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House of Commons Hansard #104 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was children.

Topics

Questions Passed As Orders For ReturnsRoutine Proceedings

10:25 a.m.

Liberal

Paul Zed Liberal Fundy Royal, NB

Madam Speaker, I am sorry I do not have a specific answer on when that question will be returned to the House. It is a very large question, a request that goes to all government departments. I have been informed that it is in the final stages of being revised. I hope we can have that information soon.

I ask that the remaining questions be allowed to stand.

Questions Passed As Orders For ReturnsRoutine Proceedings

10:25 a.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

Is that agreed?

Questions Passed As Orders For ReturnsRoutine Proceedings

10:25 a.m.

Some hon. members

Agreed.

SupplyGovernment Orders

10:25 a.m.

Reform

Sharon Hayes Reform Port Moody—Coquitlam, BC

moved:

That, in the opinion of this House, the government should provide tax fairness for all Canadian families by extending the Child Care Tax deduction to all families of all income levels and converting it to a credit, thereby removing the tax bias against parents caring for their own children.

SupplyGovernment Orders

10:25 a.m.

Reform

Chuck Strahl Reform Fraser Valley East, BC

Madam Speaker, on a point of order, the first two speakers from the Reform Party, the members for Port Moody-Coquitlam and Mission-Coquitlam, will be splitting their time.

SupplyGovernment Orders

10:25 a.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

Today being the final allotted day for the business of supply ending December 10, 1996, the House will proceed as usual to the review and adoption of a supply bill.

In light of recent practices, does the House agree to have the bill distributed now?

SupplyGovernment Orders

10:25 a.m.

Some hon. members

Agreed.

SupplyGovernment Orders

10:25 a.m.

Reform

Sharon Hayes Reform Port Moody—Coquitlam, BC

Madam Speaker, I am pleased to rise today and also to split my time with my colleague from Mission-Coquitlam. My colleague and I share some of the same community. Certainly that community like other communities across Canada is very much affected by the decisions of this House and the priorities it sets. The topic of today is how government priorities affect children and parents, indeed all people of this nation.

Today, one day after national child day, we want to highlight the Reform Party's proposal make tax relief for Canadian families a priority in government policy.

The proposal I will elaborate on today reflects a recognition of the importance of family units and the importance of choices for parents in public policy. The greatness of our country today is a reflection of the legacy of the greatness of the families which have built it, families both from abroad and those that are Canadian born. Today we must not forfeit the source of our success as a country.

Existing government priorities seem only too eager to ignore the family unit. For instance, there is but a single reference to the word family in the Liberal red book. This certainly illustrates the reality of government neglect of this important institution. The years of sowing the seeds of neglect of the family in public policy are now yielding a whirlwind of social, economic and judicial consequences. Our homes, our streets and even the statistics on youth crime, youth suicide and teen pregnancy all give too great evidence that government priorities and policies must change in this area.

What are the government's priorities and policies? What is the Liberal vision of government? Today I would like to remind the House that we have a government that is wedded to big spending, high taxes and big government. The Liberal government is addicted to expenditures exceeding $150 billion a year and it has shown no sign of changing that philosophy.

The deficit reduction that has been accomplished has been accomplished on the backs on the Canadian taxpayers, the families of this country. The reduced deficit is due only to the increase in revenues.

The Reform vision in contrast is a vision of smaller government, lower taxes and more choices for the Canadians who must pay those taxes. We would like to reduce government expenditures by $15 billion a year. We would like to balance the budget, not just talk about balancing the budget. That would give tax relief to our overtaxed Canadian families.

A major plank of the Reform fresh start program will extend the following child care deduction to all parents, including those who care for their children at home: $5,000 for every preschool child and $3,000 for every child seven to 12 years of age. We will make this as fair as possible for families of all income levels. We will turn the deduction into a tax credit so that everyone will receive the same saving.

The Liberal plan that now exists for the child care deduction is very unfair. It favours parents who choose to have paid child care over those who choose to take care of their own children. It also favours rich parents over poor because it is a tax deduction.

How does it favour parents who choose to have paid child care? The Liberal plan for the child care deduction applies only to receiptable day care expenses. Therefore it denies the value and the choice to care for one's own children. It denies the flexibility of the family to choose to have another family member look after the children or to have some kind of co-operative arrangement within the neighbourhood.

This morning in the Globe and Mail there was an article which described how many children are in step-families. The article stated that in 1994-95, 32.4 per cent of children under 12 years of age were in the care of someone other than the parent. In other words 67.6 per cent were cared for by a parent.

