised Canadians that their plan was revenue-neutral. Since then, the revenue minister has conceded that the plan is not revenue-neutral; it would leave a $1-billion hole. The Parliamentary Budget Officer released a report estimating that the cost will be closer to $1.7 billion. This is a broken promise that proves that the Liberal plan has been grossly miscalculated.

Canadians know that the Liberal tax plan will end up costing them, so they deserve to know where the money will come from. It is my hope that the Liberal government will see the impact these changes will have on Canadians and will change direction so that all Canadians may benefit from TFSAs to the max.

[Sheri Benson, NDP, Saskatoon West, SK]

Madam Speaker, I agree with my colleague's comments about the Liberal tax plan providing the maximum benefit to wealthy Canadians while nearly 60% of the population will receive nothing. In my riding of Saskatoon West, the largest occupational group is people who work in the retail and service sector. That group will receive little to no tax benefit from this plan.

Would the hon. member join with me and the NDP to propose an amendment to the bill to see the tax benefit actually benefit more lower-income Canadians, because during the Conservative government, many in my riding did not benefit at all.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, we believe that it is important that there be equity, that everyone be allowed to continue to benefit from TFSAs. As I mentioned in my remarks, 60% of those with TFSAs earn less than $60,000. The Liberal government has said that TFSAs disproportionately benefit the wealthy. However, $60,000 a year is not a wealthy income. For 60% of people who have TFSAs, that is what their income is, or less.

We believe that the Liberals should pull back this legislation so that everyone continues to benefit, regardless of their income, because that is good for Canadians and for their families.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Madam Speaker, I thank the member opposite on her passionate speech about TFSAs.

Let me quote:

Doubling the annual maximum does nothing for the 93.3 per cent of Canadians who cannot max-out their TFSA contributions at the existing limit of $5500/year....

Following a detailed review of this program last winter, the Parliamentary Budget Officer (PBO) said: “TFSA benefits, currently balanced across wealth groups, will become increasingly skewed toward high-wealth households over time.”

After the recent budget, would the member not agree that the TFSA, and especially the increase in TFSAs, was to pander to the Conservative base?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, in fact, TFSAs were introduced to benefit all Canadians. Right now, 11 million Canadians have opened TFSA accounts. If we think about our population of around 33 million to 35 million people, that is one-third of all Canadians, and they must be 18 years of age or older.

This is a very popular program right across the financial spectrum. The wealthy are included in it, but one-third of the population is not in that bracket.

This is a program that appeals to all Canadians. Over 60% of those who have opened them have incomes of less than $60,000 a year. We believe that they should continue to benefit from this program. If they do not contribute to it to the max, then it should not affect the finances. However, they should be given the opportunity.

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

Madam Speaker, I note that the member talks about the TFSAs. I think there are different circumstances in people's lives. It is not about the rich. There could be a 30-some-year-old who has been barely making ends meet who has not started to save for his or her retirement but who has a bit of a windfall gain in terms of an inheritance. There could be seniors who are converting their income retirement plans.

Could my colleague talk a bit further about the enormous opportunities TFSAs had for Canadians and how they really were not just a tool? I know it seems like a lot of money every year, but that balance carried forward for years when people had extraordinary circumstances.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, my colleague raises a very good point. At different points in our lives, different circumstances exist. Often someone receives an inheritance or a windfall or perhaps makes a bit of money on the lottery, or any other number of circumstances. Perhaps there is a separation, which is an unfortunate circumstance, but if they find a job quickly thereafter, they would have extra funding that they would need to invest and invest wisely.

I think it behooves the Canadian government to support those individuals and help them protect their earnings going forward so that they can save for a stronger future, which makes a stronger future for us all.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Madam Speaker, thank you for the opportunity to speak to Bill C-2, an act to amend the Income Tax Act. The proposed changes to the act are the following: first, the reduction of room in the tax-free savings account for hard-working Canadians; and second, a reduction in taxes that have been marketed to Canadians as helping the middle class.

To preface any comments regarding these changes, I would like to begin by stating on the record that prior to my election as the representative for Barrie—Springwater—Oro-Medonte, my career was in finance. From personal, to small business, to commercial finance, I have had experience in planning finances and investment portfolios, with the exception of securities, and reviewing financial statements to understand the solvency of both individuals and businesses.

My remarks today are focused on four clear results of this tax-and-spend Liberal ideology we are seeing. One, the reduction of the tax-free savings account hurts seniors and young people more than anyone else. Two, it discourages Canadians from saving their money for the future. Three, the apparent Liberal tax reduction for the middle-class in fact benefits the top 10% of income earners in this country more than anyone else, while doing absolutely nothing to benefit those earning $45,000 per year or less. Four, a proposal that the Prime Minister, the Minister of Finance, and Liberal government have touted as revenue neutral will single-handedly be responsible for $8.9 billion worth of deficit over the next six years.

One of the most innovative tools ever delivered to Canadians, specifically seniors, is the tax-free savings account. While I understand that the government is looking at these changes from a theoretical perspective, my goal is to properly communicate what the practical advantages of these changes are. In my opinion, the Liberal government is reducing benefits to seniors and to all Canadians, benefits that were introduced and changed by the previous Conservative government.

For example, a widowed senior is required by the Canadian tax code to transition their life savings from a registered retirement savings plan, known as an RRSP, to a registered retirement income fund known as a RRIF. Upon transition to the retirement income fund, this senior must start withdrawing a minimum amount, which they are then taxed on. A withholding tax of up to 30% is then levied against withdrawals exceeding the withdrawal limits. Since retirement savings plans and retirement income funds are not truly liquid assets, a person may want to transition their savings into a more liquid vehicle, which is where the tax-free savings account comes in. The hitch is that, as stated, this person is being taxed as much as 30%. The idea that his or her life savings can be placed in a vehicle that can grow without tax in the future is ideal in most situations.

However, the government has reduced the annual amount a person can place in a tax-free savings account, which results in one of two things happening for seniors. First, the person is not able to remove as much of their life savings from their registered income fund in any given year. Second, the person is taxed based on a higher amount and then taxed again on the growth they attain in their senior years. I do not support separating seniors from their hard-earned money, which is likely being used to secure independent living, a healthy lifestyle, and to live out the remainder of their days as they see fit. I do not support under any circumstances raising taxes on seniors in our society.

Likewise, I do not support tax increases on young people looking to make the most incredible investment of their lifetime, in their first home. The CBC has stated the following:

With the TFSA, young people and home buyers have another option....

By contrast, withdrawals to the TFSA can be repaid to the plan at any time, following the year of withdrawal. “And unlike HBP [the home-buyers plan], failure to repay amounts withdrawn from a TFSA never result in tax on funds not repaid”....

The Liberal government has made it more difficult for young people to save for their first home. These young people in the GTA, Vancouver, and other hot markets throughout the country are being mandated now to save up to 10% for the down payment. At the same time, the Liberal government is clawing back one of the most effective tools to save that 10%. The government's action forces young people either to be taxed on the growth of their savings or use the home buyers' plan and pay back the money to the plan over the ensuing 10 years. Repayment, in these circumstances, can be difficult, as moving into home ownership is a life-changing situation and new homeowners often find these times challenging. What the Liberal government will do, therefore, is make it more difficult for young people to save and more difficult to purchase their first home.

While the Liberal finance minister travels around talking about shrinking household debt and increasing down payments on homes valued over $500,000, his government's policies are actually discouraging Canadians from saving for that same home. Therefore, why does the Liberal government say one thing and do another? The government believes that these tax hikes for seniors and young people trying to save for their first home are necessary. They are necessary in order to pay for its apparent middle-class tax cut.

Following the introduction of this apparent middle-class tax cut, economists stated that it would actually help those earning $190,000 a year, that is, those earning more than anyone else. In other words, no one would receive more help than those sitting in the top 10% of income earners in the country. How could the Liberal government, Liberal Prime Minister, Liberal Minister of Finance, and the Liberal MPs promote cutting taxes for those earning $190,000 a year on the backs of seniors in retirement and young people starting out their lives, or like the family I grew up in? We fought for years, like many Canadian families, to get and gain in home ownership.

I wish I could stop here. I wish this was where, to quote the member for Papineau, the “nonsensical” behaviour of this government ended, but it is not. Not only did the government raise taxes on seniors and young people, reduce incentives for saving, provide lower taxes to the top 10% of society, but when it did it, it also threw the government into deficit.

It was reported last week that the former Conservative government had left a $400 million surplus in November. In December, the finance minister announced that the Liberals would run a $3.5 billion deficit this year. This means the government has projected to spend $4.1 billion between November and March more than it takes in. One might ask how. It is because the revenue neutral middle-class tax cut is not revenue neutral and results in the 2016 fiscal year coming with a $1.7 billion shortfall, according to the Parliamentary Budget Officer. Furthermore, it will result in a total $8.9 billion shortfall over the next six years.

When Canadians elected this government they did so believing that the middle class would be the great benefactor, that young people would be given greater opportunity, and that seniors would be given a new way to live out the remainder of their days. Based on the promises the government has made, it has shown that it will say just about anything to anyone to get elected. Canadians will hold the Liberals to account for the actions they take, for the actions they fail to take, and in what order they do so.

The government's priorities are transparent as a result of the actions it has taken first. As it stands today, the government has not prioritized seniors, young people, lower and middle-class Canadians, and our children by its leaving a greater deficit year after year The government has prioritized tax cuts for the top 10% of income earners in Canada. This what the government will be judged on. This is what it will be known for. This is why, as a Conservative, I cannot support Bill C-2.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, I welcome my friend to the House. I have a brief question for him. All day now we have been asking my Liberal friends across the way for a simple or working definition of what the middle class is. They like to use the term ad nauseam, but when asked what the term actually means in the real world, they spin back with their spin.

The reason we ask the question is that when we look at their tax scheme, those Canadians earning between $48,000 and $62,000 a year would be getting a grand total of $50 in tax cuts from this plan. Meanwhile, people earning north of $200,000 a year would get 16 times more in tax cuts from the Liberals.

Perhaps the Liberals would like to define the middle class as $200,000 and above. I would like my friend to illuminate me, the House, and perhaps some Liberals as well as to what the middle class might actually mean.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Madam Speaker, we certainly heard this narrative throughout the election, talking about the middle class. The member is right that we were not told by the Liberals what the middle class is defined as. They have defined it, though, through the tax measure they have brought in. They said they were going to concentrate on middle-class Canadians. They have concentrated on delivering tax relief to the top 10% of income earners in this country. By definition, what I and I think Canadians see is that the Liberal government and my Liberals colleagues across the aisle believe that the Canadian middle class is composed of those earning $190,000 or more.

The House resumed consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the second time and referred to a committee, and of the amendment.

[The Speaker, Liberal, Geoff Regan]

There are three minutes left for questions and comments.

The hon. parliamentary secretary to the government House leader.

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

Mr. Speaker, I appreciate individuals who take the time to present on important pieces of legislation. This is a very important piece of legislation because it would help put into place a major part of the Prime Minister's election platform, on which the Liberal Party campaigned very heavily. That was to put in place a tax increase on those who make in excess of $200,000 and to support the middle class by giving them a tax break. This is really important for Canada's middle class.

My question for the member is this. Would he not acknowledge that there is inequality in income distribution and that the bill would go some way in encouraging more equality in income from a government taxation perspective, and therefore it is a good thing for the middle class in Canada?

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Mr. Speaker, I certainly appreciate the parliamentary secretary trying to put words into our mouths over here. However, with all due respect, this bill exacerbates the issues. It gives tax breaks to those who are earning $190,000. Through the Speaker, I would say to the member that this is the Liberal government walking away from its election promise to help the middle class, because those who get the most out of this are in the top 10 percentile of income earners in this country.

Why did the government not help those in the middle class? Why is the government not focusing on those who earn less than $45,000? Why is the government removing room in the TFSA for Canadian seniors and for young people to be able to purchase their first homes?

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

Mr. Speaker, I would like to quickly ask my hon. colleague this. Most income earners, when they are starting out in their lives, are at their lowest point of income earnings, for example, under $45,000 if they are single, and they might not be able to save money. It does not make financial sense for them to put money into an RRSP as a tax deferral at that particular time.

Therefore, I would like to ask my colleague this. Does the tax-free savings account allow younger people or people starting out in their careers an opportunity to put money into an account where it is tax sheltered until they get into a high-income earning position where contributing to an RRSP makes more sense because they would get a bigger tax break at that tax bracket? I wonder if my hon. colleague could, through his financial experience, enlighten the Liberal Party across the way on how, if we empower people to look after themselves, it means fewer people the government has to look after.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Mr. Speaker, the hon. member is absolutely correct, not just with respect to the flexibility that is given through the tax-free savings account for younger Canadians; but it is ideal to take advantage of it because, the older one gets, usually the greater one's salary—there is an increase in revenue earned—and that point in life is the best opportunity to take advantage of an RRSP. That is 100% correct.

I am not sure why our colleagues across the aisle do not realize this. However, if they do not realize it, I can certainly see where the coffers of the government are going in the future.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I would like to share my time with the member for Malpeque.

It is with great pleasure that I rise in this House today to talk about real change for Canadians. The middle class has gone too long without a raise, and in challenging economic times, we have taken action to help them.

In the next budget and over the next decade, our government will be making historic investments into infrastructure and supporting families through the Canada child benefit, which would lift hundreds of thousands of children out of poverty, and benefit nine out of 10 Canadian families. Bill C-2 is just one of many concrete actions that our government is undertaking in order to help the middle class. We were elected on a plan to grow the economy and help the middle class, and that is exactly what we did in December when the Minister of Finance introduced Bill C-2 in this place.

We are looking at initiatives to help the largest number of Canadians succeed, and we have already begun by cutting taxes for the middle class. Families work hard to make ends meet, and they need a government that understands their reality. The tax cut for the middle class would benefit many in my riding. This is not only true for my riding but for all Canadians. About nine million Canadians would benefit from this measure in 2016. Single individuals who would benefit would see an average tax reduction of $330 every year, and couples who would benefit would see an average tax reduction of $540 every year. The maximum tax reduction would be $679 per individual and $1,358 per couple. That is real change—putting more money in the pockets of the families who need it most. When the middle class is strong and prosperous, we create jobs, spur investment, and create a country that works for all Canadians.

That is not all. We are asking Canadians who have been fortunate enough to succeed to contribute a little more. That is why we are going to create a new tax bracket for those who earn over $200,000 a year. The new rate will increase from 29% to 33%. It will affect 1% of Canadians, but benefit most Canadians.

Bill C-2 also reduces the annual contribution limit for tax-free savings accounts from $10,000 to $5,500 and reinstates indexation of the TFSA annual contribution limit for 2016 and subsequent taxation years.

My opposition colleagues will say that this measure prevents Canadians from saving. That is completely untrue. Only 6.7% of eligible Canadians were able to make the maximum contribution to a TFSA. Doubling the annual contribution limit does nothing for the 93.3% of Canadians who cannot max out their TFSA contributions at the existing limit of $5,500 a year. Obviously most Canadians do not have enough money to make the maximum contribution to their TFSA. In fact, in 2013, Canadians had $592 billion in unused contribution room.

Governing this country calls for a long-term vision. In April 2015—I was not a member of Parliament then, but I was very interested in what the previous government was doing—the former finance minister said that lost revenue due to the higher TFSA limit was a problem for the Prime Minister's grandchildren to deal with. That is not the right way to do things. That is why we brought the limit back down to $5,500 per year. We want to safeguard the future of the next generation.

I am proud to be part of a government that serves all Canadians. That is why we are focused on implementing concrete measures that will help everyone. That is why we want to implement measures to grow the economy. That is why, when we spend money, we will make sure that every dollar is invested wisely.

For example, in the 2016 budget, we will create a Canada child benefit that will help nine out of 10 Canadian families. For the typical family of four, that means an extra $2,500 in help, tax-free, every year. The new Canada child benefit will be tax-free and tied to income. It will also provide more help to those who need it most, such as single-parent and low-income families.

Thanks to our plan, 315,000 children will be lifted out of poverty. Those who do not need it will not receive the Canada child benefit. This measure will mean real change.

Passing Bill C-2 is an important step that will help strengthen the middle class by implementing a tax cut that will benefit millions of Canadians every year.

We are asking those who have been lucky enough to succeed to contribute a little more. We will lower the TFSA contribution limit because it is the right thing to do, especially for the next generation. Of course, we believe in this investment tool, but raising the limit does nothing for 93.3% of Canadians.

I am very proud to support this bill because I know that the people of my riding, Glengarry—Prescott—Russell, will benefit a great deal from it. I encourage my colleagues across the aisle to think about the nine million Canadians who will benefit from this tax cut.

We did not close the door to TFSA holders. We simply set a reasonable limit that will allow their children and grandchildren to contribute to a TFSA and benefit from that tool. There are always limits in life. All we have done with TFSAs is set a reasonable limit.

I also urge my colleagues to take a look at the overall picture of what we are trying to accomplish and to take a look beyond Bill C-2.

We will reduce income tax for the middle class, and we will ask those who make $200,000 and more to contribute a little more. We will introduce a new Canada child benefit, which nine out of 10 families will benefit from.

Recognizing that we are in challenging economic times, we will invest in infrastructure. Of all the mayors that I have spoken to in Glengarry—Prescott—Russell, not one of them has told me that they have sufficient financial capacity to fulfill their infrastructure needs over the next 10 years. I know other mayors across Canada feel the same way.

Now, with the tax measures announced in Bill C-2 and the infrastructure plan that we will be announcing in the next budget, the overall plan to grow the economy makes sense for the middle class. The vision makes sense for our towns and our families. Bill C-2 is a pillar of that vision, and that is why I am supporting it.

I look forward to discussing any issues that I have raised in my speech with my colleagues in the House.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, I want to welcome my colleague and my neighbour from Glengarry—Prescott—Russell to the House. I am not sure if this is his maiden speech, but it was certainly a good speech, and I appreciate that. I welcome him, and I am sure that we will be doing much business together.

As members know, we have been debating Bill C-2 all day. We on this side have been looking for the definition of middle class. It seems like a rather simple question, and we have asked it a number of times to some of my colleagues on that side, but we have not really gotten an answer.

As a good neighbour and hopefully becoming a friend, maybe my colleague opposite could tell me exactly what his party means by “middle class”.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, the member for Stormont—Dundas—South Glengarry is a good neighbour, and it seems like today is the day of neighbours. The member for Malpeque is my office neighbour here in Ottawa.

I thank the member for the middle class question. As he understands, it varies from city to city. The cost of living varies and so the impact is different from city to city.

However, what is important in my riding is the fact that nine out 10 families will benefit from this Canada child benefit. A lot of families in my riding will also benefit from the middle-class income tax cut.

I urge the member and all members across the aisle to support the measures of Bill C-2. For the life of me, I cannot understand how a Conservative member of Parliament can be against a tax cut.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I thank my new colleague from Glengarry—Prescott—Russell. My question is similar and has to do with the definition of the middle class, which is very important. It is the focus for the new government.

Is someone who earns between $48,000 and $62,000 part of the middle class? I think so. Under the Liberals' plan, this person will receive just $50. However, someone who earns more than $200,000 a year will receive more than $800. Is this person part of the middle class? I have no clue. Perhaps so in the Liberals' world. However, in the rest of the world, the first example I gave is more representative of the middle class.

My question is simple. The Liberals have not given a definition of the middle class, but we have heard a lot of references to it and a lot of spin. Is this example fair for someone who earns that amount of money?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I thank my colleague for his question.

He mentioned the middle class, and I often hear the New Democratic Party talk about the middle class. I have yet to hear the NDP's definition of the middle class.

As he knows, the cost of living varies quite a bit from city to city. It costs much more to buy a home in Vancouver than here in Ottawa. I hope he understands that reality.

[David Tilson, Conservative, Dufferin—Caledon, ON]

Mr. Speaker, the government is changing the tax-free savings account and this is discouraging residents of Canada from saving. Is it not a problem when we are discouraging residents from saving by changing the tax-free savings account?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, from what I recall we did not cancel TFSAs, we just put a reasonable limit on them so that the children of our children can benefit from them.

The member would understand that the last minister of finance said that because the limit was increased the prime minister's grandchildren would be responsible for the lack of revenue to the federal coffers.

I would caution the member. Does he not want his children or his grandchildren to participate in TFSA accounts?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, it gives me great pleasure to share my time with the member for Glengarry—Prescott—Russell, who is my new neighbour in our offices in the Valour building.

It is really great to be able to speak on Bill C-2, an act to amend the Income Tax Act, which is really the first plank as we move to implement the commitments upon which we were elected. That plank was outlined in our platform of growth for the middle class. Our key message was real change, a new plan for a strong middle class. That platform specifically stated, as it relates to Bill C-2:

We will give middle class Canadians a tax break, by making taxes more fair. When middle class Canadians have more money in their pockets to save, invest, and grow the economy, we all benefit.

Bill C-2 follows through on that commitment.

However, I will say this. Having listened to the discussion thus far today, it is only one plank among many. It is the first plank, in terms of a package that will assist the middle class and assist prosperity in this country.

As stated in the 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.

What does this mean?

What it really means is those with a taxable income of between $45,282 and $90,563 will see their current rate of taxation of 22% drop to 20.5%. That is a considerable saving for those individuals. We are targeting that group because they are a part of the middle class.

On the other hand, those with taxable income of over $200,000 will increase from the current rate of 29% to 33%.

In essence, what it really does is bring better fairness to the taxation system. It tries to lessen the income disparity and the tax advantages and disadvantages throughout the income tax system to bring better balance and ensure that those who are in the wealthiest sector of our society, who have the means, can contribute more to the fiscal coffers in a way that those monies can bring better balance to Canadians throughout society.

The second major part of the bill from the summary is:

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.

This is extremely important as it brings greater tax fairness to our taxation system and ensures greater effort is made by those with the economic means to support our economic and social programs as a whole.

I will speak a bit more on that aspect of the bill if I have time.

However, it is important to note that members have already voted in support of a ways and means motion, which allowed these changes to come into effect on January 1. Bill C-2, now before the House, would formalize that motion, and it would give members and the public the opportunity to both criticize and praise the bill, and we have seen some of that here today, and maybe even find ways to further improve the bill, either through this act or through future legislation.

As others have said before me, there will be more legislation coming forward that will continue to build on our commitment to income security for the middle class.

The government, beyond these measures today, will introduce proposals in the budget to create a new Canada child benefit payment system under the new Canada child benefit, which will begin in July 2016. The proposed Canada child benefit will simplify and consolidate existing child benefits, while ensuring that help is better targeted to those who need it most.

It is important because one of the difficulties in this place is we debate one bill at a time. In order to look at our package as a whole, this is just one plank in that package, and the Canada child benefit is an extremely important part of our ability to ensure fairness in the system and ensure those who need most and those with families get the benefits we said during the election campaign that we would provide.

Let me come back to the tax-free savings account because there has been considerable discussion in the House on that point. There is no question that the previous government's plan to nearly double the contribution limit to the TFSA would have helped Canada's wealthiest individuals save more. However, we committed to a fairer tax system. We know that only 6.7% of Canadians eligible for the TFSAs contributed the maximum in 2013. The numbers show that a better policy would be to reduce those tax benefits that really only benefit the wealthy, and use those extra monies for other programs to bring greater fairness throughout the system, whether through the new child benefit or through other measures that we laid out in our platform.

We have to look at the 6.7% of Canadians eligible for TFSAs who contributed the maximum. The fact is that most Canadians cannot even contribute $5,500, but those with the means can contribute $10,000, and they are using it more as a tax dodge than anything else. Those monies would be better spent in other ways and bring greater fairness.

There are better ways than the current system of providing income equality for Canadians, and our platform was all about changing that system. This bill gets into two particular areas. It was moved as a ways and means motion in December so the tax changes would be in effect starting this year. This was the intent we talked about during the election. This follows through on that commitment. Again, I emphasize it is one part of our platform among many to make the package complete.

I would encourage members in the House to support the bill and to see it for what it is: a system of tax fairness targeting programs to those who need it most in a way that would help Canada and Canadians gain greater prosperity.

[Sheri Benson, NDP, Saskatoon West, SK]

Mr. Speaker, I want to note that Bill C-2 would provide maximum benefits to those wealthier Canadians, those earning between $89,000 and $200,000, while six out of ten Canadians would receive nothing. Although I appreciate that this is just one plank within a larger platform, or a first step, I feel it is a first step in the wrong direction.

Would the member comment on why the government does not look at reducing the lowest tax rate so many more Canadians will be helped rather than having a tax rate that helps wealthier Canadians?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I should probably not say this in this place, but I always love to get questions from Saskatoon because it is one of my favourite cities. I had an office there for some 11 years. It is a great community.

We are all about fairness in the taxation system. Those people in the low-income bracket that the member mentioned will be handled in other ways, as the Parliamentary Secretary to the Prime Minister mentioned earlier, through housing programs and other means within our total package. That will target those people in the less than $45,000 tax bracket.

Let me go through the tax brackets. Those at $90,563 to $140,388 would stay at the rate of 26%. Those at $140,388 to $200,000 would stay at the tax rate of 29%. The rate for those with an income over $200,000, as is proposed in the bill, would change from 29% to 33%. We would bring better balance to the tax regime within Canada.

[Bob Saroya, Conservative, Markham—Unionville, ON]

Mr. Speaker, I asked the same question earlier today and I hope I can get an answer this time.

I have heard the term “middle class” 10,000 times in the last four weeks. What is the definition of middle class? Is it an individual with an income of $40,000, $50,000 or $60,000 a year? What is the simple definition of middle class? Who does the member consider to be middle class?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, the income levels of the middle class varies across the country, whether in my province of Prince Edward Island or in the province of B.C.

What the member of the Conservative Party should understand and support is that the Liberal Party is supporting the average Canadian in the middle class. He is a member of a party that in the last four years supported the wealthy in our country. His party put a burden on our children and grandchildren going forward into the future.

I heard some of the questions coming from members of the Conservative Party earlier. They were talking about their government ending up with a surplus, which is just a fictional surplus. All that government had were deficits. The Conservative government had the worst economic record in 80 years, since R.B. Bennett. In the last four years, the Conservative Party added $150 billion to Canada's debt. You, sir, should be standing up and supporting this government in getting our country back on track.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I want to remind members that it is not the Speaker, so when you are talking, you are talking about the hon. member.

The hon. member for Fredericton.

[Matt DeCourcey, Liberal, Fredericton, NB]

Mr. Speaker, I thank my colleague, who has had a long and distinguished career in the House. I have a great deal of respect and admiration for him.

He spoke about the middle-class tax cut as one plank in an ambitious agenda that would provide economic and social support to Canada's middle class and those in more vulnerable situations struggling to join the middle class. How does this lay the groundwork for the ambitious agenda of this government? How would some of those other pieces fit together to help strengthen Canada from his home province of Prince Edward Island to the other end of the country?

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

The hon. member for Malpeque in 30 seconds or less, please.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, it would actually take about 30 minutes to answer that question, but it is all good and it is all leading to the country being more prosperous, with greater benefits going to the middle class.

As was said in my remarks, this is just the first plank. It deals with some of the necessary tax changes. It had to be done in a way that it would come into effect early this year. Following on that will be the new Canada child benefit, which will bring greater benefits to all families that are raising children, regardless of income. From there, we will go to housing programs, and on and on will go the list.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, it is a pleasure for me to get up after my friend, the long-serving MP for Malpeque, who never lets the facts interrupt his rhetorical flights in this place.

I enjoyed the fact that he said, mere days after the revenue department confirmed a $1 billion surplus for November, that he still thinks that is fiction, even though the Parliamentary Budget Officer has confirmed that the previous government certainly left a surplus. It was so good in a tight global economy that despite the Liberals' best efforts, they are still accruing the surpluses in their first few months of government. The facts state that quite clearly.

I am very pleased to rise here today in relation to Bill C-2, an act to amend the Income Tax Act.

It is Bill C-2 for a reason. Probably the majority of members of the House are new members of Parliament. They may now know that the first bill, “an act respecting the administration of oaths of office”, is a formulaic standard bill that starts off a session. Therefore, Bill C-2 represents the top priority of a new government coming to office.

Bill C-2 would codify what the Liberals brought Parliament together for six days after they won the election in October of last year, which was to raise taxes on Canadians. Nothing suggests the priority of the current government better than Bill C-2, which is why I thought I would rise in the House.

What I find most ironic about Bill C-2, an act to amend the Income Tax Act, or an act to raise taxes, is that it confirms the age-old nickname for the Liberal Party in this place. A nickname is a term of endearment. I respect anyone who comes to Canada's Parliament, doing their best for the country, but Conservatives for generations, long before my colleagues or I have been here, have accused the Liberal Party of being the tax-and-spend party. What has happened is that the Liberals' early record in their first few months of government confirms that.

My friend from Malpeque confirmed that. He tried to suggest that it was fiction that the last government, the Conservative government, left Canada in a surplus position, but that is exactly what the Parliamentary Budget Officer confirmed last fall. In fact, the Finance Department confirmed the numbers from November of another surplus month. Therefore, the country was left with a modestly growing economy and a surplus.

The two things the government did in the short period of time it governed in 2015 were to make massive commitments for deficits, well above what the Liberals spoke to Canadians about during the election, and they raised taxes. This is one of those occasions for the pundits who often ask why the Conservatives call the Liberal Party the tax-and-spend party. It is because in the first three months of government, the Liberals are raising taxes and spending out of control. That is just the record that we are debating here today with their first bill coming to the House of Commons.

Why I think this is important is that it is setting a tone. This is not a bill that debates assistance or investments in a resource sector that needs some help, as well as the families affected by the downturn in resources prices. They desperately need help, and see mortgage payments on the horizon that scare them. It is not a bill about that.

The bill is about taking more from Canadians in the form of creating a new tax bracket in an already fairly complex tax code by taxing Canadians in the highest bracket more for income over $200,000. It is also a procedure to lower the amount that Canadians can shield from tax through the tax-free savings account by reducing the amount that people can contribute to that very popular device brought in by our previous government and my friend, the late Jim Flaherty, who was finance minister. This vehicle not only allows families of all income levels to save free of tax, but it is also very helpful for people approaching retirement. I heard that and still hear that daily. These are the two measures that are before us in Bill C-2.

Nothing concerns me more, not just as a Conservative but as a member of Parliament who came out of the business community before I was elected to office, than the new government's apparent lack of direction for our economy, even in its first few months.

Many of the members who were elected in October did not get a chance to see their Prime Minister when he was a third party leader. About a year ago, he refused to ever commit to running deficits. In fact, he took a position that was somewhat similar to what the government had adopted, because Conservatives worked hard over the course of many years, following the global recession, to balance Canada's books. Doing that requires decisions by government. Government is not intended to just say yes to everything, increase every budget line, and hire more people in every department. It has to set priorities, make decisions on spending, and look at the tax base to determine if Canadians can afford higher taxes in order to pay for more people in a certain department. These are the decisions of government.

A year ago the Prime Minister, then the third party leader, was committed to running a balanced budget, as was, of course, the Conservative government at the time, and it was not until an election campaign that it changed. For a few years, the fundamental economic position of the Liberal Party was one of fiscal prudence. In the middle of an election, there was a change in direction, a considerable change, perhaps for election advantage, perhaps because of a philosophical change, but it changed to running a $10 billion deficit. That was the commitment that the party talked about with Canadians. It was a temporary deficit of only $10 billion so that the government could fulfill some commitments and add some additional infrastructure money on top of the already substantial building Canada plan that the previous government had put in place.

Within the first few weeks of government, before the House was even called back in session and before you had the honour of occupying that chair, Mr. Speaker, that $10 billion commitment was already $20 billion. If we read the papers, as many members of the House did, a week or so ago, we now see the finance minister hedging perhaps two years of $25 billion deficits. Did Canadians vote for that? Did Canadians vote for the first two moves of the new government to go from a probably improper $20 billion deficit commitment to a $50 billion deficit commitment?

The new government's first act in this place was to raise taxes on Canadians, a tax increase that Liberals told Canadians would be revenue neutral. That is yet another promise that appeased people during the election campaign but was not met and has already been abandoned. Ironically, it was the C.D. Howe Institute, a think tank that the finance minister once chaired, that said that these tax increases would not be revenue neutral for a variety of reasons. From a public policy standpoint, those in the higher tax brackets are more mobile, so there could be a risk of driving more people out of Canada, out of our system of taxation.

I was reading just this morning in The Globe and Mail the great column by Konrad Yakabuski, who identified this tax increase as a risk to a lot of the tech entrepreneurs and growing sectors, as well as the fact they are going to treat stock options as income, which is another thing. Compounded with the fact that our dollar is going down, the government seems to be set on driving talent out of this country at a time when a lot of people are looking for an economic plan that is far more than a Keynesian tax-and-spend approach, with no strategic direction and at a time when it is actually hampering the increased revenues that are possible if we could get our resources to tidewater with energy east. There was a debate in the House last week when the Prime Minister seemed to be putting in place a system and series of consultations and reviews that would essentially mean that capital leaves Canada because of the uncertainty of our business climate.

It is with sadness that I rise today to say that Bill C-2 confirms the nickname of the Liberals as the tax-and-spenders of Canada. I certainly hope that subsequent bills start showing some real direction for the Canada of the future.

[Arnold Chan, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, I want to thank my friend opposite from Durham for his comments in respect to the legislation before the House. While I take his comments to heart, I do not necessarily agree with his characterization that this side of the House is one of “tax-and-spend”, to use his nomenclature.

As the member was giving a history lesson to this side of the House and although I know that he might not have been here earlier, since he also joined the 41st Parliament like I did in a by-election, I want to ask him how he would characterize, for example, the $160 billion in debt that was incurred under his previous government and used and justified by that government to deal with the difficult economy in 2008-09.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I am proud to answer that question from someone who indeed is a friend. We were all very happy to see him get through a difficult personal challenge with his health and return to the last Parliament and then get re-elected. I have a lot of time for the member and, as I said, nicknames are often terms of endearment. It is because we like Liberals that at the end of the day the tax-and-spend nickname is a nickname, but my goodness, with Bill C-2 they are confirming tax-and-spend as their strategy.

When it comes to the global recession of 2008-09, out of which Canada led the G7 in job growth and recovery, certainly we did run deficits. No one has hidden that at all, but we set a course to balance the books by fiscal year 2014-15, which takes decisions. As I said, leadership is not about always saying yes. Tony Blair was famous for saying that leadership is at times about saying no. My father who was a provincial member at Queen's Park coined that phrase long before Tony Blair, that sometimes it means saying no and saying why by setting priorities.

I hope with subsequent bills that come before this place that my friend and my friends will bring forward a plan that is more than just taxing Canadians, more than just reducing their ability to save for retirement. We need a vision that includes resources, that includes new Canadians, that includes a diverse economy to make sure that Canada stays on top.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, I would like to point out for the record that all governments tax and spend. I have always hated that term because it is the whole purpose of government. We take resources, pool them, and we spend them for the greater good.

We have figures from the Parliamentary Budget Officer with respect to the tax-free savings accounts that the increase in TFSA contribution limits would have put a glaring hole in future governments' revenues. I know my colleagues across the way like to support our military, which is one of the biggest consumers of the federal budget.

If we are looking at a $132 billion hole in combined federal and provincial coffers from the Conservatives' increase in the TFSA, how would the member purport to balance the books when we would lose that much revenue?

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I would like welcome another new friend to this place and thank him for his question. To him as a member of the New Democratic Party, now that we are talking about the tax-and-spend concept, I would say that nothing underscores the difference between the three parties in this place better than this question. He looked at the TFSA changes and our increase causing a hole in revenues.

On this side in this party we do not see that as the government's money. Tax and spend decisions to us should be made in a way that takes the minimal amount possible from Canadians to give us the opportunity and the great services and quality of life we have here, while recognizing the trust that we are held to to spend that wisely and only take what is needed. This is not a hole in our revenue. This is Canadians' money. TFSAs are an example where we are saying,“You have made this money, you can save it and earn some income from investments without our taxing it again”. Or in the RRSP option, we defer that taxation.

That is what was so exciting about the TFSA. The fact that we have Bill C-2 and the fact that I have this question about holes in revenue underscores that only the Conservative Party really looks at this as Canadians' money that we were entrusted to spend on priorities and make decisions to make sure that we do not take too much.

[Stephen Fuhr, Liberal, Kelowna—Lake Country, BC]

Mr. Speaker, as this is my first opportunity to rise in this House, I would like to thank the good people of Kelowna—Lake Country, British Columbia, for the opportunity to speak on their behalf. I would also like to take this opportunity to thank the large group of volunteers who worked tirelessly to make this possible.

Let me begin today's debate by quoting the Minister of Finance directly when he announced the middle-class tax cut earlier:

On October 19th, Canadians gave us a strong mandate to take a new approach. We promised to strengthen the middle class and put more money in their pockets to save, invest and grow the economy. Fundamental to that plan was greater tax fairness for the people who need it most—the middle class.

I could not agree more.

One of the most important components to this tax cut is restoring middle-class economic progress, which is the backbone of our economy. That is why the government tabled a notice of the ways and means motion to cut taxes for the middle class in December. This was the right thing to do and a smart thing for our economy.

The proposed middle-class tax cut and accompanying proposals would help make the tax system fairer so that all Canadians can have an opportunity to succeed and prosper.

The bill specifically proposes to reduce the second personal income tax rate from 22% to 20.5%, to introduce a 33% personal income tax rate on individual income tax that exceeds $200,000, and to return the tax-free savings account annual contribution of $5,500 from $10,000 and reinstate indexation of the TFSA annual contribution limit.

Let me quickly expand on these three points.

First, the personal income tax rate changes are proposed to take effect on January 1. It is expected that nine million Canadians would benefit from this measure in 2016. Single individuals would see an average tax reduction of $330 per year, and couples would see an average reduction of $540 per year.

Second, the government is proposing to introduce a new personal income tax rate of 33% that would apply to individual taxable income rates in excess of $200,000. This means that only Canada's top income earners would be expected to pay more as a result of the government's proposed changes to personal income tax rates. As with other bracketed thresholds, the $200,000 threshold would be indexed to inflation.

Third, the government is proposing to return the tax-free savings account, the TFSA, annual contribution limit to $5,500 from $10,000, effective January 1, 2016. Let me reassure this House that the change would not be retroactive. The TFSA annual contribution limit for 2015 would remain at $10,000. Returning the TFSA annual contribution limit to $5,500 is consistent with the government's objective of making the tax system fairer and helping those who need it the most. When combined with other registered savings plans, a $5,500 TFSA annual contribution limit would permit most individuals to meet their ongoing savings needs in a tax-efficient manner. The indexation of the TFSA annual contribution limit would be reinstated so that the annual limit maintains its real value over time.

The previous government's plan to nearly double the contribution limit to the TFSA could have helped Canada's wealthiest save more while costing the federal treasury several hundreds of millions of dollars over the next five years, and some tens of billions of dollars over the long term.

We know that only 6.7% of Canadians eligible for a TFSA contributed the maximum in 2013. Doubling the annual maximum does nothing for the 93.3% of Canadians who do not max out their TFSA contributions at the existing limit of $5,500 per year. That is the real point here. We have talked about this almost exhaustively all day, that very few Canadians take advantage of this, so raising it makes no sense.

Our government is committed to making the tax system fairer and finding ways to support those who need it most.

Finally, I would like to highlight some of the other measures that are included in today's legislation. Today's bill proposes to change the current flat top rate taxation rules applicable to trusts to use the new rate of 33%.

The bill proposes to set the tax on split incomes at the new rate of 33%.

It would amend the charitable donation tax credit to allow higher-income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the 33% marginal tax rate. It would also increase the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the proposed new 33% personal income tax rate.

Going forward, the government will introduce proposals in the budget to create a new Canada child benefit. Payments under the new Canada child benefit would begin in July 2016.

In addition to replacing the universal child care benefit under the previous government, which is not tied to income, the proposed Canada child benefit would simplify and consolidate existing child benefits while ensuring that help is better targeted to those who need it the most. Hundreds of thousands of children would be lifted out of poverty and nearly nine out of ten Canadian families would be better off than they were before.

Before I conclude, I would like to very quickly highlight the government's pre-budget consultations, which took place recently and continue.

When we set out to do consultations, we wanted to do a couple of things. The government wanted to involve as many Canadians as possible, and we wanted to do things differently. The numbers really do tell the story. To date, the combined total number of Canadians reached through channels is up to tens of thousands, the highest turnout on record for pre-budget consultations. For example, we opened up the online consultation on January 6. We have already received more than 67,000 web views and more than 3,500 separate submissions from Canadians, individuals, and groups.

The Minister of Finance had three separate live chats with university students, which gave the government valuable insight into the concerns of young Canadians from across Canada. Apparently, in the Dalhousie University Facebook live event alone, the number of people who logged in reached almost 8,000 and since then many more have replayed it online. At the second Facebook live event in Calgary, the government had more than 70,000 people tuning in live. The pre-budget consultation hashtag, #pbc16, is being used widely by Canadians who have great ideas on how to implement our plan to grow the economy and by commentators and MPs from across the political spectrum.

I want to take this opportunity as a member of the government to express many thanks to everyone who has taken the time out of their day to meet with the Minister of Finance and his parliamentary secretary and to share their ideas. It has been a privilege of the government to hear from Canadians directly, and I can assure them it has had a very profound effect.

To conclude, I believe our program of tax cuts for the middle class is an investment that would lead to a more prosperous, inclusive, and sustainable economic future. Economic growth requires giving everyone a real and fair chance to succeed. We will continue to work with Canadians to implement our platform for real change, which includes investing in our economy, our communities, and Canadians themselves. That means transformative investment in infrastructure and a plan for a strong middle class.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, one of the most important responsibilities we have here is our responsibility to our constituents. My colleague opposite spoke about helping the middle class. I wonder if he can tell me exactly how, in financial terms, his government defines what middle class means—by income bracket—how many of his constituents fall into that bracket, and how many of them would actually be adversely affected by the tax changes contained in this bill.

[Stephen Fuhr, Liberal, Kelowna—Lake Country, BC]

Mr. Speaker, as has been explained several times today, this tax change would be a result of a plenitude of different initiatives and I want to name some of them: obviously, the tax cut that I just discussed; a more generous tax-free child benefit, which was also mentioned; an increase to GIS for single seniors; a substantial investment on social infrastructure; and we are going to work with the provinces to ensure that CPP becomes more meaningful in the future. It is a combination of these things that would kick start our economy and help those who need it the most.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Mr. Speaker, I thank the hon. member for a very clear explanation of what the bill includes. As part of his speech, though, the hon. member talked about consulting with students, many of whom make less than $45,000 a year. I would ask the hon. member how this bill would benefit those students who are in the lowest income bracket.

[Stephen Fuhr, Liberal, Kelowna—Lake Country, BC]

Mr. Speaker, the financial packages on the whole would benefit students. These people have a lot of time ahead of them. Obviously, they are going to get to a point in their lives when they will need CPP. If we start working on it now, CPP could be more meaningful for them in the future. It is going to take some time, and once we get this going, it is the people at the back end of income earning who would benefit the most.

[Kate Young, Liberal, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, could the hon. member talk about his own riding and how the bill would help people who need it the most?

[Stephen Fuhr, Liberal, Kelowna—Lake Country, BC]

Mr. Speaker, I have a wide range of financial situations in my riding, from people who struggle with homelessness to people who are fairly well off. The tax break would obviously help a lot of folks who need the help, again combined with the Canadian child benefit, which would be more generous and tax free. It is a combination of those things that would help people immediately; and then in the long term, looking at things like revamping CPP, which is incredibly important. We know there is not enough meaningful money to get people where they need to go when they get older. It is a combination of all those things that would help.

My riding is no different from any of the other ridings that are struggling right now with homelessness, mental health issues, and a wide variety of things. This money would help us today and also in the future of the plan.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, I want to thank my colleague for his speech.

I want to make a couple of comments and then ask a direct question. I think the comments I am going to make are important because we have approximately 200 new members in this place; and it seems there has to be a bit of a primer given to these new members on what actually occurred in years past, since I heard a bit of revisionist history being bandied about here today.

I know the member opposite is new to this place. I also want to make a comment based upon an exchange between the hon. member for Scarborough—Agincourt and my colleague the member for Durham. That exchange was based upon what happened in the global recession back in 2008. There seemed to be some criticism from the member opposite that we were running deficits. I would point out to all new members in this place that, during the time we were engaged in the debate on whether or not our government at the time should be running deficits, both the Liberals' and the NDP's main complaint was that the deficits were not large enough.

For any member of the opposition NDP and any member of the new Liberal government to complain that our deficit was some of the cause of our financial difficulties today is absolutely ludicrous.

My question is this. Why is it that the Liberals always seem to be wanting higher deficits when the Conservatives are the ones trying to get back to balance?

[Stephen Fuhr, Liberal, Kelowna—Lake Country, BC]

Mr. Speaker, deficit spending can make sense in certain situations when we have economic problems. We have seen it done in the past. Sometimes it is successful and sometimes it is not.

I think the situation coming out of 2008 was a function of how we applied that stimulus and the policies that fell out of it. We did not diversify our economy and really pinned the tail on the donkey to the energy sector, leaving us open to a lack of diversification. Therefore, when the dollar is down and manufacturing has been ignored and oil is down, we suffer across the board, as opposed to those other things coming up when the other commodity comes down.

Deficit spending can be helpful in certain situations. We understand that. It is the plan that—

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Order, please.

Resuming debate.

The hon. member for Calgary Nose Hill.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, there has been a lot of talk today in the House on this bill with regard to helping the middle class. I want to talk about the middle class and the overall economy in my riding, and specifically in Alberta.

It is grim right now. I want everyone in the House to understand what it is like in Alberta right now. One cannot walk down a street or go anywhere without talking to someone who has been directly impacted by what is a significant economic issue in this country. I want everyone in the House to realize what is going on right now. It is really serious.

