Mr. Speaker, you will understand that having just learned of the sudden and dreadful illness that has afflicted our leader, we are all, and particularly those of us who are members of the Bloc Quebecois, deeply saddened, not to say in shock. I can only hope that the Leader of the Opposition will make a speedy recovery.
The Bloc Quebecois is opposed to Bill C-59, an act to amend the Income Tax Act and the Income Tax Application Rules, because of certain measures it introduces. We are not, however, opposed to the following provisions of Bill C-59. First, the permanent renewal of the provision under which money accumulated in an RRSP can be used to finance the purchase of a first home. Second, the measure increasing the value, in many cases, of the charitable donations tax credit. The Bloc Quebecois is in agreement with this last measure, as it recognizes the contribution made by charitable donations to the well-being of the community.
At the present time, taxpayers are entitled to a tax credit equivalent to 17 per cent of the first $250 of charitable donations and a tax credit equal to 29 per cent on charitable donations over $250. The bill before us increases the total value of the tax credit for charitable donations, while lowering the threshold from $250 to $200.
The third measure that we do not object to is the one that permits a tax deduction for contributions into mine reclamation funds by businesses in the mining industry in the year in which these contributions are made. Such funds are used to cover the costs incurred when mines are shut down.
However, as a spokesperson for seniors' associations and organizations in Canada, I have undertaken to ensure that the social programs review not be reduced to simply making cuts across the board in programs designed to protect the disadvantaged, and the aged in particular.
The Bloc Quebecois denounces the fact that, over the next three years, the federal government will take half a billion dollars from seniors with this reduction in the age tax credit.
The National Advisory Council on Aging reported the following regarding the personal disposable income of the elderly: in 1989, the average income of unattached senior citizens 65 and over was $16,316, as compared to $23,080 for their counterparts under 65. An unattached senior citizen is a person who lives alone or in a household in which he or she is related to no other member of the household.
In 1992, the average income in unattached senior citizen households was $18,434, whereas that for other unattached persons was $25,039. Nearly 21 per cent, or 625,000, of Canadian senior citizens are considered as low income. The percentage of low income elderly is always higher than in the general population.
On March 9, I rose in this House and asked the Minister of Human Resources Development this question:
By making alarming statements on the old age security system, is the minister preparing to hit seniors with a considerable cut in their old age security pensions?
By way of an answer, the Minister of Human Resources Development and Minister of Western Economic Diversification simply said that he wanted to "ensure that there will be a stable, effective, fair, honest system for seniors in the future and to make sure that this country can pay for it".
Allow me to wonder about the meaning of the word "stable" used in his reply in relation to seniors, as some tax provisions in Bill C-59 create a climate of insecurity for seniors.
On September 28, I asked the Minister of Human Resources Development another question concerning programs for seniors:
Does the minister still intend to slash programs for seniors in order to finance other federal government programs?
The minister's reply was this:
Mr. Speaker, it never was our intention, it will not be our intention, la réponse est non .
The next day, September 29, I rose again in the House of Commons to say this to the Minister of Finance:
The Minister of Finance turns a deaf ear to public opinion and is using current consultations to deflect any questions. Senior citizens have often saved for years to have a decent income in their old age-
The government wants to change the rules in the middle of the game. Although the minister has been stalling for several days, he will have to make a decision. Seniors hope he will select the only fair option: no taxation of RRSPs.
Bill C-59 clearly penalizes those most in need. Seniors have worked hard all their lives. We should be grateful to them for being pioneers.
In the last budget, the federal government decided to reduce the age credit. All taxpayers aged 65 and up can apply for a tax credit equal to 17 per cent of $3,482 at the federal level and to 20 per cent of $2,200 in Quebec. This credit is non-refundable, that is, it applies to the tax payable and there can be no refund on the excess portion.
The credit reduces federal income tax by about $610 a year for all seniors who have to pay income tax. In most provinces, including Quebec, this credit also reduces provincial income tax. The combined reduction of federal and provincial income tax averages about $950; in Quebec, it is about $1,050: $610 in federal tax and $440 for Quebec.
The change made by the latest budget would reduce this credit for seniors whose net income exceeds $25,921, the current threshold for other income-dependent credits. This threshold will be indexed to the annual increase in consumer prices over 3 per cent. The credit will be reduced by 15 per cent of an individual's net income over $25,921 and will be completely eliminated when his or her income reaches $49,100.