These choices in child care are completely ignored by the Liberal plan for the child care deduction. The government through its plan rewards those who would use outside care. The government discriminates against 67 per cent of parents who want to take care of their own children in their own home.

This government by its policies denies choice to parents. Also it denies the value of parenting.

I mentioned that the tax deduction given by the Liberal government is more valuable for higher income earners. If we look at a quick example, a tax deduction of $5,000 to a person earning more than $100,000 could be worth approximately $2,500 at the end of the tax year. To a struggling Canadian who is making $20,000 a year, that tax deduction would only be worth approximately $1,500. It is a discriminatory practice which works against those who need it most.

For all the puffery of the finance minister, perhaps he would like to admit that he fails to mention that his rich friends benefit the most by the present system of the child care tax deduction. That same minister is also proud of extending day care deductions to 16-year olds from the 12-year old ceiling. These two things illustrate the misplaced priorities of government policy. Is it not those who need it most that should be given the greatest attention in government policy?

Earlier I mentioned that the government has no appreciation of the value of parenting. More and more I see that interest groups, from day care advocates to affirmative action zealots, all ignore parents in order to push their own agenda in government policy. With what this government does and its priority in budgeting, and I noticed something unique in the government's budgets in that it recently tripled the budget for the status of women while other budgets are being cut. What kind of priority does this show to families?

The priorities of government in budgeting and in legislation are predicated on other things, not the priorities of the nation's families. For example, when the finance minister claimed that doubling the working income supplement helps families and also stated that our party did not support the bill, he failed to point out that this provision, that is, the doubling of the working income supplement, was but a small part of the amendments to the Divorce Act.

Bill C-41, like so many bills brought by the government to this House, had some good elements in it. Tragically however the incidence of divorce, the bitterness of the disputes in a divorce and the resulting devastation on the children and families will only escalate given the mindset of the provisions of Bill C-41. It totally ignores essential elements or provisions that should have been put in place, such as mandatory mediation, unified family court and more basically, equal treatment of the parties involved in divorce so that enforcement of access and support are both looked at by government.

Divorce hurts children. Single parenthood and broken families are the surest way to predicate financial needs. It is a cruel joke for the Liberals to increase the working income supplement and in the same legislation fuel the number of families that will need that supplement.

When Reform challenges the Liberal government for its lack of concern for Canadian families, the only answer is a list of programs through which increased funding will be given to targeted groups. The federal government has in place over 25 programs which specifically target at least a portion of its spending to children, over 25 programs costing billions of taxpayer dollars.

Many of these programs have existed for years, yet the government over the last decade has never undertaken a thorough evaluation of them to determine if they are accomplishing the intended outcome. Using the government's own figures, child poverty has risen from 15 to 20 per cent since 1989 despite all of the government spending that took place on behalf of children. Where is the evidence that more spending is going to reduce these figures?

This government is clearly not interested in evidence. It would rather listen to the people who tickle the ears of the Liberals with cries for help. They like to listen to people who see government as their source of funds.

Reform makes families a priority. The well-being of our nation's children cannot be separated from the well-being of our nation's families. A happy child is not the sum of government programs, but it is found in the strength of personal relationships that surround that child. Reform's fresh start seeks to strengthen families with the basic philosophy that a dollar left in the hands of the taxpayer is better than a dollar in the hands of any bureaucrat.

SupplyGovernment Orders

10:35 a.m.

Liberal

Harold Culbert Liberal Carleton—Charlotte, NB

Madam Speaker, first I want to congratulate the member for Port Moody-Coquitlam for her presentation this morning in the House. I listened very carefully to her comments. I have a couple of questions.

She mentioned that government of big spending leads to high taxes and big government. I think everyone in this House and all Canadians by this time are well aware that this government has taken those actions which were demanded by Canadians to reduce the size of government, to reduce the size of expenditures, to reduce spending, and to do it in a balanced fashion so that we could look forward to balancing our budget.

As everyone in this House and most Canadians know, the hon. Minister of Finance took those actions by setting targets which to date have been either met or exceeded. Economists not only here in Canada but throughout the world are suggesting that Canada leads the world, or at least the industrialized countries of the world, in its actions and meeting its commitments to date. Therefore I wonder why the hon. member would state that.

All members of this House are well aware that we are not talking about bigger government. This government made a commitment, not one that it particularly wanted to do, but one that was necessary because Canadians said that they wanted to see a smaller government. The government committed to a reduction of 45,000 positions in the federal government over a three or four year period which affected every department.