I get so many calls in my office from people who just do not know what to do. These are not just oil sector workers. This is the service industry. This is everything.

Members have to realize that people's severances are running out in the next few months. This is a major issue. While we are here talking academically about the middle class and what is happening, this is where the rubber hits the road. I implore all members, when we are thinking about this type of economic policy, to understand what it means to someone who does not have a job and does not have any sort of prospect for a job.

I have heard in this place that what is happening in Alberta is simply explained away as low commodity prices or a lack of trust in this or a lack of trust in that. The bottom line is that Canada's energy sector, whether members subscribe to it in their political philosophy or not, provides jobs to hundreds of thousands of people in this country. My riding is in the heart of this.

There was an article in The Globe and Mail this week that specifically talked about how this downturn affects blue collar and lower-income workers in Alberta more than anything. What blows my mind is that we are standing here talking about these policies that materially impact hundreds of thousands of people in this country, and we are not talking about exactly what it means. Opposition and government members are probably not going to agree on a lot of things, but I really hope that in their cabinet and caucus meetings, Liberals talk about the impact of what some of these things mean to people who are without jobs in Calgary.

The finance minister talked about raising taxes on stock options. There was a January 10 Globe and Mail article that stated:

Small oil and gas firms also say they want the government to reconsider its pledge to cap the amount that employees can claim through stock-option income deductions. They say the change, if implemented, will be another blow to an industry already downtrodden by depressed crude-oil and natural-gas prices.

My colleague from Kelowna—Lake Country said that people do not take advantage of the tax-free savings account. Sixty per cent of Canadians who maxed out their TFSAs in 2013 had less than $60,000 in income, and we are taking that increase away from them at a time when we should be promoting their investment in this.

During the campaign, Liberals said they wanted to increase CPP contributions. There are people who do not have jobs and do not have prospects for jobs or are small-business owners during a time when the economy is a significant issue, and the signal from the federal government is that it is going to increase premiums. What do members think happens? Fewer people get hired. That is more money off people's paycheques. The same thing goes for EI premiums.

I hear the rhetoric over and over again about income splitting and that it only affects the wealthy. I ask the Liberals what their definition is of wealthy. I ask them that. How do they define wealthy? I would ask them to look at their ridings and tell me that the people who benefit from income splitting are wealthy. I think they would have a hard time doing that.

The same thing goes for the UCCB. When the Liberals cancel what the Conservative government put in place, it will cost $1,920 per child under six and $720 for older ages.

Parents have been paying for students in certain situations. The textbook tax credit is a huge amount to someone who is depending on it, such as a low-income student, on an annual basis. The Liberals are signalling again that perhaps students should be thinking about the fact that their taxes are going to go up because they are going to school.

If this was a manufacturing plant in Ontario, there would be a national outcry about this. There would be all sorts of investment programs. There would be “rah, rah, let us help this sector”. However, this just goes without notice. In fact, there will be even more punitive things. The Liberals are talking about eliminating the mineral exploration tax credit, which would further depress the industry in Alberta.

The other thing that blows my mind is that at a time when we need to be telling workers in the energy sector that we want to promote growth in the sector, we are telling them that we are going to make the regulatory environment more uncertain. We will hear the rhetoric on the other side that there is a lack of trust. Well, the Liberals have never quantified that.

Our government put in place a responsible resource development package. It invested in things like the Pipeline Safety Act, which included another $1 billion to respond to incidents, and we enshrined the polluter pay principle. The main thing that bill did was add certainty to how long a process was going to take. It was not about getting to a yes; it was about getting to a yes or a no in a certain period of time, because that is actually a determinant in investment in the natural resource sector.

My background is in intellectual property management and research administration. To talk about economic diversification and dismiss the problems in Canada's energy sector as simply having to do with commodity prices, or to say that somehow the government can diversify the economy itself, is shortsighted. When we have a thriving industry, we use the receptor capacity created in that industry to see technologies adopted and tested, have venture capital pools created, and have intellectual capital stay in the country.

However, when we increase taxes on small businesses and raise taxes on stock options, the sorts of incentives that help people invest and innovate, it says to people, “Why would they bother investing here?”

It is a very shortsighted philosophy to think that increasing taxes over and over again and increasing the deficit of our country is going to miraculously result in an economic turnaround.

I want people at home, and anyone who is listening in Alberta today, to understand that if they hear the Liberals over and over again say that it is just low commodity prices or it is just this or it is just that, it shows a complete lack of understanding of how the sector works. Everyone in Alberta knows that we need to have regulatory certainty to move forward on major projects.

We also need to ensure that we retain skilled labour so that when the prices do rebound, all the skilled labour has not left. We have not heard once from the government how it is going to keep the remarkable talent we have built in Canada's energy infrastructure or how it is going help them through this. All we hear is that we are going to increase their taxes, because they are wealthy.

The thing that bothers me most about this is that there is a lack of a plan. We heard in the campaign that the Liberals were going to have a $10-billion deficit. There are different schools of thought as to whether that is a good or bad thing. However, what I think is very negative is the fact that the government does not even know what that end number is going to be. Will it be $50 billion, $100 billion? Who knows? We do not know what that is going to do for the Canadian economy.

Anyone in my riding listening to this and anyone across the country who has a concern about where Canada's economy is going should write to their Liberal MPs and ask them why they are raising their taxes.

I implore my colleagues opposite to really have a think about this. When they are in their caucus meetings, they should ask how these tax increases will affect their constituents. They should ask what that huge increase in the deficit means, not just for their constituents but for their children and their children's children. Hopefully we can see something good come out of this.

[Steven MacKinnon, Liberal, Gatineau, QC]

Mr. Speaker, I thank my colleague for his speech.

An unemployed Canadian is one unemployed Canadian too many. What the energy sector is going through today is the same situation we have experienced in the forestry in Quebec, the mining industry in New Brunswick, and indeed, the manufacturing sector in Ontario and Quebec during the past 10 years.

Any job that is lost is one job too many. The member opposite watched as oil prices went from $110 to $90 to $70 to $50 under the previous government, yet we did not hear the kind of speech she gave in the chamber today.

The member opposite was the minister of western economic diversification. What measures did she put in place in the last 10 years that would gird Alberta and our energy sector, which is living through a crisis, during the kind of situation they are going through now?

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Before we go to the hon. member, I want to remind members in the House, and the member who is about to speak, that they should be speaking through the Chair and not to the other side.

The hon. member for Calgary Nose Hill.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, during my tenure as minister of state for western economic diversification, I completely remodelled the department in five key themed areas. They included skilled labour training and ensuring that there was a better pathway for the commercialization of the research and development that was happening in western Canada. That included a $100-million fund to see process developments and prototypes commercialized and put into markets. I worked with first nations communities to ensure that first nations and aboriginal communities in western Canada had equal access to the economic opportunities created in western Canada. I worked to ensure that trading investment opportunities with new markets were opened up to western Canadian trade groups and producers. I also worked with the western Canadian aerospace sector to ensure that small and medium-sized enterprises had access to our supply chain.

However, I also stood up for my constituents day in and day out and said that the argument around Canada's energy sector was not a good versus evil debate; it is a sector we should embrace throughout the country, because it creates jobs. We also saw the lowest federal tax burden in over 50 years, which increased investment.

I think that is a pretty good record and is one I am more than happy to stand on.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, I would like to thank the member for Calgary Nose Hill for her speech. She is obviously a passionate person standing up for her riding.

I would like to let all members of the House know that we all are feeling the pain Alberta is going through. On a personal note, I have a brother who resides in the city of Calgary. He lost his job. I am a resident of British Columbia, and many people who live in my riding depended on the oil boom of Alberta for long-term, prosperous work. We all feel the pain Alberta is going through. It affects not just locals in Alberta but many people from across the country who got jobs there.

My question for the member is whether, in this time of economic uncertainty and the hurt Alberta is going through, she thinks the government would have been better to introduce in its first bill some honest measures to help the people who are going through a tough time by reforming our Employment Insurance Act.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, I am happy to again speak to the comments on employment insurance as a whole. My concern is with the government signalling to employers, especially small businesses, that it is going to increase EI premiums at a time when, clearly, we need to be looking at ways to promote economic growth. That is going to have a huge impact not only on small business growth but specifically on employees. For someone who may have taken a pay cut or was laid off, this means additional money right off their paycheque. It is not something I support. I strongly feel that it is going to be detrimental to the economy and that the Liberals will have to answer for that if they should pass it.

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am pleased to speak today. I want to begin by acknowledging my hon. colleague across the way, who said:

Does the government have a plan? I can assure the House that the government has a plan. We first reduced taxes. I cannot believe that the hon. member would be against that. Nine million people will benefit. Although she is leaving the room, I am sure she will understand that.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Order, please.

I just want to remind all members that we do not refer to the presence of other members, whether they are leaving or whether they are here.

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

Mr. Speaker, I am sure my colleagues on the other side will appreciate that we have a plan. We started by reducing taxes in December. We are going to put the Canada child benefit program in place in the next budget, and we are going to make historical investments in our infrastructure. That is the plan we have.

I criss-crossed the country. I am sure hon. members know that. We went from Moncton to Yellowknife to listen to people. I can assure them that what Canadians expect from us is to invest in our economy.

This is a turbulent time for the global economy, a time when the Bank of Japan is resorting to negative interest rates, China is facing a slowdown, the collapse of commodity prices is more than just a blip, and mediocre growth is the new norm. That is how Christine Lagarde, the head of the International Monetary Fund, recently spoke about the mediocre growth around the world.

This is a time when Canada needs decisive measures and a firm hand. It requires leadership in order to make smart investments and tax measures to put our economy on track for growth. That is what Canadians expect from us.

Our government is ready to rise to the challenge. After 10 years of slow economic growth, our government was elected to bring in an ambitious economic program to boost our economy. We are taking meaningful action to manage our economy. We are building a more sound economic foundation by providing tax relief to middle-class Canadians and investing in key economic sectors.

That is what people were asking us to do when I was criss-crossing the country during our prebudget consultations. People want us to invest in innovation, productivity, and in our infrastructure. They want us to diversify our economy and promote our exports.

Our government understands that infrastructure can and will go a long way toward solving our problems in the short term and ensuring prosperity in the long term. We know that investing in public infrastructure is the smart thing to do.

In the fall, we finished a very long election campaign during which Canadians voted for real change in Ottawa. They voted for a clear promise to help the middle class and invest in our country to create economic growth and good jobs.

Canadians made their voices heard. They said that it was time to come up with a new plan and a new economic approach. It is time to invest in our communities and in the things that are part of people's everyday lives, such as public transit, roads, clean energy, housing, and child care.

We need to grow our economy's infrastructure to move forward and prosper. As many members know, infrastructure is much more than just structures. It is more than concrete, water pipes, roads, bridges, buses, and railroads. As my colleague, the member for Edmonton—Mill Woods—Beaumont, pointed out, infrastructure is really about people. It is about what enables Canadians to connect in their communities and to play an active role in society and the economy.

When we were doing our cross-country pre-budget consultations, people talked to us about infrastructure, but they also talked about digital infrastructure. They talked about Internet and cell phone connectivity. My colleagues across the way talk about Alberta, but I am from a region that has seen major job losses, like in Shawinigan. Today, people are asking us to make smart investments in infrastructure so that they can participate fully in the economy.

Everyone in the House of Commons is well aware of the significant economic benefits that come from investing in public infrastructure in both the short term and the long term. However, we are also well aware of the power that infrastructure has when it comes to building communities and creating places where we want to live, work, and prosper. During the election campaign, we presented an ambitious platform, and that is the platform that Canadians voted for.

We have committed to doubling federal investments in infrastructure over the next decade. We are betting on and investing in Canadians, and specifically the middle class, in order to stimulate and diversify Canada's economy.

We have committed to investing new funds in three sectors, and they are public transit, green infrastructure, and social infrastructure. We are all familiar with the economic challenges we are currently facing, but strategic investment in infrastructure can stimulate the economy and help build strong, sustainable, and inclusive communities.

That is why the government is committed to working closely with its local partners. We have confidence in their expertise when it comes to establishing priorities in their own communities.

In order to build the infrastructure that Canada needs most, co-operation will be crucial to our success. That is why we have taken the time to go out and meet with Canadians across the country. We went from coast to coast to coast. I even went to Yellowknife to hear the voice of every Canadian. We visited more than 20 towns and cities right across the country, precisely to make sure that the programs we are bringing in are good for Canadians.

In this spirit of collaboration, the Minister of Finance and I held the most comprehensive pre-budget consultations in recent history. More than 146,000 Canadians participated in this process, and this number will continue to increase as online consultations are ongoing.

On January 11, the minister and I went on a six-day tour in order to speak with as many Canadians as possible. We hosted 26 separate meetings and round tables with stakeholders and Canadians all across the country. In addition to these meetings, the minister spoke to capacity crowds at the Halifax Chamber of Commerce, the Montreal Council on Foreign Relations, and the Surrey Board of Trade, with a total attendance of over 1,500 people. Those Canadians who were not able to meet with the minister or myself in person can continue to share their ideas on the Department of Finance website. We have already received more than 3,000 submissions from Canadians. This evening I will be in the riding of Ottawa Centre to hold pre-budget consultations with my colleague, the Minister of Environment .

As part of our pre-budget consultations, we are talking to Canadians to get their input on how the government can best support the middle class, meet infrastructure needs and help grow the economy, protect the environment, and meet local needs, as well as ensure that the most vulnerable members of our society do not get left behind. It is an ambitious list, to say the least, but one that respects Canadian values of honesty, hard work, fiscal prudence, and generosity.

Canadians will be able to see their contributions when the 2016 budget is tabled. I want to assure Canadians that we are listening and we hope that this renewed interest by Canadians will make a better country for all of us, for our families and for our communities.

No one will be surprised to hear me say that the economy is going through a very difficult period. However, in the face of this real challenge, there is also real opportunity to put in place the conditions to create long-term growth. Canadians asked us to make smart choices, and that is exactly what we are going to do. This growth will create good jobs and help our middle class, the lifeblood of our economy, to prosper. We have a plan to grow the economy, and we have already begun to implement it by focusing on investments that promote economic growth while maintaining a commitment to manage the country's economy responsibly.

We will improve economic prospects for our middle class, which is the backbone of our economy.

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

Mr. Speaker, when my colleague was running for office, I am sure he knocked on many doors and talked at many community forums where he would have indicated some of his party's key platform commitments, one being that there might be a deficit, but it would not be any more than $10 billion, and that the Liberals would have the rich pay more and the middle class would benefit, but it would be revenue-neutral. We now know that the deficit will be higher than $10 billion and we know that this revenue-neutral tax actually will be $1.4 billion.

How will my colleague explain that to residents of his riding? The Liberals will create a structural deficit, so who will pay that debt in the future?

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

Mr. Speaker, Canadians understand that when interest rates are low, we invest in the economy to grow the economy. My answer for my constituents is simple. I told them what we would do with the economy, and that is exactly what we are doing. In December we started our plan by reducing taxes for the middle class. We will have the Canada child benefit program, which will be put in place in the next budget. It will lift hundreds of thousands of children out of poverty. It will help 9 out of 10 families, probably 9.9 in my riding. We will invest in a historical fashion in our infrastructure. That is what we said we would do, and that is what we are doing.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, before I start, I want to quickly wish my eldest daughter a happy 16th birthday today.

In the member's speech, I did not hear a lot about Bill C-2. He talked about consultation with Canadians and going around the country. We know that the bill benefits 40% of Canadians, those who earn over $45,000. Those who do not earn $45,000, which is 60% of Canadians, were they consulted about this tax? If they were, I have a hard time believing that they would support this tax break.

The government has talked about setting its priorities and pushing those forward in the first 100 days. When are 60% of the taxpayers going to become a priority of the government?

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

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

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

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

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

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

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

Mr. Speaker, the answer is quite simple.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Would the member not agree with that?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This expenditure on infrastructure would create jobs, real jobs.

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

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

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

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

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

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

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

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

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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

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

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

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

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

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

The hon. member for Elmwood—Transcona.

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

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

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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

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

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

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

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

[Tom Kmiec, Conservative, Calgary Shepard, AB]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, it is interesting to hear all the concern about future generations. When Joe Oliver was the finance minister and he was challenged on the increase in the TFSA limit and how that would de-fund governments in the future, he said that was up to Stephen Harper's grandkids to worry about. So much for that.

On financial literacy, remember the income splitting where 65%, $3 billion to $4 billion a year, would have gone to Canada's wealthiest people? At least some know how to read it. De-funding government over 10 years and yet spending us into the ground is the legacy of those guys.

The deficit the Conservatives claim to have eliminated, as close as they got and they did not get all the way, was done on the backs of veterans, on the basis of a fire sale of GM stocks, a one-time only thing, at a loss. Financial literacy, I do not think so.

Now with things going down the tube in Alberta, Nova Scotia and Saskatchewan, the Conservatives want the Liberal government to help after they have done all they can to weaken the government over the past 10 years. Therefore, which is it? Allow the private people to look after themselves and deprive the government an opportunity to help them when they need it, or—

[The Deputy Speaker, Conservative, Bruce Stanton]

Order, please. We just have five minutes for questions and comments, so I will interrupt the hon. member there. I think we have the question and the comment out.

I would remind hon. members that the right hon. member for Calgary Heritage remains a member in the House. I remind hon. members not to use the given or family names of other hon. members, but to use either their title in the case of parliamentary secretaries or ministers, or the riding names in the case of all other members.

The hon. member for Calgary Shepard.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I would like to reacquaint the member with the facts, and he may want to talk to the Minister of Finance about this. The “Fiscal Monitor” published by the Department of Finance showed that there was indeed a surplus that was left by our government.

We have no excuses to make on this side of the House. We have a very good record. We have left Canadians with the lowest tax burden in 60 years, and 11 million of Canadians take advantage of the TFSA.

My constituents want the government to get out of the way of private business and workers. Energy workers are good at their jobs and proud of their craftsmanship in their trades. They know how to build pipelines. They know how to work on energy projects all across Canada. They do not need the government putting in more red tape that is completely unnecessary at a time like this.

According to the OECD, Canada has a lower than average tax burden than other OECD countries. That cannot be achieved without practising financial literacy in government and we did just that.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I thank my colleague from Calgary Shepard for his excellent speech. Two things really stood out for me, and I want to ask him a simple question.

The government is racking up debt and penalizing low-income families with increased spending that is going to create deficits. Its tax cut is going to send us $8.9 billion into debt and will help only the wealthy.

It is cutting taxes for the rich and, by reducing people's ability to save in the long term, it is depriving them of a tool that helps them meet their own needs in the future.

Is it not troubling to see the Liberal government creating massive debts for future generations by making these bad decisions and taking away a tool for saving, which puts their future at risk?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Speaker, I thank the hon. member for his question.

I did skip one little paragraph in my speech because my time was running out. I would also like to say that my constituents work hard for their money. Telling them that their tax-free savings account is going to be eliminated is disrespectful.

The marginal tax rate in Alberta is currently over 50% for some taxpayers, including many professionals and skilled workers, such as doctors and dentists.

They are in the trades and they earn a very strong income because they work extremely long hours on very long shifts. They sacrifice time with their families knowing that at the end of the day they can better the quality of life of their families and grow their prosperity. It is important to remember that this has a real impact 10 to 30 years down the line when they will be thinking about whether they will have enough to retire and enough to share with their children to ensure they will have an education, or to buy a car so they can get to school or university. It has a real impact on them and that is who I am thinking about.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, I am pleased to participate in today's debate on Bill C-2, the government's tax bill. I would like to begin by saying that we will vote for this bill.

We will vote for this bill, but not because it is excellent; it is not. It is actually rather insignificant, but it is slightly less bad than the status quo that the Conservatives and the NDP were championing during the recent election campaign.

This bill gives effect to the ways and means notice that was hastily tabled before the holidays as a gift to taxpayers. It implements just one of the tax measures that the government promised, and not necessarily the best one.

Objectively, there is little or nothing to justify separating this tax measure from the other tax measures in the upcoming budget and rushing to introduce it before Christmas, nothing but partisan motives.

The government had to do something, anything, to convince people that it intended to keep its promises. It had to do something, because the Liberals have a long history of failing to make good on promises.

The previous Liberal government promised to abolish the GST. It did not. It promised to tear up NAFTA. It did not. It promised to be the government of honesty and transparency. It gave us the secret national unity fund, the sponsorship scandal, and Alfonso Gagliano as minister in charge of government operations. It promised to be the government of growth. It cut transfers to the provinces so drastically that it practically sent Quebec into bankruptcy.

The government had to do something, anything. That something is Bill C-2, which we are currently discussing.

Taxation should be looked at as a whole. It is only by looking at all the tax measures, tax credits, exemptions, benefits, in fact all tax measures, that we can measure a government's performance when it comes to wealth, the middle class, families, and those who are hurting, struggling to pay their bills and make ends meet.

Here we have a government proposing a measure in isolation that will affect a minority of people. This bill proposes to raise taxes on those who drive a Bentley in order to provide relief to those who drive a BMW.

Above $200,000 of taxable income, the marginal tax rate jumps to 33%. This increase will affect the richest 1.4% of taxpayers. No one can disagree with that. The wealthiest 1%, in particular the wealthiest 0.1%, continue to hold a growing share of our society's wealth. That is a problem. They are holding an increasingly larger slice of the pie, while the middle class and other classes continue to get poorer.

On the other hand, Bill C-2 would drop the tax rate for incomes between $45,000 and $90,000 from 22% to 20.5%. The government claims that this mini-reform will provide relief to the middle class, but the kicker is that this measure does not provide any relief to the middle class. According to figures from Revenu Québec, 74% of Quebec taxpayers earn less than $50,000. These people are the ones who really need a break, but Bill C-2 will not help them. The bill does nothing for most of the middle class, for most of the people who are represented here. Instead, this bill will help the majority of the people here in this chamber, who will be able to take full advantage. All of us here, in the House, will benefit from this bill.

According to Revenu Québec, only 5.2% of Quebec taxpayers earn more than $100,000. I find that this government has a rather strange view of the middle class.

Furthermore, the parliamentary budget officer believes that those subject to the tax increase will take steps to avoid it by changing how they report their income. In the end, the government will lose out. We know that without measures to combat tax havens, Bill C-2 will be ineffective for the most part.

As I mentioned, passing this bill will lead to a slight improvement over the status quo. However, it is not this bill, which is nothing more than a public relations exercise, that will determine whether this government really plans on helping the middle class and people of modest means. It will be the next budget.

The next budget will reveal whether the government really supports families by providing its new benefit, collecting enough taxes from those earning more than $100,000—such as MPs, especially by eliminating certain measures—helping seniors by increasing the guaranteed income supplement or by indexing pensions, and looking after the unemployed by making changes to the employment insurance fund and not plundering it, as has been done over the past 20 years.

There is another problem with taxation. I honestly do not think that the government is going to tackle this problem, and I do not believe that the other parties would tackle it if they were in power. I am referring to the fiscal imbalance. The federal government takes approximately 50% of tax revenue in Canada, but provides virtually no services. Consequently, it needs more money than necessary to assume its responsibilities. There are two consequences.

First, the federal government does not need to manage its money properly because it already has too much. Look at what happens when it starts to manage its services. It costs 150% more to handle an employment insurance claim in Ottawa than it does to deal with a claim for social assistance in Quebec. It costs 100% more to take care of a patient in a Veterans Affairs Canada hospital than it does in a hospital in Quebec. At that rate, we would go bankrupt if Ottawa was responsible for health.

Second, the provinces can barely keep their heads above water. While the federal government is spending $50 billion to build ships, and is also thinking about buying F-35s, Quebec universities are thinking of cancelling their subscriptions to scientific journals just to save a few pennies.

Nevertheless, I am convinced that if we were to ask the people of Quebec to choose between a good education and an F-35, the choice would be obvious. Unfortunately, they do not have that choice because the system for sharing tax revenue in Canada is broken and because the federal government has enough revenue to poorly manage its own jurisdictions and to stick its nose where it does not belong.

Since Canadians control the joint account, they claim the right to decide how Quebeckers will organize their own society even in areas where we are already supposed to be sovereign under the Constitution. That is a serious problem that is only going to get worse.

Since it is Quebec that will have to foot the bill for the aging population, our government, like all other provincial governments, is at risk of crumbling under the weight of the health care system, unless it brings in permanent austerity measures and shrinks the government.

The federal government will not be affected, and it will start raking in an obscene surplus. The parliamentary budget officer and the Council of the Federation have stated that, 20 years from now, Ottawa will have paid back its entire debt accumulated over 150 years, but the provinces will all be virtually bankrupt. It is clear that from a taxation perspective, Canada is not working at all. This is creating tension and pointless quarrels, and it is depriving my people of the freedom they need to grow and flourish.

There is obviously one government too many in this equation. We think the superfluous government is the federal government. We will have to tackle this problem one of these days, and the sooner, the better. We have put off the inevitable long enough. The Bloc Québécois will make sure it happens.

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I enjoyed listening to my hon. colleague, except for his political manifesto. It is time to set the record straight.

To say it in English, we need to set the record straight.

First of all, I applaud my hon. colleague's intervention, since he indicated that the Bloc Québécois plans to support Bill C-2. That is the right thing to do. This bill will help the middle class.

When I heard my colleague use a word like “insignificant” to describe a bill that will lower taxes for nine million Canadians, I found that insulting, especially in this House, to the middle-class people I represent from Saint-Maurice—Champlain, which has one of the lowest per capita disposable income averages in Quebec. When the government shows that it cares about the middle class by proposing a measure that will reduce taxes for nine million Canadians, that is not insignificant.

Furthermore, my hon. colleague must have noticed that the measure set out in Bill C-2, the middle-class tax cut, was merely the first step. The upcoming budget will include the Canada child benefit, which will benefit nine out of 10 families.

While the federal government is taking steps to help the middle class, what would my colleague propose to help the middle class?

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, I thank my colleague opposite for his comments and question, although the question was hard to understand.

He mentioned two things in his comments that I want to address. The first is that this is the first step toward the upcoming budget. As I said in my speech earlier, we do not understand why, with just two months before the budget, the government did not just include the first step in the upcoming budget. Why the smoke and mirrors and the gifts just before Christmas when it could have simply incorporated these measures in the budget? From where we are standing, this is nothing more than a public relations and marketing scheme.

The second thing is the child tax benefit that will be included in the upcoming budget, as the government announced. It is too bad that the benefit the Conservatives enhanced was not made non-taxable. Instead, families having a hard time making ends meet will be taxed on the benefits they received during the year. We think that makes no sense. The government should have eliminated the tax on that benefit.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I thank my colleague for his speech. I also thank him for saying that he supports Bill C-2.

I understand that his political party believes that Quebec should be an independent country. In his speech, he said that Quebec did not need the federal government and that his people were trapped in a federation. Twice, in two referendums, our people voted to remain in Canada.

After two referendums and a number of provincial and federal elections in which our people decided to stay in Canada, why does he still believe that the desire and will of the people of Quebec are not respected?

[The Deputy Speaker, Conservative, Bruce Stanton]

I remind hon. members to direct their comments through the Chair.

The hon. member for Pierre-Boucher—Les Patriotes—Verchères.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, I want to tell my colleague opposite that, with respect to Quebec's independence, not a single Quebec premier has signed the Constitution since it was forced on Quebeckers in 1982. No one has accepted the situation that Quebec is in. We are in a kind of no man's land. Ottawa continues to impose things on us that we never agreed to. The best example is the pipeline.

A number of studies, which were swept under the rug, have shown that the federal government went well beyond its allowed spending for the 1980 and 1995 referendums. It cheated and did not follow the rules.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, it is my pleasure to rise today to speak in support of Bill C-2, An Act to amend the Income Tax Act. As stated on January 29 by my hon. colleague, the member for Toronto Centre, Bill C-2 would help strengthen and grow the middle class, as promised in the government's election platform. Bill C-2 would deliver on that promise.

All hon. members of the House have heard about widening income inequality. On January 1, 2016, Canada's highest-paid CEOs had already earned what most Canadians earn in an entire year. With this growing gap between extreme ends of the income scale, the people who are squeezed the most are the people in the middle-income group. They are the Canadians whose real take-home pay packages have been declining, and these are the Canadians who contribute to the economy and pay their taxes and spend money so the economy can keep growing. This is the group that we would like to address with our tax cuts.

My colleagues and I have been conducting town hall meetings for this pre-budget consultation. We have engaged thousands of people and continue to do so. Resoundingly, the people who have attended the town halls have been telling us that the tax cuts we are proposing are a good move. It is the first move toward prosperity for all. However, constituents also know that the rhetoric from the Conservatives is just that. It is filled with fallacy. So they want me to get some facts right.

The Conservatives had the worst job-creation record since 1946, the worst economic growth in G7, and the worst budget deficits, with some eight deficits in a row. According to Mr. Jim Stanford and Jordan Brennan, “it turns out that the economic record of the [previous Conservative] government is actually the worst of any government since World War II—and by a wide margin”.

The first order of business this government therefore undertook, as promised in our platform, was to cut taxes for a majority of Canadians. We promised to invest in infrastructure, in physical and social infrastructure as well as green technology. Throughout the debate today, the Conservatives have been talking about job losses and want the Liberal government to clear up the mess the previous Conservative government created over 10 years. We are not magicians; in 10 weeks we cannot do that. However, there is something that we can all do together. As a person who works in the financial field, I always advise my clients to diversify and not to put their eggs in one basket. This is common sense. Unfortunately, the previous Conservative government did not believe in wider diversification.

The resource industry is an important industry, but it also needs investment in research and development to help it diversify. If the previous government had diversified the energy sector, the creative people who are intelligent would have been able to move to different areas of work, like in the clean-technology environment, and we would have maintained our market share of the clean-energy sector, which was at 74%, but we have lost it.

Canadians are intelligent, smart, and resilient. Therefore, we would like to improve economic growth for everyone by working with everyone. I hope the hon. members opposite will support this because it is a move in the right direction. We said that we would cut taxes for 90% of the people, invest in infrastructure, create good jobs, and invest in children.

Bill C-2 helps these Canadians directly by lowering the income tax rate they pay. The passage of Bill C-2 would reduce the income tax rate from 22% to 20%, and this change alone would benefit approximately nine million Canadians whose taxable income is between $45,000 to $90,000. I personally know many people in my riding of Don Valley East who would benefit from this well-deserved tax cut.

In my riding, the majority of people do not earn more than $50,000. That is what we call the “middle income”. They need the help, and with our tax cuts plus the investment in the Canada child benefit, people will move out of poverty and into economic prosperity, which will help them pay taxes and help the economy grow.

Several international organizations, such as the World Bank, the IMF, and the OECD have concluded that growing income inequality is a hindrance to economic growth. In its report entitled “Alternative Federal Budget 2015”, the Canadian Centre for Policy Alternatives found that the top 1% income earners in Canada pay less in income tax than the poorest 10%. That is unfair, which is why we have created a new category for that 1% earning $200,000 and more.

Our government has taken the bold step of bringing about a progressive taxation system. I have been to many think tanks, and as a tax consultant myself, people have been telling me that the boutique tax cuts that the previous government made deprived the treasury and benefited only a handful of people, and that is totally unfair. It is why we see ourselves in the situation we are in. It is because the previous government lacked common sense or economic sense.

The other aspect of Bill C-2 that I would like to address is income splitting. There has been much misunderstanding on this, and I will set the record straight.

Bill C-2 does not apply to pension income splitting for our senior citizens. The repeal of income splitting will only apply to a small group of families. According to the commentary from the C.D. Howe Institute, only 15% of the population benefits from this, which is why the late Jim Flaherty, the minister of Finance for the Conservatives, did not believe in it.

Bill C-2 contains critical building blocks, which are necessary to restore fairness and progressiveness in our income tax system. It would provide our government with revenues that would otherwise have been hidden from taxes to invest in people and make the economy grow.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Mr. Speaker, young families across the riding are waiting for help. The reality is that child care in my area is well over $700 per child a month, and the lack of spaces leave families struggling.

During my time knocking on doors, I met several women who quit their jobs because they could not find daycare or because they were simply working to pay for the daycare. They shared their concerns with me about saving for a home or saving for their child's education, and they were feeling that they would never get out of poverty. The bill would not help families with concrete child care seats, which is real help.

Will the member share the Liberal plan for real child care seats for Canadian families?

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, I thank the hon. member for her question, but I believe that she has not been in Parliament long enough to remember that in our budget of 2004-05, we brought in the child care spaces, but that was defeated by the NDP. This would have been progressive, and we would not be facing the problems we are today.

However, we have now tried to make it more equitable by giving the Canada child benefit to those families who deserve it rather than to millionaires who do not deserve it.

[Kevin Sorenson, Conservative, Battle River—Crowfoot, AB]

Mr. Speaker, I was not going to stand to ask a question today, but the member's last comment troubled me when she said that they were going to give it to the poor or middle class who deserve it and not to the wealthier Canadians who do not deserve it.

That seems to be the Liberal philosophy, that if people have worked hard, if they have succeeded, if they have played by the rules, they do not deserve a tax break.

If we take all the workers in Canada and take the top 50% of workers and the bottom 50% of wage earners in this country, the top 50% of earners pay 96% of all federal, provincial, and territorial taxes. They are working hard. They are succeeding.

I would like the member to comment on why they do not deserve it.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, I thank the member for his passion.

We continually hear fallacies from that side. If we look at the income tax returns, the 1% that are the top earners do not pay their fair share of taxes. They do not need a handout from the government. That is exactly what the economic policy of the previous government was: give handouts to its friends and let the poor get poorer.

We want to reverse that situation.

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

Mr. Speaker, the member speaks very passionately about the issue of income inequality.

Would the member provide her thoughts with respect to how important it is that we get this right? The issue of income inequality is addressed inside this legislation by ensuring that there is a better redistribution through Canada's taxation policy. The middle class will in fact be the beneficiary of this. By voting in favour of this legislation, whether they are on government benches or on the opposition benches, members are saying to Canadians that they support tax reform that gives strength to Canada's middle class.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, our tax system at the moment is a confusing one. If one is not a tax expert, one has no idea what is going on.

I think it is important that what we are proposing is a progressive tax system, not a regressive system that benefits only a few. Progressive means that on a gradation, those who earn the least pay the least in taxes.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, I would like to thank the hon. member for Milton for leading Canada's official opposition on this file as our finance critic.

I can say without hesitation that Bill C-2, as it stands now, would have a significant affect on the lives of Canadians. While the Liberal members opposite would argue that the bill would benefit Canadians by lessening taxes on the middle class and increasing taxes on wealthy Canadians, the bill would in fact hurt Canadians more than it would help.

Do not misunderstand me. As a Conservative, I am very much in support of keeping Canadians' hard-earned dollars in their pockets. Our Conservative government endeavoured to do just that. It let Canadians keep more of their hard-earned money. We have a proud legacy of tax fairness and cutting taxes. While in office, our Conservative government reduced taxes more than 140 times. We did so through targeted measures that were responsible and consistent.

However, there is a significant difference. Bill C-2 would end up costing $8.9 billion over the next six years. Do not just take my word for it. A Parliamentary Budget Officer's report, “The Fiscal and Distributional Impact of Changes to the Federal Personal Income Tax Regime”, says the exact same thing. The PBO made it clear that these changes would lower taxes for a significant number of Canadians and increase them for just 1.5% of the population, which would result in a cost of $8.9 billion to Canadians over six years.

The PBO estimates that the tax changes would cost $400 million this year and $1.7 billion in the subsequent years. Since the government inherited a $400 million surplus, it has squandered the surplus already. I hear jokes already, but it is in the PBO report. This happened in only four short months.

How can the government claim that it is a good idea to commit more money to programs and tax breaks when it is not fiscally responsible to do so? We all know that eventually the money does run out. There is only one taxpayer. I am interested to know what the Liberals have planned at that point. Would they increase taxes on Canadians, or would they cut service levels? Perhaps they would cut some programs altogether. Perhaps they could leave this mess for our next generation to deal with. However, the next time I speak with the students in my riding, whether they be from Lindsay, Kennington, Haliburton, or Millbrook, I guess I should warn them to start saving now since they will be paying not only their bills but ours as well.

Many of my colleagues have gone through the amendments in the bill thoroughly so I will not rehash all of them, except to say that an extra $6.34 a week for those individuals who qualify is not enough income to grow the economy, nor does throwing money at the middle class stimulate growth and innovation. I am suggesting that the government should be less worried about the income tax rate and focus more on creating jobs so more people would be paying in. These modifications to the income tax rate hardly qualify as significant tax relief for Canadians, and come with a much larger price tag. The Liberals promised that their tax plan would be revenue neutral, and clearly it is not. This is yet another example of broken Liberal promises.

A tax hike for the wealthy, they say. The new Liberal plan would raise taxes on higher income earners, those who traditionally create jobs and grow our overall economy. By increasing taxes on these job creators, we are discouraging success, while doing nothing for those making less than $45,000 a year. Many in my riding are in that category.

I will now touch on how the changes to the tax-free savings accounts, or TFSAs, come into play. Tax-free savings accounts allow Canadians to set money aside in eligible investments and watch them grow tax free. While meeting with my constituents, many of them spoke to me about the value of their tax-free savings account. Whether they used it for saving for a child's tuition fees, a home renovation, opening a small business, or saving for a family vacation, all of these constituents were able to use their tax-free savings account to save their money. Their savings, in turn, stimulate the economy, whether it is paying for the costs associated with university or college, paying a contractor for home renovations, or buying supplies to open up a business.

In my riding, the towns and communities are driven not only by agriculture but also by tourism. Whether it is places like Sir Sam's ski hill near Eagle Lake, Happy Days Houseboat Rentals in Bobcaygeon, or even Emily Provincial Park near Omemee, these and many other small businesses across my riding and across the country could benefit from an increase in tourism.

Giving Canadians a mechanism in which to save money can and will stimulate the economy. I would be remiss not to mention that this bill still leaves $5,500 in contribution room. However, why put such a low cap on a program that not only helps Canadians and their families, but also benefits the wider community?

The members opposite have argued that TFSAs only benefit the wealthy. However, we all know this is not true. The majority of tax-free savings accounts belong to low and middle-income earners. In fact, two-thirds of tax-free savings accounts are held by people with incomes less than $60,000. Why is the government trying to limit the choice of Canadians on how they choose to save their money?

Canadians are taking on a significant amount of debt lately. Instead of trying to help, the government is taking away one of those methods in which they can save. Bill C-2 would increase the national debt, penalize those who have worked hard and prospered, while also limiting the amount that Canadians can save, while doing nothing for those earning less than $45,000 a year.

The Liberal government inherited a $400 million surplus. We, as the official opposition, will continue to protect the hard-earned money of Canadians from the high-tax, high-spend agenda of the government. We all know we cannot spend our way to growth, and we cannot tax our way to prosperity.

I look forward to questions from my colleagues.

[Mark Holland, Liberal, Parliamentary Secretary to the Minister of Democratic Institutions]

Mr. Speaker, I am confused by the zeal with which he talks about never running a deficit, given that the previous government ran so many deficits, including a deficit to run its so-called economic action plan, the efficacy of which could be challenged.

In reviewing the history of where we have come, in 1993, The Wall Street Journal called Canada an honorary member of the third world. It said that our economy was a basket case, that we had the worst debt-to-GDP ratio of any country, and that we had the worst job creation record in the G8. In fact, across almost every economic indicator we were at the bottom. When the Liberal government left in 2004, the party opposite inherited a state that was completely the opposite. It was the envy of the world. It was called “the Canadian miracle”, where we ran a consecutive surplus, while paying down the deficit. Then the member's party ran deficits almost entirely during its time in office.

If the member does not agree, was he against the economic action plan that his own government ran? Was he opposed to the deficits that his own government ran to try to stimulate the economy? I am confused by his contradiction.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, my riding includes the township of Brock. It is part of the Durham region. I look forward to working with the member on the issues facing the region of Durham.

We went through some of the most troubled economic times in a lifetime. Do members remember the economic stimulus package? There were $200 million of infrastructure and permits that went into Haliburton—Kawartha Lakes—Brock in the period since 2008. It created jobs, stimulated the economy, built libraries, and renovated arenas.

A decision was made by all the industrialized countries to stimulate the economy at once. They knew the economy was in trouble, they knew that was the way to do it, and that was the plan they chose. All of the industrialized countries did it. If I remember correctly, the party opposite and the NDP as well were not calling for less spending, but for more spending.

Although we had the building Canada plan, the stimulus package came into effect. The key here was that when the economy started to improve, we turned off the taps and brought things down to the normal infrastructure level, which was the building Canada fund. Governments need to have the ability know when to bring things down so they are not running that credit card even further. I am proud of our government's record. We had the—

[The Deputy Speaker, Conservative, Bruce Stanton]

Questions and comments, the hon. member for Skeena—Bulkley Valley.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I am curious as to my friend's source of pride, only because his government also left more than $150 billion in debt for those future generations he now concerns himself with. One would think, having borrowed that much money over the course of the last government, that we would be left with a robust, strong, diversified economy. Lord knows, the Conservatives spent enough to maybe get us there, but so much of it was misspent. There was $750 million spent on ads. The Conservatives said that was somehow a good use of the public expenditure. That money was all borrowed.

I hope the member also reminds students that the money they will be paying back will also be due to his government's choices when it was in office.

My question is this, though. I represent northwestern British Columbia, primarily resource communities of varied incomes, but a lot of people we would call working-class people, middle-class people, earning somewhere around $40,000, $50,000, $60,000 a year. Under the current Liberal tax plan, those people would receive an average of $50 in benefits, whereas someone making $200,000 would receive more than $800 in benefits.

I am wondering which kind of middle class my friend acknowledges as opposed to the ones the Liberals have actually written into this legislation.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, I congratulate the member from northern British Columbia on his re-election. Before I get to his question, I want to thank him publicly. I thanked him during the election of the Speaker for his very eloquent speech to newly elected MPs. I want to congratulate him for that very good speech. It was very inspiring.

As I go back to the point of my answer before, it was the New Democratic Party that was advocating for even more spending. The key is to know when to turn off the taps and go back to the normal. That is what the Conservatives did. We recognized that we were slowly coming out of the economic downturn. We were on our way up. We were starting to have one of the best job-creation records in the G7, with most jobs being full-time, and private-sector growth in high-wage industries. We were on the way up. We had a surplus in the last fiscal year. We had one up to this quarter, in November.

We are watching the deficit spending on this middle-class income tax cut. It only means further spending cuts down the road. It means higher taxes, and it means that future generations are going to start paying for this. The key is to know when enough is enough.

[Matt DeCourcey, Liberal, Fredericton, NB]

Mr. Speaker, it will come as no surprise when I say that Canada is going through tough economic times.

However, along with this real challenge, we also have a real opportunity for establishing the conditions needed for long-term growth, which in turn will create good jobs and contribute to the prosperity of the middle class, the lifeblood of our economy.

First, I would like to elaborate a moment on our government's ambitious economic agenda that sets Canada on the path for economic growth. Our government believes that all Canadians should have a real and fair chance to succeed. Central to that success is a strong and growing middle class, but in the face of this real challenge, there is a real opportunity to put in place the conditions to create long-term growth.

We were elected on a plan to grow the economy, and we have already started by introducing this tax cut in December. From infrastructure investment to responsible environmental stewardship, we are providing needed leadership. Our priority is to strike a balance between fiscal responsibility and delivering on our commitment to Canadians.

Indeed, we fully intend that our plan for economic growth will benefit all Canadians through targeted investments. Let me reassure the House that the government is not daunted by the challenges before us. We are cognizant of our fiscal reality.

Before turning to the content of Bill C-2, I would like to mention that the government's plan will include introducing proposals to create a new Canada child benefit. This new, tax-free, income-tested benefit would lift hundreds of thousands of children out of poverty. In fact, nine out of 10 Canadian families would be better off under this plan. We aim to have payments under the new Canada child benefit begin in July 2016.

The proposed Canada child benefit would simplify and consolidate existing child benefits. It would replace the universal child care benefit, which is not income tested. As we have committed, this new Canada child benefit would be better targeted to those who need it most.

We also recognize that public investment is needed to create and support economic growth as well as job creation and economic prosperity, which is why we will make significant new investments in public transit, green infrastructure, and social infrastructure. We will work together with both the private sector and our provincial and municipal counterparts to advance our shared priorities across a range of fronts.

Here are some of the areas. We will make targeted investments in public infrastructure that would grow the economy, get Canadians moving, and open up more cost-efficient trade options for our exporters with a focus on public transit, green infrastructure, and social infrastructure.

We will also work together with all of the provinces and territories for a cleaner environment and to fight climate change. Canada has a plan to invest historic amounts each year in green technology producers, so they can tackle Canada's most pressing environmental challenges and create more opportunities for Canadian workers. The government will also invest to support innovation and the use of clean technologies in forestry, fisheries, mining, energy, and the agricultural sector.

We will support our communities and our economy by making significant new investments in green infrastructure and clean technologies. Not only will these strategic investments help us tackle climate change, but they will create jobs. Canadian businesses now have an incredible opportunity to be a part of the solution and to help build a low-carbon economy. The government will prove to Canadians and to the world that a clean environment and a strong economy go hand in hand. In fact, we cannot have one without the other.

Protecting the environment and growing the economy are not incompatible goals, and in fact, our future success demands that we do both.

We are committed to a strong and growing middle class, and we want to ensure that all Canadians have a fair and real chance to succeed. This is why our government has enacted legislation to deliver a tax cut to the middle class. This is the fair thing to do and the smart thing to do for Canada's economy.

That is why Bill C-2 is so important for all Canadians.

I would now like to talk about the specific elements of Bill C-2. Our tax cut for the middle class and the accompanying proposals will make the tax system fairer by reducing the second personal income tax rate from 22% to 20.5%; introducing a personal tax rate of 33% on individual taxable income in excess of $200,000; decreasing the $10,000 maximum contribution to a tax-free savings account to its previous level of $5,500; and reinstating indexation of this ceiling.

