Debates of Nov. 21st, 1996

Supply

[Brent St. Denis, Liberal, Algoma, ON]

Mr. Speaker, I want to thank my colleagues on both sides of the House for allowing me 10 minutes of comments on an opposition day motion. It is not the worst motion I have seen from the opposition side but it is certainly not one that I can support even though they have kindly let me have a few minutes here this afternoon.

There is a hidden agenda with this motion but I suppose we should come to expect that from the third party. As much as I respect individual members of the third party, the total package from time to time leaves something to be desired. The hidden agenda I sense in this motion is that the Reform Party is against a broad based day care, child care, system in Canada.

I would like to begin by relating an experience that I had when I was a student at the University of Toronto. At that time I was involved in establishing the first parent co-op day care centre at the University of Toronto, a day care centre I am proud to say still exists as the Sussex Parent Co-op Day Care Centre. It is quite an interesting story and maybe some other time I could go into details.

That experience taught me that there is no one simple solution for the care of our children. While I accept that the pre-eminent place of care for children should always be the family, the circumstances in this present world do not always allow us to have that circumstance available to everybody.

Single parents need day care whether they can afford to fully pay for it themselves or whether they need publicly assisted day care. In some families it is absolutely necessary that both parents work in order to pay the bills that are part of family life.

To suggest that simply providing a child care tax deduction to all families of all income levels pretends that there is a uniform situation for families. I think we tend to fool ourselves sometimes by talking about the typical family or standard family. There are many varieties of family arrangements in the modern world and we cannot try to adapt the social culture to take care of all situations with the simplistic solution we are offered here today.

The tax system provides a measure of relief for low and middle income families.

I would be the last one to say it is perfect. In times past, when my children were younger, I was happily able to take take advantage of that tax deduction. My children are old enough now that I do not have to worry about that, but I was sure glad it was there for me at the time when I was a low to middle income person in my younger years.

I do not think even well-to-do families would generally agree they need a tax deduction for which I have seen estimates of billions of dollars. I ask the Reform Party to take note of these numbers and do their own arithmetic. I wonder if the arithmetic might not be better than we have seen in the past.

I will quote from some research notes. If Reform means to give a $5,000 tax credit for every child under seven years of age and a $3,000 tax credit for every child aged seven to twelve, the cost of the program would be approximately $21 billion or far greater than the figures Reform projects when it says its total package of tax breaks is worth $12 billion. Even $12 billion is a lot of money. I wonder whether the upper income families the Reformers may be thinking about need that kind of tax break at this time.

I am not against targeting tax cuts and tax incentives for needy sectors of our society at the proper time when the deficit is taken care of. However this smacks of a broad based tax break from income zero to income millions per annum and I must object to that.

The other hidden agenda, besides being against a broad based community day care system, is that the Reform Party is telling women to stay home to take care of the children. I accept that a lot of women would choose that. Some are able to and some cannot because of life circumstances.

It is an individual decision on the part of the mother. It is not a decision we as a society should be imposing on any woman. It should be that men and women are equals in society. I resent the subliminal message in this Reform motion that women should stay at home to take care of the children.

The government has already answered-and I admit we have a way to go-the concerns of families with children. I wish we could go further right now. In due course I suspect we will be able to. We should be focusing our attention on the the whole issue of children and poverty among children in our society.

I do not think this plan which would redistribute tax dollars to upper income families would allow us to do what is needed to ensure the poor and the poorest in society have a proper share of what this great country has to offer.

With great respect to the fine members who are here, I do not know how Reform Party members can argue on the one hand for deficit reduction-and I would argue the government is doing a great job with that program-and then propose a plan that would cost $10 billion to $21 billion according to our estimates. Perhaps they could explain that to me as other members participate in the debate.

As I much as I appreciate it is the privilege of the opposition members to bring forward ideas for debate, they have missed an opportunity to bring forward a good idea. They brought forward an idea I cannot support.

I conclude by saying that there are among other things two hidden items: that the Reform Party is against broad based child care and that it is asking women to stay home to take care of their children.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, I have a great deal of respect for the member opposite. He and I shared some time together on the Standing Committee on Finance. I got to know him as being an honourable gentleman. Therefore I can only assume he has not taken the time to understand what the Reform Party is about.

My wife and I have some very dear friends. When their children were growing up he was a school teacher and hated his job. His wife was a dental assistant and loved her job. They decided he would become a home husband, which we applauded.

The description the member has given of the Reform Party was completely out of place. The Reform Party is about choice. This is something that he and unfortunately his Liberal friends do not understand. The reality is that when he talks about one simple solution, his one simple solution is some kind of a national child day care program.

The difference is that the Reform Party is saying we should put the money in the hands of the people at the bottom end of the scale. We should give them the opportunity to have a choice, whether they are single parent families with a man or woman as the parent, whether they are traditional family units or whether they are in multiple family arrangements.

