Evidence of meeting #13 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was rate.
A recording is available from Parliament.
General Director, Tax Policy Branch, Department of Finance
About 60% of those maximizers have incomes less than $60,000.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
I'd just like to talk about the second income tax bracket, because you brought up a very good point, and I did miss the exact percentage. What percentage of tax filers are actually, effectively, not paying tax?
General Director, Tax Policy Branch, Department of Finance
Thirty-five per cent.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thirty-five per cent. Effectively, when you go from the first tax bracket, if I remember my old CICA days, to the second tax bracket, as you said, you tend to lose a lot of the credits and benefits that are available for, say, low-income Canadians. Is that correct?
General Director, Tax Policy Branch, Department of Finance
Yes, that is correct.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Effectively, it would make a lot of sense, from a tax standpoint, to reduce that second income tax bracket because, in my view, to cut that second income tax bracket benefits those middle-income families who may not qualify— say, if it's from income-tested means, or so forth—for those benefits or credits that are available for low-income Canadians. You don't have to comment because it's more of a statement.
Conservative
General Director, Tax Policy Branch, Department of Finance
Roughly 11 million.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
Eleven million Canadians have opened TFSAs.
I just want to confirm that I'm clear on this. The rule of TFSAs is that if you don't use a portion of them, they accumulate, and you can use them anywhere down the road. Is that correct?
General Director, Tax Policy Branch, Department of Finance
That is correct.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
A person contemplating saving money once they're in their job maybe for 10 years, and going into the latter part, I think the demographics makes sense, in terms of maximization. I think a lot of Canadians—and I'll editorialize here—have the goal of saving money in TFSAs, by 11 million Canadians saving in them or having opened them. I'd just like to clarify the numbers for the middle-class tax cut. My colleague verified that you agreed with 75¢ a day per individual in a couple situation would be the average savings. Is that correct? I didn't hear you say that was correct.
General Director, Tax Policy Branch, Department of Finance
I haven't made the calculation myself.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
You divide the number by 365 days in the year. That's how we get to that math.
Is that correct?
General Director, Tax Policy Branch, Department of Finance
I assume that you did the calculation correctly. I can't confirm because I haven't done it.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
Okay, so 75¢.
And on the individual side, I did the math, of $330.
Is that the number you said was the average for a single individual?
Conservative
Phil McColeman Conservative Brantford—Brant, ON
It's 90¢ per day.
Could I have you confirm that is correct?
General Director, Tax Policy Branch, Department of Finance
You want me to do the calculation and confirm?
General Director, Tax Policy Branch, Department of Finance
It looks like 330 divided by 365, in all logic, is below a dollar.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
—330 divided by 365 is 90¢ a day.
Currently, there's a whole suite of tax changes that are occurring in the budget documents. I'm not here to ask you specifics on those because I know we're talking about C2, but it does relate to C2. As my colleague said over here, he brought up the child tax credit, which he used.
Is your department right now considering how families will end up or individuals or couples, the whole mix of the demographic, and how this will affect all of the changes made, meaning the taxes that are taken away that the budget has proposed and the new credits that are given, along with the changes in C2? Have you looked through the math in terms of whether this will mean more income or less income for certain categories of Canadians?
General Director, Tax Policy Branch, Department of Finance
We do have a calculation, a number here.
If you take the new Canada child benefit into account, combined with the middle-class tax cut, and also take into account the repeal of the family tax cut and of the children's fitness tax credit and arts tax credit with it, all that net would provide about $14 billion in net benefit over the 2015-16 to 2020-21 periods to families with children.
Conservative
Phil McColeman Conservative Brantford—Brant, ON
That divided by different amounts, depending on your income level—even though we can't define what middle class is from a taxation point of view—would break down differently on the different math scales. Correct?
I don't need you to answer that.
I'd like to use the last minute of my time, Chair, to introduce a motion. My motion is:
That the Committee invite the Honourable Bill Morneau, the Minister of Finance, and officials from the Department of Finance, to testify about the Main Estimates 2016-17 on or before May 20th, 2016.
Mr. Chair, I put that motion on the floor.