Recently the Minister of Finance, his parliamentary secretary, and MPs across the country fanned out asking Canadians directly what our government could do to better support them. They met with indigenous leaders, business leaders, and cultural leaders, all with the intent of listening to Canadians and engaging in discussions to find practical solutions to the difficulties we know they are facing. These pre-budget consultations continue online. The response rate and comments received have been absolutely tremendous. With over 146,000 Canadians reached to date, this has been the largest pre-budget consultation on record.

Through these consultations, Canadians confirmed that they want a government that will deliver on strengthening the middle class and that will help those working hard to join it. This legislation would help do just that, and that is why it is a priority for the Government of Canada.

During the pre-budget consultations, it also became increasingly clear that Canada's economic outlook has changed since the election. This only reaffirmed the government's commitment to the path we were elected to follow. More importantly, by engaging with Canadians, we have been able to consider new perspectives and refine our plans that will be included in the federal budget.

The government's approach to consultation recognizes that collaboration is essential to delivering real change. The government has committed to, and has already demonstrated, its willingness to listen, engage, and collaborate with members from all parties to identify ways to find solutions and to avoid escalating conflicts unnecessarily.

Given that we have already heard from Canadians and many members of the other parties, I look forward to discussing and debating how best to serve Canadians.

There has never been a better time to make targeted investments to support our country's economic growth. We are confident in our plan to achieve that goal. That is the main reason why I am optimistic about our future prospects. I therefore encourage all members to support this bill.

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

Mr. Speaker, I have a hard time squaring the government's rhetoric on helping the middle class and the reality of how its tax plan would actually work. It would be of absolutely no benefit to people making less than $45,000 a year.

The government is going to do away with the $10,000 limit for tax-free savings accounts, when in reality more than half of those who max out their tax-free savings accounts make less than $60,000 a year.

How does the member compare those realities, in terms of how his government's tax plan would affect ordinary Canadians, with some of the high-minded rhetoric?

[Matt DeCourcey, Liberal, Fredericton, NB]

Mr. Speaker, my colleague across the way must have missed the part in my speech where I mentioned how we are going to lift hundreds of thousands of children out of poverty with the new Canada child benefit that will support nine out of ten Canadian families, giving them more each month than what they currently receive under the former Conservative government's scheme.

The member opposite will know that we have taken action to provide opportunities for students and graduates to secure employment by doubling the allotment in the Canada summer jobs program. This is going to help students with their debt loads and help graduates move into the workforce, something we sorely need in this country, certainly where I am from in New Brunswick. This is a need of students graduating with crushing debt loads from the University of New Brunswick, St. Thomas University, and our New Brunswick Community College.

By helping hard-working teachers, nurses, soldiers, and public servants who contribute so much to our community, this tax break will be a worthy endeavour and will be just one of the many things we will do to deliver real change right across this country.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I thank my friend for his speech and welcome him to the House.

One of the tenets of good government is to never over-commit and under-deliver. We looked through this piece of legislation about the upcoming help for the middle class because it was lauded and repeated ad nauseam in the campaign. While middle class was never defined and remains undefined by my Liberal colleagues today, definitions matter when it comes to things like the tax code.

I would like my friend to comment on this. We find that, under this plan, 18 million Canadians who file taxes would see no benefit whatsoever. Further to that, a lot of Canadians watching or listening to us would see people as middle class when they earn between $48,000 and $62,000 a year. That sounds kind of middle class to me, and where I live in northern B.C., it would be solidly middle class. Those folks would get a benefit of $50.

We now look up to the higher end of the tax spectrum, which may include Liberal middle-class people—I am not sure; again, the Liberals remain unwilling or unable to define it. We see that people who earn $200,000 would receive 16 times more benefit than somebody earning $50,000. People earning $200,000 are the middle class that the current Prime Minister and the Liberals were talking about.

However, I wonder if he does not run the risk of raising those expectations and hopes only to dash them upon the rocks of those tax returns that are coming, for all those middle-class Canadians who are wondering where the help is for them when somebody making $200,000 is getting upward of $800. That is 16 times more than the average middle-class Canadian would receive.

[Matt DeCourcey, Liberal, Fredericton, NB]

Mr. Speaker, I would like to thank my colleague from Skeena—Bulkley Valley.

I think it is okay that expectations are high. After 10 deplorable years, certainly in my region of the country, people made a decision on October 19 that they had had enough. I think the member would agree that he had had enough of those 10 years as well.

What I will say for the member is this. What really matters is action, and this side of the floor is ready to deliver upon the ambitious agenda that we put forward in the campaign, which Canadians put their trust in us to deliver. I look forward to working with everybody here, and in fact all parliamentarians, to help provide more opportunity for those working hard across Canada and those in more vulnerable situations who need a bit more help and attention from their government.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Mr. Speaker, we have heard the Parliamentary Budget Officer referred to many times in this House today. I would like to note that, with respect to the TFSA, the PBO reviewed the previous government's doubling of contribution limits to this savings vehicle and noted that it primarily benefited well-off Canadians and made the tax break “much more regressive”:

By 2060, gains for high wealth households project to be twice the median and ten times that of low-wealth households.

I would like to ask my friend how this measure would play a role in bringing fairness to our tax system and how this measure could in fact help the middle class.

[Matt DeCourcey, Liberal, Fredericton, NB]

Mr. Speaker, the words just delivered by my friend on this side of the floor speak volumes. I will say that providing the space of $5,500 is adequate to ensure that average Canadians can save, while also ensuring that we provide support where it is needed most.

Many of the people graduating from university in the next number of years—again, from those fine institutions in my riding—will be looking to secure employment and pay down debt. That is what we need to focus on, while also helping vulnerable Canadians.

The House resumed from February 1 consideration of the motion that Bill C-2, an act to amend the Income Tax Act, be read the second time and referred to a committee, and of the amendment.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, our government was proud to run on an ambitious economic agenda, an agenda that highlighted the importance of investment, investing in our economy and infrastructure. However, we did not pledge only to invest in the economy; we pledged to invest in the resourceful and talented people of our great country.

Specifically, our campaign was predicated on the belief that investing in the middle class and those working hard to join it was of utmost importance. As all members of the House can agree, when the middle class succeeds, we all succeed.

We are committed to a strong and growing middle class. The middle class is the true driver of economic growth and job creation in our country, and it needs our help.

Having run on, and been elected on, this plan, I am proud to support this legislation, which delivers on our promise to cut taxes for the middle class that has gone far too long without a raise. This is the fair thing to do; this is the right thing to do.

In the economic update of a few days ago, the Minister of Finance made clear that we were facing difficult economic times. We know that times of economic difficulty exacerbate inequality.

Bill C-2 would cut the tax rate on income earned between $45,282 and $90,563 in 2016 to 20.5% from 22%, and it would introduce a new tax rate of 33% on income in excess of $200,000.

As of January 1, the government is putting $3.4 billion in the pockets of about nine million Canadians each year.

Single individuals who benefit would see an average tax reduction of $330 every year, and couples who benefit would see an average tax reduction of $540 every year.

To help pay for this middle-class tax cut, the government is asking the wealthiest Canadians to contribute a little more. We are therefore creating a new top personal income tax rate of 33% for individual taxable incomes in excess of $200,000.

Earlier, I mentioned the importance of helping the middle class, and those working hard to join it. It is critical that as a government we remember those most vulnerable in our society. In budget 2016, we will see a major step forward in helping our most vulnerable, through the introduction of the Canada child benefit.

I would like to discuss what this measure will mean for Canadian families.

This new tax-free income-tested benefit will lift hundreds of thousands of children out of poverty. Nine out of ten Canadian families will be better off.

The proposed Canada child benefit will simplify and consolidate existing child benefits. It will replace the universal child care benefit, which is not income tested. As we have committed, the new Canada child benefit will be better targeted to those who need it most.

We aim to have payments under the CCB begin this summer. It will give a new generation of Canadians just a bit more space to be children and to grow into a Canada that has prepared itself for them through long-term investments. That includes things like skills and labour strategies to unlock the potential of greater productivity, without making people work longer and harder for less.

Our most vulnerable will also benefit from our historical commitments to infrastructure. They will benefit from our commitment to social infrastructure in things like affordable housing, but also targeted investments in public infrastructure that will grow the economy and get Canadians moving, and green infrastructure that will open up new sectors while addressing climate change.

Canadians elected us to do these things, and they are supportive on the work we are doing.

Recently the Minister of Finance and the parliamentary secretary fanned out across the country, asking Canadians directly what our government could do to better support the middle class. They met with indigenous leaders, business leaders, cultural leaders, all with the intent of listening to Canadians and engaging in discussions to find practical solutions to the difficulties they were facing.

These pre-budget consultations continued online until very recently. The response rate and comments received were tremendous. With over 200,000 interactions with Canadians and more than 500,000 online submissions, this has been the largest pre-budget consultation on record.

Throughout the course of these consultations, Canadians confirmed that they wanted a government that delivered on strengthening the middle class and helping those working hard to join it, and we will deliver.

Our plan to grow the economy is now more important than ever. As the minister reiterated at the finance committee and in the House, the other parties' balanced budget proposals would have led to massive cuts at a time when the economy needed more investment. Cuts at this time would have led to more layoffs and less flexibility.

After 10 years of weak growth, we have a plan to grow the economy. As Bill C-2 clearly demonstrates, we have already started. It is a plan that we are proud to put forward and proud to be implementing. I know some in the House disagree, and members on our side will be happy to hear their perspective and happy to debate them. However, ultimately, we will not be deterred from implementing a plan that will help Canada by investing in it and in its talented, resourceful, and well-educated people.

The tax relief proposed in the legislation will help millions of Canadians. It will give middle-class Canadians more money in their pockets to spend, invest, and grow the economy. I encourage all members of the House to vote for this important legislation.

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

Mr. Speaker, the member for Nepean mentioned that the pre-budget consultation his government did was one of the largest in history. Would the hon. member not agree that bigger is not always better?

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, bigger is always better when we engage Canadians. From coast to coast to coast, we listened to indigenous, community, and cultural leaders. We heard their issues and the problems they faced so we could propose good plans for implementation.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, six out of 10 Canadians will get nothing under the Liberal plan. Seniors who are waiting for an increased pension are being told to hang on. Families are still waiting to find out how much they will get under the Canada child benefit. However, my colleague talked about this child benefit using the conditional tense and said that it should begin this summer. We are asking questions, but we are not getting any answers.

My colleague talked about the most vulnerable members of our society. Why are Canadians who are living in poverty, the vulnerable people he is talking about, still not getting anything under this bill?

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, as I mentioned, we will include a Canada child care benefit that will help nine out of ten families that need this assistance most. We also said we would increase the old age pension plan to help seniors. We have other plans for seniors as well.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, I want to follow up on the question my colleague asked regarding the consultation.

When I went around my riding and most of Alberta, the feedback I received from Albertans was that the increase in the tax-free savings account was extremely welcomed to Albertans. Talking to my colleagues, I heard that it was extremely positive across Canada.

The member talked about consultations with Canadians. Have the Liberals ignored the feedback from Canadians who appreciate the increase in the tax-free savings account? Bill C-2 would eliminate that increase. I would be interested to hear why the Liberals would eliminate something that Canadians really want.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, we hosted a very good pre-budget consultation meeting in my riding of Nepean. It was a jam-packed room. We heard very clearly that Canadians were happy with the tax cuts we proposed for the middle class and were interested in our infrastructure plans that would allow the economy to continue to grow.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, I have one comment with respect to tax-free savings accounts. It was a very good program initially, but I think the facts show that a very small percentage of Canadians actually maxed out their tax-free savings accounts and a smaller percentage took advantage of doubling the tax-free savings account. This absolutely was done by the party opposite to pander to its base and allow those who could afford it to do so.

The Liberals came forward with a tax break for the middle class, to put more money back into the pockets of the middle class. What does my hon. colleague believe the benefit of putting more money back into the pockets of hard-working middle-class Canadians will mean to the economy?

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, in relation to the problems he has mentioned with the tax-free savings account, it is a harsh fact of life that many Canadians cannot even invest in RRSPs. I believe the amount not being invested is in the range of $700 billion. The tax-free savings account is above and beyond what people can invest in their RRSPs.

Taking about our proposed tax cuts, we know this is a time when Canadians need to spend. We need the economy to grow and that can come through both spending by individuals and investments in infrastructure.

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

Mr. Speaker, I am pleased to rise in debate on this bill today.

What has been most interesting about the debate on this bill to date has been the opportunity to drill down into an issue of contemporary Canadian political semantics. There was a time when we started to talk about the middle class that a lot of people felt this was sort of updating the language of standing up for working-class people and that when we talked about the middle class, we were talking about people who were going to work every day and working hard every day to bring home what they needed to be able to feed their family, pay for their home, and engage in some meaningful recreation after working hours as well.

That is where a lot of people felt the language of the campaign put forward by many parties, especially the governing party, was going when we were talking about the middle class. People felt the middle class meant people who were working hard every day to try to provide for their families.

We see an acknowledgement by the government sometimes that that is not quite what they mean by “middle class”. It has talked about the middle class and those working hard to join it. However, in fact, the way the government is defining the middle class through the tax cuts is to say, first of all, that they would only benefit people making over $45,000 a year, which already does not include 60% of Canadians going to work every day and trying to provide for their families.

Then the greatest benefit, of course, does not come at the bottom of that bracket, but at the top, so when we start talking about the people who are going to see the major benefit of this tax cut, it is plain to see that it is far more than 60% of Canadians who will not be seeing any real, substantial benefit from this tax break.

We have been talking about how we define the middle class. If we are trying to define in any sort of absolute way what that means vis-à-vis the majority of working Canadians, then I would say the government proposal really does fail to do anything for the middle class, understood as the large majority of Canadians who are going out and earning the median market wage for a lot of the work being done in Canada. The median salary of a Canadian worker is somewhere in the neighbourhood of $35,000 a year. That is not even close to qualifying for any benefit under the new Liberal tax plan.

We can define it aspirationally, as the Prime Minister sometimes does when he says it is the middle class and those working hard to join it. Maybe the implication is somehow that is more the focus or that we really need to capture all those people under the umbrella of “middle class”, even though they are living a life quite different life from those making $90,000, $100,000, $110,000, $120,000, who are the people in the middle of the bracket that the government has chosen to target.

If we are defining it aspirationally, then it is a mistake to say it is the class of people who need the most help. It is not. It is often implied by the government itself that the intention of the program is to provide help to those who need it the most, but if the middle class is going to be defined only aspirationally, then it would be a mistake to say that it is the class of people who need it most.

If it is defined absolutely, we are looking at the majority of working Canadians, and I would say that those are the people who do need help. If anyone needs extra help or extra resources in order to leverage more out of their work and create an acceptable living standard for their family, it is the people on the lower end of that scale, not the people on the higher end.

I find it a strange focus. I wish the government would be clear about the way in which it is going to go about defining the middle class and clarify whether it wants to speak directly to the majority of working Canadians or whether it is talking about some aspirational category. If that is the case, then the help is misplaced. We really want to be helping those who are trying to get into that category, and this tax package really has nothing to do with that.

I find that odd. We want to talk about how we provide real help to those who need it, those working families. If the Liberals are going to get away with defining “middle class” as being that upper end, a six-figure category, then we do need to rehabilitate the language related to “working class” in Canada, because the category of people we thought we were talking about when we were talking about the middle class clearly is not the category we are talking about if we listen to the government.

There is a whole group of people out there, 60% of the population, working for under $45,000. Those are the people on whom the efforts of government are best spent, both because there is a moral obligation to make sure that people who are putting in that work are getting a fair return for that work and are able to provide for their families and also because there is an economic argument.

It is the kind of economic argument that has been appropriated by the government in favour of those making around six figures. That argument really belongs with that 60% who are making $45,000 or less a year. The resources provided to them and the extra bit of spending money that could be provided to them, whether it is through tax relief or through a child care program program that would do a better job, would relieve the actual dollars that are coming out of the pocket just the same as taxes are.

Child care is not optional for most working families in Canada, so the money that they spend on child care is no more an option than the money that is taken off their cheque every week for taxes. Providing relief on the cost of child care is meaningful and would put money back into the pockets of families. The benefit of this strategy is that it also means we could do a better job of making sure those services are available where they are needed.

We know that the market has not always been doing that in the most efficient way and that there is room for intervention there. There are many ways to put money back into the pockets of those families who need it the most—not the ones in which one or two earners are making $100,000 a year, but the ones who are making a median salary. We could do that with a child care program.

We could do it by providing relief on EI, because even families who might have benefited from these tax cuts because they were making $80,000 to $120,000 somewhere in the country in the trades are now unable to find work. Because of the change in commodity prices, their jobs no longer exist, and those families need relief right now.

It is why I was quite pleased with our opposition day motion to get the government to move as quickly on EI as it saw fit to move on this tax break, the main benefit of which is going to go to people already making six figures. It will not help the people who need it now. If the government asked what its priorities are and how it can move quickly to help those who need it most and how it is going to put money in the pockets of people who will spend it right away because they have to and need to, this would not fit the bill.

I am shocked that this is what we are debating and that it took an NDP opposition day motion to get urgent debate on EI reform in the House. We will be voting on that later today, and I would be pleased to see colleagues across the way stand in favour of that motion. It is much needed, and I would be remiss if I did not mention it, because the vote is today.

In the spirit of being constructive, we also put forward a different tax proposal. Investing in a national child care strategy is a better way to go and would accomplish a lot of what the Liberal government said it wants to accomplish through tax relief. We said, “Fine; the Liberals ran on a platform of tax cuts that are supposed to help the middle class, so let us play ball. Why do we not give a proposal that is in spirit the same thing, but would actually do a better job of realizing the objectives the Liberals set out in the campaign for tax relief?”

We proposed a reduction on the first bracket that would actually cover that 60% of Canadians earning below $45,000 a year. It is why we are looking to move the bill on to the committee stage to have it examined. I hope members opposite will see that as an opportunity to improve a plan that has misfired because it not helping those who need the help and is not helping those that the government in the election campaign implied it was going to be helping with tax relief.

We are looking to be constructive in the House. We think we have found a way to help the new government help itself. It is a busy time. There is a rush to get certain things through, and we hope that our reflections may assist the government in doing a better job of what it said it would do. We are voting in favour of the bill at second reading to get it to committee and have that full debate.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I will start with a comment about what we are discussing today and then go on to the less fortunate individuals in our society, as the member mentioned and pointed out so rightly.

I will start by saying that this measure would put money into the pockets of nine million Canadians. We cannot dispute the fact that would have the ability to spread throughout the economy and help it grow.

If we were to stop there, then I could possibly agree with the suggestion that this would not be enough. However, we are going further. This goes to the member's point in his eloquent speech and to the passion he showed with respect to the less fortunate in our communities. That is why the Liberal Party is planning to put forward the Canadian child tax benefit, which would put more money into the pockets of families who need it the most, rather than maintaining the universal child care benefit—which, by the way, the NDP supported during the election.

My question to the member opposite is this. When it comes to the particular program that we will be putting forward, a program that would put more money into the pockets of families who are struggling, will he go against what the NDP committed to during the election and support that plan? It would truly benefit those he has singled out who were not being taken care of, which is what we plan to do with the Canadian child tax benefit.

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

Mr. Speaker, it would be irresponsible to endorse a plan I have not seen. In the House we have been calling to see that plan. We keep being told that it is coming. However, until I see the details, I will not say one way or another whether it is something I would be willing to support.

I would urge the member or another member to stand up in the House today and give us the details of that plan so that we might better evaluate our support.

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

Mr. Speaker, I thank the member for his eloquent speech. I agree with him that this bill and this strategy that the Liberal government is putting forward to this place does not help the low-income Canadians who need it the most. I will certainly grant him that point. I wish the priorities of the Liberals were different on that front.

The NDP and the member have said they will be supporting this measure. To bring it to committee means that it will have a good examination, and the NDP may decide not to support it later. What I am concerned about is that this measure will cause a deficit of $1.2 billion or more, because it is not revenue neutral as the Liberals originally proposed it would be.

Does the member not see, though, that if we continue to put forward things that would put us into a deficit position, many of the programs and supports that the member is calling for that would help low-income Canadians would inevitably be put under pressure, to the point where we may revisit the 1990s, when the Liberal government at the time cut transfers to the provinces, particularly around health care, in order to pay the bills?

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

Mr. Speaker, I would agree with the hon. member that I am concerned that as deficits mount for a Liberal government, it does look to cutting programs eventually as a way to make up for that shortfall. That is why we have proposed that it look at raising the corporate tax rate and closing tax loopholes for CEOs, and we have seen them starting to backpedal somewhat on that commitment, so I do share some of the member's concerns.

I would say that if we are to offer good and sustainable social programs that support families, we do need to ask that revenue question. That is something that the NDP has been willing to do. It is a harder conversation than promising the moon and then getting elected and sorting it out later, usually to the dissatisfaction of most Canadians. That is a conversation we are willing to have. I would urge the government to look at raising the corporate tax rate in order to make up for some of the shortfalls in its plan, and I look forward to further discussion at committee.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, I am pleased to stand today to speak on behalf of my constituents and Canadians across the country who have great reservations about Bill C-2 and the ballooning deficit agenda of the Liberal government.

My riding of Yorkton—Melville is strongly representative of the highly educated and talented workforces the Minister of Finance confirms exist in Canada, from young successful entrepreneurs and professionals to small- and medium-sized businesses in the real estate, retail, agriculture, manufacturing, and mining sectors, just to name a few.

We are a hardworking bunch who are committed to sustainable growth and prosperity. We value caring for each other and those less fortunate. We value investing in our communities, our hospitals, care homes, and our youth at risk programs. Quite frankly, the people of Yorkton—Melville are second to none when it comes to hard work, compassion, and common sense.

Election promises were made. However, promises made, promises kept, has yet to apply to the government. Instead of helping the middle class, the Liberals' tax cut is most beneficial to the high end of the second highest tax bracket, those who make close to $200,000 a year. In fact, the parliamentary budget officer says that the reduction of the second tax bracket will benefit the top 30% of income earners in the country.

Based on the Finance Department's own estimates, the new Liberal tax plan amounts to an average $6.34 a week for those who qualify. These facts reveal that this tax cut does not in any way uphold the Liberals' campaign promise. They promised that the tax cuts would be part of a plan holding the deficit to $10 billion.

The Prime Minister promised a $3 billion tax cut for the middle class, paid for by a $3 billion tax increase on high-income earners. The middle class tax cut would be revenue neutral. By the Minister of Finance's own admission, there will be a revenue shortfall of over $1 billion on this issue.

The Institute of Research on Public Policy has said that the shortfall will be even greater, creating a revenue debt up to $1.5 billion. The C.D. Howe Institute, which the Minister of Finance once chaired, said the Liberal plan will fall short by nearly $2 billion, that will not be revenue neutral, but a tax cut that will cost the treasury a minimum of $1 billion.

I have to say that ordinary folks in my riding are shaking their heads, wondering how election promises were made, either with poor research and poor advice, or with no clarity other than that hope that “This could work. It sounds good. Let's go for it.”

Another related promise has been made that in the upcoming budget a new Canada child benefit will be introduced, plainly to target those who need it most by replacing the universal child care benefit, which was not tied to income.

The UCCB was given to every family, true, regardless of income. In addition, the Canada child tax benefit was also available for parents who needed and were eligible for more support. Here, I totally agree with the member opposite that my own family, when they were in challenging circumstances, were very thankful for that support that lower income folks need, and especially since, in many cases, the amount of tax they pay is minimal to begin with.

While I was door knocking during the election campaign, one gentleman complained to me that his daughter and son-in-law would have to give it all back when submitting their taxes and that it would not be of any benefit to them. As we talked, he did share that they were both good income earners who had qualified for their mortgage, and whose children were well cared for and that they had a little bit of savings. Since they knew they were likely to have to return the money, I suggested that perhaps they could put it in their tax-free savings account and at least make a little tax-free interest in the meantime.

As well, I suggested that it was probably good to know it was there in case the unexpected happened, an illness or who knows what, such as a downturn in the economy that could mean a temporary or permanent loss of employment, in which case an unexpected change in their family income could suddenly mean that the UCCB would be there for them because it is readily available and not tied to income.

This new Liberal child benefit tied to income would not be adjustable until after one's income tax has been filed and a difficult year is in the past, like the year that many of our oilfield workers in Saskatchewan and Alberta and those from the east coast are experiencing right now.

Then there is the decision of the government to eliminate the increase in the tax-free savings account to $10,000, declaring that this action is consistent with their objective of creating a tax system that is fair and helps those most in need.

As a result of the TFSA being designed to be cumulative, it encourages young Canadians to invest what they can, knowing that it is a savings account to be used for the future when they are economically able to put more away in the knowledge that they had that choice. These accounts were an enormous step forward for the middle class to support a wide range of their financial goals, including saving for school, their children's futures, a home, or a comfortable retirement.

When the money is withdrawn it carries no tax penalties. Unlike the RRSP, money in a TFSA can be used as collateral, while at the same time investments are not counted as income to qualify for government benefits or pension supplements that carry a means test. They are not to penalize the most vulnerable people in society but to add to the free choice of how Canadians can save.

The argument that keeping the limit at $10,000 would have helped Canada's wealthiest save more while costing the federal treasury hundreds of millions of dollars over the next five years is truly telling. It says that the government cannot afford people putting away for their own futures, saving for their own retirements, so they can continue into their golden years self-sufficient and continue to contribute to the economy. It says that when the government goes into deficit to the tune of at least $50 billion in the next four years, it will need to claw back the hundreds of millions of dollars Canadians would be saving for themselves and their families' futures over the next five years.

The new government's approach to retirement savings is counter-intuitive. On the one hand, it supports the Government of Ontario's ideology to force all workers into new government-sponsored pension schemes that would cut take-home pay and force employers to cut jobs and/or have less to invest in the very businesses that are the backbone of our economy. On the other hand, the Liberals want to deter Canadians from using a revolutionary savings tool designed to support Canadians in whatever their own unique goals might be.

Eleven million Canadians opened tax-free savings accounts. People earning less than $80,000 a year accounted for 80% of those holding those accounts, and 60% of the individuals contributing the maximum amount had incomes of less than $60,000.

I personally encourage all young Canadians to open tax-free savings accounts now, in the midst of the challenges of getting their post-secondary education, raising their young families, facing increased unemployment and rising housing costs, including higher down payment expectations from the government that will hurt their ability to get into the housing market. I urge them to do it now so that the accrued potential for their future savings gives them hope and the incentive to plan and take hold of their future, and certainly not depend on a government that says on the one hand that it wants to invest in the middle class while on the other hand stifling their saving options and growing a national debt that will ultimately fall on their shoulders to repay.

This legislation does not recognize the fact that the tax break for the middle class is not revenue-neutral and would not make a significant difference in the ability of the middle class to grow or stimulate the economy in a significant way. This legislation would place a higher priority on federal revenues to offset the government's intentions to go significantly further into deficit than on empowering Canadians. When the Minister of Finance introduced the bill he said that “the government's job is to help Canadians succeed”. Sadly, the bill does not meet that objective.

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

Mr. Speaker, there are a lot of problems with this legislation, the most glaring of which the the member highlighted in her remarks, that those who would benefit the most from the government's tax changes are those making over $90,000 a year, but that most of those who use tax-free savings accounts make less than $60,000 a year. On the one hand, the government is talking about the middle class but on the other hand it is helping those who are doing better than those making less than $60,000 a year.

Could the member talk a bit more about the value of tax-free savings accounts specifically for middle- and low-income Canadians, which really illustrates why the government's rhetoric does not match the reality of the bill?

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, there is no question in my mind that the tax-free savings accounts, which our government encouraged be raised to $10,000, were significantly appreciated across the board by lower- income families as well as middle-income families.

This has an impact my own family, which is in the circumstances that I talked about. Right now it is in the midst of the challenges of family members upgrading their education and their families growing. Saving for their future is challenging at this point in time. Knowing that the ability was there for them to add that significant amount to their tax-free savings accounts in the future was significant. It is truly a disappointment to them because it will no longer be the case.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, for the record, let us talk about the tax-free savings accounts. They were doubled for one reason, and that was to pander to the Conservative base. I wonder if the member opposite could tell me how many middle-income or low-income people would benefit from the Conservative Party's doubling of the tax-free savings account.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, the majority of people with tax-free savings account have incomes of $80,000 or less. Sixty per cent of those individuals contributing the maximum had incomes of less than $60,000. I am not sure what the member opposite is calling the middle class. These are folks who do not have the potential right now to invest in their future.

This younger generation of Canadians understands that that will very much be their responsibility and are excited and hopeful when they hear the government say “We're going to make sure our economy is strong”. That would have been the case if the government were not planning on going into significant debt and there were still growing employment opportunities and these young Canadians were not facing the circumstances they are facing right now.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Before I continue to questions and comments, I just want to remind members that I am trying to listen from up here and with members' comments starting up on the side it really makes it hard for me. Therefore, if members do not mind thinking about me and my aging ears, I would appreciate it.

The hon. member for Elmwood—Transcona.

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

Mr. Speaker, Canadians made it very clear in the last election that there is an appetite for government to invest in infrastructure, whether physical or social infrastructure. However, I wonder about the wisdom of cutting government revenue to make those investments. Canadians are getting some money back in their pockets, but it is money the government is spending anyway and Canadian taxpayers then have to pay interest on it.

We saw that a little with the previous government too, where big deficits were already being run and taxes were being reduced. Taxpayers end up paying for the money they are getting back with interest. I just wonder about the wisdom of that.

[Cathay Wagantall, Conservative, Yorkton—Melville, SK]

Mr. Speaker, I am proud to stand today as a Conservative who was part of a government that saw our country through one of the worst depressions the world has ever seen. It required going into some debt to survive that. However, our country is not facing that kind of a dynamic right now and it is very important that we make sure our economy is very robust by investing in Canadians, Canadian businesses, entrepreneurs, and innovators who can make the difference for Canadians.

Yes, we need the infrastructure. We were prepared to invest in that infrastructure in a way that would be doable.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to speak on Bill C-2 today. It is an initiative that New Democrats support going to committee. The reason we are doing so is because there are so many issues related to the incomes of Canadians.

The debate itself is healthy, because we have seen in society, during the years that I have been here, a movement away from the middle class, in two directions. One direction has been that some have become more affluent and are able to take advantage of certain government changes in laws, like the tax-free savings account and other types of measures put in place over the last decade. In the opposite direction, there are people with challenging circumstances, such as their wages being frozen, having their working hours reduced, a reduction in benefits taking place as collective agreements have been stretched to the limit, or benefits staying the same and cutting the workforce. That has very much been a priority of unions across this country, because they want to keep the same benefits and wages. However, there has been a stagnation with that.

We have also witnessed, on the other end against personal income taxes, massive corporate tax reductions that were supported by the Liberals originally, and then later by the Conservatives. That has left our economy without a lot of the tools that we normally would have had. There are a number of different industries, like the banks and so forth, that have benefited from a lot of tax reductions. Their response to those tax reductions has been historic layoffs and closures of facilities that actually cost Canadians more. There has also been a reward for them related to the products and services that they provide to customers on the other end. Therefore, there are those who are less affluent and cannot take advantage of their different circumstances.

Before I get into the connection to Bill C-2, I will take, for example, my bank, which I will not mention the name of; I also deal with a credit union. My bank allows its customers free banking services if they maintain a minimum of $1,000 in their accounts. It continues for the duration of a month. If customers go below that amount, then they pay a series of charges. In the riding I represent, Windsor West, there are a lot of people who do not have $1,000 in their accounts, especially if they are students or working-class families. They pay those additional fees, whereas people with the money do not have to. We have lost the income stream from the government's tax reductions and a whole bunch of dead money in our economy, and then, on top of that, service charges continue to grow.

The tax-free savings account, in Bill C-2, is something that New Democrats are happy to see the eventual reduction of. The parliamentary budget officer and others have raised the caution flag with regard to the way that this expanded. I know from representing my area and travelling to other parts of Canada over the years, whether it be for my seniors charter of rights bill or other initiatives on auto fairness, that there are a series of things I have run into. The common thing is that a lot of people do not even have enough money to save for their current school year, let alone the next one.

There is a fine college, St. Clair College, in my riding, as well as the University of Windsor, that have done their part in expanding services and competitiveness, and attracting international students and other Canadians to go there. In many respects, it revitalized some of our innovation. However, the reality is that most people who go to school there are just getting by or taking out loans to get by, let alone putting money in a tax-free savings account. Perhaps some of their family members are doing so with their help, but the ordinary Canadians I represent do not have that luxury.

The squeeze is on the middle class and those who are unemployed. As I mentioned, in the job service sector many people are moving to part-time or precarious work and basically just getting by. Unfortunately with this bill, we know from third-party experts and economists that 60% of this plan for a reduction in taxes for Canadians will not be enjoyed by the middle class or people with less earnings. Therefore, there is a series of Canadians who will be left out. Because of the way this scheme works, the wealthiest will have the benefit. That is a real problem that New Democrats want to address at committee. It is an issue that we have raised before.

There will be a vote later tonight on employment insurance, where there are many people paying into a system that does not provide them with any benefit whatsoever. In the example that I used in speaking about this issue earlier in the House, there are persons with disabilities. They only have a certain number of hours to do their jobs because of health restrictions. They pay into the system, and to my knowledge would never benefit from it because they would not qualify at the end of the day.

We have to be careful. People are still getting their heads around it. To this day, I run into people who say they do not want to go on employment insurance because they do not want to feel they are taking taxpayers' money. They like to get by on their own. However, what people forget is that employment insurance is their money that comes off their pay cheques, and the companies' money. That has nothing to do with the government, aside from the government deciding how that is disbursed, how it is actually given back to workers.

We set rules that disadvantage those who are in more precarious and part-time positions, and that includes women. We have a systemic issue within our culture and our society, even on the government programming side. We make lots of noise about being equality driven, but we still have rules in place that do not allow that to happen.

Who would not benefit from this bill? It is important for Canadians to realize some of the comparisons and who would not benefit whatsoever from this plan in terms of tax reductions. They are office workers who make an annual salary of less than $40,000 per year; they would receive nothing under this scheme. They are hairstylists, who in Canada basically earn around $28,000 annually. They will get zero. They are social workers, which I used to be in my previous working life. I worked for two organizations, on behalf of persons with disabilities and on behalf of youth at risk. Their annual salary today is around $44,000. They would get nothing. Some people in the process of trying to buy a home, who are trying to raise families and trying to get forward, would not be able to benefit from this plan.

We have cashiers. When we go to stores and see the people working there, they work hard doing what they need to do. In our economy in some places, we have had challenges with the retail sector and so forth. They earn $21,424 on average. Cashiers would get nothing back. That is a classic example. All of the people working in department stores, in retail shops, in drive-throughs, in fast-food chains, and all of these different businesses, would receive zero from the plan. To me, they are the people we should be rewarding with a tax reduction. These are the people who do not have the equity to easily afford some of the tax deductions that wealthier Canadians get. They do not earn income at the level to take advantage of some of the policies that have been put in place over the last couple of decades.

Waiters and waitresses earn less than $22,000 as an average wage. They would get zero. That is another group of individuals I would argue would not benefit from this tax reduction. They would get nothing at all. Nannies are another good example, and chefs and assistant chefs as well. They would not get anything.

Who would get income from this legislation? Our bank managers, who earn around $82,000 a year, would receive $555 in their tax season from this. They would receive that and also be eligible for the tax-free savings account. They would be in an income stream where they might be able to take advantage of it. It would be beneficial for them and their families. A lawyer, earning around $108,000 a year on average in Canada, would get $679. Members of Parliament in that same wage amount would get the cap, at around $680, as well.

I know my time is running out, but I want to hopefully create an opportunity at committee so we can work on some of the measures to ensure that all Canadians are included in this proposed tax reduction. We know it is going to come from the cost of borrowing, as the Liberals do not have the money coming in that they thought they had for this bill. Interest and payments on that money in the future is paid for by all Canadians, so all Canadians should be part of a tax reduction.

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

Mr. Speaker, what the member does not realize, or he did not state, is that there are millions of Canadians who will benefit. I also did not hear him make reference to the tens of thousands of manufacturing jobs, and those workers who would benefit by the bill. This is why the NDP have chosen to support the bill.

The member did not talk about the tens of thousands of teachers from coast to coast to coast who would benefit in tax relief from the bill before us. There are nine million Canadians who would benefit from the bill.

The NDP asks about those on very low income. Never before have we seen such a progressive national child care program, which we are going to be hearing a lot more about in a week or so, that would lift hundreds of thousands of children out of poverty.

These are the types of progressive initiatives that the Liberal Party talked about prior to the last federal election. What we are seeing today, through Bill C-2, is a piece of legislation that would help to implement the Liberal platform. It would lift children out of poverty and support Canada's middle class.

I appreciate that the NDP will be supporting the bill, but will the member not at the very least acknowledge the benefits that tens of thousands, if not millions, of Canadians, would receive by seeing this legislation pass?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, apparently I excited the hon. member with my speech. I do not know how he knows what I do or do not realize, and I will not get into it, but it is a presumptuous argument to take in answer to a question being proposed.

However, I do argue in the House of Commons that when there is an inequity to be faced here and there is a social justice aspect to it, I will raise those issues, and I will be confident in doing so, to bring the truth to Canadians.

The member can cherry-pick who he wants, as I did. I found some examples that got it and some that did not get it. However, the harsh reality at the end of the day is that most Canadians will not benefit, and that is unfair.

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

Mr. Speaker, I am trying to understand the NDP position.

I know that NDP members will be supporting the bill to go to committee so that it can be thoroughly reviewed by the finance committee. However, I want to know if they are against larger tax-free savings accounts and that is why they are in essence for the bill, or is it because they agree that people in those upper incomes, up to $199,000, who will benefit the most from this is the proper plan to go forward.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, we do want to work at the committee level to get more information.

However, like a number of organizations, including the parliamentary budget officer, we believe that the current system for the tax-free savings account, which the Conservatives brought in, becomes a drag on everyone else who cannot contribute to it. It is at their expense for those who can afford it. It is a significant tax reduction, but others pay for that tax reduction, especially in deficits when we have to borrow for that money.

It is similar to the Conservatives' economic policies where we have actually had deficits in borrowing for large corporate tax reductions. It is similar to when we brought in the HST in Canada, which cost $6 billion. We actually had to pay interest, and are paying interest, on that $6 billion. The independent commission that studied this showed that with the interest rate, it would probably be up to $8 billion in total cost. We were borrowing money to bring in a tax on Canadians.

Therefore, we support returning the tax-free savings account to its previous level and going from there, and making sure that all Canadians can enjoy it in a tax benefit or tax credit. We are borrowing this money. If we are borrowing this money, then it is unfair that all have to pay for it and only some get the benefit.

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

Mr. Speaker, I share the member's principle objection to the bill in terms of the lack of genuine progress in the tax changes, but I do want to ask him about corporate taxes. The evidence shows that as business taxes have been reduced, corporate tax revenue has gone up, presumably because of the relative elasticity of business investment.

Could the member comment on how the NDP plan to raise business taxes would actually reduce tax revenue?

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, in watching the decline of the manufacturing industry and the fact that most of the decisions are made for investment outside of our country, in the United States, we have seen a shrinking on the manufacturing sector that has been significant. We have also seen a lot of the corporations that have their head offices here in Canada enjoy some of those tax benefits. I can tell the member that large corporate tax reductions have not resulted in lower unemployment, and we see that in all communities across this country.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, let me draw a picture. A single mother is earning $80,000 and has two kids; one of the kids is in day care, and one of the kids is starting grade 2. She has to afford her mortgage, her grocery bill, her day care bill, and all of these different things in her daily life. This is exactly the type of measure that is designed to help her and nine million other Canadians. This is why I am so proud to rise today to support Bill C-2 in its second reading.

On January 1 of this year, nine million Canadians received a tax break. Our government was elected on a plan to grow the economy, and these changes are an important first step in that plan.

This week, our government reiterated its conviction that when you have an economy that works for the middle class, you have a country that works for everyone. Our government is charting a new course. At the heart of this approach is a commitment to strengthen the middle class and create conditions for economic growth that benefit all Canadians.

The new government will take action to ensure that economic growth is shared equally with the middle class and those working so hard to join it. In challenging economic times, the government has an important role to play. Now, more than ever, is the time to make investments to build a stronger middle class and foster sustainable, clean growth.

The legislative measures set out in Bill C-2 are the first step in the government's plan to create the long-term conditions necessary for economic growth. This will certainly not be the last step since we have a very ambitious agenda that we will fulfill one step at a time, one bill at a time, and one debate at at time.

I want to focus on the bill we are debating today, Bill C-2. This bill makes a meaningful change for the middle class by putting more money in the pockets of Canadian workers. In 2016, this bill will lower the personal tax rate for taxable income by 7% for people earning between $45,282 and $90,563.

On January 1, 2016, the government also reduced the annual contribution limit for the tax-free savings account, or TFSA, from $10,000 to $5,500. I assure the House that this change is not retroactive. The 2015 contribution limit will remain $10,000. We know that just 6.7% of Canadians who are eligible to contribute to a TFSA contributed the maximum amount in 2013. Doubling the contribution limit did nothing for the 93.3% of Canadians who did not contribute the existing maximum. Indexation of the annual contribution limit will be reinstated so that the annual limit maintains its real value over time.

Let me just say that I very strongly support the TFSA. I think it is a very important investment vehicle.

However, given the fact that so few Canadians used the maximum amount—only 6.7% in 2013—the amount of money we are losing in treasury for doubling the amount of TFSA can well be used on better things, such as for example, the Canadian child tax benefit that we intend to introduce.

With this tax cut for the middle class and the associated changes, we are delivering a fairer tax system. It is expected that about nine million Canadians will benefit from this measure in 2016, and this measure represents a real change for many Canadian workers. Not only is this measure fair, but it is also the smart thing to do for our economy. Furthermore, the tax changes proposed in Bill C-2 took effect on January 1, 2016. This means that the Canadians affected by these tax changes are already seeing the impact on their paycheques.

This is a turbulent time for the global economy, a time when the Bank of Japan has adopted a negative interest rate policy, China is facing a slowdown, the collapse of commodity prices is more than just a blip, and mediocre growth is the new norm.

This is a time when Canada needs decisive measures and a firm hand. It requires bold leadership in order to make smart investments and adopt tax measures to put our economy on track for growth.

Our government is ready to rise to the challenge. Our government was elected to implement an ambitious economic agenda that will kick-start our economy. We are taking concrete action to manage the Canadian economy. We are building a more sound economic foundation by providing tax relief to middle-class Canadians and investing in key sectors.

Thanks to our plan to strengthen the middle class and grow the economy, people who work hard can expect a good standard of living, a secure retirement, and better opportunities for their children.

During the election campaign, many of us had the chance to travel around our own ridings; and my riding of Mount Royal is no different from many other ridings. All of us know many people who would benefit from the middle-class tax cut.

It is true that not every Canadian would benefit. Some Canadians who earn more than $200,000 would be taxed a little more. Some Canadians who earn less than $45,000 would not benefit from the middle-class tax cut itself. However, they would benefit from all of the corollary efforts the government would make: to add to the guaranteed income supplement for single seniors, the Canada child tax benefit that would allow those who earn less to have much more to take their children out of poverty, and all of the corollary plans of our agenda, which was the plan Canadians chose in this election. They are ones that we believe are well worthwhile to put through.

I fully understand that some members opposite may disagree. We are all free, in a democracy, to disagree. However, I do think nobody can doubt that this was a proposal we made in the election campaign—a proposal we were elected on—and as such, it is a proposal the government needs to adopt in this Parliament.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the member for Mount Royal started out with the example of a single mother making $80,000, who would benefit from this proposal.

I could provide the example of a single mother making $45,000, or less than that, who would see absolutely no benefit from the so-called middle-class tax cut.

Could the member for Mount Royal explain why it is actually better to cut the tax bracket over $45,000 as opposed to cutting the first tax bracket that everyone pays? It is not good enough to just say that some people will benefit from this, so it is good, or they won the election, so it is good. I want a focused answer on why it makes more sense to give this tax cut only to people making more than $45,000, rather than something that would include all Canadian taxpayers.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, let me note that during the election campaign, the NDP did not propose any tax cuts, either for those earning over $45,000 or for those earning under $45,000. It is mysterious to me why the NDP is now determined to add to the tax cut and say we should be offering it other people, which they did not themselves propose during the election campaign.

Meanwhile, the Canada child tax benefit, which would be aimed squarely at those who earn less money, would be of great benefit to the single mother who earns $45,000. That is a program we intend to introduce this year. That single mother about whom the member is talking would benefit greatly from it, and so would her children.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, let us look at the facts on TFSAs.

There are 28 million Canadians eligible; 10 million participated, which is 38%. Of that 38%, 18% maxed the original amount. It is only 18%, yet the party opposite doubled the amount; 93% of Canadians did not benefit from the TFSA.

There was a comment that it could be a dream of future Canadians to participate in a TFSA. Has the party opposite been to a low-income priority neighbourhood? During the election, I went from door to door in these neighbourhoods. Basically next to none of the people in these neighbourhoods participated in the TFSAs.

The doubling of the TFSAs would drain government money, government resources for now and the future, and that money could be used to help low-income families, families in need.

I commend my colleague for his speech. Would the member not agree that the tax cut for the middle class would do the right thing for our economy, and that the Canada child benefit would put money back into families that need it?

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I agree with the conclusion the member reached related to the child tax benefit, and I totally agree that we need to put money back in the pockets of working-class Canadians.

I believe in the TFSA. It is a good vehicle. We should allow Canadians who are in the middle class, and higher-income Canadians, to save. We always need to draw a balance. The previous government had reached a good balance at the $5,500 level. Doubling it, given the how many people were using the maximum, was unnecessary, and I would prefer to redirect that money to working-class Canadians.

I strongly favour the TFSA as a vehicle, and many members in the House would agree with me, even though we believe that lowering the cap from what was promised is a better choice.