We also know that one of the first steps taken after this government took office was to reduce the size of ministers' staffs. Previously junior portfolios had 50 to 60 staff persons and senior portfolios 100 to 120 staff persons. They are now down to 10 to 15 staff members. That is responsibility.

With respect to deficit reduction we have met or exceeded those targets to date. I might add that we are on target for the future for this year and certainly will be for subsequent years. The result has been interest rate reductions to levels that have not been seen for the past 30 or 40 years. This has put money in the pockets of Canadian families.

The hon. member spoke of Liberalism and the Liberal government not being for the family. I have been involved for a number of years with the Liberals and I can say that the family is always first and foremost for all Liberals I have met. They are a family and they also have the greatest respect for the family. I have not seen a group of men and women across this country who work more for the family, for family units.

I would point out to the hon. member for Port Moody-Coquitlam that this government has taken action. Obviously in the weeks and months to come further actions will be introduced in this House that will continue to promote the family.

The hon. member referred to children. There is no question that children have to be first and foremost on all of our minds.

SupplyGovernment Orders

10:40 a.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

The hon. member for Port Moody-Coquitlam, you have 45 seconds.

SupplyGovernment Orders

10:40 a.m.

Reform

Sharon Hayes Reform Port Moody—Coquitlam, BC

Madam Speaker, that is short work for some interesting points.

I remind my friend of the red book. If the Liberals are so concerned with family, why is it just mentioned once?

With respect to government targets and the ability of government to meet them, it still has no specific goal for deficit elimination. In terms of that we can talk about money spent here but what about the record personal bankruptcies that Canadian families are addressing across this country? We have a 10 per cent unemployment rate.

Whatever the government is doing certainly it does not seem to be getting to the people who need it the most. I remind my colleague that because the government has not addressed its deficit position, real income in the last three years has decreased for the average family by $3,000.

SupplyGovernment Orders

10:45 a.m.

Reform

Daphne Jennings Reform Mission—Coquitlam, BC

Madam Speaker, it is my privilege today to speak on Reform's supply day motion which reads:

That, in the opinion of this House, the government should provide tax fairness for all Canadian families by extending the child care tax deduction to all families of all income levels and converting it to a credit, thereby removing the tax bias against parents caring for their own children.

Canadians have told us that they want a tax system that is fair to all families. Let us take a look at the taxes paid by families today. The average family pays an incredible 46 per cent of its income each year in taxes, almost half of its income.

High taxes have stripped families of the disposable income they need to plan for their future and exercise choice in how to arrange their lives. A Reform government will provide real tax relief for all Canadians and simplify the tax system to make it fairer for families at all income levels.

Children are this country's key to the future, but more often than not the policies and programs of the federal government have a negative impact on Canadian families. We must give parents greater freedom to spend time parenting and to succeed economically while doing so.

That is why Reform will extend the following child care deduction to all parents, including those who care for their children at home: $5,000 for every preschool child and $3,000 for every child seven to twelve years of age. To make this as fair as possible for families at all income levels we will turn the deduction into a tax credit so everyone gets the same savings.

These changes are necessary since fiscal burdens and government intervention both mean that Canadian parents have fewer choices about how to raise and care for their children. Big

government programs such as universal day care, which the Liberals promised in the 1993 election campaign, only add to the burden of government debt and high taxes and contribute to removing choices away from Canadian families.

The Reform Party believes that parents are the people best equipped to make these decisions and wants to leave them as much choice and decision making power as possible. Reform believes that returning money into the hands of families will provide them with the choice and the flexibility they need to make the best decisions for their children.

Reform therefore opposes state run day care, supporting in its place child care programs that subsidize financial need, not the method of child care chosen, and that subsidize children and parents, not institutions and professionals.

These initiatives are important because more parents are choosing to stay at home to look after their young children.

According to Sherry Cooper, the chief economist for the Canadian investment firm Nesbit Burns, birth rates are rising in Canada and traditional families, father working and mother at home with the children, are growing from a record low of 28 per cent of all households in the 1980s toward the level of 44 per cent by the year 2005. Demographic trends, she says, point to the resurgence of traditional family life. Canadian parents who want to stay home to raise their children find that government policy penalizes them for their decision. Consequently many spouses are forced to work outside the home even if they do not want to.

Given today's unemployment rate of 10 per cent surely the government would have enough sense to realize more jobs will be available for the unemployed if working parents can stay home and raise their children rather than go out to work and take up the jobs that are in the marketplace.

