Mr. Speaker, before I begin my comments on Bill C-282, I would like to preface my remarks by putting this in its proper context.
It was interesting when the member for St. Boniface was making comments in regular House business, he was saying that Reform members think they have haloes. No, we do not think we have haloes, not at all.
We do look at some of the actions of the government. We do look at some of the things it is doing, particularly when we look at the plight of seniors in our nation and how they will be potentially impacted positively, I might say, by Bill C-282. All of these things have to be put into context.
I draw to the attention of the House the Ottawa Citizen of yesterday which states: Treasury Board president had met bitter caucus resistance to serious pension reforms'', that is from the Liberals,
in December. He said he could only promise the government will fulfil vows made during the 1993 election campaign''.
The issue in Bill C-282 is particularly near and dear to the people. They see the Liberals incapable of coming to a consensus on something very simple and straightforward. Return MPs' pensions to normal industry standards. What is complex about that? I do not find anything complex about it. I realize I should not imply or impugn values, so I would not use the word hypocrisy in that context.
I am also interested in some of the actions of the government. The Calgary Sun on the weekend noted that in the past year Ottawa has announced a $50 million anti-smoking campaign while at the same time giving away $400 million of taxes because it was unwilling to enforce the laws of the land as they stood. It established a new $30 million anti-racism committee and will spend $1 million to celebrate the 30th anniversary of the Canadian flag.
I have had the good fortune of being able to travel offshore as a tourist from time to time. I am very proud of the Canadian flag, wear it on my apparel, have it on my suitcase. It stands for the great nation that we are. But to be putting out $1 million at this time for a 30th anniversary when we are talking about the enactment of Bill C-282 being a potential cost of $3 million to the treasury, the numbers just do not add up.
While I do not see in any way the concept of Reform members feeling that they have haloes, on the other side of the coin I can see why Canadians might say to themselves: "I do not understand a party where there are such willy-nilly things all over the place that just do not seem to make any sense".
Before I begin my comments on this bill I would also like to say that I really applaud and salute the member for Burin-St. George's for his initiative on this. His intent is very laudable.
I rise today to speak to Bill C-282, an act to amend the Income Tax Act on medical expenses for disabled senior citizens. As has already been recited, the purpose of this bill is to lower the threshold for deductibles of seniors for the medical expenses tax credit. It lowers the threshold by altering the formula for determining the medical tax credit for disabled seniors by means of rewording item (c) of subsection 118.2(1) of the Income Tax Act.
Under the current law the first $1,614 dollars, or 3 per cent of net income, is required to be spent before it can be taken into account for income tax purposes. The bill would make it possible for all eligible medical expenses from the very first dollar to, in effect, be income deductible for senior citizens.
The reason for targeting disabled seniors for redress is because their higher medical expenses and lower incomes leave them with a disproportionately high relative cost from the limited deductibility. It is estimated that the average deductible medical expense for disabled seniors is twice as high as that for all other tax filers.
The proposed amendment to the Income Tax Act could result in a potential revenue loss of approximately $3 million. Certainly not a huge amount in light of the numbers we were just talking about; a $400 million giveaway for taxes on cigarettes no longer collected. Actually I understand from other sources that it will be $800 million and $50 million for an anti-smoking campaign to counteract that. It seems to me we are getting close to a billion dollars when we add on the $30 million plus the $1 million I was talking about. Therefore, $3 million certainly is not a huge amount.
On the face of it, the bill seems fair and equitable. By altering part of a formula for the purpose of allowing disabled seniors
more deductions for medical expenses is part of horizontal equity. In my judgement the current rumours very rampant around the country that the government is going to be taxing medical and dental benefits would all be part of this whole thing.
I see the bill as an attempt to square a circle, the circle being the targeting of disadvantaged seniors inadvertently targeted by an aberration in the Income Tax Act. Therefore, the bill itself is not disturbing. As a matter of fact, I would probably as revenue critic for my party recommend that we seriously consider supporting it if it was votable.
What is disturbing is discovered by attempting to determine the effects of the bill. The bill amends subsection 118.2(1) of the Income Tax Act. In that subsection is a formula for the medical expense credit. Let us look at just this little snapshot of some of the complications in the Income Tax Act.
I have to read this. The formula is a(b) minus c (minus d) where a is the appropriate percentage for the year; b is the total medical expenses of the individual; c is presently the lesser of $1,614 and 3 per cent of the individual's income for the year; d concerns the income of dependants and spouses as claimed by the person filing for the medical expense tax credit. Part c of the formula is altered by this bill by adding (a) an amount under section 118.3. Section 118.3 deals with a tax credit for mental or physical impairment and (b) an amount under subsection 118(2), in which case C is equal to zero.
That is really terrific. Therefore we have before us in this simple one-page bill which touches the medical expense credit, the tax credit for medical or physical impairment and the age credit, a bit of an idea why Canada's Income Tax Act is over 2,000 pages long. One can see how it got to be that big. That is a matter of philosophy. Let me describe the philosophy that leads to an ever-growing act and a constantly increasing tax burden on Canadians.
There is perceived a need or deficiency encountered by certain individuals such as, for example, mental or physical impairment. I really admire the work of the member from Newfoundland but he believes that the government is to be used as an instrument of action that enacts or changes legislation to address this need.
I certainly accept that this was done with the best of intentions by well-meaning individuals, as was the case with this bill. What happens when the government acts to address the needs of only one group of people? Other groups and individuals seek to address their problems through government action. That is how we ended up with age credits, medical expense credits, GST credits, charitable donation credits, political donation credits. The list goes on endlessly.
The Income Tax Act quickly changes from being straightforward legislation which sets rates of taxation and strictly defines taxable income into an amalgamation of credits, write-offs, grants seeking to redress or placate every group in Canadian society. This is the snowball effect where the small snowball starts at the top of the hill and picks up speed on the way down the hill.
What the Liberals fail to ignore or to understand is that the fiscal crisis we are currently in is not a result of a few years of unbalanced books. It is a result of a conscious decision in the 1960s and the 1970s of the government to involve itself in the lives of its citizens to an unprecedented degree. The involvement of the government into the lives of citizens, once begun, is very hard to slow down, to stop and even harder to reverse. What we see in this band-aid legislative proposal is that a band-aid would not stop the Titanic from sinking.
It further complicates an overwhelmingly loaded, confusing and complex collection system. Combined with the Liberal's blind homage to the outdated concept of big brother knows best, Canadians lack real hope of reform.
As I mentioned, if this was a votable bill, I would be recommending to my caucus that we support it for all the good reasons that will be expounded. But the real reason in my judgment for this bill to even have to be in place is the complexity of the Income Tax Act that the government refuses to do anything about.