[Ted Falk, Conservative, Provencher, MB]

Mr. Speaker, I want to thank the member for Mount Royal for his excellent speech and defence of Bill C-2; however, I would like to focus on the tax-free savings accounts, TFSAs.

In my riding and right across Canada, the most prolific users of tax-free savings accounts were our seniors. It was an avenue for seniors to take their nest egg, their retirement savings accumulated over a lifetime of working, and put it into a vehicle that did not attract any tax. The government is focused on giving the guaranteed income supplement a boost, but would this not have also been a good measure for our seniors?

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I would note that this government is retaining income-splitting for seniors, and while the TFSA is an excellent vehicle for everyone, including seniors, only 6.3% used it up to the cap, and that was the lower cap in 2013. My issue is not with the concept of the TFSA or using the TFSA for all of us, including seniors; the question is whether the cap needed to be doubled when less than 7% used it up to the cap.

[Louis Plamondon, Bloc, Bécancour—Nicolet—Saurel, QC]

Mr. Speaker, the Bloc Québécois will be supporting this bill so that we can examine it more thoroughly in committee. My colleague, the member for Pierre-Boucher—Les Patriotes—Verchères, spoke about the Bloc Québécois's position in the speech he gave on February 1. He clearly explained why we will be supporting this bill.

He also pointed out the lack of substance in this ways and means motion, which was moved just before the holidays. In fact, this ways and means motion seemed much more a political exercise to create the impression that the Liberals were keeping their election promise. However, that was just one small part of the picture. The Liberals were not considering the overall picture in terms of the tax reforms that are required.

In its haste, the government introduced an incomplete bill. It is short on measures on income splitting and helping families, which leaves us with an imbalanced tax reform that does very little for most people. People in the very upper middle class, those with a taxable income of nearly $90,000, are the ones who will enjoy the largest tax cuts. There is nothing for middle- or lower-income taxpayers. I am talking about more than two-thirds of Quebeckers, the very people who need a boost the most.

People only start paying more tax if their gross income is higher than roughly $250,000. For example, members of the House of Commons, whose income is at the limit that I mentioned, will not pay more in taxes. It is not right, considering that their income is higher than average. We are quite far from the tax reform promised during the election campaign, which, according to Liberal Party documents, sought to make the tax system fairer, more progressive, and beneficial to most families. This motion does no such thing.

However minor it may be, it is nevertheless an improvement over the status quo, which the Conservatives and New Democrats wanted to perpetuate, in particular by promising a balanced budget. We will give the government a chance and support this initiative, in the hope that new measures will be introduced in the budget on March 22.

Since the government decided before Christmas to rush this ways and means motion, we do not understand why it did not make the UCCB tax-free in this motion. That amount was adopted precipitously by the previous government, just before the election. It was a bit of an election goody for families, but it was taxable; in other words, it had to be declared as taxable income. This tax credit would be added to families' incomes, and families would then have to pay back part of it. There was a lot of talk during the election campaign about making this benefit tax-free.

The same thing could be said about the tax credit for labour-sponsored funds, 80% of which are in Quebec. That tax credit should have been restored in full before the end of 2015, so that the issue could have been resolved before the end of RRSP season, which just ended.

That being said, before we throw any stones, we are waiting for the budget, because we think the government's real intentions will be revealed in this budget. We also believe that the somewhat botched and incomplete notice of motion tabled before Christmas was merely political smoke and mirrors.

In the notice of ways and means motion, right now, the maximum federal income tax rate is 29%. That applies to all income in excess of precisely $138,586 for the year. In the notice of ways and means motion, the government is introducing, effective as of January, some of the measures promised during the election campaign, but not all of them.

As I said earlier, the motion includes a new fifth tax bracket that would raise the tax on income in excess of $200,000 for the year from 29% to 33%. It would also reduce the tax rate on income within the second tax bracket from 22% to 20.5% and lower the TFSA limit.

During the election campaign, the Liberals said that changing income tax rates would cost very little, and they said that the two changes would balance each other out. They also talked about income splitting and reducing the TFSA limit.

The fact is that they overestimated revenue and underestimated the shortfall. The measures in the notice of ways and means motion will cost $1.2 billion. That is what we are talking about today in connection with this bill. Things will not balance out after all.

The other measures in the notice of ways and means motion, such as corporate taxes, taxes on dividend income and investment income, and charitable tax deductions, are essentially technical and are merely there for reasons of consistency.

There are a number of measures missing from this bill. I am talking about the so-called progressive measures from the election campaign. Of course, we heard about income tax on income over $200,000 a year, which I mentioned earlier, income tax for the second tax bracket, and TFSA limits. However, there are no measures to eliminate income splitting and make child benefits tax free, for example. There are two important measures missing from this notice of ways and means motion.

Take, for example, the elimination of income splitting. This provision enables a family member with a higher income to transfer up to $50,000 to their spouse with a lower income, so the couple can save the equivalent of the difference in tax rates.

The rich and members of the upper middle class are the ones who will benefit the most from income splitting. Also, the goal of Quebec's family policy is to help women enter the labour market, and it has been successful in doing so. Income splitting does exactly the opposite. It is particularly beneficial for traditional families where the husband has a good income and the wife stays at home. The government is still favouring this type of family approach.

In a scrum, the Minister of Finance indicated that income splitting will be eliminated for 2016 and that the measure will not be introduced until later. Let us hope that it will be in the coming budget. The same goes for the changes to family benefits. The Liberals promised to make changes to programs to support families. Their plan was to merge all of the programs to create the Canada child benefit. According to their platform, this new benefit will be tax free and tied to income. That means that low-income families will get more, families with higher incomes will get less, and the richest families will not get anything. We agree with that.

However, if these changes do not come into effect until July, there will be six months next year when people have to pay for the income they received under the UCCB, a family program implemented by the previous government.

I would like to close by saying that this bill is a small step forward, but there is really something missing. If we are given the opportunity to speak in committee, we will, of course, be very interested in proposing real ways of improving this bill.

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

Mr. Speaker, the member has alluded to the fact that this bill is a small step forward. We are talking about one aspect of an overall platform that would give literally millions of Canadians a significant tax break.

The member made reference to the fact that the federal budget will be delivered on March 22. There is great anticipation that we will see a number of initiatives to assist with the implementation of other policy platforms. When we talk about budgetary measures, such as tax relief and program development, we need to take more holistic approach to the legislation and the budget to get a better sense of how the government proposes to deal with the whole issue of income inequality. If we were to combine it as one, we would find that the middle class would be the greatest benefactor. Would the member not agree with that?

[Louis Plamondon, Bloc, Bécancour—Nicolet—Saurel, QC]

Mr. Speaker, I believe that the hon. member just summarized what I said in my speech. He referred to an overall, holistic reform and that is exactly what is missing in this bill. It is just one aspect. The notice of the ways and means motion which led to the actual bill was hastily tabled before Christmas. It covered only one aspect of the election promises. It seemed to be an exercise in partisanship to demonstrate that they wanted to act quickly. I believed that it could have been more substantive, especially with regard to the TFSA and income splitting, and could have taken a more holistic and overall approach, as the member said earlier.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I would like to thank my colleague from Bécancour—Nicolet—Saurel for his speech. Bill C-2 will reduce the second personal income tax rate on income exceeding $45,000. My question for my colleague is as follows: would it be better to reduce the first tax bracket, which applies to everyone?

[Louis Plamondon, Bloc, Bécancour—Nicolet—Saurel, QC]

Mr. Speaker, I concur with my colleague. People earning less than $45,000 will get absolutely nothing out of these measures. They will not benefit in any way from the measures in this budget. I believe that there should have been an item, as my colleague just said, covering all income, from no income to very high income, to ensure that people making $45,000 or less, who are very close to the middle class, could also benefit. We call them the least advantaged.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I thank my hon. colleague for his speech. I heard his response to the question from the hon. member for Regina—Lewvan. I would like to know whether the Bloc Québécois campaigned on lowering taxes for those who earn less than $45,000 because, as a candidate in Quebec during the election campaign, I never heard the Bloc Québécois say anything about that.

[Louis Plamondon, Bloc, Bécancour—Nicolet—Saurel, QC]

Mr. Speaker, in its extensive platform, the Bloc Québécois proposed tax measures to help the least advantaged and people with low income. For example, we wanted to enhance the guaranteed income supplement for seniors. We also wanted to improve the basic amount up to a maximum. We wanted to do that to raise the maximum income amount for eligibility to the guaranteed income supplement. In that sense we certainly did talk regularly about improving things for the least advantaged, while hoping the middle class could also benefit from a tax cut.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, it is a pleasure to speak to Bill C-2. I want to focus my discussion today on the tax-free savings account.

I find some of the comments from the other side of the floor about the tax-free savings account, which we initiated, very interesting. We are very proud of this initiative and I think many Canadians appreciate it.

From going around my riding of Foothills in southern Alberta during the campaign and during other times during the year, I know Canadians, especially those in my riding, appreciated the increase in the tax-free savings account. Canadians use this to save for their children's education, or to buy their first home, or maybe to have a comfortable retirement. However, the fact is that the tax-free savings account allows Canadians to save.

Some members opposite claimed that this was just a way for us to pander to our base. If the middle-class Canadians who supported TFSA is our base, I would be more than happy to take them.

Members say that these dollars do no go to the Treasury and that they could be better spent. That is an arrogant statement, especially coming from a government that horribly has gotten the math wrong on its middle-class tax cut, which will now go into $30-billion annual deficits despite having pledged $10-billion deficits. Its financial plan is a mess and yet it is telling Canadians that it does not want them to have the benefits of the tax-free savings account because it feels it could spend those dollars better than them. It is extremely disingenuous to tell Canadians that a government can spend their dollars better than they can.

I want to talk a bit about what the tax-free savings account really means to Canadians.

We heard members opposite say that this was something very few Canadians could use, that it was a tax haven for the wealthy.

It should be noted that 11 million Canadians have tax-free savings accounts. That is certainly more than just wealthy Canadians. Eighty per cent of those are making $80,000 or less. Of those who maxed out their TFSA, 60% are making $60,000 or less annually. These are not wealthy Canadians. These are hard-working Canadians who are making difficult choices for their families, difficult choices that they feel will benefit them in the future, whether that is saving for their first house, or their children's education or for retirement. These are hard-working Canadians making the financial choices that they feel are best for them.

Since when does the government step in and say that it knows better than them when it comes to savings? These Canadians are simply trying to have a sound financial plan. We should be encouraging these things, not eliminating them. The key is that Canadians should have the opportunity to make decisions that are best for them. They are making choices that suit their priorities. Certainly some may have an RRSP, but the TFSA has much more flexibility than an RRSP. What is wrong with giving Canadians another option, another opportunity to save for their futures?

Canadians want to have those choices so they can put money away when times are good. Certainly for Albertans, many of them may be tapping into their tax-free savings account when times are difficult. This is a great chance for them to put funds away when times are good to help them through when times are difficult. When times are tough and they do not have that savings, they will rely on government social programs, whether it is EI or other programs. Any time they can be self-sufficient and rely on their own savings is a benefit for the government.

The new Liberal government's approach to this is misguided. It wants to take away something that has been extremely popular. As I said, 11 million Canadians have a TFSA. The Liberals want to take away something that allows Canadians to make their own choices in whatever their unique savings goals might be. Not only do they want to take away the TFSA, but they will be implementing a mandatory CPP increase. This will not only hurt Canadian taxpayers—an additional $1,000 a year—but it will also impact Canadian business owners because they will have to also match those fees.

Why would the government put in a mandatory savings when it has this great opportunity of which many Canadians can take advantage? They can put as much or as little into it, whatever they feel best benefits them and their families.

What kind of message is this sending to Canadians when the Liberal government is saying that it wants to take away some of their options for savings, but at the same time it will use those dollars to try to mitigate this massive deficit it will pass on to the taxpayers. The government will be taking with one hand and taking with the other. That could be extremely frustrating for Canadians who are trying to save for their future.

The Parliamentary Budget Officer released a report earlier this year that stated household indebtedness and financial vulnerability in Canada was increasing. It showed household debt servicing capacities were continuing to trend upward, while continuing capacity to meet those debt obligations was diminishing. It shows that we should be giving Canadians every opportunity to save when times are good, so when times are tough, like they are right now in Alberta, Atlantic Canada and Saskatchewan, they have an opportunity to have savings they can tap into when they need it.

Reducing the TFSA contribution limits will simply reduce the ability of Canadians to save for retirement and to protect themselves during those economic downturns. TFSAs remove barriers for all Canadians to maximize their financial position. It really is a shame the Liberal government wants to decrease the ability of Canadians to use this tool to save for their future.

The other issue at hand with Bill C-2 is the middle class tax cut. I am sure this vision was burned into the minds of Canadians during the election campaign. The Prime Minister went from coast to coast to coast and said, “A billion dollar tax cut for the middle class, paid for by a $3 billion increase on high income earners”.

However, the Liberals got their numbers completely wrong. This middle class tax cut is anything but revenue neutral. In fact, the Parliamentary Budget Officer has said that this tax reform, and I will not call it a tax cut, will cost Canadians $8.9 billion over the next six years. That is anything but revenue neutral and it shows that the Liberal government will be taking away with one hand and taking away with the other. They say that this is a middle class tax cut, but average Canadians who qualify for this will only get $6 a week. I do not think that will have a profound impact on stimulating our economy or making a big impact for middle-class Canadians. In fact, middle-class Canadians will not benefit from this at all. The group that makes closer to $200,000 will benefit the most.

We will be penalizing those hard-working Canadians, usually those who have started businesses, created jobs, grown our economy and who worked extremely hard to be in that higher tax bracket. We will be taking $3 billion away from them, and it will not be making that big of an impact.

We should be taking a hard look at who actually will be benefiting from this middle tax cut. It is not a tax cut. It will be a $8.9 billion debt for which each and every Canadian taxpayers will have to pay.

We should not be impacting or discouraging Canadians from saving. We should not be discouraging those hard-working Canadians who are job creators, who have started businesses, who have helped grow our economy. What I see in Bill C-2 are miscalculations impacting our business owners and our entrepreneurs. Also it will not have the financial impact the Liberals have said it will have.

I encourage all members of the House to vote against Bill C-2. This will have not have the financial impact the Liberals have said it will, other than increasing our massive and growing debt. It comes down to this. Should Canadians be taking financial advice from a Liberal government that could not get the math right on its middle class tax cut, is arguing with its own financial staff on the amount of the Conservative surplus, and will now have a $30 billion annual debt that it will put on Canadians? I do not think we should be taking financial advice from that party or that government.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, the member opposite said that our party would take with one hand and take with the other. That could not be further from the truth. Let us look at the numbers. They show that 6.7% of Canadians max out TFSAs. That is a fact. Why does the party opposite want to double that number? The Conservatives wanted to double the number because it pandered to their base.

The member opposite also said that the government would take that money, and that we were arrogant about how we would spend it. Is it arrogant to come up with a Canada child benefit that would help nine out of ten Canadian families and that would pull 315,000 children out of poverty?

The party opposite's finance minister, who has disappeared off the face of the earth, stated that future generations would pay for this. Our grandkids and great-grandkids would pay for the TFSA doubling. That is not fair to Canadians. It is not fair to Canadian families. What the Liberal Party would do is put money back in the pockets of families and in the pockets of people in the middle class.

If only 6.7% of Canadians maxed TFSAs, what was the rationale behind doubling that amount?

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, first, on the child tax credit, the liberals got their math very wrong on the middle-class tax cut. I am really going to be interested to see what your math is like on the child benefit and whether it will indeed benefit nine out of ten Canadian families.

On the TFSA, what is the harm in doubling it? You are so concerned that so few Canadians actually used it? Actually 11 million Canadians have a TFSA account. This is a very profound and significant opportunity for Canadians to save for their future. The key is to save for what they feel is best and their priorities, not the government's.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I want to remind hon. members that they are speaking through the Chair and not directly across.

Questions and comments, the hon. member for Regina—Lewvan.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I would like to thank the member for Foothills for his impassioned defence of tax-free savings accounts. Of course the question before the House is not whether we should have TFSAs; it is whether the contribution limit should be $5,500 or $10,000.

The member for Foothills talked about the large number of Canadians who might use TFSAs to some extent. However, does he acknowledge that fewer than 7% of Canadians actually reached that maximum of $5,500 in contributions, and that therefore it would be a relatively small and relatively affluent group that would gain from increasing that limit to $10,000?

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, the key phrase in that question was “affluent Canadians”. With all the stats and facts that are out there, the Liberals still feel that the tax-free savings account is somehow a tax shelter for the wealthy. Sixty per cent of those people who maxed out their TFSA made $60,000 or less. I would like to hear in any community across Canada where people feel that an annual salary of $60,000 somehow makes someone affluent.

This is an opportunity for hard-working Canadians to make difficult choices, which some of them are choosing a savings account as a priority over many material things. However, the key is that it is a choice they themselves make. What is wrong with allowing Canadians to make those choices for themselves, rather than giving those dollars over to government where they have no control over it, to a government that now has $30 billion in annual deficits?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, it is a pleasure for me to speak today on what I think should be more appropriately titled the Liberal government's legislation on misplaced priorities, because that is exactly what Bill C-2 is.

The government of the day claims that this is a tax cut for middle-class Canadians and will help stimulate the economy. In fact, all it is is a bit of a shell game.

Liberals are attempting on the one hand to suggest to Canadians that this is a good thing, that it is reducing taxes, which is certainly something that our government believes in, since when we were in government for nine years, we reduced taxes over 140 times. The reason it is a shell game is that while there may be some modest gains in tax relief for some Canadians, on the other hand the Liberals have started to reduce the amount of contributions allowed in TFSAs.

The tax-free savings account was an initiative that our government brought in several years ago, the most important savings vehicle that Canadians have seen since the advent of the RRSP. It has been incredibly popular, and it was well received by Canadians from all income brackets.

My colleagues previously have talked about the fact that 60% of Canadians who maxed out their TFSAs have modest incomes. I always say that any time we give Canadians an opportunity to save money in a tax-free vehicle, that has to be a good thing, so when did it become wrong for Canadians to have the ability to save more of their hard-earned money tax free? When did it become wrong to do that? However, that is exactly what the government apparently is saying, because it is planning to reduce the TFSA contribution limit from $10,500 to $5,500. Liberals are denying Canadians the opportunity to put $5,000 more per year into a tax-free savings account.

I recognize that perhaps not all Canadians would be able to contribute the full amount each and every year, but the TFSAs have been structured so that there is a carry-over element. If people cannot max out their contributions in one year, they do not lose it the next year. No, that unused amount can be carried over, and carried over almost into perpetuity, so that several years down the road if a retired couple wants to sell their house in which they have built up a great deal of equity to travel in their golden years, they could take the money from the sale of their house and put it into a TFSA to the maximum amount.

However, the Liberals feel that this is not the right route to take. Rather than allowing Canadians more opportunities to save more money, they want to reduce that amount. Their argument is that only the wealthy can afford to contribute $10,500 a year, but that is not what they really are saying. They may say that publicly, but what they mean and what they intend is that if a majority of Canadians maxed out their contributions at $10,500, it would cost the government money in lost tax revenue. That is really the crux behind this move, because the government is in trouble.

Although the Liberals promised what they considered to be modest $10-billion-a-year deficits in the first three years of their term, now are going to be incurring at least $30-billion deficits for the first several years of their mandate. They said they would be able to balance the books by 2019, by the time of the next election. It is now admitted by the government's own officials that doing so will be an impossible task.

The government needs more revenue. Allowing Canadians to save more in a tax-free environment would deny the government the much-needed revenue it so desires. What do the Liberals do? Their approach is to spend more money. They say that spending more money will ultimately create a healthier and larger economy. This Keynesian approach has never worked in the past and it will not work this time, but that is the approach that the government has.

I suspect that some of that comes from a long history of Liberal mismanagement in the economy. If one only takes a look at the current Prime Minister's father and his regime, when former Prime Minister Pierre Elliott Trudeau left office, his Liberal government was spending $1.03 for every $1 that it took in in revenue.

No wonder we have such a huge debt in this country, a debt that we are still trying to pay off, thanks to a previous Liberal government. Apparently the apple did not fall far from the tree, because the current Prime Minister seems to be taking the same approach as his father, an approach that has left this country in massive debt.

This is unacceptable, but obviously there are options. Any government has choices. How can it increase its revenue? How can it take in the amount of money it needs to produce programs and balance the budget, as it apparently desires to do?

The obvious choice is to raise taxes, but that is never a popular choice for any government. The other option is to find projects that might increase employment and consequently increase tax revenue, both personal and corporate. The government would argue that this is exactly what it is doing with its stimulus spending: by putting money into the economy, it would create those jobs, create those projects, and in return receive additional revenue.

Unfortuntely, most economists worth their salt would tell us that stimulus really only works if a government or a country is in a recession, which Canada is not. Our economy is growing. Perhaps it is growing more slowly than we would like, but we are most certainly not in a recession, so there is no need for stimulus spending. What is needed is for the private sector to initiate projects that would bring in that much-needed tax revenue, projects that would create employment.

What have we got out there? Is there anything on the horizon that we could point to that might actually fit the bill? There is something, and it is called the energy east pipeline. Here is a project that is shovel ready, would not cost the Liberal government or taxpayers a dime, and would create literally thousands of jobs and billions of dollars in tax revenue between personal and corporate income tax, yet the government sees fit to put so many impositions and prohibitions on the start of this project that the chances of energy east ever seeing the light of day are slim. Hopefully, chances are not zero, but that is what is probably going to happen.

This is why I say that this piece of legislation is misguided in its priorities. There are alternatives. There are options the government could employ to increase its revenue base without costing the Canadian taxpayer a dime, but the Liberal government does not want to do that. Instead, it is going to punish and penalize average hard-working Canadians by reducing the amount of money that those same Canadians can contribute to their tax-free savings accounts.

The Liberal government is making the wrong choices. It has misguided priorities. At the end of the day, we will find that Bill C-2, the first piece of legislation the government has introduced, will end up costing Canadians far more than they will save.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, the member across the aisle made a good presentation. It covered a lot of the previous government's strategy around investment, which resulted in creating $150 billion more in debt, which is part of a more recent history than the 1970s.

I found a couple of the member's comments interesting. He said that investing in Canada should only be done during a recession and that jobs can only be created during a recession. Did the previous government put us in two recessions to create jobs?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, once again, as is common with most Liberals and with most newly elected Liberals, they have this sense of revisionist history. Let us talk about what actually happened.

Back in 2008 when the global recession hit, every G20 country agreed that the best way to get out of the recession was to stimulate the economy by investing money in infrastructure. I was part of that debate in this place. What happened during that debate? The Liberals, who were then in third place, and the NDP, which was the official opposition, criticized our government for not putting enough money into stimulus. In other words, had the Liberals or the NDP had their way, we would have had a larger debt than we do today. Our deficit would have been larger if they had had their way. For anyone on the Liberal benches to say that we created a deficit that they would not have created is absolutely factually incorrect, and the records show that.

Second, we entered into a deficit situation because of the global recession, but we got out of it. In our last years in office, we balanced the budget. That is something the Liberal government will probably never do in its short mandate, which I expect to be only four years.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I would like to thank my neighbour MP from Moose Jaw—Lake Centre—Lanigan for not running in Regina—Lewvan. I would also like to thank him for his able chairmanship of the government operations committee, on which I also serve. Finally, I would like to thank the member for his speech.

I would like to pick up on the point he raised about TFSA contribution limits being cumulative from one year to the next. It seems to me one of the problems with the contribution limit of $10,000 is that over the years and decades it would enable wealthy Canadians to accumulate pools of hundreds of thousands of dollars of investments that would be completely untaxed, and this could contribute significantly to growing inequality and would erode public finances. I wonder what the member thinks about that prospect, looking into the future.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, I want to thank my colleague from Regina for thanking me for not running in his riding.

If we took a poll of all Canadians, regardless of income level, and asked them this simple question: “Do you agree that you should be allowed to contribute more money to a tax-free savings account, rather than less?”, the answer would come back with a clear “Yes, we want to have the ability to invest more money in a tax-free environment if we can.”

This does not allow only the wealthy to put money into an account. I have many people in my riding, most of whom are not wealthy or affluent, as the government would suggest. When I talk to them about the TFSA, many of them say that if they were to sell their house or come into an inheritance or somehow come into additional dollars, they would like to have the ability to put the money into an account where it would be tax free. They do not want to be denied that ability. Whether or not they max out or contribute to it in totality over the years is incidental, but at least knowing it is there is something they agree with.

I fall back on words I said in my initial presentation. When in Canada did it become a bad thing to allow Canadians to contribute more money tax free? Apparently it was when the Liberal government got elected.

[Peter Kent, Conservative, Thornhill, ON]

Mr. Speaker, it is a pleasure to rise in the final hours of debate on Bill C-2.

We all recognize that this piece of legislation, rushed into the House in December, a forerunner of the budget scheduled for March 22, was intended to fulfill a number of misguided campaign promises in time for a new taxation year. I must say that over the hours of debate since the speech by the Minister of Finance, his answers in debate and in question period, his pronouncements in various fora across Canada, Canadians are getting a very clear and concerning picture of where the government intends to go in terms of taxation, the collection of Canadians' hard-earned tax dollars, and of spending, namely, that it intends to go on a mega disbursement spree of those same hard-earned tax dollars.

The economic situation in Canada today, which a number of speakers have remarked upon, is truly a crisis in parts of the country walloped by the crash of resource prices, but it is not at all like the 2008-09 global recession. The fact is that Canada is not in recession today. Focused stimulation, tax cuts, incentives, and decisive and courageous support of projects such as pipelines and power projects are, indeed, appropriate for provinces hit hard by the resource downturn. However, massive, expansionary government spending, growth of the debt, increased debt servicing, and the mortgaging of our children's futures is simply not justified.

The minister's much touted middle-class tax cut will, he proclaimed, put more money into the pockets of Canadians who need it. The tax cut does, modestly, do that, but the finance minister himself estimates that that it will amount to barely $10 a week for the middle class and then, as our NDP colleagues have pointed out, only a portion of the middle class. At the same time, the Liberals promised that the total cost of the tax cuts would be offset by a new tax on Canada's most affluent taxpayers. Again, a reality check from Finance Canada reveals that, in fact, there will be at least a billion dollar shortfall in the Liberals' estimate, or, more appropriately, guesstimate, which is hardly reassuring as we anticipate the coming budget.

I will move on to the minister's ill-advised trimming of the tax-free savings accounts. The TFSA, as we know, was created by our previous Conservative government, along with more than 180 tax cuts made between 2006 and 2015. These tax cuts combined to give Canadians across all income groups significantly greater take-home income and reduced the federal tax burden to the lowest level in half a century. About half of adult Canadians today have tax-free savings accounts, which is a very high level of participation, indeed, for a program that only began in 2009.

These numbers have been cited before, but I am proud to remind the government again that of those TFSA investors who took advantage of last year's $10,000 limit, fully 60% earned $60,000 or less, which refutes the Prime Minister and the finance minister's characterization of the TFSA as a tool for the rich only. The tax-free savings account is also a particularly important retirement savings tool for seniors who can no longer take advantage of RRSPs, registered retirement savings plans.

A majority of Canadians supported and still support the $10,000 limit. Public opinion polls reflected this and still reflect this. That support is consistent across all age groups, income levels, and regions of our country. That support was reflected in one of the first e-petitions to the government, an e-petition that I was proud to sponsor. Folks at home can find and consider that petition at petitions.parl.gc.ca, listed under e-3, with the key words “taxation”, and “tax free savings account”. This petition has accumulated almost 5,000 signatures, even though the government plowed ahead in reducing this year's TFSA contribution level by half. The petition is still open for another month, and frustrated Canadians can still register their unhappiness with the government's decision until April.

The government tried to justify the gutting of the annual savings limits with the excuse that the TFSA cost the government too much. The federal government spends much more every year to support the very generous indexed pensions of government employees. Those public service pensions are paid for with the hard-earned tax dollars of the 80% of Canadians who do not work for the government, who have much less generous employer pension plans, or who must provide entirely for their own retirement.

In my constituency, the wonderfully diverse middle-class community of Thornhill, TFSAs have become an important part of taxpayers' retirement savings portfolios, an important part, again, of our senior citizens' retirement savings portfolios. That is evident across all income levels, as national polls show.

Making the retirement savings process even more challenging and burdensome, the new federal government has agreed to collect for the spendthrift Government of Ontario the job-killing payroll taxes from employees and employers for the so-called Ontario retirement pension plan. The ORPP is sold as a top-up to the Canada pension plan, but it will take fully 40 years to reach its modest annual payback level. Why now? What is the rush?

Well, Premier Wynne's government, in an amazing blaze of unintended transparency, in its 2014 budget, revealed that the ORPP is not really designed for retirees. The budget document revealed that ORPP is really a tax grab. It will help bail out the debt and deficit created by the provincial Liberal government's misspending. The 2014 budget said precisely that by “encouraging more Ontarians to save through a proposed new Ontario Retirement Pension Plan, new pools of capital would be available for Ontario-based projects such as building roads, bridges and new transit.”

The federal government is now complicit by recently agreeing to collect for Ontario the job-killing employment taxes, not for the workers of today who will see little, if any, eventual benefit, but effectively to create a new slush fund for its provincial Liberal cousins who have created the largest sub-national debt in the world.

A variation of an old joke, not that far from reality is, ask an Ontario Liberal how to create a small business and they will say, take a medium-sized business and tax it down to size.

I see my remaining time is short, so I will briefly return to the Minister of Finance's remarks, when he introduced to Bill C-2, in which he talked about growth and investment in the budget that will tabled March 22.

We on this side of the House are very concerned about the dark reality for Canadian taxpayers and the Canadian economy that will, we believe, define those words. The growth that the minister and Prime Minister are trying, unwisely, to create will be in annual deficits: $30 billion, $40 billion, or more, in expansionary spending that simply cannot be justified. The investment will be the billions of dollars of deeper debt that our children and grandchildren will eventually have to confront.

If the Liberals are really serious about growing the economy, the minister must come forward with a jobs plan that will actually help get Canadians back to work. He should abandon the rush to recklessly push Canadians' billions of hard-earned tax dollars into spontaneously confected, inadequately planned infrastructure projects or to impose new regulations and taxes based on half-baked theories.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, we inherited an economy that was not moving forward and not in good shape due to the low-growth policies of the party opposite.

When the party opposite talks about the shell game the Liberals are playing, let us talk about the party that invented the shell game. After seven straight deficits, the party opposite said it was going to come up with a plan, that it would come up with a surplus or a balanced budget in the year before the election.

Let us talk about the shell game. There was $900 million put back into the budget from its own public servants' sick leave; the $2 billion rainy fund was put into the shell game; the GM shares were sold and also put into the shell game; and lapsed funding for veterans affairs was put into the shell game; and EI training was thrown in too.

Canadians have woken up to a low-growth, no-growth economic style from the party opposite. Good government and good government policies are for the many, not the few. With only 6.3% of Canadians using tax-free savings accounts, doubling that number pandered to the few.

Would the member opposite not concede that good government policy, good governance, is for the many, not the few, and not like the doubling of the tax-free savings accounts?

[Peter Kent, Conservative, Thornhill, ON]

Mr. Speaker, I thank my colleague for his question and for refraining from making the implausible claim that the Liberals found Canada in a deficit when they took power. Last year, the Canadian economy grew by 1.2%, and as the parliamentary budget officer has said many times, although this was ignored by the finance minister, we left the government in a surplus and in growth.

In response to the member's question with respect the tax-free savings account, I do not know how many times members on our side will say this today but fully 60% of the people who maxed out at the $10,000 level, many of whom are seniors who have no other place to put their money because they are forced to cash in their RRSPs at the age of 72, earn $60,000 or significantly less.

When I was knocking on doors in Thornhill last year, I met young people, university students and graduates, some of whom were paying both for university and making contributions to the TFSA. It is not for the affluent. Of the middle-income earners of all ages who made significant contributions, many chose not to buy an SUV but rather to drive a used vehicle and put some of that money aside. For those who are self-employed, the TFSA represents a real opportunity for long-term maximum benefit, and an even greater benefit than the RRSP.

I again think that the Liberal government was misguided into playing class warfare in trimming the TFSA.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the member for Thornhill just said that 60% of the people who maxed out at the $10,000 level were earning $60,000 or less. How can the member possibly have any data on who maxed out at $10,000?

[Peter Kent, Conservative, Thornhill, ON]

Mr. Speaker, I would point the member to the various firms in Canada that carry out surveys of working Canadians, including the Working Canadians organization and the financial institutions that handle the establishment of tax-free savings accounts. Those numbers are solid.

In quoting low participation rates, the Liberals looked back to the 2013 investment year. However, if we speak to any of the major financial institutions in this country, we will find that participation rates rose sharply last year, and even more sharply when it became clear that the Liberals were hell bent on fulfilling their campaign promises to slash the $10,000 annual investment limit.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the late Saskatchewan premier Allan Blakeney defined social democracy as a “fair share for all in a free society”, and the NDP certainly believes in a free society.

In the last Parliament, we were the only party to stand up and vote against Bill C-51, the Conservative surveillance law. In the current Parliament, we were the only party to stand up and oppose the Conservative motion calling on the state to condemn controversial speech about Israel.

However, as important as civil liberties are, and as good as the NDP's record is in this area, civil liberties are not what define us fundamentally as social democrats. “Liberal” is also a derivative of “liberty”. Even in the Conservative Party, there is a libertarian strain, even if it was pretty difficult to detect under the last Conservative government. What really defines us as social democrats is our concern for what former premier Blakeney described as a fair share: a more equitable distribution of income and wealth.

We believe in equality, not just for its own sake, but also because all the evidence indicates that a more equitable distribution of income and wealth leads to more happiness, better health, and less crime. Therefore, the trend toward worsening inequality is quite troubling.

In recent years and decades, a vastly disproportionate share of income gains have been concentrated in too few hands at the very top of the scale. The tax system is one of the most powerful tools available to government to address those inequalities. Therefore, I believe the House should evaluate Bill C-2 in terms of its effect on income inequality.

At this point, I will shift from quoting Allan Blakeney to invoking Clint Eastwood, because Bill C-2 has the consistency of a spaghetti western. Allow me to review the good, the bad, and yes, the ugly aspects of the legislation before us.

The good thing about Bill C-2 is that it includes tangible measures to collect a fairer share of tax from the rich. Specifically, it would increase by 4% the top income tax rate on incomes over $200,000.

This is entirely consistent with what the NDP has achieved at the provincial level. In Nova Scotia, the NDP government increased by 4% the top rate on incomes over $150,000. In a minority legislature in Ontario, the NDP amended a budget to add two points of income tax on incomes over half a million dollars. The most excellent NDP government in Alberta has quite correctly gone from a flat tax to a progressive income tax system. As part of our election platform in Saskatchewan, the NDP is proposing an additional percentage point of tax on incomes over $175,000.

The other positive aspect of this legislation is to restore the TFSA contribution limit to $5,500 per year. I think it is important to note that the previous Conservative government's proposal to increase that limit to $10,000 would only affect people who have extra money left over after the 18% of income that can be contributed to RRSPs and after the $5,500 that can still be contributed to TFSAs.

In 2013, fewer than 7% of eligible Canadians made the maximum TFSA contribution. It stands to reason that probably only up to that 7% of Canadians would stand to gain anything from a higher limit on TFSA contributions. Therefore, restoring that limit to $5,500 is clearly a progressive move. That is the good.

Now I am moving on to the bad.

Bill C-2 would include a so-called middle-class tax cut that would not actually help the middle class. I think the Liberals might be a bit confused between cutting the middle tax bracket and changing taxes in such a way as to help people with middle incomes, because what the bill proposes is a tax cut that only applies to incomes above $45,000, and that is more than the median Canadian income. To receive the maximum benefit, someone would need to have an income of more than $90,000 per year.

To put that into perspective, someone working as a nanny for the Prime Minister would receive nothing from the middle-class tax cut. However, the Prime Minister himself, and indeed all members of this House, would get the maximum benefit of about $700—but we do not need the money.

What are the alternatives?

We in the NDP had proposed to reduce the first tax bracket, which applies to everyone. We also proposed to boost the working income tax benefit, which is more targeted toward lower incomes.

In our election platform in Saskatchewan, the provincial NDP is proposing to boost the basic personal exemption, which again applies to everyone.

It would be extremely easy to design and implement a middle-class tax cut that would actually go to the middle class. However, in all the discussion we have heard about the bill, I have not heard a coherent explanation from the Liberals as to why they are pushing ahead with a tax cut that would only go to incomes above $45,000, rather than enacting a tax cut that would include all Canadian taxpayers.

I notice that many people on this side of the House are speaking today because the Liberals have given up their speaking slots in this debate. I would suggest that is because they do not actually have a very good answer to this question.

That is the bad.

Now, I am moving on to the ugly.

The bill would not even add up. I would argue that the Liberal tax proposal during the election was palatable to many progressive Canadians because it was promised to pay for itself. Even though the Liberal proposal was not very well targeted, it at least seemed that a redistribution from the very rich to the upper middle class might be a move in the direction of equality.

It has since been revealed that the bill would not pay for itself, that it would cost more than $1 billion a year in lost federal revenue. In effect, what the government is proposing is to borrow money to fund a tax break for people who do not really need it.

How could we make up the lost revenue?

Since 2000, Liberal and Conservative governments have slashed the federal corporate tax rate in half. We have not seen the promised boost in investment. On the contrary, we see private non-financial corporations sitting on a record hoard of cash.

The parliamentary budget officer estimates that each point of corporate income tax that we might restore would collect $2 billion of revenue.

One might argue that, with low commodity prices and depressed corporate profits, the corporate tax would not actually bring in that much. However, that is the beauty of corporate taxes: they function as an automatic stabilizer. When the economy is depressed and profits are low, they do not take very much money out of it, but as the economy starts to recover and we want to move toward a balanced budget, corporate taxes will automatically collect more revenue.

I would urge the government to very seriously consider at least partially reversing corporate tax cuts as a way of starting to collect the additional revenue that will be wanted as our economy begins to recover.

In conclusion, there are enough positive elements in Bill C-2 that the NDP is prepared to support it on second reading. However, there is a huge amount of room for improvement in targeting the so-called middle-class tax cut to those who really need it and in collecting the revenue that will ultimately be needed if the government is ever going to balance the budget.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I want to congratulate the hon. member for Regina—Lewvan on a very entertaining speech. It is rare that we hear Clint Eastwood quoted in this chamber. I do not think he is quoted enough, so let me quote him from Heartbreak Ridge. Clint Eastwood said to improvise, adapt, and overcome.

I enjoyed how the hon. member improvised and adapted. During the election campaign, the NDP did not favour a tax increase for those earning over $200,000. During the election campaign, the NDP did not favour a tax decrease for those earning less than $45,000. However, suddenly the hon. member for Regina—Lewvan is adapting, improvising, and trying to overcome by criticizing all the things we are now doing and saying that the NDP believes this and this and this; but the New Democrats said completely the opposite in the election campaign.

I would like to ask this for the hon. member for Regina—Lewvan. How can he possibly improvise, adapt, and overcome in this way when he is now contradicting what his party said in the election campaign?

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I will refrain from quoting Clint Eastwood as to whether the member opposite is feeling lucky, but I will make the point that there are many ways of making the tax system more progressive.

In the election campaign, the NDP proposed a reversal of corporate tax cuts as a way of collecting more revenue and funding important public services and infrastructure. The Liberal Party chose not to make that proposal. The Liberals proposed a modest increase in the top personal tax rate. That is quite consistent with what the NDP has achieved at the provincial level, and we are happy to support it in this House as well.

The real question is whether the Liberal government will actually start reversing corporate tax cuts in order to collect a fairer share of revenue and start to move back toward a balanced budget.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, my colleague brought the scope of provincial NDP governments into his speech, so let us talk about that.

In Manitoba, there was legislation that required a referendum prior to a PST increase. The NDP government, even though it campaigned against a PST increase, increased the PST. It had to go and try to gut the legislation requiring the referendum, but still increased the PST before that law was changed, even though a survey by Angus Reid at the time said that 74% of Manitobans wanted a referendum and 72% disagreed with raising the PST. Why was that? It was because common-sense Canadians know that raises to general consumption taxes are a bad thing.

I am asking the following for my colleague. Given the absolutely disastrous reign of the Manitoba NDP in my home province of Manitoba—it has been in power since I was 19 years old—including the loss of jobs, the instability in social programming, and the absolute disaster that the government has been, how can my colleague bring provincial politics into his speech and think that the NDP has absolutely any credibility whatsoever to speak to taxation issues?

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I will just clarify for the member for Calgary Nose Hill that I am from Saskatchewan, not Manitoba, and I will not pretend to be intimately familiar with all the details of Manitoba provincial politics. What I will say philosophically is that I do not believe in legislation that requires governments to go through referenda before making tax changes. I believe in the sovereignty of Parliament, and I think that governments need to make important fiscal decisions all the time.

However, what I am really excited about, in terms of the NDP at the provincial level, is the most excellent government we have in Alberta. It has really moved that province out of the dark ages of having this regressive flat tax and has in fact brought Alberta into the light of having a progressive income tax, where people who have the good fortune to earn higher incomes pay a higher rate of tax on those incomes. I believe that progressive taxation is really a hallmark of civilized society, and it is a great thing that Alberta, under the NDP, has joined the rest of the country in that regard.

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

Mr. Speaker, I begin my speech today by referring to page 9 of the Liberal Party of Canada election platform and will quote directly from that document: “The two tax changes will be revenue neutral to the federal government.” It does not say that these tax changes might be revenue neutral to the federal government or that they hope these tax changes will be revenue neutral to the federal government. The Liberals were very clear that these tax changes will be revenue neutral to the federal government.

Of course, on page 6 of the same document, Liberals told us that this was all part of a “fully costed” platform. In fact, throughout the election, we heard how Liberal experts had fully costed the platform. However, we now know that the so-called Liberal experts got it wrong. In fact, they got it very wrong.

The public budget office has shown us the real cost of these Liberal tax changes. These are not revenue neutral at all. The real cost is $8.9 billion by the 2020-21 fiscal year. In other words, every single Liberal member of this House was elected under questionable pretenses.

Where are those Liberal experts today? I have yet to hear the Prime Minister apologize on behalf of these experts, or hold them accountable for misleading Canadians. The Liberals, as we know, say these tax changes will help the middle class. In fact, if we search Hansard, as well as online search engines, we would see hundreds of references by the Prime Minister about the middle class.

Yet, here is an interesting observation. On dozens of occasions in this place and in the media, the Prime Minister and the Minister of Finance have been repeatedly asked how they define the middle class. To my amazement, I have yet to find an answer. They consistently refuse to provide a definition.

Let us look at these tax changes for an idea on who the Liberals think are the middle class. Are they citizens who are earning $45,000 a year? According to the Liberals, these are not middle-class Canadians because there is no income tax cut for them in these changes.

In essence, the Liberal tax changes apply to the tax bracket for incomes just over $45,000, and up to $90,563. However, wait, there is more. For those who earn over $90,000, they will also pay less tax on this portion of their income. For those earning up to $199,000—and I will come back to why I reference $199,000 in a moment—they will benefit from this tax cut. In other words, someone earning $199,000 per year benefits from these Liberals income tax changes, while someone earning $45,000 a year does not.

I challenge any member of this House to ask your constituents who they think is part of the middle class. Is it someone earning $45,0000 a year who does not benefit from these Liberal tax changes, or someone earning $199,000 per year who does? It is no wonder that our Prime Minister and Minister of Finance refuse to define the middle class. Only the Liberals would think that someone earning $199,000 is middle class and someone earning $45,000 is not.

The other interesting part is that the Liberals, in spite of the shoddy revenue-neutral math, tell us that these tax changes are there to help stimulate the economy. However, part of these tax changes are that the Prime Minister has created his own new top income tax rate. Those earning $200,000 or more will be penalized with a new 33% tax rate. In other words, we have a tax cut intended to help stimulate the economy, yet those who are most financially able to stimulate the economy are being penalized not to do so.

I have no doubt that the same Liberal experts who bungled the math on these tax changes being revenue neutral likely came up with this misguided policy as well. With this Liberal tax hike, combined with provincial income taxes, some provinces will now be paying a combined rate of taxation that exceeds 50%.

I know that the Liberals think, who cares, that these people are wealthy. However, in talking to regions desperately trying to recruit much-needed new doctors, particularly rural areas in my riding, when doctors hear about a total tax rate of over 50%, they say “Thanks, but no thanks”.

What is also interesting is that Bill C-2 proposes to roll back the maximum TFSA contribution implemented by the former government. I went through Hansard and read the Prime Minister's comments to try to determine why he hates the idea of Canadians saving money.

I found an interesting reference from the Prime Minister. He believes that having a tax-free savings account will only benefit the rich and will be paid for by the next generation of Canadians. I find this fascinating. Here we have a Prime Minister who is saddling the next generation of Canadians with billions of dollars in new debt, and he is worried about people having too much money in a savings account. Only in Liberal land does this make sense.

Let us not forget that all tax-free savings account contributions are made with net after-tax dollars. In other words, they are from the net income after tax has been paid. Let us also not forget that although people's investment income may not be taxable within a tax-free savings account, which is the entire point of having one, eventually that money will be withdrawn. In fact, people already withdraw from the TFSA for vehicle purchases, home renovations, and other big-ticket items that are common reasons for withdrawal.

Let us not overlook that when people spend that money here in Canada, not only do they support our local economies, but the money is also taxed, by GST, HST in some places, provincial sales tax. It is bizarre when the Liberals say that they are cutting taxes for some Canadians to help stimulate the economy, yet they discourage the idea of saving money.

Yesterday, I read an interesting column in a report by Vancity Credit Union. It talked about the expectations of millennials to inherit funds from the bank of mom and dad. The problem is that in many cases the expectations exceed what the bank of mom and dad is planning on delivering. That is why I submit that cutting back the tax-free savings account and sending the message that saving after-tax dollars is a bad idea is so misguided.