Consequently Reform supports a revision of the federal income tax regulations to end discrimination against parents who provide for child care at home.

How does Reform view Canadian parents? We are convinced that the majority of Canadian parents are caring, are capable and are responsible. They know what is best for their own children. What is more, they demonstrate it every day through the large and the small sacrifices they make, that the well-being of their children is their top priority.

In the case of divorced parents we want to see fair and equal treatment for all parties involved in a support ruling. It is vital in any child access or custody settlement that the needs of the child and the parents' ability to pay are the first consideration. This government constantly puts forth flowery phrases of how supportive it is of family. Yet its actions makes lies of its words. Children need the loving care and visits from all family members.

Yet this government, in contradiction to Canada's acceptance of the convention of the child and of a child's right of access to their families, voted down the grandparents bill which would have given grandparents the right to ask the judge at the time of divorce if they could continue to see their grandchildren.

How could this government do this, knowing that many of our seniors have already died without seeing their grandchildren in their later years? How could it be so cruel as to continue to deny families the right of access?

This government cares about families, we heard the Liberal member say a few minutes ago. Oh, yes.

What about this government's promise to remove the GST on reading material and thereby enable families to have reading material in their homes without paying GST on those essential? Remember, the Deputy Prime Minister promised that there would be no GST on books which were as necessary as food.

The member for Glengarry-Prescott-Russell said it would be undemocratic to put GST on books. Yet Atlantic Canadians are now paying 15 per cent on books at retail book stores in the Atlantic provinces. That is not helping families.

Who are the victims in the terrible crimes across this country? Good law-abiding families have been made to suffer while the rights of criminals have been upper most in Liberals' minds since 1971 when the Liberals at the time decided that the rehabilitation of criminals was more important than the victims of crime and the families of victims.

What did the government do when Mr. Niven, a good family man, was kicked to death outside a 7-Eleven store just outside my riding? This government passed Bill C-41 which dealt with sentencing. It stressed that the murder of a gay deserved a stiffer sentence than the murder of a family man like Mr. Niven.

The new Bill C-41 deals with punitive measures for support payments in arrears. Once again this government did not help families. This government was concerned only with punishment. It could have dealt with a comprehensive package which would have included access and visitation rights.

In the American legislation under the Florida statutes its package was comprehensive. It did deal with all those issues. This government did not even care about families. What is worse, this government took the drawing up of guidelines out of the hands of parliamentarians. It ended up with inflexible and unrealistic guidelines.

Elected members of Parliament could have ensured that families were encouraged to make realistic settlements, settlements which

dealt with the needs of the child and the ability to pay and add that these agreements be considered first by the judge rather than going first to the inflexible guidelines, which is what that bill instructs the judge to do at this time. That is a recipe for failure.

In the guidelines there are a number of omissions and additions that would result in many unfair awards. For example, the lack of an adjustment of awards for the time the child spends with a non-custodial parent. However, that is not in there. There is also the completely different and extreme treatment of joint custody situations, which is getting very common in our country today.

Mr. Bouchard, co-ordinator of the National Alliance for the Advancement of Non-Custodial Parents, stated: "Fair and equitable guidelines would go a long way to bring some consistency to support awards". Support awards must be paid and it is essential that parliamentarians be responsible and set guidelines which will help prevent future arrears in these necessary support payments.

In fact, the Equitable Child Maintenance and Access Society stated that the federal, provincial and territorial task force was supposed to deal jointly with the issues of custody, access and maintenance. This government ignored two-thirds of this mandate and gave the area of child support preferential and exclusive treatment.

Studies in the area of divorce show that children suffer more from the custody and access conflicts and therefore priority must be given to these areas in conjunction with financial support.

The result is that Bill C-41 is designed to specifically exclude the paying spouse from the definition of family. The finance minister brags about all the wonderful things this government is doing for families.

What about the new tax treatment of child support payments? No deductions and no inclusions. Who benefits from this set up? It is not the families, Mr. Finance Minister. It is a major tax grab at the expense of families. The spouse paying support, usually the higher earner in family settlements, will now not be able to claim deductions and consequently will pay higher income tax to the government, causing him to have less money to look after his new family and his first family.

In short, by eliminating the deduction inclusion system there is less money to go around for divorced families and both sides suffer while government revenues obviously rise.

It is essential that we as parliamentarians put families first. In this way we do not only help to build character and self-respect in our children, we also help our literacy rate to rise and help prevent crime.

