Mr. Speaker, I would like to address the amendment put forward by the official opposition.
It is correct that Bill C-59 will subject the age credit to an income test. Canada's debt and the burden of high taxes and interest rates it imposes on all Canadians, including seniors, demands that government spending be both fair and effective.
This measure meets that test by ensuring that assistance goes to seniors who need it but not to those with annual incomes hitting $50,000. Under the current tax system, all Canadians 65 and older are eligible for the age credit. It delivers a combined federal-provincial tax reduction of about $950 a year.
Under the proposed legislation, individuals with net incomes below $25,921 will retain their full credit. For people with net incomes above the threshold, the credit will be reduced at a rate of 15 per cent of their net incomes exceeding $25,981. The threshold will be indexed.
I would like to make it very clear that 75 per cent of all seniors, 2.6 million people, will not be affected. In addition, most of the people who are affected will continue to receive partial benefits. In fact, only six per cent of all seniors, those whose income is over the $49,134 threshold, will stop receiving benefits altogether.
It is also important to note that the reduction will be staggered over a period of more than 12 years. In 1994, the reduction would reach half of the figure that otherwise would have been set. In addition, people will still be able to transfer the age tax credit to a spouse.
Let me assure the House that we do not take this measure lightly. It is today's senior citizens who built this country into what is considered by many the best place in the world. Our government will never forget the obligation it has to helping seniors and why.
We also must remember the obligation we owe to all Canadians to restore the fiscal responsibility that makes possible lower taxes, easing in interest rates and more jobs.
The Toronto Star in an editorial this morning made the point that as it scrambles to cut spending Ottawa can achieve fairness only if it allocates its limited resources on the basis of real need. By itself the age of 65 is not a measure of need.
That is why Bill C-59 moves to sustain aid to those seniors who do need it but not for those with significant incomes.