That is why I am here today opposing Bill C-2. So-called Liberal experts have the map badly wrong and have misled Canadians in the process. These same so-called experts further came up with policies that will only further set Canada behind, while adding billions in increased debt. It is not increased debt because we are in a recession, but rather debt because we are in a period of slow growth. That does not make sense.

The Liberals often like to say that a Canadian is a Canadian is a Canadian. However, if someone is a Canadian making $45,000 a year, there is no tax cut. If a Canadian is making $199,000 a year, they are apparently the middle class and do get a tax cut. If someone is a Canadian making $200,000 a year or more, they are further financially penalized. However, I suppose the fact that all future Canadians, regardless of income, will be left paying billions of dollars in new debt from these Liberal tax changes is the great equalizer.

I oppose these changes, because I believe that as Canadians we deserve better.

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

Mr. Speaker, I find it truly amazing that the member would express concern in regard to deficits. All he needs to do is reflect on the 10 years of Conservative rule where there is over $150 billion. The only governments in the past that have truly had balanced budgets and surpluses have been the Paul Martin and Jean Chrétien governments.

The member makes reference to the tax breaks and the middle class. If I were a Conservative, I too would have a tough time to vote against this legislation. As much as he tries to cherry-pick in terms of who is benefiting, the individuals he does not choose are the hundreds of thousands of individuals who work in factories, teachers, many different professionals, who are going to have more money in their pockets as a direct result of this legislation.

I would suggest that the member reflect in terms of why he believes that the bulk of middle-class Canadians, many of whom are in his constituency, do not deserve a tax break. That is what he is voting on. Does he believe that his constituents should be getting the tax break?

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

Mr. Speaker, this is Liberal land at its finest. The fact is, the Liberals' own experts panned that this would be a revenue neutral tax cut. It is clearly not. At $8.9 billion a year by 2020-21, it is not a healthy thing for Canada.

He talked about the deficits that prime ministers Chrétien and Martin dealt with. They dealt with them by cutting transfers to people, to provinces, and particularly downloading to municipalities and provincial health care programs. That is not a Canada that I want to see.

When we added to our deficits, it was because we had the financial crisis of 2007-08, which then precipitated the great recession, the lowest output in North America since the Great Depression. There was a rationale then; there is no rationale now. The member should be a little more clear and coherent about what he is panning.

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

Mr. Speaker, it is surprising to see so much misinformation coming out of the government. This $150-billion figure that they keep quoting is not accurate. In fact, the numbers are much lower in terms of debt that was added over the last 10 years. Projections are that the government will add more debt in the next four years than happened over the last 10 years, and that was coming through a financial crisis. We do not have a financial crisis right now, at all.

I was concerned as well to see very high levels of a combined debt-to-GDP ratio for Canada, if we include provincial and municipal numbers as well. Now is not the time to be increasing our debt-to-GDP ratio, as the government plan would be.

Could the member comment on that and also correct some of the ridiculous misinformation we are getting from the government?

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

Mr. Speaker, we always have to take into account the context of the situation today. With our aging demographic, we are going to see less capacity to pay for things as we go forward. Is there a place for senior levels of government to invest in quality of life and productive infrastructure to make our economy better over the long term? Absolutely. However, we should be asking ourselves at what point it is within our means.

The government blew through the modest deficit promise of $10 billion a year. Now, we are talking about a starting point of $18.4 billion. It has blown past any suggestion that it would anchor itself to the GDP-to-net debt. That promise is blown away. What happens if we hit another financial crisis? What happens if there is another recession and we are behind the eight ball when it comes to dealing with our demographics and our aging society?

There is an argument to be made for investments. However, to be totally throwing out the financial road map that both previous Liberal and Conservative governments held, that balanced budgets make us stronger as a country, I believe is the wrong path.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Speaker, it is my very great pleasure to rise today and speak on behalf of residents of Milton with respect to Bill C-2.

If we recall the last campaign, the new Liberal tax plan was a central part of the government's campaign. It would become a vital plank of the Liberals' platform, one that they would go on to say was a major part of the plan that they credit their election win on. In fact, it was a vital plank of their platform that was signed off on by the now-Minister of Finance.

What was really important to my constituents in that campaign platform was that the plan be revenue neutral, as they had promised. However, soon after coming into power, the Minister of Finance admitted that there was a miscalculation. He is basically admitting that the Liberals had been elected under false pretenses.

We also have it confirmed now by the Parliamentary Budget Officer that this tax plan will end up costing Canadians $8.9 billion over the next four years. This is one of the first concrete initiatives that was brought in by the new Liberal government, and it was grossly miscalculated. This leads us to where we find ourselves today, very much concerned about what is next. What future is our government headed toward in terms of other possible miscalculations?

The Liberals have justified destroying the former Conservative surplus and repealing the budget balance bill on the grounds that their spending is going to stimulate the economy. They are assuring Canadians, “Do not worry; relying on borrowed money is going to be okay. What really matters is the relationship between debt and GDP.”

What the Liberals are not telling Canadians is that these values of debt and GDP are not within the government's control. The government controls only spending, and quite frankly, it should be exercising prudence on this front. Targeted spending that will truly stimulate the economy is a good thing, and it is very different from these feel-good handouts that we are seeing more and more from the Liberal government.

What is this for? What is this deficit for, in terms of this tax plan? In reality, for a single person, Finance Canada tells us that it amounts to $6.34 a week. That is the price of a latte once a week, or maybe a salad once a week. The plan also relies on a feeling of consumer confidence, but when I talk to constituents in my riding, they have suggested that they are starting to feel a pinch.

A few weeks ago the Premier of Ontario announced a 4.5¢ tax on a litre of gas. That is about $900 a year for Canadian families to fill up at the pump. That is the cost associated with moving kids around to hockey, to soccer, to school. Under the federal Liberals' new tax plan, middle-class families are just going to receive $300 per year, and with this provincial tax, money granted under this bill will be completely swallowed up. Now, rather than feeling confident in spending, many plan on saving. After all, putting money in one pocket just to take it out of the other is certainly not what was promised in the election campaign.

The other aspect of this legislation that is truly concerning is that it seeks to make it more difficult for Canadians to save in general. It actually slashes the contribution limits for the tax-free savings account to $5,500 from the $10,000 that a previous Conservative government had set it at.

Many of the constituents in Milton have told me that they rely upon these savings accounts when planning for their future. In fact, there are two ways in which families in Milton are saving for their retirement and their future. One is by investing in their home. When they have their home equity built up, they utilize that in future years. They know they are saving toward a great goal.

The second way, of course, was through these TFSAs. The beautiful part about the TFSA is that individuals did not have to sell their homes in order to access the growth in these accounts. To someone saving for a higher education, a single couple saving to start a family, entrepreneurs saving for their businesses, parents saving for next year's hockey costs, or a low-income senior saving for retirement, the TFSA was a key tool to help them save. The Liberal tax plan will make life less affordable for Canadians and seniors who are ultimately trying to save for vulnerable years.

A recent report from the Parliamentary Budget Officer demonstrates that Canadians are taking on uncontrollable levels of debt. Canada has the highest debt in the G7, 171%, but at the same time we are taking away ways for Canadians to save their own money, and that is going to increase their exposure to becoming delinquent. The government should be encouraging responsibility in saving, regardless of how it chooses to run the nation's finances.

At a cost of $8.9 billion over four years, the new Liberal tax plan will do virtually nothing for Ontarians. The point is that the amount of money granted under the Liberal tax plan is so small that it is not worth the cost. With low oil prices, with thousands of lost jobs across the country, Canadians cannot afford to be plunged into a greater economic uncertainty with more deficit spending, which, by the way, is borrowing. When individuals buy cars, they do not say they are going to deficit finance that car. They say they are going to borrow money for that car.

If net benefits are nebulous, as they are in this Liberal tax plan, then it is problematic. If the government cannot manage its own books, who will? At the end of the day, all Canadians will end up paying in the form of tax increases.

The Conservative government had a legacy of tax fairness and a legacy of cutting taxes. When in office, the Conservative government cut taxes over 140 times. It left government with a surplus on the books, according to Finance Canada. That surplus became a deficit pretty soon after the Liberals took power. The Liberal path of deficit spending is disconcerting. The lack of oversight demonstrated in Bill C-2 speaks to this, and for Canadians, this should be a red flag.

Three promises were made in the Liberal campaign platform. The first was that the budget would be balanced by the end of the Liberal mandate, the second was that any deficit would be moderate, and the third was that any tax plan would be revenue neutral.

Canadians took the Liberals at their word, but over 120 days, every single one of these fundamental promises has been broken and fundamentally breached. Those promises, I would submit, were absolutely made in consideration for the vote of the Canadian taxpayer. As a result, we sit in a situation now where we do not know how much the deficit will be, but we expect it will be significant.

The Liberals are not going to balance the budget at the end of their mandate. We know with great certainty that this is not a revenue-neutral tax plan, because it has been shown not to be upon admission and by Finance Canada.

As I said, for Canadians these are not only broken promises but very costly broken promises. Canadians cannot afford these changes, and when they come at the cost of growing structural long-term deficits, they should be opposed.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, according to the Conservatives, it is a dream to have Canadians save. They want everybody to be able to save. However, try telling that to people in low-income areas in priority neighbourhoods. Try telling that to families that are living day to day. Try telling that to people on the street. Our homeless rates are rising. Our poverty levels are rising. Try telling that to them.

The Conservatives also talk about the Liberal shell game. A previous speech by a member of the party opposite talked about Premier Wynne and how she was using a government slush fund to pay down debt. That came from a party that took $20 billion in EI reforms in 2010 and another $3 billion in EI reforms from 2010 to 2015 to pay down debt, so let us not talk half-truths.

Would the member opposite not agree that only 6.7% of Canadians maximized or registered for a tax-free savings account, which does not mean it was used? Would the member not agree that doubling something like that was actually for the few and not for the many? Would the member not agree that good governments make policy for the many, policy such as the Canada child benefit or a tax break for the middle class?

That is what good government should be.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Speaker, the hon. member and I both come from the same region of Canada. I, of course, am from Cape Breton. We cannot all be blessed: he is from Saint John, New Brunswick. However, during his earlier speech something caught my attention, some words that I do believe separate us in this House, one on this side and one on that side.

When he was talking about TFSAs, he said that having them in place would affect government revenues. I take a very different point of view. These are taxpayer dollars that people have worked for. This is what they have achieved and aspired to do. Notionally, to think of utilizing what is in people's TFSAs on a year-by-year basis is the wrong way of looking at it.

I did not make a lot of money when growing up on Cape Breton Island. I remember doing my grandmother's taxes. She made $18,000 in 1989 and she brought us both up on that. The reality is I had dreams. I wanted to do better, and the TFSA goes with me through life. When I get to a higher salary, it allows me to shelter the money that I have worked extremely hard for so that I not only have a house I can rely upon if things go bad but I also have this tax-free savings account that is there for me to allow me to choose what to do, when I want to do it, and how I want to do it.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, I want to add to the comments made by my colleague with respect to the Liberal plan not being revenue neutral and in particular to the proposed carbon taxes the government wants to bring in.

I will quote Greg Sorbara, a former Ontario Liberal minister of finance and someone who would know a bit about this. In talking about what was done in Ontario, he stated, “Although the minister said there are no tax increases, the fact is that there's a $1.9-billion increase, which I call a flow-through tax, that will ultimately affect consumers. Cap and trade is a system where the government sells to industry an imaginary product called carbon credits, and those industries pass the costs—$1.9 billion, in this case—through the system, and it gives rise to higher prices at the gas pump, for gas that heats homes, and ultimately for every single product that we buy. The issue that I have with it.... I mean, it's an interesting way to raise money and say at the same time that you're not raising taxes. The issue that I have, and I'm not sure, because there's no evidence anywhere in the world that the cap and trade system actually does work to significantly reduce carbon emissions....”

My question to my colleague is this. The Liberals are addicted to all of these new taxes, and we have talked about the pension tax increases. However, what would this cap and trade plan do to the competitiveness of Canada when we are competing aggressively for new investment, especially in places like Oshawa, where I come from? What would these new taxes that are not revenue neutral do to our competitiveness internationally?

[Lisa Raitt, Conservative, Milton, ON]

Mr. Speaker, that is an excellent question. I thank the hon. member for his research on the matter.

The issue that arises with adding on all these taxes is that those who cannot afford them the most are the ones who feel them the most. It is the mother who on a Saturday morning is looking at how expensive gas is to fill up the minivan because she knows she has to get her kids to different areas in her town and she knows how much gas it will take for her to do that. It is happening in Nova Scotia, where people and senior citizens are wondering if they can fill their heating oil tank for the winter. I know they worry about global warming, but the truth is that an easier winter is something that will be easier on their pocketbooks. That is the reality. People make difficult choices with the small amount of money they have. Extra taxes on top of that seriously affect their quality of life.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Mr. Speaker, I would like to congratulate my seatmate on an excellent analysis of why Bill C-2 is so flawed and why the previous government's economic record was so good. The member has a lot of material to work with.

I am sure that members, at least on this side of the House, will be familiar with the last two “Fiscal Monitor” releases, which showed that the Conservative government left the Liberals with a surplus. At the time the Liberals took over, the Government of Canada was running a surplus. We know there will be a deficit and that this deficit will be a direct result of the choices the Liberal Party has made, and not because of anything the previous government did, because we left the books in such great shape.

The tail end of my colleague's speech centred on the tax-free savings account, and I would like to speak to that as well.

Canada used to have a lifetime capital gains exemption. I believe at the time it was phased-out by a previous government, it was a $500,000 in lifetime capital gains. It meant that any Canadian could buy and sell shares, equities, or investment real estate properties, and when they sold, a good chunk of it would be tax free, and there were a lot of reasons for that.

There is a huge economic incentive to protect capital gains in that way, and the first aspect I would like to touch on is the idea that inflation is a tax.

When one has a capital gain, a good chunk of that notional gain is due to inflation. In other words, if I buy $100 worth of equities today and 20 years from now they have gone up 20%, when I sell them, I have to pay taxes on that gain even though a good chunk of that has been the normal inflation that the Bank of Canada actively seeks with its mandate to achieve a 2% inflation target. Therefore, the $120 that I sold the equities for is not really $120, because a good chunk of the value of it has been eaten away by inflation, but I still pay the taxes as if I had the benefit of the entire 20%.

What the tax-free savings account does, of course, is protect all of the growth, both inflation and real growth, from the tax man. Therefore, if I have equities in a tax-free savings account and it does go up by 20% over a period of time, then, yes, a good chunk of that is inflation, fake growth and not real, a kind of a tax and devaluation of something that I own, but it is protected at the very least from paying taxes.

Ordinary Canadians cannot protect themselves from inflation. It is a tool of government, a tool of the Bank of Canada, and it is done for many different reasons.

There is some debate as to the benefits of having an inflation target, but nonetheless ordinary Canadians can do nothing about it. They can try to protect themselves in terms of where they put their money, they can try to find investments that offer some kind of predictable return, but they cannot control what the folks at the Bank of Canada do, and it in turn certainly cannot control the mandate it is given by the government. However, the tax-free savings account, at the very least, offered a little bit of a shelter against the negative impacts of inflation when it comes to paying taxes, as one would not have to pay tax on that fake growth.

Mr. Speaker, I see we are approaching statements by members.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I was just waiting to cut you off, but certainly old habits die hard. After question period, the hon. member will have six minutes and ten seconds remaining.

The House resumed consideration of the motion that Bill C-2, an act to amend the Income Tax Act, be read the second time and referred to a committee, and of the amendment.

[The Speaker, Liberal, Geoff Regan]

The hon. member for Regina—Qu'Appelle has six minutes remaining in his speech.

The member for Regina—Qu'Appelle.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Mr. Speaker, before question period started, I had just finished explaining how inflation acted as a tax on ordinary Canadians and that when the government imposed an inflation target, as Canada has, of 2%, that it slowly but surely would eat away at the value of what Canadians had saved. It lets the government off the hook because the liability today to a group, whether that be individuals or other entities, gets eaten away by inflation as the money they end up having to pay back over time is reduced because of the inflationary acts of the central bank policy.

However, I want to shift gears a bit and talk about how savings can be a stimulus. When it comes to economic times, we hear these buzz words of liquidity traps, dead cash, and all these kinds of phantom problems about which we should be concerned. A lot of people have a misconception about what happens when Canadians save money.

When individuals put money into a tax-free savings account, that does not go into a mattress or become dead money. Rather, it gets invested into the market. It becomes capital that businesses and individuals can tap into to expand operations, to invest in new equipment and capital expenditures for their business. It becomes real loanable funds, not the loanable funds the government creates out of thin air through deficit financing or the modern day alchemy like we see in Europe and the United States with quantitative easing, and these types of new monetary tools that many governments around the world have experienced.

It strikes me on how history repeats itself. We hear stories in history books and legends of kings and queens commanding the wizards and astronomers of the day to try to turn lead into gold. We call them alchemists. They used to get the support of the monarchy in the area to take something of no value and turn it into something of great value. The most common example is the practice of alchemy and trying to turn lead into gold. We always see governments around the world doing that with monetary policy, such as quantitative easing, and that somehow printing more dollar bills will improve the economy. We know that is false. Thankfully, under the previous government, we refused to go down that road and engage in that type of trickery.

However, real savings, which is real individuals putting money into investment vehicles, such as a tax-free savings account, mutual funds or bonds, is real capital. That is something tangible. Savings today become a stimulus tomorrow because they are real funds that are there. That is what our economic policy was all about when our party was in power, encouraging private sector stimulus.

As we lead up to the record deficits that we know are coming in the next budget, we have been hearing a lot from the Liberals in the last few days on how we need to stimulate the economy and that the only thing that can do that is government spending. We hear time and again from the parliamentary secretary and from the Minister of Finance, who should know better having been on Bay Street before, that somehow if the government could just spend the right amount of money, we would get back to big growth again. This is the problem we are facing. We hear from the other side that the government was not spending enough money. We can look back over the decades to budget documents.

As an aside, I know the Liberals do not like reading budget documents or Finance Canada reports because they show we left them with a surplus. It is becoming quite clear that the only people who do not believe the government was left a surplus are the Liberals themselves.

With respect to private sector stimulus, I want to point to a couple of examples. The first is the energy east pipeline, which is a $15 billion private sector stimulus package that does not require a cent of taxpayer money and will put people to work because there is a market solution, there is a business case for it. We know there is a business case for it. If there were not, the company would not propose it.

A similar example would be the Toronto Island airport. My friend from Spadina—Fort York cares very passionately about this because he represents a lot of very rich condo dwellers in downtown Toronto who do not want the inconvenience of jets landing and spoiling their waterfront view as they wake up in the morning and drink their fancy coffee.

Meanwhile, people in Montreal who work in the aerospace industry have their jobs threatened because there is no ability for the airlines to buy those jets and land them at the airport. This is a classic Liberal example of putting up a wall, blocking an economic stimulant like energy east or the Toronto Island airport, and then coming along with taxpayers' dollars and saying, “Don't worry; we'll bail out the company” or “Don't worry; we'll expand EI benefits for all those people who are out of work for a long period of time.”

That is the difference between the economic approaches of the two parties. On this side of the House, we want the private sector to provide that stimulus. We want to get the government out of the way. We want to tear down those walls that prevent innovation and investment, and allow the market to do what it does best, and that is to allocate resources, make those investments, and get people back to work. We do not think the government should cause the problem in the first place and then come along with a solution that always, invariably, just results in more taxpayers' dollars being spent.

[Arnold Chan, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, I want to thank my friend from Regina—Qu'Appelle for his comments. I listened very carefully to his contribution to the debate on Bill C-2, and I take to heart what he was saying about the inflationary factors that ultimately may erode the savings of Canadians, but what we really ultimately need to look at is a fundamental difference in approach with respect to savings.

This side of the House is not opposed to Canadians saving their hard-earned money. The question at the end of the day is this: who ultimately benefits? Who can actually maximize the contribution limits that had been proposed by the previous government, the new savings limits that had been proposed for TFSAs? From the perspective of his particular party, was the increase from $5,500 to $10,000 an inflationary factor, or was it fundamentally about rewarding those who fundamentally do not need it?

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Mr. Speaker, the member must not be familiar with the stats that show that the vast majority of people who use tax-free savings accounts and who maxed out doing so were people of very modest means. In many situations, they were seniors.

I have heard many examples of seniors having to transfer money out of a registered retirement product and put it into a vehicle. There is a huge tax implication there, but tax-free savings accounts were an attractive way to do that, to take money from a RRIF and put it into a tax-free savings account. The fact of the matter is that this increase in the TFSA limit benefited hundreds of thousands of people in many different demographics and income brackets.

It always comes back to the point where the Liberals need to be talked into giving taxpayers' money back to hard-working Canadians. Our default position is that government needs a reason to take the money, not a reason to leave the money in the pockets of Canadians. That is the fundamental difference between our two parties.

[Pierre Poilievre, Conservative, Carleton, ON]

Mr. Speaker, to build on the member's excellent speech, the published and available facts are that 60% of those who maxed out their tax-free savings accounts earned less than $60,000 a year.

“How is that possible?” asks the Prime Minister. “How could someone who makes only $60,000 a year have $5,000 to max out the TFSA every year?”

The answer is that they do not. They do not get it from their income. They get it from downsizing their home. They turn some of their home equity into cash, as many seniors do, or a spouse passes away and bequeaths their savings, or they are forced to take money out of their RRIFs, which they have accumulated over an entire lifetime. They often have large infusions, even though they are people of very limited means.

That is why 60% of people who max out their TFSAs earn less than $60,000 a year. The decision by the present government to cut back tax-free savings accounts will limit the ability of these people of modest means to put that money into a tax-free vehicle, where it can grow and pay them an income in a dignified retirement for the rest of their lives, two-thirds of them being in their retirement period.

I wonder if the member could comment on the irony of a government that wants to raise taxes on the savings of seniors and the retired while simultaneously proposing a mandatory expansion of the CPP under the pretext of helping people retire.

[Andrew Scheer, Conservative, Regina—Qu'Appelle, SK]

Mr. Speaker, I thank my colleague for the question and I appreciate his ability to recall those types of stats and figures. I knew in general terms, but of course he very articulately brought in the actual stats, and I thank him for that.

It is true that there is a great irony there, and it is an irony that we see in the Liberals' approach to all economic matters. Fundamentally, they fear the independence of ordinary Canadians. The Liberals like to have clients. They like to have people reliant on government, but if people have their own money in a TFSA, if they have their own RSPs, they do not need government. They do not need different programs to be expanded or altered. They can just quietly go about living their life based on the savings they have accumulated.

However, if they are not allowed to put that money in those types of vehicles and they have to depend on government programs, then the Liberals have a base that they can grow and they have people who are beholden to government. That, I think, is ultimately what they are trying to do: limit the independence of ordinary Canadians so they do end up more and more heavily dependent on the state and look for parties like the Liberals, who constantly offer more and more spending.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I am pleased to rise in the House today to debate Bill C-2, which was introduced in December and is now being debated in the House.

Middle-class families are losing ground even though they are working harder than ever. What these families need is a government that is concerned about their situation and will fight against growing inequality. Unfortunately, we see that this government is doing the opposite. Liberals have repeated for months and months that they have a plan for the middle class. They promised quick, urgent and positive change. However, we see today that we know very little about how these major changes will happen and even less about when they will happen.

Bill C-2 was a golden opportunity to make good on these promises and to put words into action. Unfortunately, the Liberals' plan is quite disappointing.

The Liberals' proposed tax plan does nothing for 60% of Canadians, six out of 10 Canadians. Once again, the wealthy are the ones who will benefit. The NDP put forward solutions that would benefit a large number of Canadians and would allow a fairer distribution of tax cuts: boosting the national child benefit supplement, increasing the guaranteed income supplement, creating a $15-a-day national child care program for all Canadian families, and restoring the tax credit for labour-sponsored funds. These realistic, progressive measures would provide real help for the middle class.

The Liberals campaigned on a platform focused on the middle class. As my colleague from Rimouski-Neigette—Témiscouata—Les Basques mentioned in his speech in the House, we want to know how the Liberal Party defines the middle class. This is a legitimate and important question. This government keeps promising tax cuts for the middle class. However, as the parliamentary budget officer explained very clearly in his report, the real middle class will not benefit from this government's promised tax cut. A tax cut for the middle class should benefit the middle class.

When we really look at the Liberal plan, it is quite clear that unfortunately, it does not make sense. The median income in Canada is about $31,000 a year. Obviously, this means that half of Canadians earn less than $31,000 a year and the other half earns more than $31,000 a year.

If we imagine a pizzeria worker in my riding who earns $20,000 a year, will he benefit from this tax cut? Unfortunately, no. Will a social worker who earns $43,000 a year benefit from this tax cut? The answer is still no. The reality is that someone who works hard and earns $50,000 a year will probably receive only $20 or $30. Is that real change?

One has to wonder who is really going to benefit from this change. Who is really going to benefit from these cuts? Who could benefit? When we look closely at the figures, we see that this will benefit people who earn more than $90,000 a year. What is more, someone who earns $200,000 a year will get the most out of this tax cut. Saying that this will benefit the middle class is not entirely true.

I hope I did not lose too many of my colleagues with all those figures, but they are important in understanding just how much hard-working families, our seniors who often live in poverty, and the real middle class will unfortunately not benefit from these measures.

If we take the median income, people will receive nothing. If we take the income that everyone associates with the middle class, in other words, $45,000, people will receive nothing. Those who will receive the biggest slice of the tax-cut pie are the top 20% income earners. That is not the middle class. The Liberals' proposed tax cuts will help the rich, not students or young families.

When I talk to groups in my riding and my constituents about this, they are disappointed. Like me, and like most Canadians, they expected the tax cuts to help those who need it most and to benefit the real middle class.

During the election campaign, people who believed they were part of the middle class were told over and over again, for nearly 80 days, that they would finally have room to breathe and that they would be given tax breaks. Today, they are realizing that that is not the case.

Unfortunately, the middle class will not benefit from these measures; only the richest 20% will. That is what the figures say. When middle-class Canadians file their income tax returns, they will be surprised, and not in a good way.

In fact, most Canadians will see that they cannot benefit from the tax cuts that this government promised them. Only 20% of the population will be eligible for the tax cuts, even though they were supposed to give the middle class some breathing room.

The fact that the tax breaks will benefit those who earn $200,00 a year and not those who earn $39,000 shows just how inequitable the proposed tax breaks make the tax system. That is really unfortunate.

After the bill to amend the Income Tax Act was introduced, I read with interest what Luc Godbout, an eminent tax expert in Quebec, had to say about it. When looking at how this would affect couples, he determined that, if a couple had a combined income of $250,000 a year, they could receive a tax break of up to $1,120. However, a hardworking couple in my riding with a combined income of $75,000 a year, who sometimes has trouble making ends meet, would receive an average of zero to four dollars. That is really disappointing.

The NDP developed a plan to fix the Liberals' tax plan, to ensure that the government's measures truly reflect its campaign promises. Our plan would reduce the tax burden on middle-class and lower-class workers. We urge the Liberals to take our suggestions so that we can help those who truly need it.

Our plan is simple. The NDP calls on the government to lower the tax rate for Canadians in the first tax bracket from 15% to 14%, instead of lowering the tax rate for Canadians in the second tax bracket. This way, eight out of ten taxpayers would see a change in the amount of tax they pay. This solution would benefit many more taxpayers. Under our proposal, people earning the median income could see a reduction of up to $250 a year, but these people get nothing under the existing plan.

Our concrete proposal could really help the middle class. That is what the people of Saint-Hyacinthe—Bagot and the 337 other ridings want.

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

Mr. Speaker, I have had the opportunity to listen to a number of New Democrats talk to Bill C-2. We look at Bill C-2 as a commitment that was made to Canadians. The Liberal Party wants to build the middle class, believing that a healthy middle class means a healthy economy. This is an investment in the middle class.

The New Democrats are somewhat critical of it, but they are supporting the legislation, and I do appreciate their support. When we complement Bill C-2 with other actions the Government of Canada is taking, such as the child benefit plan, which is going to raise literally hundreds of thousands of children out of poverty, would she not say that, looking at the bigger picture, for the first time in many years we are seeing a very progressive attitude in dealing with the issues of poverty and enhancing the strength of Canada's middle class?

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank my colleague for his question. We do support this bill, and we hope to improve it in committee.

We all spent the past week in our ridings. During the week, constituents contacted me to say that they were happy they would benefit from the tax cut because they belong to the middle class. Then I asked them what their household income was. Each time, I had to tell them that the so-called middle-class tax cut was not for them and that it would benefit people who are richer than they are.

We are here to represent our constituents. We have to respond to their disappointment. In the 2015 election, people had high expectations in connection with Liberal promises, but they have been let down over and over.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, my question follows on the question from my Liberal colleague, who tried to suggest that Bill C-2 was a progressive measure to help Canadians who need help, the middle class. The member who spoke identified that there are many people who aspire to the middle class or consider themselves to be the middle class, who would not be helped by the measures in Bill C-2 at all, and in fact it would then raise taxes on a whole range of other Canadians.

The previous Conservative government undertook a reduction to the GST to reduce consumption taxes. The lower-income and lower-middle-income people consume most of their income, and therefore lowering the consumption taxes and raising the basic personal exemption, which the Conservative government also did, also took hundreds of thousands of Canadian families off the tax rolls entirely.

Could the member comment on how Bill C-2 would actually miss some Canadians who are probably the most deserving of relief?

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank my colleague for the question.

I think that a graduated tax rate, in other words a tax rate based on annual income, is the best way to redistribute wealth in our society. A consumption tax certainly hinges our on consumption, which in turn depends on our income. However, we all know that there are some purchases that have to be made for many of our basic needs regardless of whether we have a low income or a high income.

In my opinion, changing the tax rate in a way that is equitable to people with different incomes is a better way to distribute wealth in our society.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I will be sharing my time with the member for Louis-Saint-Laurent. This is actually the first chance I have had to share my time with him.

The latest election returned a lot of new members from the Quebec City region. We are very proud to have them here in the House of Commons to participate in this important work. I am particularly proud to have my colleague from Louis-Saint-Laurent here with us. He is a passionate and talented MP whom the esteemed journalist, Jacques Samson, even compared to Peter Stastny.

We like having high scorers on our team. These days, we really need good net minders because the Liberal government seems keen on racking up deficits like hat tricks. Unfortunately, taxpayers end up paying the price, particularly those who need help the most.

That is why I am rising in the House today. I want to make it clear that, on behalf of the people of Bellechasse—Les Etchemins—Lévis, I will oppose this bill. In theory, the Liberals seem to want to help the middle class, but the fact is that they will do exactly the opposite, as I am about to show.

Through the tax measures they have proposed, the Liberals seem to want to drive those most in need of help into poverty and debt. These measures will prevent the public, which does not always have access to tax shelters, from saving and setting money aside tax-free.

According to the Institut de la statistique du Québec, the median employment income of workers in Bellechasse between the ages of 25 and 64 is $38,289. The median income for workers in Lévis in the same age bracket is $46,384. Those data are from 2013, so they are quite recent.

The measure we are talking about today does very little, since it is really a tax cut only for those who earn an annual salary of $45,282 or more. Anyone who earns less than $45,282 gets nothing.

What is more, this bill is not revenue neutral. In other words, in order to pay for a tax cut for those who earn more than $45,000, those who earn less will be forced into debt and therefore into poverty. That is the reality with regard to the bill currently before us. The Liberals are saying that they have something else, but today we are talking about Bill C-2.

People who earn less than $45,000 will see the government debt, our collective debt, increase so that those who earn over $45,282 can pay 1.5% less in taxes. That also applies to those who earn $150,000, $200,000 or $300,000 a year. Everyone with an income in the $45,282 to $90,563 tax bracket, the so-called middle class, will be eligible for these savings.

However, 70% of the population earns less than $35,000, so one can only imagine how many people have incomes less than $45,000. All of these people will get poorer because the measure is not revenue neutral. Tax savings come at a cost. According to Statistics Canada, the nearly 18 million people who earn less than $35,000 a year will go into debt and become poorer because of this measure.

Speaking of the middle class, it is really a Liberal myth. Who is part of the middle class? It is difficult to determine and could be defined in a number of ways. Some say that the middle class is the portion of the population that is neither rich nor poor. However, what is the middle class? I would like to share what renowned Quebec economist Pierre Fortin has to say on the matter.

He considers the middle class to include families with incomes between $44,660 and $95,700 per year. A typical family has two incomes. Once again, families that fit the definition of middle class do not earn enough to benefit from the Liberals' tax cut. That is the reality.

However, people who earn $150,000, $200,000, $300,000 or $500,000 a year will pass go and collect their savings of 1.5% on the portion of their income that falls within that tax bracket. That speaks volumes. I gave the average income of people in Bellechasse. I gave the average income of people in Les Etchemins. We are talking about $38,000 a year. The measure that the Liberals are proposing kicks in at a minimum of $45,000 per year and therefore does not apply. It is not good for Lévis, it is not good for Bellechasse, and it is not good for nearly 70% of the Canadian population.

What we know is that this will create a deficit. The parliamentary budget officer said so. He said that this measure would lead to a deficit. Obviously it is the taxpayers who will have to pay. That is the main reason I am against the measure before us today. It is in stark contrast to the tax measures and policies that our government put in place over the past 10 years.

Yesterday, I was reading Le Soleil, and Romain Gagné, from Quebec City, said:

From the...2008-09 recession through all the subsequent years until 2014, Canada had the strongest economic growth of the G7 countries, with 15.6% [growth, surpassing the Americans]. The debt burden was the lowest of the G7 countries at 15.6% versus 13.5% for the United States, and the middle class was the wealthiest of the G20 countries, according to a study cited by the New York Times.

Indeed, we have sound fiscal management, but we also put in place effective measures, not like the ones in Bill C-2, which do nothing for the workers in Bellechasse and Les Etchemins who do not earn $45,000 a year, who earn less. Our measures helped those who needed it most. That is what our government did. That is how we ended up in The New York Times with the wealthiest middle class in the G20.

It was because we brought in income splitting for seniors. More than a million senior couples were able to benefit from it. Hon. members will recall that in 2011, we increased the guaranteed income supplement to help the most vulnerable. We also implemented a number of tax measures, including more than 100 tax cuts, ensuring that the average family would benefit from a tax cut of more than $5,000.

We can be very proud of the fact that the tax-free savings account helps 2.7 million seniors. That is another thing that this bill attacks. The Liberals want to restrict this safe and flexible savings option. They want to prevent Canadians from having tax-sheltered savings. They want to push us into debt and give the rich a break, at the expense of those who earn less. In short, that is the rather obvious reason why I oppose this measure.

I would like to remind members that over the past 10 years, under a Conservative government, almost 400,000 seniors were taken off the tax rolls. We did not go looking for money in the tax brackets for those earning a lot of money, but we did, in a way, erode the tax base so that those who earn less no longer pay taxes. Those are the responsible and progressive tax measures that the Conservative Party introduced. That is not at all what we have in Bill C-2.

In closing, it seems that when the Liberals moved from the opposition to the government benches, they forgot what they had said. I would like to quote the member from Papineau, who, on May 13, 2015, said:

Mr. Speaker, if the Prime Minister thinks that wealthy families like his and mine should be getting new benefits, then I look forward to the debates.

That is what we are talking about today. Society's highest-earning members are giving themselves a tax cut. Those who earn the least, such as the people of Bellechasse—Les Etchemins—Lévis, are being taken for a ride because they will have to foot the bill for the deficit and pick up the pieces. We are talking about $8.9 billion over the next six years.

We will stand up for taxpayers and families, for the people who most need help, and we will vote against the Liberal government's bill, which will make the neediest even poorer.

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

Mr. Speaker, the member is just wrong with his facts in what he just said. He indicated that we are taking from the poor to finance the rich. If we look at the legislation, it increases taxation of the wealthiest in Canada, who make over $200,000 annually.

The member stated that the bill does not appeal to thousands of people it should appeal to, such as lower annual earners. However, this legislation appeals to tens of thousands, going into the millions. Members can think of the factory workers, teachers, and individuals from coast to coast to coast who are part of Canada's middle class who are getting a tax break from this legislation. As well, there is an additional tax on, and a source of revenue from, those who make in excess of $200,000.

I do not quite understand where the content of the member's speech is coming from.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I thank my colleague for his question.

What the government is offering workers and manufacturers, such as Rotobec and Exceldor in the Bellechasse region, is a debt that will grow by $8.9 billion over the next six years because their incomes are not high enough for them to benefit from the tax cut the Liberals want to give them. That $8.9 billion debt will be paid by families and workers earning less than $45,000. That is what I clearly demonstrated, and I can table the Institut de la statistique du Québec document. The average income of the people of Bellechasse—Les Etchemins—Lévis is less than that.

As for their little tax hike, which is not revenue-neutral, here is how Ronald Reagan described the U.S. president's plan to hike taxes on the rich: Getting the most feathers as possible from the fewest...in order to minimize the quacking.

Once again, taxpayers will be left to pick up the pieces.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, my riding of Sarnia—Lambton has a lot of seniors in it. The average age is 54 in fact. As I was going door to door in my campaign, I saw a lot of them, especially those on a fixed income who are really struggling to make ends meet.

I wonder if the member could comment on how he thinks Bill C-2 would impact seniors.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I thank and praise the member for her interest in the elderly people of her riding. Why? It is because they are the ones who have built this country and deserve to be treated with respect, as well as the next generation. However, in both cases, they are the big losers from this Liberal proposal. Why? It is because there is nothing for the elderly in the proposal. They are generally not earning enough revenue to get this tax break, and the next generation in her riding will have to pay for this proposal, which is creating a huge deficit of $8.9 billion over six years.

This is bad policy and really goes against what has been accomplished for our elderly over the last 10 years, like income splitting and the possibility of saving without it being taxed.

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, during the debate today we have heard many times from the members opposite that the tax-free savings account is something that only benefits the wealthy, the affluent even. Some of the NDP members today have asked why they should be supporting a tax break for the affluent.

I would like my colleague to talk about the real facts of who benefits from a tax-free savings account. I do not believe these are wealthy Canadians at all times, but Canadians who are making difficult choices for their families and difficult choices for what they feel is best for their saving priorities.

Could my colleague talk about who can benefit from the tax-free savings account?

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I thank my colleague for his question and excellent work.

He has given me an opportunity to recall that tax-free savings accounts are benefiting people who earn $60,000 or less, those who are not targeted by this measure. Sixty per cent of those people are putting money aside for retirement. This tool is provided for those who have less capacity to save money, so they can better enjoy their senior years.

In a nutshell, Bill C-2 would prevent them from saving money. It is not the way to move forward to ensure that working people today can save money and not pay more taxes.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I want to thank my seasoned colleague from Bellechasse—Les Etchemins—Lévis for sharing his time with me.

What we have before us today is the debate on Bill C-2, which, to some extent, implements the financial commitments made by the Liberal Party, which now forms the Canadian government.

To put it mildly, the reality presented by the Liberal Party during the election campaign is a far cry from the reality facing Canadians today. In fact, the two could not be more opposite. We are talking about black and white, night and day.

I would remind the House that during the election campaign, the current Prime Minister boasted that the Liberals were going to make changes to the tax system that would benefit the middle class, that the wealthy would finally pay their fair share, and that it would all be revenue neutral. That was a serious mistake. First of all, let us be honest: these Robin Hood stories never work. Should we be surprised to see such a political approach from this Prime Minister? Is this not the same person who said on February 11, 2014, that “the budget will balance itself”?

When someone who believes that the budget will magically balance itself finds himself in government, reality hits hard. The Liberals' promise that the tax changes would be revenue neutral were nothing but a pipe dream.

The parliamentary budget officer recently announced that the Liberals' promise would result in a $1.7-billion deficit. That is far from a balanced budget, far from revenue neutral, and far from the Prime Minister's pipe dream that the budget would balance itself.

The tax changes for the so-called middle class come at a cost. The bill is being sent to our grandchildren and great-grandchildren who are not yet born, but who will be paying for this government's lack of political judgment, as seen in Bill C-2.

Speaking of the middle class, my colleagues, the New Democrat member for Saint-Hyacinthe—Bagot and the member for Bellechasse—Les Etchemins—Lévis, told us how the interpretation of middle class is rather broad, to say the least, especially when someone who earns more than $180,000 is supposed to be part of the middle class. The scope is quite large.

This brings us to the structural deficits run by the Liberal Party. Let us remember that, during the election campaign, the Prime Minister said over and over again that there would be very small deficits for the first two years. In the third year, the deficit would be even smaller, and then, bam! In the fourth year, the budget would be balanced again. That was what the Liberals were saying during the election campaign. Unfortunately, reality has now caught up to the Liberal Party. What did the Minister of Finance say just two weeks ago? He had to confess that Canada was headed for an $18-billion deficit.

Prestigious banking institutions all across Canada have concluded that, in the next four years, we are headed for deficits of $100 billion, $130 billion, and $150 billion. That is a far cry from the very small actuarial deficits that were going to be eliminated during the third year. Is this not the same Prime Minister, who during the election campaign, said that the budget would be balanced by the fourth year? Today, he can no longer say that. In an editorial board meeting with La Presse, he indicated that he could not confirm that the budget would be balanced.

Let us not forget the government's election platform. Unfortunately, the Standing Orders do not permit me to show it, but I have it here with me. The party leader was not present when the platform was released. I have been actively involved in politics for seven years. I was a journalist for 20 years and, honestly, this is the first time I have seen a serious national political party present its economic platform without the party leader being present. Some might say that perhaps it was better that way, because he believes that budgets and deficits balance themselves. However, the minister from Quebec City, my neighbour, was there and I commend him for that.

What did the Liberal government's economic plan say? On page 3, it says, “We will be honest about the government of Canada’s fiscal position”.

Really? In fact, that is not untrue. Last week, they acknowledged that we are headed to an $18.7-billion hole. In terms of being honest, that is a start.

Further on it says, “We will run modest deficits for three years.” That did not happen.

On page 4, it says, “A new Liberal government will release a fall Economic and Fiscal Update.” That is true. We got that update.

In the April to November 2015 Fiscal Monitor published by the Department of Finance, we see that there was a $1-billion budgetary surplus. It is true that in this regard, they kept their promise. They released a report, a positive one when it comes to what they inherited from the Conservative government.

Nonetheless, the sad thing in all of this is to read in black and white on page 7, “With the Liberal plan, the federal government will have a modest short-term deficit of less than $10 billion in each of the next two fiscal years...After the next two fiscal years, the deficit will decline and our investment plan will return Canada to a balanced budget in 2019/20.”

It is a pipe dream. These promises are not worth the paper they are printed on. That is the reality of the current Liberal government.

What really gets us is that the government is in the process of literally killing the rich legacy left by the government led by the right hon. member for Calgary Heritage. We left the house in order.

I want to remind members of the facts. We took power in 2006 and remained in power until 2014. In 2008, the entire world was hit by the global economic crisis, the worst crisis since the great recession of the 1930s. No one denies that. What did our government do? It took the bull by the horns. It made bold, brave decisions, with the result that in 2014, our record was very good. We had the best debt-to-GDP ratio. That is important, because if debt is under control, it does not cause problems, especially when the ratio is good and our GDP is higher than our debt. That is the legacy of the Conservative government. The best debt-to-GDP ratio in the G7: that is our legacy. The best job creation record in the G7 during the crisis: that is our legacy. The fastest economic recovery in the G7: that is our legacy.

We believe in infrastructure programs. As all sides of the House have noted, we are glad to see the hon. member for Lac-Saint-Jean back in fine form today. I applaud my colleagues for welcoming him back in a civil and honourable fashion. On his watch, our government introduced the boldest infrastructure plan ever. Our top priority was always to reduce taxes and let people keep more money in their pockets. Our government passed over 140 measures in 10 years. Let me remind everyone that the grandest and most effective of them was reducing the GST from 7% to 6% and from 6% to 5%. We promised, and we delivered. They promised revenue-neutral tax cuts, but they are not delivering. That is why we strongly condemn this government and will not vote in favour of Bill C-2.

Saving money is another issue that is close to our hearts. That is why our government created the TFSA, which this government is trying to water down, unfortunately. That is the wrong approach, and we hope the government will see the light on this.

This government's policies are unrealistic and irresponsible. The government is putting Canada on the road to disaster. It is scuttling the Conservative government's legacy. The Liberal Party has at times left an onerous legacy and at other times left a rich legacy. It is a political party that has vigorously tackled deficits. As the MP for the riding of Louis-Saint-Laurent, I would like to point out that the Right Honourable Louis Saint-Laurent was the prime minister who eliminated the debt after the war. The Right Honourable Paul Martin also steadfastly addressed deficits not so long ago. He made very contentious decisions including the decision to drastically reduce health transfers to the provinces. However he at least wanted to leave a strong economy and, above all, healthy public finances. That is not what the current government is doing.

It is never too late to do the right thing. Bill C-2 could be amended to give Canadians a better economy and, above all, to ensure that their government is realistic and responsible.

[Ginette Petitpas Taylor, Liberal, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, I first want to thank my colleague for his speech.

Clearly, all members of the House want greater benefits for the middle class. Can my colleague explain why he opposes lower tax rates for middle-class Canadians?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, once again, the member's question refers to a rather broadly defined middle class. Someone who earns $185,000 a year is part of the upper, upper middle class. The other reality, however, is that this is not going to be revenue neutral, as the Liberal Party had promised. This is going to create a deficit of $1.7 billion.

Need I remind the member that under our government, when we reduced the tax burden through 140 measures, we did not create a massive deficit, as this government is doing? If they wanted to cut taxes for the middle class, why not introduce measures that will actually lower them? As long as we are in the hole for $1.7 billion, why stop there? Everything is fine. That is not the right attitude to take. It is important to be realistic and responsible. If you cannot afford it, do not do it.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank the hon. member for Louis-Saint-Laurent for his speech, and I wish to inform him that the riding I represent is called Saint-Hyacinthe—Bagot.