By including those parents who are able to stay at home and raise their children without state run day care and by giving them child care deductions which can be turned into tax credits, we are also helping those who are unemployed in our society. After all the fanfare this government made about supporting families, it seems it is up to the Reform Party to raise a motion in the House to reinforce support for families.

It is time to make a fresh start for families. Therefore I move:

That the motion be amended by deleting the word "should".

SupplyGovernment Orders

10:55 a.m.

St. Paul's Ontario

Liberal

Barry Campbell LiberalParliamentary Secretary to Minister of Finance

Madam Speaker, I was truly touched by the attempt by the hon. member opposite to put a human face on the gibberish we normally hear from the Reform Party.

I was also struck by the fact that she seemed to be talking about a different kind of world than most Canadians inhabit.

I wonder if she would share with us her understanding of the composition of the Canadian family out there today. I hear it described as if all families are comprised of an Ozzie and Harriet vision. That is what I heard portrayed across the way.

Also I would like her to comment on the extent to which Reform's recent budget proposals would adversely impact on families in this country, no matter how they may defined, whether in the Ozzie and Harriet world she lives in or in the world in which real Canadians live. The dramatic changes and the increased cuts across the board that would be made as a result of that document would gut this country.

SupplyGovernment Orders

10:55 a.m.

Reform

Daphne Jennings Reform Mission—Coquitlam, BC

Madam Speaker, I thank the member for his question.

I really wish that members of this House, particularly Liberals, would stop the insulting remarks. I find it degrading for parliamentarians. Having been a teacher for 30 years, I abhor this kind of speech in the House of Commons. I do not wish to hear it again.

I am very glad that this member was truly touched by what I had to say.

With respect to the different kind of world, I suggest that the member should take a moment to think. The Reform members, apart from one, have all been from the private sector, from the public sector, but not members of Parliament. Because we have not been members of Parliament in the past we have been in touch with real Canadians. We have worked with real Canadians. We have been teachers. We have been doctors. We have worked in the resource industries. We have been there. As citizens of Canada we have been more than aware of the issues that are out there.

The hon. member mentioned some gibberish about Ozzie and Harriet. I agree that would be a wonderful situation. I am sure the member agrees that it would be wonderful. Unfortunately, with the high rate of divorce and the difficult unemployment levels which the government has helped to create by not lowering taxes, that situation no longer exists. Reform is the first to acknowledge that. That is why Reform would introduce child care tax deductions in the amount of $5,000 for each preschool child and $3,000 for each child between the ages of 7 and 12.

I wonder if the member knows that over 80 per cent of Canadian families are comprised of a husband, a wife and children.

I believe that those who are not connected with reality are the Liberals. Surely common sense dictates that if the Liberals would lower taxes, and not have 46 per cent of the income of Canadians going to the tax structure, and leave more in their pockets so they could employ more people in their businesses it would encourage a more positive outlook. Perhaps the Liberals should look at the fact that retail sales are down. They were up at the beginning of 1995 by about 7 per cent. They have gone down all the way through 1995 and 1996. People are cautious and worried, they are not spending.

By my last accounting bankruptcies are over 52,000, up 23 per cent. This suggests a government that is unaware of what going on out there. I think the member who asked me to answer a question spoke a lot of nonsense.

I recently read an article in the September Reader's Digest and even Mr. McKenna, a Liberal premier, said that duplication in provincial and federal programs is costing us $5 billion a year.

SupplyGovernment Orders

11 a.m.

Scarborough East Ontario

Liberal

Doug Peters LiberalSecretary of State (International Financial Institutions)

Madam Speaker, when I first heard the supply day motion, I was briefly tempted to congratulate the hon. member and the Reform Party for raising issues that were genuinely worthy of consideration.

Improving tax fairness is something the government believes in strongly. That is why it has taken concrete action in each of its three budgets to close loopholes and eliminate inequities.

Then there is the action that would benefit children in need. Who would dare deny the special responsibility the government holds to use available resources actively and aggressively to protect and sustain the most innocent and vulnerable of all our citizens. Here again we have as a government taken concrete action, especially in the 1996 budget.

These are the issues the motion may appear to address. Unfortunately it takes only a moment's reflection to see through the illusion, to recognize that there is actually little or nothing about equity and nothing about compassion here at all. What is at work, masquerading in the guise of fairness and family, is an attempt to buy electoral support. Because underneath the rhetoric the motion proposes nothing less than a $5 billion tax cut. The hidden agenda behind the motion goes beyond deception into the realm of duplicity.

