Mr. Speaker, I welcome this opportunity to support the amendment standing in the name of the hon. member for Mercier, whose purpose is to eliminate one of the proposals in the bill before the House today which would involve a considerable reduction in the age credit, the tax credit for seniors. As you know, the citizens of this country are entitled to special tax relief on the basis of age. This age credit is currently set at $3,482, which works out to a reduction in federal income tax of about $610 annually for all tax-paying seniors. Combined with the credit allowed by most provinces, this adds up to about $950.
The proposal, which our amendment before the House today would eliminate, would apply an income test to the credit, so that seniors whose net income exceeds $25,921 would see the value of their tax credit go down and, in the case of seniors whose net income exceeds $49,134, disappear altogether in two years' time. Let me explain. The proposed amendment to the Income Tax Act will initially have no impact on seniors who are among the neediest in our society. Seniors with an income of less than $25,920 will not be affected. This will only have an impact on seniors with a net income between $25,000 and $50,000.
These people belong to the middle class. These are people who have worked all their lives, have saved money for their retirement and have a net income of about $30,000 or $40,000. These people are not wealthy. These are members of the middle class who have worked to enjoy a good life during their retirement. These are the people who will be hit, and that is why the Bloc Quebecois is opposed to this amendment. I heard members of other parties say: "Sure, but this tax credit also benefited people earning $200,000, $300,000 or $400,000". I think that is rather exaggerated, since the vast majority of those who will be affected are people in the middle class with average incomes.
The message this amendment sends to people, especially to seniors, is that our society does not appreciate them. The age credit provision was included in the Income Tax Act-at least, that was my understanding-to provide some recognition for people who worked so hard to build our country and who managed to save some money for their retirement, and I think the country, whether we are talking about Canada or Quebec, should recognize their contribution. I think the age credit was a way to tell them that society valued their contribution.
The other thing I see in all this is that those who want to reduce the credit believe that seniors have a fair amount of money, that there is not enough money to go around, that there is a deficit, and that everyone has to pay. But in fact not everyone in Canada pays. I think that, before we go after the incomes of seniors, we should really look elsewhere. Over the past year, and even during budget preparation, the Bloc Quebecois suggested places to the Minister of Finance where money could surely be found to replenish government coffers so that the people in the middle class and, particularly, those 65 and over in Canada could be left alone.
They talk about family trusts, a way for the very rich to shelter large amounts of capital from taxes. They could be a source of hundreds of millions of dollars.
There is the whole business of tax havens. You know, Canada has agreements with some 15 or 16 countries, which allow companies in Canada and other countries to spread out profits and therefore to avoid paying taxes. It is primarily in countries that welcome big multinationals where people with a knack for accounting arrange for these companies not to pay any taxes.
I think we should look at these agreements and get the money that is due to Revenue Canada-Taxation. Here again, hundreds of millions of dollars are involved. This is where we should be looking, instead of targeting people who have worked hard all their lives to enjoy decent retirements.
Furthermore, we should take another look at the real minimum tax that could be charged on the profits of major corporations. Do you know that, right now in Canada-and I think many people find it disgusting; it is a real sin-there are companies, big corporations, not paying any taxes. They make profits, but they do not pay any taxes.
Under a particular accounting policy, they can carry over losses incurred in previous years. So, in a year when they make a profit, they can carry over losses from preceding years to offset it and avoid having to pay taxes.
If individual taxpayers were allowed to do the same, I think that we might be surprised by the results. Some people earn a lot of money one year and considerably less the following year, for any number of reasons. I do not think it is that easy for individuals to carry losses over from one year to the next.
There is a great deal of money to be made with a minimum tax on corporations and at the same time this would put an end to an outrageous situation that people read about in the papers: large corporations not paying a cent in income tax while individual taxpayers are seeing $500, $600, $1,000 or $2,000 deductions taken away from them. I think there is something wrong in terms of tax fairness and, as a result, the public doubts that the Canadian tax collection process is fair and equitable.
Finally, I would like to remind you that the auditor general reported that there some $6.6 billion was currently owed to the federal treasury in Canada. For one reason or another, the tax man did not collect the amounts due. At least 80 per cent of these unpaid taxes could still be recovered. This adds up to several billion dollars.
I think that, with the assurance that all amounts due will be collected, the public would accept more readily that measures such as the one we proposed this morning, although debatable, be adopted.
But first, the federal government and the Minister of Finance must demonstrate that the Canadian tax system is really fair, that corporations pay their share, that the rich pay their share, that all those who owe back taxes pay them. I think that we must resist any further tax increase on the middle class. The middle class is large. Small amounts times millions of taxpayers amount to a lot of money in the end.
But when the most heavily-taxed middle class, whether retired or younger people, come to realize that the system is no longer equitable, this gives rise to situations where people protest and refuse to pay taxes, not because they think that it is not fair to pay taxes, but because they feel that not everyone is paying his fair share.
So, I hope that my hon. colleague's amendment will be passed and that plans to eliminate the age tax credit will be reconsidered as far as certain categories of seniors are concerned, in particular middle class seniors.