I have had the opportunity to sit with my colleague on a committee where he went on and on about the importance of non-partisan work in committee. In that vein, we have chosen to support the bill so that we can try to improve it in committee, determine at third reading whether it meets the needs of the people we represent, and then decide whether we will support it or not.

Will my colleague also adopt this attitude and support this bill to try to improve it for the people we represent?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, first, I want to give my regards to my colleague from Saint-Hyacinthe—Bagot. I apologize for forgetting the name of her riding. Bagot is the land of the late Hon. Daniel Johnson, Premier of Quebec from 1966 to 1968.

The second part of what she said had to do with the non-partisan work of the end-of-life care committee. That was absolutely the attitude that was called for, the one that we took, and the one that we will take toward the bill that will be introduced on this issue in the House.

In committee, of course we will collaborate and move forward, but everything in this bill needs to be changed. We have to rescind the proposed tax cuts, as they are not revenue-neutral, as was announced. That is why we are going to do the work and propose amendments. However, will they be accepted by the people who were elected on a campaign that they are unable to follow through on today? We shall see. I am not holding my breath.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I thank my colleague for his speech today.

He is a welcome addition to our team, and as the member for Louis Saint-Laurent, he would make Louis Saint-Laurent and a generation of leaders from Quebec quite proud with the passion and the knowledge he brings to this House.

He touched on this in his speech. This is a very selective bill that cuts taxes for a few but claims to cut for many and actually leaves out the most needy, the lower-income to lower-middle-income Canadians, yet at the same time the government is now in the $30 billion-plus deficit range.

Could the member comment that reckless deficit spending means future taxes? While the Liberals may give a modest tax break to a few Canadians now, their work in building up liabilities and deficits and debt means that taxes will go up, carbon taxes will be imposed, and GST will be increased in the future, if they possibly ever keep a commitment to balance the budget in four years.

Could the member talk about how high deficit and high spending mean future taxes on the people for whom the government claims to be cutting now?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, let me pay all my respects to my hon. colleague who, not long ago was the minister of veterans affairs and did a tremendous job. I know what I am talking about because in my riding I have plenty of veterans. He did a heck of a good job, and I appreciate this member.

Talking about the future, yes, it is very sad to see a deficit in this situation. We are not in a crisis as we were in 2008. It is all wrong for the economy, because we are putting it into the hands of our grandchildren who are not born today.

Let me remind the House that I pay my respects to two former honourable Liberal prime ministers, but I also have to remind the House that it was under another Liberal prime minister during the 1970s that the deficits were back to the worst in the Canadian economy.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, it is an honour to rise in the House to join the debate on Bill C-2. I would like to spend some of my time speaking on why definitions of the middle class are so important.

In the last election the Liberals campaigned on a promise to reduce taxes for the middle class and support those working hard to enter the middle class. Canadians took them at their word. Like most Canadians, I agree with my NDP caucus that additional benefits should be targeted at the middle class and those who need them the most.

The problem with this legislation is that the Liberal definition of “middle class” seems to have been created by the Donald Trumps of the world. Surely only the very rich would devise a bill that would give most of the tax benefits to those making around $200,000 a year while offering Canadians who make $40,000 a year nothing at all and still call it a tax cut for the middle class. Definitions matter for the middle class.

The bill in its current form would not help Canadians who are working harder than ever, yet falling further behind. The Liberals promised to join the campaign to fight against growing inequalities, which was a big part of why they were elected, but in this legislation they are doing the exact opposite. Canadians do not like to be misled, and the Liberals will have to answer for that. Canadians also do not like empty rhetoric and grandstanding.

Let us see what needs to be done to fix this bill. We were all sent here to work together to deliver positive results for all Canadians, and I believe it is not too late.

The government needs to present its definition of who is included in its understanding of the middle class. There are different ways to define the middle class, but regardless of the definition, those definitions should always at least cover one, if not both, of the following characteristics. First, we could look at the income of all Canadians and see where most people land. This is also considered to be the median income in a country. Second, the population could be divided into groups of equivalent size, such as five blocks each comprising 20% of the population, and targeting the groups in the middle as the middle class.

Let us see if the current definition of “middle class” in the bill meets these requirements.

First, the median income in Canada is $31,000. Under the Liberal plan, any Canadian making the median income, or near it, would receive zero benefit. Second, if we divide the population into equal blocks of 20%, the bill would not benefit the lowest 20%, nor would it benefit the second tier of Canadians. For those in the third or middle block, the bill would still provide no benefit at all. Furthermore, the benefits would only kick in halfway through the fourth block, and they would begin very small. The vast majority of the benefit would go to the highest-income earners in Canada alone.

I will look at my riding of Courtenay—Alberni. In the fifties and the sixties, Alberni Valley was a booming community. It had the highest median income in the country and was sending lots of money to Ottawa. Most recently, it was rejected for a Building Canada grant for scheduled air service at its airport. It was rejected because it did not have scheduled air service.

The people in Alberni Valley feel as though they are being betrayed by Ottawa. The median income is $25,000 a year, and one in three children is living in poverty. Alberni Valley wants to move forward, but it needs help. The Liberal government promised that it was going to help the middle class.

I will talk about another demographic in my riding, the Nuu-chah-nulth people. The median income of the Nuu-chah-nulth people is $17,000 a year. The Liberal government made a lot of promises about a new relationship with aboriginal people, but this legislation does not include aboriginal people across Canada. They feel forgotten.

Seniors feel forgotten. Inequality is at an all-time high, and this legislation does not address it.

The Nuu-chah-nulth people use a word in their language, uu-a-thluk, which means “taking care of”. They use this word in reference to their fishery. They have been in a court case for over 10 years defending their right to catch and sell fish. They feel again that Ottawa has betrayed them with respect to recognizing their aboriginal rights and title. They want to take care of the resource. They want to work with Canadians so we can take care of each other. This legislation forgets to take care of the people in my riding.

Folks in my riding will do anything to support maintaining the tax-free savings account system, but they want a return to the annual cap of $5,500. This would allow my constituents the ability to put more savings away, but it would not open the door that would, in effect, give the richest Canadians a tax break. We know this because 93% of Canadians with tax-free savings accounts were not able to contribute the full amount, so the expanded limit would allow only the wealthiest Canadians—and we have seen this before—to utilize the full amount of the savings account.

To return to the income tax changes, people in my riding in the Alberni Valley, the Comox valley, and Oceanside, and aboriginal people across this country, are feeling left out. Who will see the biggest benefits from the definition of “middle class”? As I said, clearly it is not the majority of people in my riding, but those who make as much as members of Parliament here. Those who make over $160,000 a year would see their taxes lowered by almost $700, while nearly 60% of Canadians would get nothing at all. This is not fair, and the NDP opposes those measures.

How do we fix this? Instead of targeting the second bracket, as the Liberals have done, the NDP has proposed lowering the first tax bracket.

How would this help? The tax brackets are in layers, and Canadians who earn enough to enter the second and third tax brackets are still taxed on the first layer. Therefore, to focus the benefit on the middle class, one must get a tax break on the first layer rather than the second, which skews the benefits disproportionately to the top earners. The NDP plan would reduce the first tax bracket from 15% to 14%. This would give the largest benefit to those making $45,000, rather than those making $200,000, who would benefit under the Liberal plan. Because the NDP plan actually focuses on the middle class, 83% of taxpayers would benefit from our proposed idea.

It may seem strange to some folks watching at home, but the way we can fix this bill is to implement this reasonable amendment from the NDP to get the bill to committee. New Democrats want to fix this bill so that the substance matches the title. This way, a bill that is supposedly intended to help middle-class families would actually deliver on that promise, instead of giving MPs a $680 tax break that they do not need.

I was elected to hold the government to account and to work with it, wherever possible, to bring much-needed relief to those struggling in my riding. As the Nuu-chah-nulth people say, “Let's use uu-a-thluk. Let's take care of each other.”

I hope members will consider that in this bill and in making this amendment.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Mr. Speaker, my colleague opposite and I share some similar values in terms of taking care of each other and trying to find ways to take care of each other. I appreciate that this bill does not reach into some of the areas where he thinks attention needs to be paid, such as raising incomes and the outlook for people of first nations, aboriginal, Métis, and Inuit descent. We share those concerns. It is not in this bill because this bill is focused on income tax and not necessarily on those specific issues.

On the issue of helping low-income children and low-income families in particular, again the tax credit focuses specifically on raising children out of poverty, as with raising seniors out of poverty. They are not part of this bill; they are part of the budget to come.

Would the member opposite not agree that the focus of this bill is to deal with tax measures that had to be in place before the calendar year began, because that is the time in which one fixes the tax code and that is why this bill is so narrowly focused?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, I absolutely think that this is exactly the right time to help those people earning $17,000 a year.

No, they are not included in this tax bill, actually, because anyone earning under $49,000 a year does not get a tax break with this bill that has been introduced. Therefore, including them is what I would like to see. I am asking the government to include everybody in this tax bill earning under $49,000, including people earning $17,000 a year and people earning $25,000 a year. Right now, they are not being recognized in this bill. They are being left behind, and inequality is going to continue to rise. It is those earning over $49,000 who start to see the benefit and those earning more than $100,000 who see the most benefit.

This is the right time to tackle inequality. This is the right time to show that we want a new relationship with people who are struggling to make ends meet, meaning the working class, the medium-income earners of this country.

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

Mr. Speaker, I certainly share some of the member's concerns with respect to how this bill does not help those who actually need the help the most. I am sure he will applaud the Conservative record as a government in lowering the GST and lowering the lowest marginal tax rate that Canadians pay.

However, I am a bit confused about the NDP position on tax-free savings accounts, because the numbers with respect to TFSAs are very clear. They show that over half of those who max out their tax-free savings accounts are actually making less than $60,000 a year. Why does the NDP not join Conservatives in supporting tax-free savings accounts, a vital vehicle that is very useful to medium- and low-income Canadians?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, I appreciate the question from the member because we both agree that tax-free savings accounts are important. They are important to help people save for the future. We want to encourage that, but at what cost? We have to define what it will cost future generations. We know that the finance minister from the last government said that it would be the problem of future generations or a certain prime minister's granddaughter to deal with the increasing costs associated with the tax-free savings account. I do not think that is a responsible way of taking this on.

It is important that we take fiscal action right now, today, and ensure that we manage the economy, the environment, and the social well-being of our nation. We invest in that today, but we also will not leave it to the detriment of future generations to pick up the tab.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, I would like to congratulate my colleague on a great speech. I really liked his commentary on the definition of the middle class, because it should be defined as being above the poverty line and below the highest tax bracket. That would put it somewhere between $23,000 and $138,000 for individuals.

However, the current government, in giving a tax break to the middle class, is giving about $600 a year to people who make more than $50,000 and up to $200,000. Therefore, my question to the member is this: does he think that people who make more than $80,000 a year need a tax break of $50 a month?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, the government made a decision and put forward an idea upon which it got elected, a promise of a tax cut to the middle class. I want to ensure that the middle class get that tax cut. If the median income in our country is $31,000 a year, the people who earn $31,000 a year should get a tax break. That is a promise that was made by the current government.

The government cannot fulfill all of its obligations and its promises through promises of child tax benefits or old age security that we have still not seen. Here is the opportunity right now. The government has been asked to provide a tax cut and relief for the middle class, but it is not doing it for those who are earning less than $49,000 a year. It has an opportunity to bring the bill to committee to fix it and to ensure that 83% of Canadians benefit from this tax measure.

Hopefully we can fix this bill and work together collaboratively in this House to move forward in 2016 to take care of each other.

[The Deputy Speaker, Conservative, Bruce Stanton]

Order. It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the member for Regina—Lewvan, Regional Development; and the member for Hochelaga, Social Development.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, there are two provisions to Bill C-2. One is the reduction in the annual limit one can deposit into a tax-free savings account, and the other is a reduction in the second income tax bracket while increasing the top tax bracket. I will begin my discussion with the tax-free savings account.

The TFSA was introduced in the 2008 federal budget, back when the late Jim Flaherty was the minister of finance. Canadian families were able to invest their after-tax dollars and earn income tax-free through their TFSAs. TFSAs can be used to invest in all sorts of eligible financial products, whether they are GICs, mutual funds, or stocks and bonds, to name a few. Canadians were already taxed once on their income. The TFSA allows them to earn income on their savings without having to be taxed again. Unlike RRSPs, the TFSA alleviates the risk that governments will change the tax rates, as withdrawals from the TFSA are not taxed.

It is not surprising, especially with the Liberals set to increase taxes in the upcoming budget, that Canadians at all income levels are choosing to invest in TFSAs. The Liberals would like nothing more than to get their hands on the savings of Canadians. Simply put, the country benefits from Canadians saving their hard-earned money, and the TFSA allows them to do so. We should be encouraging saving and not discouraging it, as Bill C-2 will do.

The previous Conservative government was able to increase the TFSA contribution limit because our last full fiscal year in government was in surplus. The Auditor General confirmed this. Indeed, the Minister of Finance's own department, in the monthly “Fiscal Monitor” publication, showed that in the first nine months of the current fiscal year ending in December, Canada's budgetary surplus was $3 billion. Now the Liberals are choosing to squander this surplus and plunge us into massive deficits, including with Bill C-2.

I will now bring my attention to the second part of Bill C-2, which is the proposed adjustment of the income tax brackets. Since I was elected to the House of Commons in October 2008, the rates for the federal tax brackets have not changed. There is a 15% bracket, a 22% bracket, a 26% bracket, and the top bracket of 29%. With this stability, Canadians can reliably predict how much income tax they would be paying.

The new Liberal introduction of a higher tax bracket would create a situation where top-paid and top-performing professionals in Canada will be discouraged from working further and encouraged to look into ways of legally reducing their taxable income levels. In particular, I would like to point out that when we add together the combined federal and provincial marginal tax rates, Canadians who live in over half of our provinces will be paying a top combined tax rate of over 50%. These provinces include Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, and Prince Edward Island. This means that people in the top tax bracket will be paying the government more than half of their income for each extra dollar they make.

Does anyone in the House believe that these individuals will be seeking to earn more money when they will be paying more than half of their income in the form of income taxes? We should be encouraging Canadians to work hard and earn more money. This income tax change will have the opposite effect for those highly paid professionals who qualify for the top income tax bracket. There will be a point when people will choose to work less because the money they earn will simply be given to the government. Indeed, I foresee the only growth in high-paying jobs resulting from Bill C-2 will be of tax accountants, who will be finding ways to reduce the income tax burden on highly paid professionals. That was maybe the Liberal plan after all.

Speaking of Liberal plans, the other fact that the Liberals promised in their election platform is that the reduction of the second tax bracket will be paid for by the increase in taxes in the top tax bracket. Subsequent projections from the Department of Finance have indicated that Bill C-2 will not be revenue neutral but will put us further into deficit.

Indeed, our previous government's election commitments, including an increase to the TFSA annual contribution rate, were contingent on balancing the budget. Not only have the Liberals squandered the surplus, but they are implementing changes that were clearly from incorrect premises.

In summary, Bill C-2 is wrong for Canadians. I will be voting against it in its current form.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Mr. Speaker, on October 19, the Montreal Canadiens were in first place and Carey Price was the player of the week. We are now watching a play-off series about to start where the Montreal Canadiens are not going to make the play-offs simply because they were leading on October 19, and Carey Price, much like Joe Oliver, is no longer in a position to defend anything.

The situation is this. The previous Liberal government paid down $90 billion on the national debt, but the previous Conservative government added $150 billion to the national debt. Under former prime minister Pierre Trudeau, the debt was 2.9% of the GDP, but under Brian Mulroney, it was 6.7%, and it goes on and on. The bottom line is that the former prime minister, combined with Mr. Mulroney, have created three-quarters of Canada's debt since Confederation.

If the Conservatives are so concerned about the record of debt that their government left, why have they not all resigned and joined a party that actually fights deficits?

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I thank the member opposite for quoting historical records.

Historically, it was our government that cut taxes and yet was able to balance the budget. The way that the Liberals did the balancing was to cut transfers to provinces for education and health care. We had to keep adding our contribution to the provinces in order to get rid of their deficits. It was our government that was able to balance budgets several times. It was during the recession that we were able to use the deficit to create jobs,1.2 million net new jobs. When the government on the other side was doing that, they lost jobs. This is our proud record.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, my question has to do with the two conflicting views that are continually being presented in the House on the financial situation that the current government inherited. I am interested to hear the member clarify, for the sake of the public who must be very confused, what she understands about the balanced budget and the surplus left by the previous Conservative government.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I will state again that the Conservative government was able to increase the TFSA contribution limit because our full fiscal year in government had a surplus. The Auditor General confirmed this. Indeed, the Department of Finance, through its monthly “Fiscal Monitor” publication showed that in the first nine months of the current fiscal year ending December, Canada's budgetary surplus was $3 billion.

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

Mr. Speaker, the member talked about how the new bill would add to the deficit, and the government seems to have no regard for the impact of that deficit on future generations who are going to work to pay off the spending we have today.

I wonder if the member could comment specifically on the impact that the misguided fiscal approach of the current government is going to have on future generations.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I thank my young hon. member for that question.

Indeed, the Liberal government is heading to create more deficits, and I worry about the younger generation. That is why we wanted our students to be able to save for education, our families to save to start a family, entrepreneurs to save for their businesses, parents to save for their children, and low-income seniors, who are close to my heart, save for retirement.

If Bill C-2 passes without change, these changes will make life less affordable for Canadians who are trying to save for vulnerable years. Therefore, we will vote against Bill C-2 in its current form.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I appreciate the opportunity to speak on this important bill. Tax fairness has been an NDP concern for decades. Unfortunately, I am not at all convinced that Bill C-2,, an act to amend the Income Tax Act, provides the fairness that Canadians have done without for quite some time.

I will begin by quoting from the Liberal Party's election campaign platform. The Liberals told us that they would give middle-class Canadians a tax break by making taxes more fair: “When middle class Canadians have more money in their pockets to save, invest, and grow the economy, we all benefit.”

However, there is a problem here. The Liberal definition of middle class seems to be a moving target. Worse, that vagary seems to be intentional. It wins votes, but at the same time it absolves them of accountability. It leaves us with many questions.

Which Canadian workers fall into the category of middle class? Let us look at the numbers. MoneySense estimates for 2013, based on Statistics Canada data, are that an individual Canadian earning an income between $23,000 and $37,000 annually makes more than the poorest 40% of Canadians and less than the richest 40%. It is reasonable, then, to assume that if one sits in a wage range where the number of Canadians making more and less is equal, one falls in the middle, a middle which at the top end, using this definition, is just under $37,000. In fact, the Liberal tax proposal excludes anyone making less than $45,000. In other words, this tax reform excludes the lowest 60% of wage earners. However, as I pointed out, the Liberal definition of middle class is a little vague.

Let us give the Liberals the benefit of the doubt and look at Canadians with an annual income falling between $48,000 and $62,000 per year. The tax benefit now kicks in at a whopping $50.

As an aside, and because the bill also proposes a rollback in the TFSA limit, it may be sad and somewhat surprising to learn that the claims of the previous minister of employment, the member for Carleton, turned out to be inaccurate when he said that 60% of individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000 in 2013. Were they middle class? Also, for those income earners, the additional $50 tax benefit, or 96¢ a week, does not amount to much. With that increase to one's take-home pay, they would have to wait two weeks just to buy themselves a double-double.

It seems to me that except for the fact that the Conservative Party leader seems to have had a change of heart and is now aligning herself with the 99%, the old Liberal-Tories same old story adage holds true here again today. Under the current Prime Minister's plan, the highest 30% of Canadian income earners are the main beneficiaries of this legislation while the wealthiest 10% pocket most of the money. One would think that an income tax deduction designed for the middle class should actually benefit a larger proportion of Canadians.

A federal tax system is put into place in order to create and maintain an equal and just society, to provide essential services for Canadians, and to ensure that not one of us is left behind. It is the vehicle of a strong social democracy. I would like to suggest that the plan should be sustainable. New Democrats know that is possible. How can the Liberals justify this change when it will result in a total revenue loss of $8.9 billion between now and 2021?

We have an opportunity to effect real change for the people who need it most, and, in doing that, everyone benefits. Unfortunately, the tax change proposed by the Liberals does not even come close.

Why not aim higher? Why not make changes that would ensure that no Canadian lives in poverty?

New Democrats know that we do not have to get bogged down in the definition of who is middle class to see that Canadians are being left behind as a result of Conservative and Liberal government inaction. The gutting of our manufacturing sector and the loss of well-paying jobs and stable work has affected the economy and the lives of people in London, Ontario and all of Canada for decades. New Democrats understand this reality and know that we can do better. The fact that we have Canadians living in poverty is shameful. The income gap is growing and it becomes increasingly difficult for families to find accessible, affordable housing, and child care, health care, and education.

In their effective opposition, the New Democrats have proposed a number of realistic measures to help families struggling to make ends meet: a national child benefit supplement; guaranteed income supplement; $15-a-day child care for all Canadian families; and reinstatement of the labour-sponsored tax fund credit, to name just a few. The NDP understands the reality of the middle- and lower-income earners of this country.

If the country were to reduce the tax rate for Canadians earning less than $45,000 a year by just 1%, from 15% to 14%, 83% of those people, some nine million Canadians, would benefit. The cost difference would be minimal and could be easily recovered with a very slight increase of one half percentage point to the corporate tax rate. The New Democrats' proposal makes sense in and cents terms. Our proposal would also enable the government to increase the working income tax benefit, which has proven to be very effective for low-income workers, and put more money back into local economies.

As tomorrow is International Women's Day, let us talk a bit about equity.

We know that creating equity for workers with the lowest incomes benefits women. Federal tax policy is structured such that the ratio of profit between women and men is 60-40, more or less. It favours those with higher incomes, and since men by and large earn higher incomes than women, they are advantaged and women are disadvantaged under the current taxation regimes. This disadvantage follows them from the time they enter the workforce to retirement, as women on average fall more often into the category of low-wage earners and since those benefits are often calculated based upon annual income, which is more likely to be part time, precarious, or interrupted in order for women to raise children.

As members can see, tax cuts to the lowest tier of Canadian income earners, such as those proposed by the NDP, would not only benefit those workers and the communities but would also represent a small and vital step toward gender equality.

The NDP has always worked for seniors. I am very proud to say that we are the only party that has a national strategy on aging, and I am thankful to my staffer, Tara Hogeterp, who worked diligently in the last Parliament, with the aid of our NDP research staff team, to bring that strategy to the public.

We do not believe that an increased TFSA limit is the solution for lifting nearly 200,000 seniors out of poverty, so we support the government's proposal to amend it. We fought against the Conservatives' reckless decision to raise the retirement age from 65 to 67. We proposed to increase funding for the guaranteed income supplement by more than $400 million.

It seems to me that the government is missing an important opportunity here to create fair and equal taxation systems that would benefit all Canadians, missing an opportunity to fulfill one of its election promises. It makes me wonder whether it ever had any intention of doing so in the first place.

Instead of making smoke-and-mirror changes to tax policy that would not benefit anyone but copywriters, why not create a system that would actually serve the Canadian population and work toward real sustainable fairness and equity?

In doing so, the government would be able to say that election promises do matter. That would be a remarkable and refreshing change.

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

Mr. Speaker, when we became the government about 10 years ago, we cut taxes in a very specific way. We cut the GST from 7% to 6% and, eventually, to 5%. We also reduced the lowest marginal tax rate. It was important for us to do that because these tax reductions benefited all Canadians, but they focused the benefit particularly upon low-income Canadians.

We did what the government has said it would do but did not do, which is help those who need the help the most: those who are looking to join the middle class.

I know that we disagree about business taxes, but I wonder if the member would reflect upon the differences between those changes to the lowest marginal rate and the GTS compared with the way the current government is proceeding?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I was here during those Conservative years, and without a doubt, in all of the Conservatives' so-called help for Canadians, they missed out a whole lot of people.

They did not help women. They put women at a great disadvantage, and they certainly did not help seniors when they raised the age of eligibility for OAS/GIS to age 67. They did not bring in any kind of socially progressive legislation or policies that really would have made a difference to people in our communities.

There was no national housing program. There was no child care. It was all simply a matter of throwing around money, and most of the money landed in the laps of those who did not need it. I would not call that tax fairness by any stretch.

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

Mr. Speaker, I think the hon. member for London—Fanshawe and I can agree that the last 10 years did not address issues of inequality but contributed to a spreading problem, a real crisis in Canada with inequality.

I would like to ask if the New Democratic Party is willing to join the Greens in supporting a guaranteed livable income so that we can end poverty for all in Canada. I have been encouraged to hear the new Minister of Families, Children and Social Development talk out loud about maybe moving to that progressive policy, and I am hoping the NDP is ready to join us.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I thank my hon. colleague for her invitation. I would counter by saying that I hope that the Greens will join New Democrats, because we have been talking about the importance of income equality for years and years.

I think that a guaranteed livable income would be a very important step in making sure that those in our communities who have given so much, the seniors, the veterans, the working families, receive the kind of supports that allow them to contribute to our economy.

One of the fallacies in all of this is that somehow these are folks who are simply on the receiving end of government benevolence. They are the backbone of this country and make this country strong. They are the ones who are providing, and we need to acknowledge that.

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

Mr. Speaker, when I look at Bill C-2, it is just one of the many things being done to address some of the existing income inequalities that the previous Conservative government somewhat exacerbated.

An important component is that nine million-plus Canadians would benefit directly. Tens of thousands of workers from every region of our country would get tax money going back in their pockets. I see that as a positive thing.

When we take into consideration issues such as our senior pension programs, for which there will be substantial increases, from what I understand, coming in the March 22 budget that I know Canadians are waiting to hear, there is a movement in the other direction, a direction that empowers Canadians and Canada's middle class, which would be healthier for our economy. Would the member not agree?

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, the member from the government caucus talks about all that the Liberals are doing. I do not think so. We are still waiting over here. There has been a whole lot of talk in a chamber filled with thunderous noise and all kinds of assertions, but I have not seen anything tangible.

The reality is that when we look at Bill C-2, we see very clearly that it is rewarding those who have the highest incomes. Those who earn $45,000 or less are not benefiting. How on earth is this construed anywhere as a positive step in helping Canadians?

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

Mr. Speaker, it is an honour to rise today in the House to discuss Bill C-2.

I want to start by clearly stating my premise up front and then speak to it throughout the 10 minutes I have. My premise is that fairness for the middle class and societal inequality cannot stand together. We cannot as a society, and nor can the government, decide that the middle class is the be all and end all of tax policy. I will say this bill misses the mark on delivering for the middle class.

We cannot say that fairness for the middle class is the be all and end all for society, because as long as inequality and poverty persist, every part of society is disadvantaged. Every part of society is disadvantaged by the continuation of poverty.

In the last half hour, I heard a Conservative member say that the people who need the tax breaks the most, the people who need the help the most, are the middle class. No, the people who need the help the most are the homeless. The people who need the help the most are the unemployed. The people who need the help the most are the poor.

In terms of inequality, where does Canadian society stand today? By any measure, we are a fairer and more equitable society than the United States. However, in a very real way, we are not as fair or as equitable as we used to be.

During the election campaign, I was digging all the time for stats and arguments for the few leaders' debates in which I was included. While doing research, I was staggered to come across this stunning statistic: the 86 wealthiest families in Canada have more combined wealth than the 11.4 million Canadians in the bottom of income brackets. Eighty-six individual Canadian families have more wealth than 11.4 million Canadians at the bottom.

Is this a problem? I submit it is a serious problem, and it is a problem that Bill C-2 will not address. I do not imagine that anyone thought Bill C-2 would address it. I will say, in fairness to the new government, that I hope that more is planned if it is serious about addressing income inequality.

Let us just look at this on a higher plane of analysis, namely, in regard to the mania for neo-liberalism, for the policies of Milton Friedman and for the Thatcher-Reagan era, in which no politician would say anything other than that we needed smaller government, that we needed tax cuts, that we needed deregulation, that we needed trade liberalism, as though that mantra would deliver great blessings to society overall.

One of the economists who I think has skewered this most effectively with detailed empirical research, and who does not brook a different opinion because he comes fully loaded with the facts, is Nobel prize winning economist and current professor at Columbia University in New York, Joseph Stiglitz. Stiglitz amassed all the information any Parliament would need to decide that inequality is unacceptable for a society that wants to succeed at anything.

Joseph Stiglitz's book, The Price of Inequality, is one that I hope every member of Parliament will read. Stiglitz concludes that:

Inequality leads to lower growth and less efficiency. Lack of opportunity means that its most valuable asset—its people—is not being fully used.

There are a lot of things one can say about the era of Thatcher-Reagan, neo-liberalism, and the kinds of trickle-down policies that were supposed to deliver benefits for all, but Joseph Stiglitz has pronounced, and I think it is time that we all learned how to say it, that the neo-liberal experiment with tax cuts to deliver wealth has been tried and is a monumental failure. Growth is stagnant. The economy is suffering, not just in Canada but everywhere. In Canada, particularly more than some of our OECD colleagues, we have had stagnant growth for a while now. We are not seeing investment, and I want to touch on what our corporate sector has been doing or not doing.

Trickle-down economics is a joke. The great Canadian economist, the late John Kenneth Galbraith, used to explain trickle-down economics like this. If one feeds a horse enough oats, the sparrows will eventually find a meal in the manure. That is trickle-down economics. In the alternative, as Gus Speth, who used to be head of the United Nations Development Programme, once said, when talking about trade liberalization, a rising tide lifts all boats; we can now fairly say that a rising tide will lift all yachts, not all boats.

We have a real challenge in our society and, boy, do we have a really good opportunity right now. I would urge the new government to actually embrace the idea of tackling inequality in our society. We have seen a foundational shift in our tax system in the last 10 years.

Let me provide this statistic. I am indebted to a great Canadian economist, who I wish had not just moved to Australia, Jim Stanford, for having identified this. Over the 10 years of the previous government, the federal revenues as a share of GDP fell from 16% in 2006 to 14.3% last year. That may be celebrated by some, but tax cuts overall end up with shrinking revenue to do the things that society needs, like make sure the health care system works, deliver child care for all, make sure people are not living in poverty and cannot get adequate housing, because again, I repeat, the empirical evidence is clear that it disadvantages all of society, not just the poor.

If we are going to see a rise in revenue, that means politicians are going to have to get used to saying some words that have been drilled out of our lexicon since the Thatcher-Reagan era began, and that is to ask where we are going to find the taxes to increase government revenue. It is clear that this tax cut modestly, moderately readjusts a tax bracket for our highest income earners. The top 20% basically see $3 billion removed from the very highest taxpayers, so that the next highest taxpayers get a slight benefit. It is not bad in itself, but it is not, on its own, tax relief for the middle class, nor does it strike any significant blow against income inequality. It is a small step, but tepid, and it fails to address the needs of the middle class, nor does it address the needs of the poor, nor does it really deal with the complicated tax code we have.

I would like to propose to the Minister of Finance that we need root and branch tax reform. We need to step back from all the fashionable pandering to individual sectors of a voting electorate, the boutique tax cuts of the previous 10 years. We need to review all of the complications that work against a tax code, that frankly, the fiscal conservatives say they want, and that people in Canadians for Tax Fairness argue we absolutely need. We need to simplify our tax code by taking out the special rewards: for people who happen to have kids who are already in hockey and can get a prize for that, for people who are already taking the bus and can get a prize for that. That is not good tax policy.

We also need to look for where we should be increasing taxes. I would suggest we need to look no further than what happened to the tax code for the corporate tax rate in the previous 10 years. It used to be 28% in the year 2000. By 2006, when the previous administration took over, it had dropped from 28% to 20%. It now stands at 15%. People might be interested to know that, in comparison, the U.S. corporate income tax rate stands at 35%. Other than Ireland, which is at 12%, Canada has the lowest tax rate in the industrialized world, and certainly right now we stand with the lowest tax rate in the G7.

I draw members' attention to the fact that Canada's corporate tax cut has resulted in about $700 billion to date being considered as dead money, as the former governor of the Bank of Canada described it—$700 billion sloshing around as available cash and not being reinvested in our economy where we need it. We may need to look at other tax measures. Down the road, we may need to look at the GST. The Green Party is not advocating raising that tax. We are talking about increasing the corporate tax rate. I believe it should be set where it was in 2008. We really need to look at a guaranteed livable income, because the bottom line is that Canada's society is middle class. All of Canada's society will not experience well-being and prosperity as long as poverty persists.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, you are doing a great job. I really enjoy being in the House with the member who just spoke. I have a great deal of respect for her. She, along with the Prime Minister, is one of the long-time movers of civility in the House, and I really appreciate that.

I appreciated the topic of the member's speech today on equality. It is very interesting that a lot of research has been done on this. It shows that it does not matter whether a country is very wealthy or very poor, but what determines its success is the disparity in income groups and the disparity among various people from the highest range to the lowest range. It is certainly an admirable goal that would lead to profitable economic and social results by reducing income inequality.

The member referred earlier, in a question actually, to the guaranteed annual income. I wonder if she could expound a bit on her vision of that, because it is a very interesting concept, where we would take all of the various supports and put them into a guaranteed annual income. Would she see that going to every single citizen, or would there be a limit so it would be affordable and the lower-income people could get a higher amount? How might that system that she is contemplating work?

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

Mr. Speaker, I thank my hon. colleague from Yukon. If he is pleased to see me here, I cannot tell him how happy I am to see him here, back again.

The premise of the guaranteed livable income was embraced once by Reverend Martin Luther King as the only true solution to poverty. It must apply to everyone. That is the way it works. Some people describe it as a negative income tax. The essence of it is that every single citizen receives an income from the government. It would replace quite a lot of other programs, and that is why it is a saving. For instance, it could replace welfare and employment insurance, and would be a phenomenal benefit for students in school.

It would be set at a level that would alleviate poverty in its extreme form but would not create a situation where someone did not want to work. In other words, it would not be a sufficient income to induce people to stay home.

What it would do is say to a woman who is a single mother that she should declare her income and that there would be no clawback, whereas the welfare system penalizes a single mother for going back to work or encourages an underground economy. People would keep earning money until they became a taxpayer. That is where it becomes a negative income tax. Higher-income earners of course would have all of their guaranteed livable income taxed back; lower-income earners could work their way out of poverty.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I want to congratulate the member for her speech. She talked about reducing inequality.

Is the bill in front of us not doing exactly the opposite by increasing inequalities? We are seeing in this bill that 70% of the population would not get a tax break. Those who need it the most would actually carry the burden of the deficit created by this measure that would provide a tax break for those who earn more, and those who earn less would be left with a deficit.

My question for the member is this. Is the member supporting the bill? If so, how can we support such a bill that would increase inequality so dramatically for those who need it the most?

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

Mr. Speaker, I do not see how this bill would increase inequality. I do not think it does enough to attack inequality. However, the increase in tax paid by the highest-income earners, over $200,000, which would be roughly $3 billion, would pretty much offset the small tax break that would go to the higher upper end of the middle class.

Here is one piece that I found in a paper I like. John Geddes' column described it as how the current Prime Minister's plan “takes from the rich and gives to the almost-as-rich”. I think that captures it about right, but it would not increase inequality, nor would it increase deficits, as much as the hon. member might like to wish it would.

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

Mr. Speaker, it is a great pleasure to rise in the House today to speak to Bill C-2.

I realize that we are near the end of the debate and the vote is coming tonight. Oftentimes when we prepare for these types of things, a lot of what we want to say has already been said. We have heard some good arguments from both sides of the House, but I happen to think that the arguments from this side have been more persuasive.

I have tried to break this issue down to its simplest form, and its simplest form is this. If I were standing in a Tim Hortons in Stroud or Alcona or if I were at Big Bay Point or in Huronia, in Barrie, how would I explain Bill C-2 to the residents of my riding? I would simply start by saying that it is a shell game. I have often used the term “liberalnomics”. If one were to define “liberalnomics”, it would be accurately reflected as a fiscal policy of saying that things will add up when they do not; a fiscal policy that equates to playing pin the tail on the donkey in the dark, where a government keeps missing its targets; and a fiscal policy in which, if government members made decisions using their own money, they certainly would not make the same types of decisions they are making, including those that appear in Bill C-2.

Who is going to pay for this? That is the question we need to ask. The Liberals said they were going to give middle class Canadians a tax break by making taxes fairer. They said they would cut the middle-class tax bracket to 20.5%, and they certainly have done that. However, they also said that this plan would be revenue neutral. All of the speeches that have been presented by members on our side, even information that has been presented to us by the parliamentary budget officer, have indicated that a $1.7 billion deficit will be created by this plan this year and effectively an $8.9 billion deficit over six years. This plan would benefit the top 30% of wage earners. How would I explain this to the people of my riding if I were standing in Tim Hortons?

This may not be a great example for this side to use, but it is an example nonetheless and it comes from Mr. David Macdonald, who is senior economist with the Canadian Centre for Policy Alternatives. In an article in Maclean's magazine Mr. Macdonald, through a study, said that 1.6 million families making $48,000 to $62,000 a year would see roughly $51 a year in tax savings; and for those families making $62,000 to $78,000 a year, they would be making $117 in tax savings. I would define those figures as the middle class, and Mr. Macdonald did as well.

Then Mr. Macdonald moved into an interesting category that he defined as the upper middle class, and I think most of us would agree with his definition. Those Canadians who make $124,000 to $166,000 a year would see a benefit of this middle-class tax decrease of about $521 a year, while those making $166,000 to $211,000 would see a tax saving of $813 a year.

How would I explain that to my residents if I were standing in Tim Hortons? I would simply say to them that this middle-class tax decrease would benefit every single member of the House of Commons more than it would affect those who need it the most.

We have heard the finance minister stand up many times in the House during question period and say that nine million Canadians are going to benefit from this. If the parliamentary budget officer's estimates are correct—and there is no reason to think that anyone in the House would discount them—that means for those nine million Canadians, the amount of deficit that they would have to pay is equal to about $164 each. If I were to explain to my residents in Barrie—Innisfil, with an average median household income of $69,000 in Barrie and $66,000 in Innisfil, that the maximum amount they would get as a result of this middle-class decrease would be $51 but the expectation would be that they would have to pay $164 for the amount of this deficit, not one of them would think this is a good deal.

Yet the Canadian government is running around, because of this election promise, saying that nine million Canadians will actually benefit from it, when in fact, every member of the House knows that it is Canadians who pay the price.

Based on Finance Canada's estimates, the new Liberal tax plan amounts to an average of an extra $6.34 a week for those who qualify, merely a head of cauliflower with the way the prices are today.

The other thing Bill C-2 talks about is the reduction of the TFSA from its current amount down to $5,500. In fact, 11 million Canadians took advantage of the TFSA. My wife and I, who I would classify as middle-class Canadians, and my kids who are in university have used TFSAs as a savings and investment vehicle. It is a tool that lessens the dependence on government. It gives people options. To reduce it just does not make sense because it puts Canadians in control of their future if they choose to do so.

Recently, my financial planner talked about TFSAs and he was quite concerned about the fact that we would see a reduction in them. He told me the story of a 22-year-old student who had invested the maximum amount in a TFSA, which was now worth $220,000. That individual will be able to take that out tax-free and use it for whatever purpose he or she chooses to use it for. The purpose of the TFSA was all about that.

About a century ago, American author and journalist H.L. Mencken wrote that complex problems had simple, easy to understand wrong answers. He may as well have been referring to the idea that budgets balanced themselves or that the Government of Canada could foster economic growth by simply injecting mountains of taxpayer money into the economy.

Government stimulus spending and workers alike can succeed. However, bad public policy, one based on pin the tail on the donkey approach, Liberalnomics, sees companies rushing for the border and everyone else heading straight to the unemployment line. That is exactly the road that the people in my home province have found themselves travelling on over the past 13 years and Canadians are sadly following the same disastrous route under the current government.

Tax breaks that do not help those who need it the most and they create deficits that are not needed. That is Liberalnomics. That is how I would explain to the residents of my riding why I am not supporting Bill C-2. It does not help those who need it the most. It gives members of Parliament a bigger tax decrease than most Canadians, and I will not support it.

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

Mr. Speaker, we are giving these tax breaks to hard-working middle-class Canadians. It was an increase in last year's fiscal budget under the former prime minister that took the TFSAs from $5,000 to $10,000. This legislation rectifies the wrong and it brings it back down to $5,000.

In discussions with my constituents, they do not have that extra $5,000 or $10,000 after paying their mortgages and loans, having to provide food and necessities for children or even on their own. This was a policy decision of the previous government and it did not address the needs of Canada's middle class. This legislation goes a long way in addressing those needs, especially when it is part one of another part that will come with a child tax benefit. Would the member not acknowledge that?

[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.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, I thank my hon. colleague for that question. I am sure the hon. member for Winnipeg North across the way will probably continue from 2008 to 2011 with the broken promises.

I am very proud to stand with that Conservative government. We have made many great promises, including lowering taxes and increasing the TFSA. We have stood proud behind our record, and I do so today as well.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, it is definitely nice to hear our Conservative colleagues being so worried about low- and middle-income Canadians. I share their concern. It would have been even nicer had they passed the memo to the previous administration 10 years ago.

That said, I would like to come back to the doubling of the TFSA amount. According to a previous parliamentary budget officer, Kevin Page, it was a policy that would have benefited the 10% wealthiest Canadians the most. It was also considered by that parliamentary budget officer as a regressive tax policy. According to many economists, it was a promise and an engagement that the Conservatives had taken that would have cost $15 billion a year a few decades from now. According to the previous finance minister, it was a problem that we should have left to the prime minister's granddaughter. According to us, it is not a problem that we should leave to anybody's granddaughter, and that is why we have reduced the limit to what it was before.

I would like to have the member's take on all of these opinions about the doubling of the TFSA amount.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, the reality is the majority of TFSA accounts are held by individuals in the low and middle class. We can sit here and say it benefits the wealthy, but the reality is that 73% of those maxing out their contributions are making less than $80,000 year, so it is benefiting the middle class.

I do find it quite strange to have someone across the way comment about future debt when his party has been piling on $19 billion, $20 billion, $30 billion of debt this year alone, including $9 billion of irresponsible spending from this so-called middle-class tax cut.

[Colin Fraser, Liberal, West Nova, NS]

Mr. Speaker, it is clear that members on this side of the House support the tax-free savings account. What we are talking about is the increase that was made last year to almost double the contribution to the tax-free savings account and whether that was a fair and proportional way to allocate those resources.

The tax-free savings account is an important savings tool. That is why we support returning it to the way it was in 2014. There is no disagreement there. It was brought into effect in 2009. In 2010, 2011, and 2012, the maximum contribution remained at $5,000. Then in 2014 it went up, based on the rate of inflation, to $5,500. We want it to go back to the 2014 level, which is fair and proportionate. We do not agree with doubling it in an election year. We do not agree with doing it for less than reasonable purposes.

I wonder if my friend would agree with me that restoring it to the 2014 level would be fair and equitable. We on this side of the House support the TFSA.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Speaker, we do not agree with your position. The TFSA has been shown to benefit the massive numbers of people have taken advantage of it, and they are in the middle to lower class. Clearly, 50% of the contributions are made by people who make less than $50,000 a year. It benefits the lower and middle class. The more we can benefit them, the better our country will be.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Before I continue with the debate, I just want to remind everyone that the Speaker does not have a position. I am sure it was in third person.

The hon. member for Calgary Signal Hill.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Mr. Speaker, I wish I could say it is my pleasure to stand today and speak to this piece of legislation. Unfortunately, it is not, but it is important to put some views on record. These are the views of my constituents that I talked to during the election campaign.

As I went from door to door through various communities, the issue of the tax-free savings account was seen as a very creative way that as we move away in the future from defined benefit plans, the tax-free savings account was something that they could contribute to and rely on as they went through their retirement years.

We have seen, in the 150 or so days that the government has been in power, promise after promise being broken, but this is one promise that I wish the government had broken.

I have reflected on how some of these decisions were made by the Liberal campaign team. I envisioned that when the Liberal plane was flying over Sault Ste. Marie, the Liberal leader decided he did not have a promise to make when he landed in Winnipeg, because everywhere he went, he wanted to promise something. Some bright staffer said, “Let us give a middle-class tax cut.” Nobody really knows what the middle class is, and I will come back to that in a minute.

One of the staffers pipes up and says, “That will cost us a lot of money. How are we going to make up that revenue?” The leader says, “Well, we will just put this little tax on the rich, and in addition we will roll back that promise of the TFSA from $10,000 to $5,000 which should make this revenue neutral.”

Of course, we have seen in the House that it is not revenue neutral. It was a broken promise. It was an ill-thought-out promise, and now we are going to be paying for it.

What my constituents want to see is logical planning going forward. The do not want to see programs that were designed on the back of a napkin, and that is what we have seen too much of with the current government.

I want to talk about this new terminology of the so-called middle class, a term that has been glommed onto by the Prime Minister and the Minister of Finance. When the finance minister appeared before the House of Commons finance committee, I asked him to explain what his definition of middle class is. He did not answer, and I do not believe the Liberals know what they are referring to when they talk about the middle class.

I asked the finance minister, “If I am not middle class, what am I?” Am I lower class, upper class? What am I, if I am not middle class? I call on the government to start to define some of the terminology that it uses, because in this country we do not have a class system. We have a system whereby we can work and improve our standard of living. I am frankly one who is offended by continuing to hear this term “middle class” thrown around as though there is a particular level of Canadians who might be better than other Canadians. That is one of the problems that I have with these bills that have been thrown out and designed to appeal to a segment of the voting population.

We all know that the TFSA is a program that has been incredibly successful. On this side of the House, we have tried to impress that some 11 million Canadians have in one way or another contributed to the TFSA. I would dare to say that if the government left the commitment to move to a $10,000 level alone and even looked at increasing it further down the road, many more Canadians would be contributing to a TFSA, and we would not have some of these unfunded pension liabilities that we are starting to face with our baby boom population.