Not only are we being asked to endorse a dramatic tax cut in a year when the deficit is targeted at about $24 billion, it is a tax cut that will create unfairness in two ways. First, if the motion became law it would actually create inequity in the tax treatment of child care deductions. What is more damning is the fact that the real beneficiaries of this motion would be the affluent and the wealthy and their children at the expense of poor Canadians and their families.

This not so hidden agenda will come as no surprise to anyone who has studied the philosophy and the rhetoric of the Reform Party. Theirs is the gospel of comforting the comfortable and abusing the afflicted. Perhaps that sounds a little intemperate, but the false logic and perverse pandering of today's motion deserves no respect.

Let me prove my point by addressing the first aspect of this motion, the mistaken idea that fairness as enunciated by the Reform Party requires "extending the child care expense deduction to all families of all income levels". This is in keeping with the Reform's continuing allegation that the Income Tax Act discriminates against families that provide care at home for their children. They ask why working Canadians should be able to claim a deduction for their expenses when stay at home caregivers cannot claim the expense they incur.

SupplyGovernment Orders

11 a.m.

Reform

Lee Morrison Reform Swift Current—Maple Creek—Assiniboia, SK

Do you think they do not work?

SupplyGovernment Orders

11 a.m.

Liberal

Doug Peters Liberal Scarborough East, ON

This is not just a case of apples and oranges logic. This is apples and sour grapes logic. It is attempting to make night equal day. In reality, the rationale for the child care expense deduction is to prevent discrimination and unfairness. It does this by recognizing for tax purposes the child care expenses that taxpayers must incur in order to earn income or to study.

In other words, the deduction is a way for the tax system to acknowledge that when both spouses work, these taxpayers generally have less of a capacity to pay taxes than other taxpaying families with identical incomes that do not have these child care expenses. That may sound a little bureaucratic but it is not.

Of course families with a stay at home spouse has child care expenses. That is why in addition to the regular child tax benefit of $1,020 for each child, the tax system also provides a supplement to

help modest income parents who choose to remain in the home to raise preschool aged children.

The fact is when both spouses work they will have higher child care expenses than families where one spouse stays at home. Those additional expenses will include day care, work transportation for two people and other costs incurred in earning income.

This takes me back to the bottom line. Despite Reform's implication, the child care expense deduction is not anti-family social engineering. It has nothing to do with providing a benefit or acting as an incentive for people to participate in the workforce. Instead the child care expense deduction seeks to ensure that families where both partners must work or study do not suffer a disadvantage by being taxed on gross income when child care costs mean that they have reduced capacity to pay.

Incidentally, I should point out that the child care expense deduction parallels the approach applied to business. Firms do not pay taxes on expenses they incur to generate income but only on their profits. By the same logic, the child care expense deduction does not tax-up to a certain limit-the expenses incurred when both parents must work to generate income.

I have established that this motion clearly fails to recognize the real purpose and process of the child care expense deduction. That purpose is to deliver neutrality, in effect, real fairness, within the tax system.

I will address the more fatal flaws of today's proposal: fiscal irresponsibility and rewarding affluent Canadians at the expense of those in real need. The motion seeks to extend the child care expense deduction to all families of all income levels and convert it to a credit.

This raises an obvious question which the hon. member has not answered. What is the cost? Assuming we use the current structure of the deduction, which is $5,000 for children under seven years of age and $3,000 for children between seven and fourteen, the cost in lost revenue will probably be in the vicinity of $5 billion. That compares to about $400 million under the existing deduction system.

That $5 billion can only come from one of three places: adding $5 billion to the yearly deficit, not just this year, not just next year, but year after year after year; or raising other taxes by the same $5 billion; or cutting federal spending by a further $5 billion, which would be on top of the most dramatic government spending cuts in Canada's post-war history. Inevitably that would require new cuts to transfers to provinces for social assistance and health care.

Who would be the real beneficiaries? There would be some benefits to families with stay at home parents, a group which is less than 25 per cent of Canadian families. This benefit would have little to do with real need and the problem of child poverty which should be the priority issue in family policy.

Let us look at Reform's priority. The simple fact is that under this motion every professional and executive, people who earn $75,000, $100,000 or $1 million a year, those who can best afford a stay at home spouse probably with housekeeping help and a nanny to boot, would enjoy a nice fat tax break. But this motion adds nothing for the low income family where both partners must work or choose to work.

SupplyGovernment Orders

11:05 a.m.

Reform

Lee Morrison Reform Swift Current—Maple Creek—Assiniboia, SK

Have you ever heard of a tax credit?