This measure will be phased in over two years. In 1994, the reduction will be half the amount calculated and the total reduction will apply starting in 1995.
According to the finance department, this measure will affect 800,000 out of 2.6 million seniors, including 600,000 seniors whose income is between $25,921 and $49,134 and 200,000 whose income is over $49,134.
Although the finance department estimated that the credit cost the federal government $1.3 billion in 1991, the expected savings are as follows: $20 million in 1994-95, $170 million in 1995-96 and $300 million in 1996-97.
By tightening the program conditions for seniors, the government is just lowering their income and making them feel insecure.
Furthermore, the government still stubbornly insists on penalizing seniors by proposing to install voice mail systems to answer inquiries from seniors. On May 10, I asked the minister responsible for seniors about using voice mail to answer inquiries from seniors. The minister simply told us about how fast the proposed service was. I explained that many seniors were reluctant to use this type of service, as the representative of the seniors' federation said clearly on their behalf. At the beginning of the period when we present petitions, I will have several petitions to table on this subject.
On May 11, 1994, I raised the issue again by asking this question in the House:
-why does the federal government insists on attacking senior citizens, considering that most of them find it very difficult to deal with a system that is so impersonal?
The minister's response was both disarming and unacceptable. He said that the program would be more efficient and personalized, and that it would provide better service to seniors. The implementation of a centralized telephone answering system using voice mail to answer every request for information from seniors regarding government services will have a major impact on the quality of services provided to these people.
The Liberal Party was the first one to oppose cuts affecting programs for seniors. The government did not keep its promises. After targeting the age credit, cutting into old age pensions, scaring seniors with the announcement of a review of the Canada Pension Plan, the government now has the audacity to try to tax RRSPs. Every available source of income for seniors will be adversely affected and the federal government does not guarantee anything any more to people who saved money throughout their lives to have decent retirement incomes.
This fear among seniors is prevalent right across the country. I recently met with a delegation representing various associations for seniors, and I was told about their concerns regarding the government's proposed cuts to seniors' programs. I am referring more specifically to the old age pensioners' association, which was represented by its president, Mr. Grabke, its director of public relations, Mr. Ben Swankey, and its chairperson, Mrs. Marjory Kingsbury.
This association is the oldest organization in English Canada and has nearly 10,000 members in about 100 groups throughout British Columbia.
The position of the seniors in these groups was expressed as follows by their representatives.
"The position of seniors is that our generation made a lifelong contribution to building our country and we believe strongly that Canada should continue to provide a measure of security for seniors in their declining years".
On December 1, here on Parliament Hill, I also met representatives of the coalition of seniors for social equity. The association which has a membership of about 500,000 senior citizens, submitted a brief on the income of seniors: Myth or Reality. The coalition expressed the need for wide ranging consultations and planning, involving both government and seniors groups, before any changes were made in the old age security program.
Mr. André Lécuyer, a spokesman for francophone seniors, stressed that it was important to give people time to plan and adjust to changes in the system. According to Mr. Lécuyer, the public had been led to believe that the government could save more money than it does now, by cutting income security programs for seniors.
The spokesman for the coalition and president of the Federal Superannuates National Association, Mr. Claude Edwards, said during this press conference that they were not prepared to sit idle at a time when the very foundation of their superannuation plan was cracking. He said it was like buying insurance during one's working life and, upon retirement, being told by the insurance company that the policy had been cancelled and the money was no longer available. Why tax seniors?
And what about family trusts? According to some tax experts, wealthy Canadian families use family trusts as a special tax planning tool. Assets in trusts are not subject to capital gains tax for several decades, which means that these families are able to protect part of their family inheritance from one generation to the next. The family trust system introduced in 1972 by the Trudeau government, provided for the disposition of assets in trust after 21 years, which means in 1993, for instance, in the case of trusts created before 1973.
The Bloc Quebecois has nothing against the principle of family trusts but objects to their use as tax shelters. For instance, the Bloc Quebecois objects to the carrying forward of capital gains tax to the next generation. Furthermore, we want the government to reveal the figures on the value of assets and family trusts and the amount of tax revenue lost by deferring capital gains.
Why is the government so hard on the most vulnerable in our society who have worked all their lives and deserve a decent quality of life?
Bill C-59 is unacceptable in its present form because, as a result of certain measures introduced in this bill, the most vulnerable in our society will be penalized.