I would appeal to those members who are so disposed to think about this. We have a vote coming up fairly soon, and I would appeal to a couple of my colleagues from Calgary, the member for Calgary Skyview and the member for Calgary Centre, who is the Minister of Veterans Affairs. I know they have taken a lot of heat over the past couple of weeks because they chose to be whipped and vote against supporting the energy east pipeline.

When the vote comes and the Speaker asks the House who would oppose this motion, this is a great opportunity for the member for Calgary Skyview to stand to vote with his constituents, not to vote the way the whip nods his head up and down or sideways.

We also have the Minister of Veterans Affairs and Associate Minister of National Defence, with whom I have had many a discussion. I know his constituency very well. I know many people who live in his riding. I know for a fact that they support what we did with the TFSA increase.

This is a great opportunity for the Minister of Veterans Affairs and Associate Minister of National Defence to raise his hand and say that he probably made a mistake in not supporting the energy east motion put forward by the Conservatives and that there is an opportunity to amend that vote with his constituents. I throw that challenge out to my colleagues from Calgary and I hope they take up that challenge when we vote later tonight, or whenever the vote is called.

I would like to come back to the whole idea of savings. It has been well-documented that we are in a situation where far too many people are over-leveraged and far too few people are saving for the future. As government, as legislators, we need to ensure we have models in place that if a third of Canadians want to save for their future and not rely upon some unfunded pension that may or may not be there, as our baby boomer population starts to increase in age and if we nurture the TFSA well, there is clearly no reason why it could not continue to succeed. This was a positive first step, with the increase to $10,000. I would strongly encourage some of those members on the other side who have said that they support the TFSAs to take this opportunity to show their leader and Minister of Finance that we need to ensure we have in place programs that will allow Canadians to make some of their own decisions.

One of the concerns I have as we ratchet back the TSFA program is that we will find ourselves increasing the amount that small business will have to pay into the Canada pension plan. It will give retirees less opportunity, less ability, to manage their retirements funds. That is a wrong-headed approach under this plan.

With those few words, I would encourage some members of the government to send a message to their finance minister that this is wrong legislation. I will not be supporting it.

[Martin Shields, Conservative, Bow River, AB]

Mr. Speaker, I appreciate the comments made of my colleague from Calgary. One of the things I do know is that he does stay connected. He really does know his constituency, and he has talked to a lot of people in Calgary. When he refers to positive feedback, my question for him would be with respect to the demographics in the sense of the responses he has received.

Would he expand upon that and say what kind of response, demographically, he has received on that issue?

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Mr. Speaker, I have a fair representation of those who are on retirement pension plans, as all members have. When I was door knocking, one of the things I found was that people who were retired and on a pension plan today were not that concerned about their own particular situation, but they were very concerned about their grandchildren. Time and again I heard that they were concerned that their grandchildren probably were not doing enough to save for themselves and that the typical pension plan they were comfortably retired on today would not be there when their grandchildren needed it.

There was was a broad range of responses, which further exemplifies the fact that we need several options for people to save for their future, not just one defined Canada pension plan.

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

I have a comment and then a question, Mr. Speaker.

The member made reference to the pipeline issue and how members of the Liberal caucus had voted. I had been here for five years when the Conservatives had a majority government and they did not build an inch of pipeline. As a prairie member of Parliament, the Conservatives failed miserably at getting our natural resources to tidewater. We support a process that will ultimately see natural resources enhanced in the prairie provinces.

Being a Conservative, how does the member justify voting no for a tax decrease? Once the bill passes, nine million-plus Canadians will benefit by a tax cut. It is as simple as that. No matter what they want to say, the Conservatives will be voting against a tax cut. How do you justify that to thousands of workers in your riding who will benefit by this tax cut, all in the name of wanting to vote because it is Liberal legislation?

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

I remind hon. members that they are speaking through the Speaker.

The hon. member for Calgary Signal Hill.

[Ron Liepert, Conservative, Calgary Signal Hill, AB]

Mr. Speaker, one of the ironies of this whole debate is that we have proven on this side of the House that this so-called tax cut the member refers to ends up being a saving of $1 a day. However, the government is taking away the ability for Canadians to make some of their own choices around saving for the future.

I would like to ensure the member has his facts correct. During the term of the Conservative government, multiple pipelines were constructed and the northern gateway pipeline was approved.

I want to challenge the government now. Will the Liberals uphold the ruling of the National Energy Board, which has approved the northern gateway pipeline, or will they stick to their Prime Minister's word, which is that we will not have any tankers on the west coast?

I challenge that member to encourage his colleagues to support the northern gateway pipeline when that particular pipeline is ready to go.

[Dave MacKenzie, Conservative, Oxford, ON]

Mr. Speaker, this is an interesting time, when we talk about Bill C-2. I come from a very strong rural riding, but it is also a riding that is one of the few in Canada that has two auto plants not related to each other. Therefore, I have a broad cross-section of Canadians. When people ask what is middle income, nobody seems to know, but one consensus is that it is always somebody who makes $10,000 more than I do. The difficulty, when we start to talk about what we are doing for middle-income people, is that there is no real definition of it.

We talk about what the Conservative Party did, and I think you, Mr. Speaker, might have been here when we reduced the HST from 7% to 6% to 5%. I think members would agree that everybody benefited from that.

This change being brought forward was be revenue neutral. Revenue neutral would mean that they would take from Peter and give to Paul, but it would not cost Mary anything in the middle. As it turns out, the Liberals abandoned the promise and according to the PBO, Bill C-2's changes would cost Canadians $8.9 billion over the next six years.

I think members recognize that when governments accumulate debt, and when we are in a position that we are in now when the economy is not that bad—it is fragile but it is still growing—it does not mean we will pay it. It is not like a mortgage when we buy a house and intend to pay it off in a certain length of time. Government debt always ends up being paid by the next generation or generations. When I look at it, I recognize that we are putting this debt not only on my grandchildren but on their heirs. The debts that we build up in our time here are very important.

By taking the debt and doing what they would do for a small benefit to some people, and it would be so small that they would not be able to retain it, the Liberals have not shown us what the real advantage would be to the economy, other than we know we would add $8.9 billion to debt. This does not make sense.

Those good people in Oxford who are the farm people, the people who work in the auto assembly plants, the firemen, the policemen and the teachers, are they the middle-class people? I do not know, but they are concerned that these debts will be added on to their children and grandchildren. We need some transparency that goes along with this.

When we said that we would reduce the HST from 7% to 6% to 5%, everybody knew what that meant. It meant that everybody was going to save on their tax dollars. We recognized that tax dollars were not for the government; they were for the people. It is not for the government to decide that the tax money should be taken from pockets of people' and to spend it willy-nilly. It is to do things for the government.

Unfortunately, in this case, we are past that point. We are looking at adding billions of dollars, and I am not sure whether anybody has calculated exactly what that will be. Some economists have said it will be $150 billion over the Liberals' term in office. That is a lot of money.

We just went through the worst downturn in the Canadian economy since the Great Depression, and we know that cost money. The deficit went up and the debt went up. However, we handed over a surplus. We should be looking at starting to pay it down, as we did in our first three years in government. Canadians are starting to see the sunny ways turn into dark cloudy days, and we are handing that big debt to our children to pay.

The tax-free savings account is one area that has been focused on a great deal. I know, when I talk to people in my riding about the tax-free savings account, they see no benefit in reducing the contribution limit. We have not heard why it is so important to reduce the contribution limit, other than if the Conservatives did it, it must be bad so we will go back to where it was. I hear from young people who say that they want to save that money to buy a house. There is a difference between RRSPs and tax-free savings accounts. When people want to buy a home out of an RRSP, it just means they have another debt. They can take their money out, but it has to be paid back or they have to pay the tax on it.

These young people, who are smart enough, and there are many of them, recognize that they can put the money into a tax-free savings account. It will not grow by leaps and bounds, but it will grow. They can take the money out to purchase a home. They do not have to put the money back in, but they do have an opportunity to put that same amount back into the tax-free savings account. It is a totally different scenario, so many are looking at that.

Many middle-aged people are looking at the TFSA as an opportunity to build for their retirement. They are not anxious to take part in the new scheme in Ontario, for instance. The Ontario government wants to have its own pension plan, something like the CPP, but we do not know exactly what it is. These middle-aged people are not interested in that. They want to save for themselves, to put that money away for when they retire.

To think that it would make sense to cut back the TFSA is illogical. It does not cost anything. The government's losses in revenues from that would be minimal. It is just a slap in the face of those people who felt the need to put the money away.

As we know, the vast majority of people who put their money in a tax-free savings account would perhaps be deemed to be in the lower half of the income brackets. They are not high-income people. This is a penalty on people who can least afford it, people who would like to save for their future, who do not want to be part of a nanny state. They want their own money they have saved for their retirement. In many cases, it also includes young people who want to save for their education or to go back to school. They may want to buy a house or a car. They may want to start a business.

Therefore, when we look at it, we wonder why the government would want to cut this back. What is the harm in leaving it where it is? It is a big harm to the people who wish to save, but no harm to the coffers of the federal government.

To turn around and have the tax break we are talking about today, which we know will be minimal—I heard a number today of $1 a day—what is the benefit in that? One cannot even buy a coffee with that, although there is one chain that is giving away free coffee now, but it is rather difficult to see how that $1 or $2 a day would make a great deal of difference to the average Canadian. It is different from when the HST was reduced. We knew what it would do for the auto industry, the recreational industry, and the equipment industry, all of those.

We have not heard what this is going to do. No one can say “We'll see an increase in productivity”, or “We'll see an increase in opportunities for manufacturers.” It just is not there.

However, what we do know from the PBO, and I am sure everyone on that side agrees with the PBO now, is that it will cost $8.9 billion over the next six years. That is just a number that gets added to the growing deficit that we hear about.

We heard during the election campaign that we would have a $10 billion deficit. That $10 billion deficit was one of the 300 promises made. Now that $10 billion deficit seems to have grown to $30 billion. When we put $30 billion here and there, I know it is just a number and that budgets will balance themselves eventually, but somehow they get balanced by our young people, our families, our grandchildren. It is just not fair that we push this on to them. We have been doing it for far too long as a nation and a province.

I am from the province of Ontario, so when we put our debt here, along with the Province of Ontario's debt, we can just imagine the kind of money that our young people will have fished out of their pockets to pay for what we have not paid for. It just does not make sense in the big picture of society.

I am really puzzled as to why we would want to support taking away just one little thing, the tax-free savings account. It just does not make any sense.

I can see, Mr. Speaker, that you are getting anxious to stand up, so I do not want to take away your time when you stand up and tell us we are finished.

I know that on this side, we do not understand why the government would deny people the opportunity to save their own money. That is really what it is: they are saving their own money.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, I appreciate the comments made by friend and colleague.

The one thing I would like him to comment on is the inconsistency that we have consistently heard, if putting it that way makes sense, from the Liberals opposite in government. They have stated on many occasions that the TFSAs only benefit the wealthy and the affluent.

We have heard that before. We heard it when we made cuts to the GST from 7% to 6% to 5%. They said that it would only help the really wealthy because only they could afford these big ticket item purchases, when in fact it was just the opposite. The GST reduction primarily helped lower-income people, because almost their entire income is used to purchase goods and services. If we can cut the tax on the goods and services that the lower-income people have to purchase by 20%, that is a huge savings.

Could my colleague please comment, then, if there is any correlation between lower-income people and middle-income people benefiting from a TFSA, or is it, as the Liberals suggest, only for the wealthy?

[Dave MacKenzie, Conservative, Oxford, ON]

Mr. Speaker, there is no difference. When the money is taken out of someone's pocket and we build up a debt, it is just not beneficial to anyone.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Is the House ready for the question?

[Some hon. members]

Question.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

[Some hon. members]

Agreed.

No.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

All those in favour of the amendment will please say yea.

[Some hon. members]

Yea.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

In my opinion the nays have it.

And five or more members having risen:

Call in the members.

[Andrew Leslie, Liberal, Orléans, ON]

Mr. Speaker, I request that the vote be deferred to Tuesday, March 8 at the end of the time provided for oral questions.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

The recorded division on the motion stands deferred.

The House resumed from March 7 consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the second time and referred to a committee, and of the amendment.

[The Speaker, Liberal, Geoff Regan]

The House will now proceed to the taking of the deferred recorded division on the amendment.

(The House divided on the amendment, which was negatived on the following division:)

Vote #20

[The Speaker, Liberal, Geoff Regan]

I declare the amendment lost.

[The Deputy Speaker, Conservative, Bruce Stanton]

I wish to inform the House that because of the deferred recorded divisions, government orders will be extended by 28 minutes.

Order. I would like to ask all hon. members who want to carry on conversations to make their way to their respective lobbies at this time.

The House resumed from March 8 consideration of the motion that Bill C-2, an act to amend the Income Tax Act, be read the second time and referred to a committee.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, I am rising for two reasons. The first is personal, and the second is to talk about Bill C-2

I would like to inform the House that this morning, my wife and I became new grandparents. Our first grandchild was born, and we are so proud. My daughter, Chantal, and her husband, Mathieu Hayley, are the proud parents of a beautiful little girl named Maëlle.

Mr. Speaker, I am extremely proud and happy to rise on Bill C-2, the law that talks about benefits for the middle class. That is what was so important about our election campaign. This was a promise that we made throughout our campaign platform, and this will make good on it.

I was very happy to hear our Prime Minister indicate that this would be the first priority of our government in this 42nd Parliament. This was a platform promise that we felt was essential because over the last 10 years the middle class has been struggling. That has been extremely difficult for many people across Canada, in many communities.

This idea is not something that came from within. This is something we heard throughout the campaign, because we were listening to and consulting with Canadians during door-to-door visits. We heard clearly that the middle class were in need of some type of tax relief for them, as they were struggling. Many people were telling me that they were working extremely hard and yet did not seem to be getting ahead because the cost of living was rising, because of the challenges of paying for personal family needs, for day care, etc. After 10 years of what I would call a low-growth economy, Canadians were looking for real change.

Our Minister of Finance has been hard at work as well, consulting with Canadians for the upcoming budget. He has consulted from coast to coast to coast. He was in Nova Scotia and had great attendance by youth at the university, and as well at the chamber of commerce. This allowed many Canadians to be engaged in this process of sharing some innovative and creative ideas. This is another sign of what I call a government that is open, transparent, and accessible. Our minister displayed that throughout that process, and I am very pleased with that.

The reality is that people have to pay the mortgage, as well as for groceries and other essentials, like child care and so on. It is very difficult for the middle class. This formula is not good for the economy, that is for sure. The bill we are debating today will allow us to shift the tax burden, so that those who have a little more will get a little less and those who have a little less will get a little more.

In my riding, over 30% of the citizens will gain from this tax reduction. Over nine million Canadians will also be taking advantage of this tax reduction. This means that a family of four will have about $540 more in their pockets for spending on things that are essential for the family.

It is also important to note that this is only part of the plan. Our plan is much more horizontal, if you will; in other words, many other initiatives that were set out in our platform will be rolled out over the next four years. What we want is to support the middle class. Our government will also be investing in infrastructure and transportation, which is absolutely crucial to stimulating the economy.

In my riding, which is Sackville—Preston—Chezzetcook, public transit and transportation are extremely important. One has to understand that there are both urban and rural parts of my riding, and I am working closely with my colleague from Dartmouth—Cole Harbour on the construction of the long-awaited Sackville-Burnside expressway. It is essential and must move forward as soon as possible.

In addition, our government is committed to creating a Canada child benefit. This will help families with day care, a fairer system, one that would see Canadians who have a little more get a little less, and those who have less getting more. That is a fairer system. There are nine out of ten Canadians who would benefit from this. Over 315,000 children will be pulled out of poverty. That is the type of plan that will be effective for Canadians. That means about $2,500 more per year for families, tax free. Add that to the $540, and it is over $3,000 per year per family. That is a very important aspect of taxes for Canadians. There will be more money in their pockets.

Our government has focused on fairness. We want to support the middle class by ensuring they have money in their pockets and that they are able to prosper.

I would like to make one final point regarding Bill C-2. We made some changes to tax-free savings accounts. The Conservatives had increased the contribution limit to $10,000. We dropped it back down to $5,500, given that 93% of Canadians were not taking advantage of the increase, because they could not afford to. The only people who will not benefit from this measure are the wealthy, not the middle class. In fact, the $10,000 limit was giving more money to those who already had the most, and the Canadian government was having to pay millions of dollars more over five years, and billions more in the long term. This will mean less spending, but it will go to those who need it most.

For the last 10 years, like I said, the middle class has been ignored. This government is putting the middle class at the forefront. This government will ensure that our policies reflect what is important for middle-class Canadians.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Mr. Speaker, I have a question for the member opposite. We have been hearing about the middle class all along, and my understanding is that 75% of Canadians are middle class. However, what we heard just now is that only 30% of Canadians will benefit from this new tax system. What happened to the other 45%? I would ask the member opposite to advise us, please.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, when I made reference to 30%, I was talking about 30% of the people in my riding who will benefit from that tax cut.

What is important to keep in mind is that nine out of ten Canadians will benefit across Canada. That is what is extremely important, that nine out of ten Canadians and over 315,000 children will be pulled out of poverty. Those are the types of programs and laws that this party wants to bring forward.

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

Mr. Speaker, what the member just said is totally false. It is not true that nine out of 10 people are going to benefit from the tax cut.

We just learned, and the parliamentary budget officer has confirmed this, that only 30% or so of the population will benefit from this tax credit. A person who earns $45,000 or $50,000 will get a small reduction. A person who earns less than $45,000 will get nothing at all. A person who earns $200,0000 will get the maximum $800 reduction.

How does this member define middle class? People like us, members of Parliament, will get the maximum reduction, but someone earning $40,000 or $45,000 will get absolutely nothing from the tax cut.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, I appreciate the question. However, I must say that this is another reason why the NDP did not succeed in the election on October 19.

The NDP only looks at what happens on an individual basis. As I said in my speech, they do not see that the Liberal government strategy is horizontal. We are providing tax relief, but we are also making major investments in the child benefit to help young families. This benefit will put another $2,500 in the pockets of middle-class families. Our government has a comprehensive vision for its full four-year term.

[Julie Dabrusin, Liberal, Toronto—Danforth, ON]

Mr. Speaker, I want to extend my best wishes to my colleague on the birth of his granddaughter.

My colleague explained very well how these changes will help middle-class families. However, can he tell us what his constituents are saying about all this?

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Mr. Speaker, it is funny. As the Liberals were laying out their strong platform, it was becoming more and more evident throughout the campaign, and the closer we got to October 19, that Canadians had made up their minds that this platform would ensure the middle class, young families, youth, seniors, all Canadians, would have opportunities to improve and would have many more opportunities in this country to prosper.

That is what good government is. That is why I am proud to be a Liberal member in this governing party.

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, it is a pleasure to speak to Bill C-2 today. I will begin by saying that, while the NDP members have issues with some elements of the bill, we are pleased to acknowledge that there are parts of the bill that we believe would be beneficial to Canadians. We have decided to support the bill going forward to committee, where some of these can be more meaningfully considered. There are some clarifications and some rationalizations that I am going to take advantage of during my time here today.

Let us talk about some of the more positive aspects of Bill C-2

Bill C-2 would include tangible measures to collect a fair tax from the rich. Specifically, it would increase, by 4%, the top income tax rate on incomes over $200,000.

As the hon. member for Regina—Lewvan pointed out when the bill was first debated, this increase is entirely consistent with what the NDP has achieved at the provincial level.

In Nova Scotia, the NDP government increased, by 4%, the top rate on incomes over $150,000.

In a minority legislature in Ontario, the NDP amended a budget to add two points of income tax on incomes over $500,000.

The NDP government in Alberta has, quite correctly, gone from a flat tax to a progressive income tax system.

As part of our election platform in Saskatchewan, the NDP is proposing an additional percentage point of tax on incomes over $175,000.

The other positive aspect of this legislation is to restore the TFSA contribution limit to $5,500 per year. I think it is important to note that the previous Conservative government's proposal to increase that limit to $10,000 would only affect people who have extra money left over after 18% of their income has been contributed to RRSPs and after the $5,500 that can still be contributed to the TFSAs.

In 2013, fewer than 7% of eligible Canadians made the maximum TFSA contribution. It stands to reason that probably only up to 7% of Canadians would stand to gain anything from a higher limit on TFSA contributions. Therefore, restoring that limit to $5,500 is clearly a progressive move.

Let us face it. Given the unemployment rate, the skyrocketing cost of food and rent or housing, and the rising precariat, there are far too many people who will not see benefit from the bill. Consider a family of four living off minimum wage with a total monthly income, including benefits and credits, of $2,882. By the way, I get this information from the local Windsor anti-poverty organization, Pathway to Potential. Of this fixed monthly income, 62% goes to rent and food, leaving only $1,082.70 for remaining expenses, such as utilities, phone, transportation, medical costs, and dental costs. People face precarious situations when their rent exceeds 30% of their monthly income. When income is low and rent is high, there is not enough money left for food. This helps explain why so many are forced to use food banks. In 2015, 80,865 individuals were served by Windsor and Essex County food banks, and 41,942 of this number were children.

I think it is safe to say that, when we have a situation this urgent, this dire, we should be drafting legislation to help these people. Yet, these are precisely the ones who are left out of the bill. When families must choose between paying rent and feeding their children, they are not going to have a spare $10,000 to hide away in a tax-free savings account.

Let us consider students. In the Windsor area, we have St. Clair College and the University of Windsor. The reality is that most people who go to school are just getting by or taking out loans to get by, let alone putting money in a tax-free savings account. Perhaps some of them are doing so with the help of family members, but the ordinary Canadians I represent do not have that luxury.

As I alluded to earlier, in the service sector, many people are moving to part-time or precarious work and basically just getting by.

Unfortunately, with this bill, we know from third-party experts and economists that 60% of this plan for a reduction in taxes for Canadians would not be enjoyed by the middle class or those with low incomes. Therefore, it is a sizeable section of Canadians who would be left out. Because of the way the scheme works, the wealthiest would benefit the most. That is a real problem, which New Democrats want to address at committee. It is an issue we have raised before.

Who would benefit from this bill? It would not be the office workers who are making an annual salary of less than $40,000 a year, or the hair stylists who basically earn around $28,000 annually in Canada. They would get zero. It is the same with social workers who make an annual salary totalling around $44,000, and with our friends in the retail sector who earn $21,424 on average.

Cashiers would get nothing back. That is a classic example. All of the people working in department stores, retail shops, drive-throughs, fast-food chains, and all of these types of businesses would receive zero from the plan. They are the people we should be rewarding with a tax reduction. These are the people who do not have the equity to easily afford some of the tax deductions that wealthier Canadians get. They do not earn income at the level to take advantage of some of the policies that have been put in place in the past couple of decades.

Waiters and waitresses earn less than $22,000 on average. They would get zero. That is another group of individuals who, I would argue, would not benefit from this reduction. They would get nothing at all. Nannies are another example. Chefs and assistant chefs would get nothing.

Who would get a benefit from this legislation? Bank managers who earn around $82,000 a year would receive $555 in their tax season from this. They would also be in an income stream where they might be able to take advantage of tax-free savings account. It would be beneficial for them and their family. Lawyers earning around $108,000 a year on average in Canada would get $679. Members of Parliament with the same wage amount would get the cap of around $680 as well.

It gets worse. Bill C-2 also includes a so-called middle-class tax cut that would not actually help the middle class. I think the Liberals might be a bit confused between cutting the middle-class tax bracket and changing taxes in such a way as to help people with middle incomes. What the bill proposes is a tax cut that applies to incomes above $45,000 a year, which is more than the median Canadian income. To receive the maximum benefit, someone would need to have an income of more than $90,000 per year. To put that into perspective, someone working as a nanny for the Prime Minister would receive nothing from the middle-class tax cut. However, the Prime Minister himself, and indeed all members in this House, would get the maximum benefit of about $700. However, we do not need the money.

What are the alternatives? We in the NDP have proposed to reduce the first tax bracket, which applies to everyone. We also propose a boost to the working income tax benefit, which is better targeted to lower incomes. It would be extremely easy to design and implement a middle-class tax cut that would actually go to the middle class. However, in all of the discussion we have heard with respect to this bill, I have not heard a coherent explanation from the Liberals as to why they are pushing ahead with a tax cut that would only go to incomes above $45,000, rather than enacting a tax cut that would include all taxpayers.

Moreover, it has been revealed that the bill would not pay for itself. It would cost more than $1 billion a year in lost federal revenue. In effect, what the government is proposing is to borrow money to fund a tax break for people who do not really need it.

In conclusion, there are a enough positive elements in Bill C-2 that the NDP is prepared to support it on second reading. However, there is a huge amount of room for improvement in targeting the so-called middle-class tax cut to those who really need it, and in collecting the revenue that would ultimately be needed if the government is ever going to balance the budget—

[The Speaker, Liberal, Geoff Regan]

Questions and comments. The hon. member for Fleetwood—Port Kells.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, the member opposite is focused only on the tax cut. Would she agree that cutting taxes for people who are earning below $45,000 a year would have limitations, because in general the lower one's income the less one pays in taxes?

A tax cut by itself might have only a limited benefit for those people. The complete plan, including the Canada child benefit, would tilt the balance of the benefits to the people with lower incomes. It seems that if a tax cut really would not deliver a great deal of benefit to people in the lower income bracket, then we must look at another mechanism to help those people, as well as the people in the middle income.

Could the member flesh out some of her ideas and the alternative ways we could help people who earn lower income and would not benefit from any kind of tax cut?

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, I just want to reiterate that the Liberals were vehement during the election campaign about relieving the middle class. What we are saying is that they have to identify who the middle class really is. In Canada today the median income is $31,000. What is the definition of middle class if it is not that?

It is not realistic to look at someone who has a lower income with limited discretionary funding and is making choices that someone in the higher income class does not even have to worry about. We have to apply a bit of empathy here, to see where the effect would be, so that we would be targeting the middle class. That was aggressively pursued by the Liberals during the campaign.

Was that all rhetoric, or can we really have some meaningful action? The median income in Canada is $31,000. Like it or not, that is the reality.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, I definitely agree that Bill C-2 would do nothing for seniors on a fixed income and those with lower wages who are counting on maybe CPP, OAS, and GIS to get through.

Does the member think a $600-a-year middle-class income tax break would really make a big difference to those making up to $200,000 a year?

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, I explained that in my speech. I expressed a bit of frustration with the shortcomings of this legislation.

What we are seeing with Bill C-2 is a token response to the Liberal platform and to what Canadians saw. There was something in that platform that resonated with Canadians. That is why they were elected, the Liberals claim, so they should do something with it. It is a token response. As a matter of fact, it is insulting to people living in that median income range, because $600 can go a long way toward nutrition and bills.

Not providing that well-being for all Canadians puts a burden on all of us as a country. One would think the Liberals would want to maximize this tool. That is why it is a bit frustrating.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, as per usual, the NDP is long on thought and short on detail. Those members started first in the election campaign and fell quickly to third, because Canadians did not buy what they were saying. Canadians did not buy their platform or their policies. As parliamentary budget officer Kevin Page said, the NDP policy was like Swiss cheese because it had so many holes.

My question to the member opposite is this. Why did you support the UCCB that gave the same amount of money to millionaires and people who need it? Why did you support that policy?

[The Speaker, Liberal, Geoff Regan]

I would remind the hon. member to always direct his comments to the Chair. Again, we do not use the word “you” in here, unless you are talking about the Speaker, and I get a little nervous when that happens.

The hon. member for Windsor—Tecumseh, a short answer.

[Cheryl Hardcastle, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, the NDP has proposed a number of realistic measures to provide assistance for a national child care benefit, guaranteed income supplement, and a national affordable daycare plan. To suggest that we have not done our due diligence and our homework, we came out with a fully costed plan. We can argue where some of the resonations were during the campaign, but it certainly was not with the stats and facts, because we have those here.

The Liberals are missing an opportunity if they do not accept those facts and move forward with the well-being of middle-class Canadians, as was aggressively put forward in their platform.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, what I like best about Bill C-2 is the tax hike for the richest 1%. In my opinion, the income gap is too wide and that is the most glaring problem in our current capitalist society, together with the extreme pressure that our economic system is placing on the environment.

Over the past 30 or 40 years, income inequality has grown steadily and has now reached unacceptable levels. Paying a CEO ten times what his employees are paid can be justified. However, when the CEO is paid 200, 300, or even 400 times as much, that is a sign that there is something seriously wrong with our society, and that the state has failed to do one of its main jobs, namely to ensure an acceptable redistribution of wealth.

The government is sending a strong message with Bill C-2 and it is headed in the right direction. It has been a long time since Ottawa increased taxes for the rich. Lowering the TFSA limit is a measure in the same vein and I will applaud if it actually shows up in the budget.

On the other hand, my enthusiasm for the tax cut for the so-called middle class is somewhat lukewarm. In my opinion, it misses the mark. This tax cut will benefit the wealthiest one-third of taxpayers. People who earn an average or median income will not benefit at all. The government is saying that anyone who earns $45,000 or more will benefit. However, if gross income is used in the calculation, people actually have to earn $51,000 to save money on their taxes. The reason for this is that other tax deductions reduce the gross income to a net income of $45,000, which is taxable. As a result, a worker who earns $51,000 a year will not save any money on taxes under Bill C-2.

By way of example, I would like to inform the parliamentary secretary that 80% of the people in his region of Mauricie report an income of less than $50,000. Only 4% of the people in his region, including himself, will see their taxes reduced by the maximum amount. People who earn $52,000 will not even save $20 with this measure. It is far from a solution. Those who earn $100,000 a year will save $680, and those who earn a gross income of $240,000 will not have to pay a penny more in taxes.

In short, the tax transfer in Bill C-2 will help the rich save money on their taxes by making the richest 1% pay more. In other words, the Bentley owners will have to pay to help BMW owners. Bill C-2 will not help Focus, Civic, or Corolla owners and will do even less for Accent owners, even though they are the ones who need help the most.

Nevertheless, this bill sends a strong message to the richest 1%. This is a step in the right direction. The proposed change is obviously symbolic and is not enough to correct the inequalities that exist. We need to go further.

The government should also target the problem of tax avoidance and tax havens as a priority. While the middle class and the poor are struggling and coping with austerity policies, receiving fewer services, and paying more for existing services, white collar criminals are ducking their social obligations. What good is it to increase their taxes by 1% if they are diverting their income? The KPMG scandal is the most recent example of this. The issue of tax havens is the elephant in the room. Canada's has one of the worst records among OECD countries. It is time for that to change.

This government can take action right now to deal with Barbados because we moved a motion to deal with this very issue. Barbados is Canada's tax haven. That is where Canadian banks and financial institutions, as well as wealthy Canadians, send their money. We can tackle Barbados as a tax haven right now. We do not need agreement from other countries to take action. I hope this will be done. It is a matter of fairness and justice.

The government of the Quebec nation is currently looking at the issue of tax havens. It will quickly see that it has little latitude on this matter and that it is largely dependent on the decisions that are made and voted on here in Parliament.

Since Quebec is not a country, it is subject to the tax treaties and laws negotiated, voted on, and ratified by Ottawa.

Quebec suffers when this government gives amnesty to white collar criminals. Quebec suffers yet again when Ottawa allows banks to move money to their branches in Barbados.

This lax attitude causes serious shortfalls for Canada and also for Quebec. When white collar criminals shirk their responsibilities, the rest of the public loses services, pays more in taxes and fees, and sees its debt balloon. This must change. We must do much more than what is in Bill C-2.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the hon. member for Joliette said that we must stop corporations from using tax havens.

Another big problem is that the Liberals and Conservatives cut the corporate tax rate in half.

Will the hon. member for Joliette also lend his support to the proposal to increase the corporate tax rate?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague for the question.

Yesterday, the Bloc Québécois expressed what it would like to see in the budget, and we also presented our expectations to the Minister of Finance.

We held more than a hundred consultations throughout Quebec to meet with different players, and one of the recommendations that came out of the consultations is to increase the tax rate for Canadian banks.

In 2007, the Canadian bank tax rate was 28%. It is currently 15%. We are proposing that it be gradually increased to 20%. Canadian banks do not compete with foreign banks. We are in a market protected by the Bank of Canada, thanks to the regulatory system. The banks are making immense profits, while we are up to our eyeballs in austerity measures and the middle class and the less fortunate are struggling. The banks have to do their part.

Our priority is to increase how much the banks have to contribute.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Mr. Speaker, I appreciate the comments of my colleague about driving Civics, Hondas, and Corollas. I drove a Neon in the past, an entry-level vehicle. Being a mechanic, I have also worked on a lot of those types of vehicles.

One of the things I would like to point out for my colleague is this. Generally, early on in life, we start out driving these kinds of vehicles, but we work hard, we get an education, and we move on. I no longer drive a Neon. I now drive a Dodge Durango. Through my education, I got a mechanic's ticket, then I went off to university and got a business degree, and now I am standing here.

I am on a trajectory with my life. I have worked hard and made money. That has given me the ability to enjoy these kinds of things in life.

There are incentives. When we tax people, there are incentives one way or the other. Does the member not see that there is a negative incentive when people are taxed greater, at higher tax brackets?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague for his question. I am pleased to learn that he is a mechanic because he probably found that very helpful as the owner of a Neon.

I am well aware that higher taxes on the very wealthy can have a negative impact, and that is something we always have to take into account in developing fiscal policy.

However, my analysis of the situation suggests that there is a problem because the wealthiest individuals do not absorb enough of the tax burden. They were given too much.

I think that increasing their contribution will not have a negative effect on stimulating the economy. On the contrary, it will help the economy. There is an impact, but it is limited. The same applies to the difference between generations. It exists, but it is hardly the only factor that explains the wealth gap.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, does the hon. member see the gap in income as a problem in Canada that might be addressed by increasing the tax on people earning more than $200,000 and decreasing the tax on people making between $45,000 and $90,000?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague for his question.

We support Bill C-2. Yes, it will have an impact, but we feel it should have gone much farther.

Let me go over the numbers. This measure will apply to incomes between $45,000 and $90,000 or more, but the gross income must be $51,000, which means there is no direct tax measure for two-thirds of taxpayers. This measure will do nothing for the least wealthy two-thirds of the population. The middle class will derive no direct benefit from this program.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, it is a pleasure and an honour to participate in the debate on the government's Bill C-2, also known as the Liberal giveth and the Liberal taketh away bill, because that is exactly what the bill would do.

Bill C-2 would give some modest tax relief to some Canadians, but it would also take away from all Canadians the ability to contribute $5,000 more to their tax-free savings accounts. That is real money we are talking about here. For a young person perhaps just starting out, aged 25, that could be 45 years or more that he could be contributing an additional $5,000 to his tax-free savings account, but which would now be denied to him because of Bill C-2.

I will explain in greater detail what Bill C-2 would do.

For a Canadian earning between $45,000 and $100,000 a year, he or she would receive some modest tax relief. If a Canadian is earning less than $45,000, there is no tax relief. If a Canadian is earning more than $200,000, he or she will be paying more taxes rather than less. However, every single Canadian eligible to open up a TFSA, that is to say every Canadian of the age of 18 or over who has a valid social insurance number, has the opportunity to open a tax-free savings account.

A tax-free savings account is a relatively new savings vehicle introduced by our previous Conservative government several years ago. It has proved to be incredibly popular. To date, over 11 million Canadians have TFSAs, and that number is growing steadily and quickly day after day.

When we first introduced the TFSA, we set a contribution limit of $5,000. Again, that is to say that all Canadians who opened a TFSA could contribute $5,000 as a maximum each and every year. The money in that account, as it grew over the years, could be withdrawn at any time tax-free. It was so popular, in fact, that most Canadians felt it was a far better savings vehicle than the RRSPs themselves, because, as everyone knows, with RRSPs one gets a tax break when putting money in, but has to pay taxes when taking the money out. TFSAs are just the opposite. One can put after-tax money into an account, and in that account, whether one had stocks, bonds, mutual funds or any other investment, that money could grow tax-free during the life span it was in the TFSA, and when a Canadian took that money out, it could be taken out tax free.

What a wonderful vehicle for Canadians who wanted to save for the future. When someone is approaching retirement age, they are quite rightly concerned about their retirement years, their so-called golden years. Will they have enough money to sustain themselves comfortably in their retirement? The TFSA went a long way to ensuring that all Canadians could do exactly that. However, Bill C-2 would deny Canadians the ability to put an additional $5,000 into their account.

As I mentioned earlier, when we first opened the TFSAs, the contribution limit was $5,000. We increased that a few years later to $5,500, and then a few years after that we put the limit up to $10,500 a year. Out of the 11 million current TFSA holders, over two-thirds of those contribute the maximum, and of those maximum contributors, about 60% have modest to low incomes. Therefore, this was a great tax savings vehicle for all Canadians, particularly those of modest and middle incomes.

The argument presented by the government as to why it reduced the level from $10,500 to $5,500 is that this was a vehicle simply for the rich. However, the statistics prove that simply is not the case. I suspect that the real reason the Liberals have chosen to reduce the ability of Canadians to put an additional $5,000 into a tax-free savings account is simply that the current Liberal government needs more tax revenue.

Why does the government need more tax revenue? It is because the Liberals are going to be spending like drunken sailors, and we have already seen evidence of that. We know now that the first year's budget, which we will be seeing on March 22, is anticipated to come in at about a $30 billion deficit. Most bank economists and people who have been analyzing the promises made by this Liberal government are anticipating that this figure of a $30 billion deficit will grow over the years.

I know that the government's Keynesian theories about putting money into the economy to stimulate it and create jobs simply do not work. Keynesian theory has never worked and will not work today, but the reality is that because of the government's wild intent to go into deficit, all Canadians ultimately will have to pay the price. Why? It is because deficits in real terms are borrowed money. Borrowed money means that someone has to pay that money back. If it is not me, it will be my children and my grandchildren.

This is not new. This is something that the Liberals have done throughout the history of their years in government. This is in their political DNA. In fact, the majority of Canada's debt as we know it today was incurred by the current Prime Minister's father, Pierre Elliott Trudeau. Figures will show that in the last year of the former Trudeau's government, the Government of Canada was spending $1.03 for every $1 that it took in in revenue. It does not take an economist or a rocket scientist to figure out that a few years of that means that the tax load and tax burden on Canadians will have to increase, because there is no way any government can sustain that type of spending.

It seems that the apple has not fallen far from the tree, because this Prime Minister seems to be taking the same approach as his father, going into massive deficits when the government does not have to do so.

Keynesian theory is for when we are in a recession, and then, perhaps short-term stimulus spending or short-term deficits could create jobs and help the economy recover. That is only a theory, and as I mentioned earlier, I believe it has not been well thought out. It certainly has not been proven to be accurate in all of those jurisdictions worldwide that have attempted this type of economics, but one thing is certain, in a jurisdiction that is not in recession, the government should not put money into the economy as stimulus because it has no need to do so.

There is one way the government could get additional tax revenue without raising taxes, and that is to look for private sector investment, private sector projects that might be able to create jobs and create tax revenue for the government. There is such a project in front of the government today. It is called the energy east pipeline, a shovel-ready project that would create literally thousands of jobs and bring in billions of dollars of tax revenue to the government, and yet, what has the government done? Has it embraced the energy east pipeline project? No, it has not.

In fact, there are several members of the Liberal government, mainly sitting on the backbench, who have won seats in ridings from provinces that would most benefit from the energy east pipeline, including Alberta, Saskatchewan, and New Brunswick, yet not one member has stood up in this place and defended the the pipeline. Not one of those members has stood in this place and said, “I endorse energy east”. Quite frankly, that is shameful, because their home provinces know the benefits that the pipeline could bring to Alberta, Saskatchewan, and New Brunswick.

Quite frankly, that does not matter to the government. The government is anti-oil and anti-pipeline, as we have seen time and time again. Instead, it has penalized average working Canadians. It has penalized Canadians by not allowing them to put more money into a tax-free vehicle, and when I ask, when did it become a bad thing to allow Canadians to save more of their money tax free, I have an answer. It occurred on October 19 of last year, when the government decided to penalize hard-working Canadians and prevent them from saving their money tax free.

Bill C-2 is a bad bill, and I will vehemently oppose it, as everyone on this side of the House will as well.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, where do I start my defence against that? Some 6.7% of Canadians maxed out their TFSAs, yet the party opposite deemed it proper to double the contribution amount. What will that do?

The rhetoric from the party and the member opposite, quite frankly, is unbelievable. Canadians made a decision on October 19 to throw out a party that was tired and outdated. The Conservative Party was asked to take a back seat, and people moved forward with a Liberal government.

Would the member not agree that Canadians made the right choice on October 19?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, not only will I not agree with that, but I think the people of New Brunswick would agree they made the wrong choice on October 19.

We have a member who finally stood up in the House to make comment on a government bill. Was it to support energy east? No, it was not. I would ask the member to go back and take a poll of the constituents in his riding to see how many constituents who voted for him on October 19 now wish they had never done so, because they have a member of Parliament who does not stand up for the interests of his province. He does not stand up for energy east.

One thing is clear. On October 19, Canadians made a choice, but increasingly they have discovered in the first 120 days that they made the wrong choice.

The House resumed consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the second time and referred to a committee.

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

Mr. Speaker, I would not turn down the opportunity to ask a friend a friendly question of sorts.

This legislation would do something positive for Canada's middle class. If the bill were passed, it will give substantial tax relief to Canada's middle class. If members vote in favour of it, they will be voting in favour of a tax cut for the middle class.

Would my friend not acknowledge that many Conservatives in the past would have voted in favour of tax cuts? This is one that Canadians could truly get behind. Over nine million Canadians will benefit if this legislation is allowed to pass. Is my friend seriously looking at supporting the legislation?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, it is a pleasure to respond to a question from a colleague and a good friend as well.

I do not have to remind my colleague of our previous government's record on reducing taxes. Over 140 taxes were reduced in our 9 years in government. We brought the tax regime for every Canadian down to the lowest level in 50 years.

However, the problem with Bill C-2, as I explained in my address, is that it does not just cut taxes for some Canadians. It would penalize every Canadian by not allowing them to max out their TFSAs to the levels that our government introduced. Everyone's contribution limits for TFSAs would be cut by $5,000. That is unacceptable and I certainly will not be supporting Bill C-2.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, perhaps members have seen the movie Groundhog Day. I started out my week by asking the member for Moose Jaw—Lake Centre—Lanigan a question about Bill C-2. I asked him whether he was concerned that a $10,000 contribution limit over time might allow the affluent to accumulate huge pools of tax-free investments. His response was that it was good to allow people to make contributions tax-free. However, there can be too much of a good thing.

In that spirit of Groundhog Day, I would like to ask the same question. At some point does the member for Moose Jaw—Lake Centre—Lanigan believe investment profits should be subject to tax?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, if anyone wondered whether my colleague for Regina—Lewvan had socialist leanings, it has been cleared up right now.

When did it become a bad thing to allow Canadians to reduce their tax burden? When did it become a bad thing to allow Canadians to invest in a vehicle that lets them keep more of their hard-earned money? When did it become a bad thing to allow Canadians to keep their money in a tax-free vehicle? They should not be penalized. Socialists would like to do that, but we do not.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I am very pleased to rise today in the House to talk about something that is particularly dear to my heart, and that is reducing inequalities. When it comes right down to it, that is what Bill C-2, an act to amend the Income Tax Act, is all about.

Obviously, I do not consider Bill C-2 to be the final destination. There will always be work to do when it comes to reducing inequalities, but this bill is a step in the right direction, a step that the government took at the earliest opportunity. This bill is a step in the right direction because it makes our income tax system more progressive by creating a new 33% tax bracket for incomes over $200,000, while lowering taxes for over nine million Canadians who earn less than $90,000.

As a forward-thinking individual, I cannot help but be pleased to see our tax system becoming more progressive through the creation of a new tax bracket under this bill. However, I am also pleased because this bill repeals what can only be described as a regressive measure implemented by the previous Conservative government that increased the maximum TFSA contribution from $5,500 to $10,000.

I do not expect members to take my word for it that this tax measure was regressive. You could listen to economist Rhys Kesselman, from Simon Fraser University, who helped lay the foundation for the introduction of the TFSA in 2009. This is what he had to say about the previous government's proposal to increase the TFSA limit to $2,000.

Before dropping the second shoe, the government should reconsider its pledge to initiate a tax change that would impose a fiscal straightjacket on future administrations that undercuts tax progressivity and increases income inequality.

There are two interesting concepts in this short quote from Mr. Kesselman, who, I remind members, is credited with helping to bring in the TFSA. An increase in contributions would have have imposed a fiscal straitjacket on future administrations, while undercutting tax progressivity and increasing inequality.

I will come back to the concept of a fiscal straitjacket, but first I want to look at how increasing the TFSA undermined our tax progressivity and drastically increased income inequality.

I have heard my Conservative colleagues on the other side say over and over, quite rightly, that 60% of TFSAs are held by individuals with incomes below $60,000. However, this statistic overlooks the fact that, often, the people who invest in a TFSA have a spouse with a substantially higher income. My Conservative colleagues should know that TFSA rules allow a spouse to contribute to both their own and their lower-income spouse's TFSA, up to a total of $11,000 under the former regime, before the Conservatives' increase.

In Kesselman's view, if you want to have a clearer picture, it is important to look at households, not at individuals. If you look at households, including single-person households, that contribute to TFSAs and have an income of less than $60,000, they represent 52% of TFSA holders, but they hold only 31% of all the money invested in TFSAs. In contrast, 4.4% of households that contribute to TFSAs and earn $200,000 or more hold 15% of all TFSA balances.