SupplyGovernment Orders

11:05 a.m.

Liberal

Doug Peters Liberal Scarborough East, ON

There is another damning downside. There is a real risk that for the less affluent families with a stay at home spouse, any improvement provided by the revised deduction could easily disappear. The reason is simple.

As I have pointed out, the $5 billion cost of the so-called Reform child care expense deduction has to come from somewhere, from higher taxes, from reduced spending on social programs or a deficit that puts new pressure on interest rates. Obviously raising taxes to pay for an effective tax cut is just going in circles so that cannot be the Reform's agenda, although going in circles seems to be what they do best.

Cutting social programs is part of the Reform agenda and their fresh start manifesto makes it clear. It is the needy and the less affluent who will feel the impact when welfare transfers, equalization and employment insurance are cut. All are contained in their fresh start. It should be called a phoney start. The needy and the less affluent will ultimately pay for Reform's child care break for the affluent executive.

Or we could let the deficit jump, although that hardly fits the Reform Party credo. If we did, it is the needy who suffer again under the pressure of higher interest rates, higher mortgage costs and a reduction in the business investment that fuels jobs and incomes.

As a parent and grandparent I share the heartfelt concern of every member here that there are children in Canada who suffer real hardship, whose future prospects are dimmed by the burden of poverty and neglect. As a taxpayer I understand the driving desire for fairness in the tax system and that we continue to eliminate inequities and absurdities.

As someone with a background in economics and as a legislator who understands the importance of the continued battle to reduce the deficit, I cannot support the Reform's motion today. These proposals are not based on need. Instead they will shift vital resources away from those who we as legislators are most obliged to help, and in order to do what? To reward families who already enjoy a superior standard of living. This would mean a meaner and a more inequitable Canada.

In conclusion, the child care expense deduction should be maintained in its current form because it plays an important role in recognizing the particular circumstances of working parents. When

both parents work outside the home, additional child care expenses are a necessary cost of earning income that is subject to tax. Because of these child care expenses, families with two working parents have a reduced ability to pay that tax compared to a single earner family with the same gross income. That is why the deduction supports a tax neutrality that makes for a fairer tax system.

The choice is clear. We can support this motion if our goal is a meaner Canada with a more inequitable tax system, or we can reject this proposal and by doing so show that we stand for a country marked by compassion and fairness.

I urge hon. members to vote no because that is what good conscience and good government demand.

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11:10 a.m.

Reform

Lee Morrison Reform Swift Current—Maple Creek—Assiniboia, SK

Madam Speaker, the hon. member stresses that he has a background in economics. I think it must have been a way back because I have never in my life heard such an Alice in Wonderland dissertation or so many distortions in one short speech in this House. It is incredible.

The Liberal and Tory governments have condemned Canadian families to economic serfdom and now a catch-22. The government says: "We are going to make it easier for you to pay your taxes. We will make it easier for both to go out and work". What great hearts the Liberals have.

Study after study show that taxes and taxes alone are the largest single expense faced by working parents. Did the hon. member ever consider, or is he capable of considering, the bitter fact faced by real Canadians, not the strata of society he comes from but real Canadians, that there might be couples out there who would not both work, who would like to have somebody stay at home, if it was economically possible for them to do so. Did he ever consider that one of the reasons so many couples in the lower income levels both have to work is that they are paying 46 per cent of their income in taxes to the three levels of government that there is nothing left for them?

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11:15 a.m.

Liberal

Doug Peters Liberal Scarborough East, ON

Madam Speaker, I am delighted to hear the member for Swift Current-Maple Creek-Assiniboia. I have lived in Swift Current, by the way. I know the real people in Canada. I know the real people in Swift Current.

Our child care expense deductions treat real people fairly and equitably, not like the Alice in Wonderland proposals the Reform Party puts forth. If the Reform Party formed a government it would be like a Mad Hatter's tea party.

Talk about knowledge of economics. I am appalled at Reformers' suggestions on economics. I am appalled that they cannot even mention a $5 billion cost here. They talk about a $5 billion cost and they do not even say where they are going to get the $5 billion from.

Higher taxes, is that what the Reform Party stands for? Goodness, Reformers are always complaining about tax levels the way they are now, yet they are going to give $5 billion more. Are they going to cut social programs? Yes, they are going to cut social programs. Yes, they are going to cut unemployment insurance. Yes, they are going to do the poor in. Yes, that is it: the Reform Party for the wealthy; the poor can go to the blazes. That seems to be the Reform Party's sense of economics.

That is not the sense which this party has. That is not the Liberal government's plan. That is not what this government will be doing. We do not have the sense that the senior executives get the tax breaks and the poor get nothing which is exactly what today's motion proposes. It is not a plan that shows the meanness and the inequities of the system; it is meanness and inequities that the Reform Party stands for. It is not fairness, it is not equitable treatment. It is simply meanness and inequity. That is the Reform Party's policy and it should have meanness and inequity written on its banner.

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11:15 a.m.

Liberal

Harold Culbert Liberal Carleton—Charlotte, NB

Madam Speaker, I would like to hear from the secretary of state exactly how we differ from previous administrations. Exactly how many increases are there on the record for this House that this administration has brought forth in personal income taxes since this government took power?

Could he explain exactly what the advantages have been of bringing our deficit under control, meeting our targets and bringing down interest rates to the lowest levels in the past 30 or 40 years? What has this meant to Canadian families regardless of the make-up of Canadian families, and how has that put money in their pockets?

Finally, the question was put forth about when we would have a balanced budget. It would seem to me with the hon. Minister of Finance's projections of reaching a deficit reduction of $9 billion by 1998, that the step subsequent to that would be a balanced budget in this country for the first time in decades.

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11:15 a.m.

Liberal

Doug Peters Liberal Scarborough East, ON

Madam Speaker, the hon. member has some very important and interesting questions.

The first one I am not able to answer. He asked me how many tax increases have we had in personal income taxes. I am not able to answer that question because there have not been any. There have been none, so I cannot give him an example. I cannot give him even one example over the past three years.

The hon. member asked me about deficit reduction and lower interest rates which have been brought about. When this government came into power we were faced with a $44 billion deficit, a deficit that was absolutely shocking in size. We thought it was

going to be $34 billion. The promise in our red book was to bring that deficit down to $25 billion or 3 per cent of GDP. However, bringing it down from $44 billion to $25 billion is a lot different problem from bringing it down from $55 billion to $34 billion. We faced up to that problem. We said we were going to do that and we did it.

Our program has not been a single purpose one. It has not been about setting a target. The previous government set many targets every year and did not meet any of them. Our program has not just been to set targets but to meet targets. I would suggest that the Reform Party has never met a target in its existence. We have not only set targets, we have met those targets.

The result has been a massive increase in the credibility of the Canadian government. We are now the darlings of the international financial community. We were much less than that three years ago. We have lowered interest rates in this country so that the bank's prime rate is 3.5 percentage points below the U.S. prime rate. I cannot remember in all my years, and that goes back a long time, since we have had interest rates as low as they are now.

I can tell the hon. members across the way who seem to keep chattering away while I am talking that lower interest rates are a real boon for Canadians. Lower interest rates lead to lower mortgage costs and lower credit costs for Canadians. This makes jobs. It enables industries to bring new plants into being which creates jobs for Canadians. The results are clear and they will be coming as we progress in this economic recovery with our low interest rates. We are already seeing those results in the increase in the number of jobs this country is producing now and it will be seen even more so in the future.

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11:20 a.m.

Reform

Sharon Hayes Reform Port Moody—Coquitlam, BC

Madam Speaker, I must admit that what I am hearing today boggles my mind. I listened to the hon. member and most of what he said goes completely against the facts and figures I have here.

I certainly have some questions to ask him. Before I do, I want to make a quick comment. He mentioned the expensive tax cuts and went on about the low interest rates which we now have. Yes, we do have low interest rates, but we also have a 10 per cent unemployment rate. That is a scourge on the Canadian population. If low interest rates create jobs, what happened?

I would also like to put to him that rather than low interest rates we also need an economy that has a future, that has hope and has jobs. Tax cuts are what we need in this country more than anything else. We need tax relief for overtaxed families, overtaxed and over-regulated businesses. That is where there is a blind spot within that party.

When the member talks about reverse pandering and who gets the benefits as to what the programs are, can he tell me, yes or no, does the child care tax deduction give more benefits to a higher income earner or a lower one? In the present system put forward by this government, someone making $100,000 and someone making $20,000, who would get the larger benefit from the present child care deduction?

The member also made the point that dual parent families have less ability to pay their taxes and therefore need added benefits. Can he tell me which kind of family would pay the higher taxes: one with an income of $60,000 from two wage earners, or one with an income of $60,000 from one wage earner? I would like to put to him that it is the dual earner family that has the benefit in our present tax system.

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11:20 a.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

The question and comment period has expired. I will allow 30 seconds for the hon. secretary of state to answer.