It should also be noted that the returns generated by families with the highest incomes are higher than those of other taxpayers, and on that particular issue, I would again like to quote Mr. Kesselman, who, I would remind the House, is the intellectual father of TFSAs in Canada:

Upper-income families enjoy TFSA tax savings to an even more unbalanced degree than those statistics might suggest: they typically generate higher investment returns on their TFSA assets than lower earners, and they avoid the higher personal tax rates that would otherwise apply on the income from assets shifted into their tax-free accounts.

Lastly, it is interesting to also note that, proportionally, not all Canadians contribute to their TFSAs equally. While only 29.2% of Canadians who earn under $50,000 contribute to their TFSA, 99% of Canadians who earn over $150,000 contribute.

It was not surprising, therefore, that the former parliamentary budget officer, Kevin Page, had something to say about the Conservatives' plan to increase the TFSA contribution limit. He wondered if it would really generate any savings for the middle class and low-income households. He pointed out that one would have to be pretty comfortable to be able to set aside $11,000 in a TFSA at the end of the year and that the priority should be investing in infrastructure, since the larger issue was growing the economy.

I could not agree more with Mr. Page, and clearly, Canadians agreed with him too. They chose growth and a more just and accountable society.

It should come as no surprise that when our American neighbours added TFSAs to their tax regime, they limited contributions to $5,500 and made TFSAs off limits to single individuals whose income exceeds $116,000 and households whose income exceeds $183,000.

Getting back to the concept of the fiscal straitjacket that Mr. Kesselman described, according the the parliamentary budget officer in a study published in February 2015, raising the TFSA limit would cost the federal government $14.7 billion a year in lost revenue by 2060. The provinces would lose $7.6 billion a year.

Interest rates are low, we need to stimulate the economy, and there is a pressing need to invest in our communities and our infrastructure, yet surreally, the Conservatives bemoan our government building up a deficit that will put future generations in debt while simultaneously tearing their hair out arguing in favour of maintaining an irresponsibly high TFSA contribution limit that will benefit only the wealthiest 10%, which would be an abdication of fiscal responsibility on the part of the government. It is utterly surreal.

I can understand why they are so attached to this policy. It was a hat trick for them. It was the triple crown. Not only did this irresponsible policy allow them to deprive the government of significant revenues, which then allowed them to justify its disengagement, but it also gave an undue and outrageous advantage to the wealthy, whose interests the Conservatives have always cared deeply about, as we know. That may be understandable, but it is not defensible.

Bill C-2 makes our tax system more progressive by a adding a tax bracket and giving back to nine million Canadians. It also undoes one of the previous government's most regressive and irresponsible policies. Overall, Bill C-2 is a step toward reducing inequality in Canada. At the beginning of my speech, I said that this issue is especially important to me. It may even be the reason I entered politics. It is important to me because I am seeing a worrisome trend in Canada. Since World War II, there has been a steady increase in worker productivity, but compensation has not kept pace. The gap between productivity and compensation keeps getting wider.

Since the 1980s, the disposable income of the top 1% of income earners has increased by 77%, while that of the 0.01% at the top of the pyramid has grown by 160%. During that same period, the other 90% have seen their incomes increase by only 19%.

In Canada, roughly 70% of all net worth belongs to 20% of the top income earners. Historically, economic growth is more robust when the trend leans toward income equality. From the 1950s until the 1970s, in developed countries, lower income inequality went hand in hand with high economic growth. The IMF was able to quantify the gains to be made by narrowing income gaps. I would like to share a quote:

If the income share of the top 20 percent increases by 1 percentage point, GDP growth is actually 0.08 percentage point lower in the following five years, suggesting that the benefits do not trickle down. Instead, a similar increase in the income share of the bottom 20 percent (the poor) is associated with 0.38 percentage point higher growth.

For all these reasons, I will enthusiastically support Bill C-2, because I believe that prosperity in Canada must be inclusive and that sustainable growth is inevitably dependent on equitable growth.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, the member for Louis-Hébert talked a lot about reducing inequalities. That is quite commendable.

However, I wonder whether he knows that two out of five Canadians spend more than 30% of their income on housing and that more than one out of five Canadians spend more than 50%. One-third of Canadians spend far too much on housing, and we are not talking about people who earn $89,000 a year or more. We are not even talking about people who earn $40,000 or $50,000. There is nothing in this bill for these people.

If it is so important to reduce inequalities, why did the federal government focus on bills that help people who earn more than $89,000 instead of people who are living in poverty? For example, why does the government not immediately introduce bills to lift seniors out of poverty instead of this bill?

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I would like to thank the member for Hochelaga for her excellent question. I share her concerns in that regard.

In my riding, I believe that 42% of the population spends more than the recommended 30% of income on housing. That being said, we need to look at the government's overall approach. Yes, Bill C-2 lowers taxes for the middle class, raises them slightly for the wealthiest members of our society, and does away with the previous TFSA limit, which in my opinion is a very good thing. However, the budget will soon be tabled, and we are committed to introducing the new Canada child benefit, which will be more generous and progressive and, according to the Library of Parliament, will lift 315,000 children out of poverty.

We are also committed to investing in social infrastructure, including affordable housing and social housing, to ensure that as many people as possible have quality of life and to reduce inequalities in Canada. That is my answer to my colleague.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, there is a clear difference between all three parties in this House. New Democrats ran their campaign and their platform on really two or three main things. It was a $15-a-day day care that was clearly not costed out, and a $15-an-hour minimum wage they proposed that was for less than 1% of Canadian workers.

What the Liberal plan offers is real change in tax relief for middle-class Canadians, with a tax cut. More important, the Canada child benefit would put money back in the pockets and hands of families that need it the most, not like the universal child care benefit that the NDP and the Conservatives both supported, which gave the same cheques to millionaires equal to those who needed it.

There is no question that the Canada child benefit would be better for nine out of ten Canadian families. I ask my hon. colleague if he could talk about the impact that the Canada child benefit would have on his riding.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I would like to thank my colleague for his question.

I think that we need to look at the government's approach as a whole, in a holistic way. Yes, there is the tax cut set out in Bill C-2, but we have also committed to introducing the Canada child benefit, which will lift 315,000 children out of poverty. We did the math for my riding, and this benefit will lift approximately 1,000 children out of poverty.

To come back to the previous question about seniors, members need to think about our government's commitment to increasing the guaranteed income supplement. It would have been impossible for the NDP to keep this type of social commitment because it also made a commitment to balance the budget and achieve a zero deficit no matter what the cost.

I think that we have the best approach, a more progressive approach. Bill C-2 may not be the final destination, but it is certainly a step in the right direction.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Speaker, changes to the Income Tax Act as proposed by the new government are a major concern for entrepreneurs and professionals from coast to coast to coast.

These are the people who drive our economy, the small business owners who have taken a chance in their life, and through their hard work are now being rewarded. Now the government has taken the initiative out of the most ambitious people in our country, like the doctors who have studied for years, have made huge sacrifices, and have built up huge debt, knowing there was a reward for them at the end of the day.

Last week, I went to a young optometrist in Saskatoon. She was just starting her career. She is under 30 years of age. The professional spent the better part of her twenties in school. She graduated with a mountain of debt. This was a concern. However, at the same time, this young professional was confident that over time she could make it up.

Now we are not too sure about this young optometrist. With this plan of more taxes for higher income earners, we are discouraging success and are actually punishing those who are high achievers in this country.

Saskatoon will be the home of a much-needed children's hospital. This has been a dream of ours and our province of 1.2 million for decades. Many families in our province were forced to send their sick children to centres like Calgary, Edmonton, Toronto, and even to Minneapolis, Rochester, and New York.

We now have the opportunity in our province to have the sick children stay at home and be well attended to. Construction has started on this project in the Saskatoon area, and optimism is very high. However, there is a legitimate concern about where the doctors will come from to feed this fabulous facility.

This is a specialty area, and it is competitive for these specialists. Not only do we compete with other provinces like Alberta, B.C., and Ontario, but with these proposed changes in the Income Tax Act, we will be losing our professionals to other parts of the world. What good is the bricks and mortar, if we cannot staff this facility with highly qualified professionals? How can we be competitive with this extra burden on those who are in this tax bracket? They will simply pick up and leave Saskatchewan, and leave Canada.

This is called “brain drain”. This Liberal tax plan will certainly lead to an exit of professionals right out of this country. I have talked to many doctors and dentists who employ a lot of people in our city. They do not need to be putting in extra hours, knowing they will be paying more taxes to the government. Many have said they will simply cut back on their hours. Instead of serving the public for six or even seven days a week, they have all said they are going to cut back their hours.

Professional athletes already have apprehension about playing in Canada. Let us take the NHL players in Ottawa, Montreal, or Toronto, along with Calgary, Edmonton, and Vancouver. With higher taxes, they can make the decision, telling their agents when they are free agents, that they simply do not want to play in Canada. When free agency hits, they have the option. They can actually put a no-trade clause into their contract not to be based on a Canadian team.

The reason is simple. Hockey is a business, and players know they only have a small window of opportunity to make their living. Taxes matter in this age group. It is no coincidence that if the playoffs were to open today in the NHL, not one Canadian-based team would make the NHL playoffs today.

Yesterday, the President of the United States made a reference right in front of the Prime Minister, asking where was the Stanley Cup. Well, guess what? The cup is in the President's home town of Chicago. Do we think that is a level playing field? It certainly is not.

How about the members across from me? Could it be another 50 years before Maple Leaf fans can plan a Stanley Cup parade down Yonge Street with this tax plan? The same goes for the entertainment business. Canada's most talented people today come from a zip code instead of a postal code, and this is going to make it worse.

I can tell the House that Canadian charities are very concerned with this Liberal tax plan and this bill. High-wage earners over the years have been very generous with their money in our communities in Canada. If not for this group, many social organizations would not be around today. These are the people who dig deep for charities so they can provide the necessary programs needed in our communities. I have sat on many charities in my city over the years, and if it were not for some of these professionals, organizations would have closed their doors long before now. Charities that do not need federal handouts can continue operations because of this class of people who give back to the community in many ways. We have all been in offices that have local art on the walls. That is because people give back to their communities so that others can enjoy their lifestyles and passion.

When the Liberals originally introduced this new system of tax breaks, they promised it was going to be revenue neutral. Four months later, though, the finance minister conceded in the House that this plan is not revenue neutral at all. A recent report from the parliamentary budget officer estimates that the cost could actually be closer to $1.7 billion. We already know that the government has blown by its $10-billion deficit per year that it promised during the election campaign. We are at least at $18.4 billion, and climbing every day. Conservatives cannot wait for the budget to come down to see the number on March 22.

I ask, who is going to pay for this? It will have to be repaid at some time. Is it our kids or our grandchildren who will pay for this Liberal tax plan? It is a broken promise because it was grossly miscalculated. I might add that it will completely eliminate the $1 billion surplus that the Conservative government handed over to the Liberals last year.

The Conservative government, and rightfully so, believed in the concept that people need to save for the future, a future that requires at one point or another taking money out of the popular TFSAs for an emergency. This was designed to take the burden off the federal government so that it could redirect much-needed money to other programs in this country. Now there is no incentive at all to put money away. The very popular TFSAs have been sliced back. Many families and seniors in my riding of Saskatoon—Grasswood are not happy at all with this new Liberal tax plan.

The report yesterday said it all in The Globe and Mail. It stated, “The more we get to know TFSAs, the more they demand attention as a vehicle for retirement saving.” The previous Conservative government introduced this program. It was a great tool for investing, even for a first home.

Canadian household debt is at an all-time high today. This country lost 2,300 jobs last month, instead of the expected gain of 10,000. Canada's unemployment rate is at 7.3% today. That is the highest level in three years. It is only going to get worse with this new Liberal tax plan. I will not support Bill C-2 today.

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

Mr. Speaker, I find it truly amazing that a Conservative would attempt to lecture a government on the idea of a balanced budget let alone a surplus. Let us get a couple of facts on the record.

There was no surplus. Only in the minds of the Conservatives can they possibly twist the truth of reality and attempt to give the impression that there was a surplus budget. It is bogus. There was no surplus. While in government, the Conservative Party added $150 billion to Canada's debt.

The Conservatives have demonstrated over the years that they do not have the capability of delivering a balanced budget let alone a surplus budget. The record at the end of this fiscal year will clearly demonstrate that to be the case.

The only party that has delivered on surpluses and balanced budgets is the Liberal governments of Jean Chrétien and Paul Martin, and in time we will see balanced budgets into the future.

Will the member not at least acknowledge that history will clearly show the Conservatives have failed at balancing budgets, and that only a Liberal government has delivered on such a thing?

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Speaker, it is Friday in the House and we will not be here next week, so I guess the hon. member from Manitoba needs a history lesson. We did give the Liberals a surplus of over a billion dollars.

We are really excited for the new government because of this bill, because we know it is $30 billion. We have talked about the $150 billion deficit of the Liberal government. We will have a history lesson with the Liberal government when it is done, and four years from now Canadians will realize the mistake they made on October 19.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Speaker, I appreciate the kind words from my colleague. If the member opposite wants to come over to this side of the House, I have the government's finance ministry website on my iPad and I am more than happy to show him the surplus. If you would like to come over, there is a seat right next to me, and I will show you those. Then you can see it for yourself and you can dispense with those words.

We on this side of the House know the value of giving people more money in their pockets to spend on their priorities. These people work hard. The taxpayers work for it. They deserve to spend their money as they want, and they should be able to do so without the government's hands in their pockets continuously soaking them for everything they have. That puts people into poverty and it does not allow businesses to invest. It is a terrible cycle we are getting into.

My friend from Saskatchewan mentioned investments with respect to a charity. I hope he can talk more about that because it is important.

I would also like him to talk about how maybe these Liberalnomics hurt jobs. The jobless rate is at its highest in three years. I hope my friend from Saskatoon can comment more on that.

[The Assistant Deputy Speaker, Liberal, Anthony Rota]

Order, please. Before we go on to the hon. member for Saskatoon—Grasswood, I want to remind the members that they are speaking through the Speaker. If I come and sit next to you, everything will shut down, and I do not want that to happen.

The hon. member for Saskatoon—Grasswood.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Mr. Speaker, as I said in my speech, we have waited decades for a children's hospital in our province. Our province has rallied around this facility. We have sent our sick children out of the province for far too long. The people in this community of Saskatchewan , 1.2 million people, have rallied around this facility to keep this charity local. However, we are worried about the specialists needed to keep this open. We are deeply concerned.

I will also say this for charities, because Saskatchewan is one of the best at donating. Last week, the Kinsmen Telemiracle raised over $5 million on a telethon that lasted over two days. That is the charity of the Saskatchewan people. However, with this tax plan, they will not have the money to donate. What will happen to the Kinsmen Telemiracle? What will happen to the children's hospital when it has its hand out looking for money from the citizens of Saskatoon and Saskatchewan?

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, the Liberals have said over and over again that they have a plan for the middle class. They promised quick, urgent and very positive change. However, since coming into office, they have given very few details about their plan, the deadlines and the proposed targets.

Bill C-2, an act to amend the Income Tax Act, is the starting point for a plan. For that reason, I applaud the proposal to reduce the contribution limit for the tax-free savings account, known as the TFSA.

However, the Liberals added to this bill a provision to change taxation rates that will not benefit those most in need, that is, those who earn less than $45,000. The Conservatives' $10,000 limit did not make sense. When it was introduced in 2015, many analysts and economists pointed out that it would benefit only the wealthiest 30% in our society.

Who can afford to sock away $10,000 every year in a tax shelter? It is obviously not recent university graduates or new entrants to the job market. Nor is it average workers in Quebec or Canada who earn a median income of $31,000 or anyone earning less than $45,000 per year. Those people make up about two-thirds of the population.

Such a measure would cost the government a huge amount of money. Over a 10-year period, the Conservatives became adept at reducing government revenue, and increasing the TFSA limit to $10,000 was the icing on the cake. To substantiate that, I have a quote from Gilles L. Bourque, Éditions Vie Économique coordinator and Institut de recherche en économie contemporaine researcher:

...this tax advantage is a ticking time bomb for federal and provincial public finances.

...it is clear that maintaining and expanding this kind of measure flies in the face of every principle of social solidarity and fiscal fairness and will worsen every aspect of social inequality.

I have another quotation I would like to read, because I find it incredible that the wealthy are being allowed to put more and more money aside, while those most in need simply cannot do the same. Furthermore, this measure would have affected several social programs.

For instance, Malcolm Hamilton, a senior fellow at the C. D. Howe Institute, said, “Raising the TFSA limit is a short-sighted election tactic that will lead to real problems 10 to 15 years from now.”

Why? By allowing more people to set money aside tax-free, future governments would have less financial resources to pay for other national social programs, such as pharmacare, old age security, GST rebates, and long-term health care.

That is why the proposal to bring the limit back down to $5,500 makes sense, in my view. It is a step in the right direction. Unfortunately, Bill C-2 has a major flaw, specifically a change in the tax rates that makes no sense, but I hope we can correct it at the committee stage.

The current economic context is bleak. In Quebec, hundreds of Bombardier workers are going to be laid off. The weak dollar has increased the cost of groceries. Just look at the price of fruits and vegetables and the number of people, seniors, low income families, and single mothers who are having a hard time preparing meals with fresh fruit and vegetables on a daily basis.

The Liberals presented a plan to the House not to help those having a hard time making ends meet, but to help the well-off, the wealthiest in our society. One of the key measures in this bill gives a break to the second tax bracket, those who earn between $45,000 and $90,000 a year. Does the Prime Minister realize that the median annual income in Canada is only $31,000?

As a result, the first tax bracket, or nearly two-thirds of Canadians, will get nothing, nada, niet, no help, when they could use a bit of breathing room.

According to the parliamentary budget officer, almost 17.9 million people will not benefit in any way from this Liberal measure. Even worse, those with the highest income will continue to receive a generous tax credit thanks to the Liberal plan. Thus, every member of Parliament will receive an additional $679.22. I imagine that we should thank the minister for that. I am obviously being very sarcastic.

According to Statistics Canada, in my riding of Salaberry—Suroît, almost nine in ten people, which is a huge number, earn less than $50,000 and will receive next to nothing, or just a few crumbs if they earn between $45,000 and $50,000. The income of almost half the households in my riding is less than $45,000, and they will receive absolutely nothing. I am certain that most of my colleagues, like me, would prefer to give my tax credit to a cashier working in a grocery store in Salaberry-de-Valleyfield, a labourer in Saint-Zotique, or a social worker in Huntingdon, who struggle to provide services every day for the greater well-being of their fellow citizens.

We must do much better for Canadians. In recent days, we have heard a lot about the KPMG scandal, which the Liberal government did not handle very well. The CRA made a secret deal with this accounting firm and millionaires who committed fraud. Under this agreement, the millionaires will only pay their taxes, but no fines and virtually no interest. The CBC talked about an amnesty.

What message is the Liberal government sending? Tax avoidance is for those with millions of dollars in the bank. There will be no additional cost and, in exchange, the tax rate will increase slightly. However, let us keep it quiet; we are not going to tell anyone.

This Liberal plan will clearly not address the growing inequality in our society and the CRA's attitude could well contribute to it.

The NDP's proposal would give more breathing room to a large part of the population that does not have access to specific programs, such as income splitting.

Rather than reducing the tax rate for the second tax bracket, the NDP is asking the government to lower the rate for the first tax bracket by one percentage point, from 15% to 14%, for those who earn less than $45,000 a year. That would allow 83% of Canadians, those who earn less than $45,000 a year, to pay less tax and keep more money in their pockets, which is not what will happen under the proposed Bill C-2.

According to the parliamentary budget officer, nine million Canadians would benefit from the measures proposed by the NDP. It would also give a little extra help to a hairdresser in Coteau-du-Lac, an office worker in Beauharnois, or a cook in Hemmingford, for example. That is why we are in politics. We are supposed to work to reduce inequalities, so that there is less and less social and economic injustice.

The difference in cost when compared to the Liberal's proposal would be minimal, and it would be offset by a slight tax increase of half a percentage point for large corporations. That is the least that our large banks, in particular, could do. This increase in corporate taxes would even generate a surplus that could be used to develop the working income tax benefit, an effective program that increases the income of workers with low annual incomes.

Bill C-2 needs a lot of work, and I hope that the government will listen to our suggestions. The NDP is a progressive party and we are proposing realistic measures to help the real middle class, the people who truly need help.

I want to share some measures that could change the daily lives of my constituents: the national child benefit supplement, a $400 increase to the guaranteed income supplement for seniors, and the return of the tax credit for labour-sponsored funds that help small businesses in Salaberry—Suroît and Quebec.

We will continue to pressure the Liberals to follow through on the changes they announced and to work towards reducing inequalities across Canada.

I hope that Bill C-2 can be amended in committee to reflect the NDP's suggestions on taxation.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Mr. Speaker, I appreciate member's passion on the subject. However, in all honesty, I think there are some things that we need to clarify for the record.

The NDP ran on smoke and mirrors. A lot of the things in the NDP platform quite simply were not embraced or trusted by Canadians. I will go back and talk about the $15 a day affordable daycare plan, which was not costed out and which many provinces across this country were not going to buy into.

Let us talk about the $15 an hour minimum wage. Originally that was presented as a minimum wage for all working Canadians, but after clearing the smoke, it was apparent that only a very small percentage of Canadians would have benefited from a $15 a day minimum wage.

The biggest question I have for the NDP, which I have asked several times during this debate, is if the New Democrats are so passionate about protecting working-class Canadians and low-income families, why did they support the UCCB along with the party opposite, the Conservatives? The universal child care benefit gave the same benefits to those earning hundreds of thousands of dollars as to families who needed it. Why did they support that? Why did they support the UCCB as a party, when the Liberals are putting forth the Canada child benefit, a program that would benefit nine out of ten Canadian families and lift hundreds of thousands of children out of poverty? No, the NDP did not support it, but the UCCB. My question for the NDP is why?

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, we are talking about the Liberals' Bill C-2. They claim that their bill will have a positive impact on middle-class workers, but it will actually make the rich richer. Two-thirds of Canadians will not see a penny more despite this proposed tax cut.

People earning $45,000 or less per year will not benefit from the Liberals' tax cut. The Liberals are making a big fuss about this, and that is why we are standing up in the House to say that we really need to work on bringing in meaningful measures that benefit the many thousands of Canadians who earn approximately $31,000 per year.

Society's poorest people are waiting for the Liberals to spare a thought for them and do something to help them put food on the table, pay their debts, and buy prescription drugs.

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

Mr. Speaker, my constituents want us to attract more doctors, but the Liberal Party wants to take more money with this bill.

During the election campaign, the NDP leader said that a tax rate higher than 50% was a bad policy for Canadians. Today we are discussing the same policies, which the NDP support.

Can the member explain to me why the NDP changed its mind?

[Anne Minh-Thu Quach, NDP, Salaberry—Suroît, QC]

Mr. Speaker, I am sorry, but I did not fully understand the question.

I would like to come back to the TFSA contribution limit, which the Conservatives increased to $10,000. A number of economists said that it would benefit only the wealthiest 30% of Canadians, while the NDP is trying to come up with ways to help the middle class, people who are tightening their belts.

That is why we are standing up in the House today to say that the government needs to make changes that will help people who earn an average of $31,000 a year, that is, people in the lowest tax bracket.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Mr. Speaker, when the Liberals originally introduced this new system of tax breaks, they promised it would be revenue neutral. Shortly after taking office, however, they abandoned this promise. It is projected by the parliamentary budget officer that Bill C-2's changes will cost Canadians $8.9 billion over the next six years.

This gross miscalculation speaks to the government's incompetence, and the fact that the Liberals are proceeding with this legislation after admitting they have broken this promise to Canadians speaks to their integrity.

In fact, many of the government commitments seem to be falling by the wayside: a $10-billion deficit cap, consultation with opposition, openness and transparency. That is three months and three major broken promises. So much for sunny ways.

This leads to a lack of trust in the government's future plans. There is a lack of transparency with this promise. Who knows how much higher these costs will go? There is a lack of evidence or explanation for why Bill C-2's changes would stimulate economic growth and development for Canadians.

Tax breaks for the middle class are not, in themselves, sufficient to stimulate economic growth and development. It is, therefore, quite likely that more initiatives will have to be introduced.

These will require even more money from the government. This money will either have to be drawn from reduced spending on public services or from the taxpayer base. Given the vulnerable economic state of Canada, tapping further into government revenue is particularly risky for this country as a whole, and also for individual Canadians.

The government continues to move ahead with these types of long-term commitments, even amidst a struggling economy, a weakening dollar, and plummeting oil prices. Canadians are asking how much higher the cost will go. These kinds of commitments are one more chip into creating long-term structural deficits, and in turn they discourage investment and growth in a struggling economy.

Our Conservative government worked very hard every day in office to stretch every cent. We left the government a surplus and expected that to be spent with caution. It seems that work was all for nothing.

The Liberals continue signalling that they plan to run massive, long-term structural deficits, which will increase the burden on taxpayers and leave Canada more vulnerable to sudden economic shocks. Our Conservative caucus will continue to stand up for taxpayers, and press the government to approach spending in a responsible manner, to protect against risk, to ensure stability and long-term prosperity.

On the subject of changes to the tax-free savings account, all Canadians over 18 may contribute to TFSAs for all purposes, not just education and retirement savings. This makes the savings mechanism the most flexible way for all to save. It is because of this that many Canadians of all backgrounds have come to rely on the tax-free savings accounts.

We have heard from students saving for higher education, families saving to start a family, entrepreneurs saving for their businesses, parents saving for their children, and low-income seniors saving for retirement, all of whom are investing in TFSAs.

It is Canadians of all kinds of financial backgrounds too. The majority of TFSA accounts belong to low- and middle-income earners. The fact is that two-thirds of TFSAs are held by tax filers with incomes less than $60,000.

What kind of message is the government projecting when it is taking away the ability for Canadians to save for their future, while racking up massive deficits?

Why does the government continue down the path of a nanny-state approach, limiting choice for Canadians to save their own money?

These are not mandatory contributions. In contrast, the Ontario Liberal plan for a provincial pension plan is. If the argument is that very few Canadians have the ability to afford a maximum contribution, why is the member opposite so opposed to offering that choice, while in other instances forcing it upon others?

Personal fiscal responsibility is something that our government should be encouraging, regardless if it refuses to lead by example.

We are in uncertain times, with dropping commodity prices, a dipping dollar, and slowing economic growth.

Recently, the PBO released a report on the state of household indebtedness and financial vulnerability in Canadians, showing that household debt-servicing capacity continues to trend upward, while capacity to meet debt obligations diminishes.

Households now face overwhelming exposure to negative income and interest rates, and are more likely to become delinquent in debt payments.

Responsible Canadians are looking for a way to save when times are good, so they can be protected. Reducing TFSA contribution limits would reduce the abilities of real Canadians to save for retirement and to protect themselves from economic shock.

This would translate to a greater burden upon all taxpayers to support those who will be unable to support themselves. Why is the government hiding these future costs from its taxpayers?

In contrast to Liberal deficit spending, whose purposes are unclear, TFSAs provide a concrete vehicle for financial independence for Canadians. Instead of encouraging consumption, they encourage saving—promoting independent control over funds—which shields Canadians from economic shock.

The burden of economic shocks on vulnerable Canadians will ultimately fall on the overall taxpaying base if the government must step in and support these individuals. Money will come from taxpayers, or public services will be compromised for the expense of increased government financial support.

TFSAs remove barriers for all Canadians to maximize their financial positions. TFSAs are open to all Canadians over 18 years of age with valid social insurance numbers. They are simple and accessible. Anyone can contribute any amount. They encourage financial literacy and curiosity.

In fact, the majority of TFSA accounts belong to low- and middle-income earners. TFSAs allow investments—any sort of investment—deposited into them to grow tax free. TFSAs make retirement savings more accessible, simple, and compelling. If individuals do not save enough for retirement, all taxpaying Canadians will ultimately be responsible for the burden.

The government's spending plans, including its nebulous deficits, are risky. We have seen no concrete evidence for targeted growth plans. Savings will shield vulnerable Canadians from the risks involved.

Conversely, limiting savings tools will limit economic self-protection and make Canadians more economically dependent upon the government. This is dangerous, given the lack of clear economic plans and directions from the government. Government dependence will likely translate to higher taxes for Canadians across a wide socioeconomic spectrum.

In popular debate, the media, and academic research, a brain drain out of Canada is cited as a very real possibility. Most doctors, lawyers, and other skilled professionals are found in the upper tax bracket, and their departure could be very dangerous for Canada.

Progressive taxation reduces investment, risk-taking, and entrepreneurial activities, since a large share of these activities is done by high-income earners.

The substitution effect is a principle that essentially states, “I'm getting less money for each hour I work; therefore, I should work fewer hours”.

Tax avoidance activities such as reporting less income, using tax-planning techniques to reduce the tax burden, working fewer hours, or even not seeking job promotions are very real possibilities.

Progressive income taxes reduce the returns to education, since high incomes are associated with high levels of education. They reduce incentives to build human capital, the kind of investment the Prime Minister talked about in Davos, while turning his back on our resources sector.

Academic consensus among experts is that taxes on both corporate and personal income are particularly harmful to economic growth, as economic growth ultimately comes from production, innovation, and risk-taking.

The conclusion is that tax rates of over 50% will not raise revenue. Between provincial and federal income taxes for top income earners, this is what would happen under Bill C-2.

I will not support Bill C-2.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, I caught the speech a little earlier by the hon. member from Saskatchewan. I have spent some time in Manitoba and I know about the concept of meadow muffins, and we have just been delivered a big plate of them.

Let us talk about the surplus.

The Conservatives tried to balance the budget. They tried to give us a surplus. I am sure they did. However, we found out just this morning that over $1 billion of that should have gone to first nations education, and billions more should have gone to our veterans and to people waiting extraordinarily long times for family reunification. The cuts that the Conservatives applied certainly contributed to the bottom line, and they still failed to balance the budget.

Let us talk about TFSAs.

I thought the member's comment was interesting when he said that tapping into government revenues is not such a very good idea. However, that is precisely what TFSAs do. As the Conservatives' own former finance minister, Joe Oliver, at least was prepared to admit, allowing higher TFSA limits in the future will in fact de-fund the government. When asked about the impact on the ability of governments in the future to help people, the answer was, well, we will leave that to the grandkids of the member for Calgary Heritage to figure out how to square that.

Who is actually benefiting from the TFSA, except for the very wealthy? Who suffers, except for the rest of Canadians?

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Mr. Speaker, I thought that was more of a speech than a question.

I just want to say one thing. We are discussing financial figures and indices here. We are discussing true figures of economic factors. This is not about the political position that this or that party takes. This is about Canada and Canadians.

Therefore, I would say to the member that if he does not believe in the TFSA, then why is it being kept at $5,500? It is because the current government believes that it will benefit them with the Canadian taxpayers, and will benefit the Liberals in votes down the road and in their position. That is why they are keeping it, and that is why they are trying to play a double standard here.

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

Mr. Speaker, I thank my colleague, with whom I cross paths regularly at the Standing Committee on Finance.

I also want to thank him for explaining really clearly how the Conservative Party wants to protect the wealthiest members of our society, at the expense of the majority of Canadians. He did this twice. First of all, when he talked about taxation, of course, he almost seemed to suggest that what the Conservatives really want is a flat tax rate.

It is called a flat tax in English, which obviously would be paid by the lower-income earners and the middle class to compensate for the lower taxes paid by the richest.

I also want to come back to the issue of TFSAs. My Liberal colleague mentioned in his comments that only 7% of Canadians make the maximum TFSA contribution at the current limit. If the limit were doubled, the same 7% would be able to double their contribution. This would be very harmful to public finances in the long term, given that the parliamentary budget officer stated that this measure would cost nearly 0.7% of GDP, even though 0.7% of GDP was too much to spend on international aid.

How can he justify increasing the limit, knowing that it will place such a heavy burden on our public finances and undermine our ability to provide the high-quality services that Canadians expect?

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Mr. Speaker, I thank my colleague. I enjoy having him on the finance committee.

All I can say is that 11 million Canadians have contributed to TFSAs. I am not sure about the 7% figure for those who maximize to the $10,000 limit. In fact, if those figures are correct, it means we still have a major number of Canadians who have enjoyed contributing to TFSAs, and it means that it is to their own benefit to do so.

Again, we have the right to say that the majority of Canadians are with it, they like it, they have enjoyed it, and it is going to be beneficial for Canadians in the long term, if we are thinking of doing investment in the long term for our future generations.

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

Mr. Speaker, I too am pleased to join in the debate today. This is, of course, really the first substantial piece of legislation that has been put forward by the Liberals. It is interesting that we have mostly been focused on the change in the marginal tax rate and the TFSA, and I am going to spend most of my time on those two issues, but for people who might be following the debate, this legislation does have a couple of other pieces to it: charitable donation tax credits, income earned by child, income earned by a trust, and taxation of corporations and shareholders.

If our party, when we were government, had put this particular bill forward, I think the Liberals would have said we had put forward an omnibus bill. They would have asked what we were doing and they would have said it was an omnibus bill because it included six different pieces.

I recognize that within an important piece of legislation it is sometimes sensible to do things that perhaps are not that controversial and are a bit of housecleaning, so there are some more pieces to this bill. It is not an omnibus bill, although the Liberals would have characterized it as such if we had put it forward, but there are some additional pieces.

As I indicated, the focus of my comments is going to be on the two pieces that most people are making comments on today. One of my colleagues called it the bill that giveth and taketh away. I think I would describe it as a bill that represents the first broken promise of the Liberal government.

The Liberals are saying they went to Canadians and were given this mandate. They told Canadians they were going to tax the rich and give it to the middle class. The Liberals did indeed tell Canadians that particular piece of information, but what they also said when they were going to Canadians during the election period was that the change would be revenue neutral. That is broken promise number one, and it is a big broken promise. It is an $8.9-billion broken promise over six years. This is not about fulfilling a promise, but about breaking a promise to Canadians.

What is that change in the tax structure that giveth to the middle class and taketh from the rich? Apparently just today, I understand, the Prime Minister of Canada called it a tiny bit of redistribution. That is what he called that change in the tax level for people who earn over $200,000. Moving from 29% to 33%, he said, is just a tiny bit of redistribution.

If we do the math, what he has actually done is given them a 12% increase in their taxes. Going from 29% to 33% is 12%. People can make $200,000, and it is a lot of money, but people with a large family who all of a sudden are hit with a 12% hike in their taxes will find It is a pretty significant hit. Everyone's circumstances can be a little bit different, but for those people who earn over $200,000 who are maybe paying off student debt or who have other elements, calling it a tiny bit of redistribution is a bit of a fallacy.

When the Prime Minister said he was going to give the money to the middle class, he never really defined the middle class. I do not think Canadians would consider the parliamentarians in this House, who are making good money, to be part of the middle class. I think our salaries are available on a website, and we are just below the $200,000. Some of the parliamentary secretaries are probably butting up to that level. They are actually benefiting the most from this tax break. If Canadians had been told that fact, they would have perhaps been less enthusiastic. They might have asked about those people making $190,000 getting tax breaks, and not only getting tax breaks but adding to the debt of our nation by doing so.

To be quite frank, the Conservative government believed in keeping our taxes as low as possible. Conservatives always support lower taxes. To be frank, when $6 a week is being added directly to the debt of this country, I think that if I had to make a choice, I would say, “Please do not put that $6 a week onto my children. I will pay that $6 a week myself.”

There are a lot of problems with this measure, which is absolutely unsupportable from our perspective. The biggest concern is that it would create a structural deficit when we actually handed the Liberals a surplus. Wrong promises and miscalculations have created a significant problem for them. We have called this a “whoops” in other speeches. This will be a burden on our children.

Now I want to shift to the tax-free savings account. The Liberals seem to love the stick approach to getting people to do things when it comes to government programs, making things mandatory, increasing the CPP, like the Ontario government is doing. They do not like carrots. They would rather have a big government program that makes people do things. Our party believes we need to provide Canadians with the opportunity and the flexibility to make their own choices.

The Liberals talk about only the rich being able to afford $10,000. I will give the House a couple of real-life examples about why the TFSA is an incredibly important tool for Canadians and that the $10,000 contribution limit is quite reasonable.

My first example is that of a young adult who has come into a small inheritance. This young person has never been able to contribute to a tax-free savings account, having just finished school. This young adult decides to put that money into a tax-free savings account and is able to grow that investment instead of spending that inheritance right away. This individual has decided to use it for the future, and in a couple of years buys a first house. Is that an inappropriate thing to do? It is a reasonable and sensible choice for someone who otherwise would have had no options.

Many seniors are now selling their homes and moving to assisted living facilities, or to a complex that provides support. They might have made some money on the sale of their homes. They have maxed out their RRSPs, but they have room to put some of that money into a tax-free savings vehicle that will help them in the future to pay their monthly expenses.

These are just two examples of why having a robust tax-free savings account is important. I recognize that not all Canadians can put in $10,000 every year, but there are times in their lives when they could. That is the beauty of the product. It is not that individuals had to contribute $10,000 every year. There are years where people might not be able to put a penny in, and there might be some years where they could top it up to where they needed to be.

I have demonstrated today that Bill C-2, the first substantial bill to be put forward in the House by the Liberal Party, has some serious and significant flaws. It would add to Canada's structural deficit. It would not do all that much in terms of the middle class. It would take away an important tool that people have in terms of saving for their future, whether they be young or old.

I would ask that the Liberals perhaps reconsider this legislation. They have been given a surplus. I would urge them to not keep adding to the debt. We are $18 billion, we are $30 billion in deficit. Those are frightening numbers. Perhaps the Liberals should rethink their plan and look at what they are going to leave for their children and their grandchildren.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, there were some regressive themes throughout the member's speech.

I am wondering about this program of TFSAs that is based on receiving an inheritance or selling a house in order to have a windfall to use, versus a program of creating prosperity, as we are suggesting, by investing in Canada, creating jobs, and stimulating our economy with real growth. That is something we have not seen for over 10 years.

The previous government was focused on cutting services and programs to artificially balance a budget that had a one-month snapshot. It looked like it was balanced, but the next month was not. Its financial programs resulted in $154 billion of additional debt to our country. Almost half of the debt we have incurred since Confederation is owned by the Conservative government of the last 10 years.

We are trying to redress the mismanagement of our finances with a program of hope and hard work, versus divisive politics and cutting costs to try and achieve false positives. Which part of hope and hard work does the hon. member not get? Is it the hope part or the hard work part?

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

Mr. Speaker, he has again demonstrated how bad the Liberals are with math. It is quite stunning. They make this mistake in terms of what the changes to this tax rate are going to do, and then he throws out numbers that are, quite frankly, totally wrong.

When I look at the actual record of our government, I see that we paid off close to $40 billion in debt. During a global recession we did, with the rest of world, enter into some stimulus spending, but when Minister Flaherty stood up in the House during the worse global recession and talked about targeted spending, he also had a plan to get back to a balanced budget. It was executed perfectly. It was very hard to turn off the taps. He stimulated and he targeted, and during a global recession, Canada had the best recovery.

The Liberal government is heading into deficit spending for a recession we are not even in.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, earlier today I asked the member for Louis-Hébert a question about income inequality.

I could ask the Conservative member the same question, because I am wondering why the Liberal and Conservative governments insist on helping people who already have financial resources.

Take the TFSA, for example. In my riding of Hochelaga, most people do not even have enough money to pay their rent, so how can they put a few dollars in a TFSA? These people need help.

Why is priority not given to investments that will help people out of difficult situations and address inequality, rather than to helping those who are not so badly off?

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

Mr. Speaker, what the member is failing to recognize is the scope of things our government did. TFSAs were one tool.

A government has a responsibility to help all citizens and to provide the tools and opportunities for their success. Certainly we did many things for the people who have challenges in their lives, whether it was the biggest increase to the guaranteed income supplement or the many measures we brought in to help those with disabilities or the 130 tax cuts that had a positive impact or the GST going from 7% to 6% to 5%.

What I fail to realize is why the NDP has such an objection to providing a tool that will allow people to move forward and be self-determining in terms of what they are doing and how they are doing it. Instead it always wants the government-knows-best route and the government has to run a program. It does not want to give tools to Canadians. It wants to make sure we have a big, bureaucratic government program to do it.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, I rise in opposition this afternoon to Bill C-2, an act to amend the Income Tax Act.

Bill C-2 would implement the so-called Liberal middle-class tax cut. The biggest problem with that so-called Liberal middle-class tax cut is that it does not actually cut taxes for middle-income Canadians. I will get to that in just a minute.

Bill C-2 would reduce the income tax rate from 22% to 20.5% for Canadians earning less than $200,000. It sounds pretty good on the surface, and I guess during the election campaign a lot of Canadians thought it sounded pretty good, but, like everything, the devil is in the details. What does it actually mean? How much are Canadians actually going to save? The answer is not a lot.

Take, for example, a Canadian who earns between $62,000 and $78,000. How much would that Canadian save under the so-called Liberal middle-class tax cut? The answer is about $117 a year or $2.25 a week. What does $2.25 get someone in Canada these days? I think a person would be lucky to get a double-double at Tim Hortons.

What about someone who is making $48,000 to $52,000? How much would that individual get back by way of the so-called Liberal middle-class tax cut? It would be $51 a year, or less than a $1 a day. That person would be lucky to to get a doughnut or a muffin at Tim Hortons in the morning for less than $1, but that is what the Liberals are offering Canadians earning $48,000 to $52,000 a year.

How about Canadians who earn $45,000? I would say that is pretty well smack dab in the middle of the middle class. How much will get under the so-called Liberal middle-class tax cut? The answer is zero, zip, nada. As I say, the biggest problem with the so-called Liberal middle-class tax cut is that it does not cut taxes for middle-class Canadians.

What is the cost of the so-called Liberal middle-class tax cut? The Prime Minister, during the election campaign, went all over Canada with his sunny ways and blue skies, saying it would be revenue neutral. Then barely after the ballots were counted, the Prime Minister had his finance minister, because I guess he did not have the courage to do so himself, say it would not be revenue neutral.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Whoops.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Whoops, it would blow a $1-billion hole in the deficit. I repeat, $1 billion.

Then we just found out from the parliamentary budget officer that, no, it will not be a $1-billion hole, but more like a $1.7-billion hole in the deficit. That is on top of the billions and billions and billions of dollars the government keeps on digging as it blows through the $1-billion surplus the previous Conservative government gave it.

Who is going to bear the burden of the so-called Liberal middle-class tax cut? We guessed it: middle-class Canadians. In order to pay for the so-called Liberal middle-class tax cut, the government is going to roll back TFSAs, the tax-free savings accounts, the most flexible investment mechanism available to Canadians.

It would roll back the opportunity for students to save for higher education, roll back the opportunity for families to save for their children, roll back the opportunity for entrepreneurs to save for their small businesses, and roll back the opportunity for seniors to save for a later day. That is what the current government wants to do. The Liberals want to roll back TFSAs from middle-income Canadians.

The frightening part is that the Liberals are just getting started, because the Prime Minister and members opposite keep talking about boutique tax credits. The Liberals effectively want to roll back all of the tax relief that the previous Conservative government provided Canadians. Canadians on average got back $6,600 in tax relief. All of that is in jeopardy because of the Liberals' so-called middle-class tax cut.

I heard one of my colleagues say “smoke and mirrors”. I would say that the Liberal middle-class tax cut is really a Liberal middle-class tax cut fraud. That is what it is.

The so-called Liberal middle-class tax cut would do absolutely nothing to give back back to hard-working Canadians who work hard every single day in order to move ahead. It would give them back absolutely nothing. The so-called Liberal middle-class tax cut would do absolutely nothing. In fact, it would take away the opportunity for hard-working Canadians to save and invest. On top of that, it would burden middle-class Canadians with billions of dollars of additional debt that other middle-class Canadians would in the end repay.

It is absolutely essential and imperative for the sake of middle-class Canadians that Bill C-2 be defeated.

[Marwan Tabbara, Liberal, Kitchener South—Hespeler, ON]

Mr. Speaker, I thank the hon. member for his quite amusing and want to point out a couple of things he said.

He said that Canadians thought it was a good idea to vote for the tax cut that lowered taxes for the middle class from 22% to 20.5%. It was a good idea, and that was what Canadians voted for. That is one.

Another thing is the member mentioned the word “fraud” in his statement. I think it is fraudulent when they give a child benefit plan and then during tax time, they claw it back in taxes.

The member mentioned a lot of examples of Time Hortons, saying that coffee is the only thing people could get from the tax cut. I will give an example of a single mother. If a single mother is earning $45,000 and raising two children on her own, she would receive, under our child benefit plan, almost $2,000 more than under the Conservatives' plan. If she is raising two children, she would get almost $4,000 more, and our plan would be tax free.

Does the hon. member not see that our child benefit plan would help the middle class and the single mother?

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, a Canadian earning $45,000 a year would get zero dollars from the Liberals' so-called middle-class tax cut plan.

The fact is we have nothing to learn from members on that side of the House when it comes to giving Canadians tax relief. Our government over 10 years in office cut taxes of every shape and size. We cut taxes for small businesses, for working families, for students, for entrepreneurs, and for apprentices. Overall, our government cut taxes not once, not twice, but more than 140 times.

That resulted in the largest tax relief afforded to Canadians in more than 50 years. That is a record that we are proud of on this side of the House, and we are going to fight and work hard to defend taxpayers against the tax-and-spend ways of that side of the House.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Mr. Speaker, I want to commend my colleague for a wonderful speech which, as my other colleague on this side of the House said, was very entertaining. It certainly was entertaining, but it was also very informative and very accurate.

I have a lot of respect for the wisdom of my colleague and I would like him to shed some light on this.

We have heard a lot of talk from both sides of the House about deficits. There is a deficit projected this year in the upcoming budget on March 22 of close to $30 billion. In previous governments, and in our government, we did have deficits. We think there was a deficit for a reason. I am not sure about this current deficit being projected at $30 billion in 2016.

I wonder if my colleague could shed some light on the difference between the projected deficit we will have this year and deficits of past governments.