Let us assume for the sake of discussion we are talking about a woman with two or three children. This person is now in a position where she has a choice. She can do what the Liberals tell her to do, or not get any support if she decides to use a family member as the person who would be helping her with the rearing of her children or somebody she respects in the neighbourhood, perhaps a friend through some kind of charitable organization or church she belongs to. The Liberals, NDPers and Conservatives have the simple solution of some kind of massive child day care program.

Another point I am rather surprised by is that my friend, a very intelligent person, went along with the $21 billion figure. He seems to have lost the relationship between a tax credit and a tax deduction.

The Reform Party is talking about a tax credit. We want to get up to a million families away from paying taxes. Those million families would be at the bottom end of the scale and not at all as he described.

Rather than just reading the notes he was handed by the Prime Minister's office, which seems to have a good time coming up with all sorts of interpretations and misinformation of what Reform is all about, has the member actually taken the time to read the fresh start document so that he understands the Reform Party is about giving Canadians a choice in how they choose as parents their values and how they bring up their children?

[Brent St. Denis, Liberal, Algoma, ON]

Madam Speaker, with great respect, the hon. member talks about creating choice if the Reform Party motion were adopted and implemented. I think it would lead to less choice.

As I understand, it is an income based proposal. The more money made, the more potential tax credit would be available.

[Jim Abbott, Reform, Kootenay East, BC]

That is dead wrong.

[Brent St. Denis, Liberal, Algoma, ON]

In a scenario like that one we will be tilting this significantly toward higher income families in society.

This will lead to a further drain on the funds of the country as they are tilted toward higher income families, giving the government less freedom and less flexibility to deal with the real issue facing many families, the issue of poverty, particularly child poverty. Regardless of how it is cut I do not see how it is a progressive suggestion. Our tax system is not perfect. We hope it is as progressive as it can be, but it is not perfect. I do not see this idea as being progressive, that the better off we are in terms of income the more choices we have because there will be more tax benefit. The choices for lower income families would still be very limited.

The Prime Minister promised during the campaign that when the finances of the country allowed we would deal with the issue of a national child care program.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Madam Speaker, it is a pleasure to take part in the debate.

I would like to set the hon. gentleman straight on the tax credit. Reform policy says that it will be at the lowest possible tax rate, which is about 17 per cent. If I am correct that means about $850 per child, which to a low income family is a lot of money. It would probably take care of their household needs for a month. For a millionaire like the gentleman was talking about, $850 probably does not pay for the car licence for his Mercedes. That is the difference. That is why we targeted low income families. Nobody gets a higher rate of tax credit than low income families. That is the Reform tax credit. It is a very wise decision.

I started farming in 1957. When our family came along in 1962, $850 bought us groceries for a long time. Even though the cost of living has risen a lot, to the low income families it still means a great deal. That is why the motion is so important to farm or rural communities. If there were this type of tax credit during the years my wife and I farmed pretty well on our own, it would have meant our children could have been looked after by someone locally who wanted to earn a few dollars. That tax credit was not available at that time. We needed every penny we had to keep our farm operating.

From 1961 to 1994 the average family saw its before tax income increase by 768 per cent, which is a tremendous increase. If we look at the other side of the story we see that taxes grew by 1,200 per cent. If we take that into consideration plus the increases in the cost of food, clothing and shelter, the family on the farm today is probably in a lot worse position than it was when I started farming.

We always had enough money to put food on the table without my wife taking a second job. We always had enough money to pay our bills and to pay the interest on the money we borrowed to buy our farm. That is not the case on the rural scene any more.

According to Statistics Canada 48 per cent of net farm income today comes from off farm jobs. This is very sad and very serious. We have seen farms increase from a half section to probably two sections as the average today. The expense and the stress are unbelievable, as well as mother or father probably having to work at an off farm job. The extra money will be beneficial to rural families trying to survive on one income.

In 1971 the average family earned $3,600. Only 39 per cent of those families had dual income.

It was rare if we saw a dual income on the farm in 1957, 1961 to 1970, but today we see that happening on almost every farm. By 1990 the average family income had crept up to $43,500 but 60 per cent of those families had dual incomes. We can see what has happened in society and with family income.

As the hon. gentleman explained, it seems that Liberals or Conservatives in power during those 35 to 40 years had all the good ideas. I am wondering why we are $600 billion in debt, why our families today have to pay interest to the tune of almost $45 billion on money that was never earned during this period but was borrowed. We are expecting our younger families to take over this burden and take care of that debt that was made before they ever had any input into how government should be run.

It bothers me when I see that we want take credit for things that we really do not deserve credit for. Sure things were tough in the 1950s, 1960s and probably the early 1970s but the communities were there and they looked after each other. There was a lot of fun even when we did not have that much money. We had local curling and skating rinks. Today they are gone. They are in the larger centres, and farm families and other industries that look after farmers such as fertilizer dealers drive 40 or 50 miles to take their kids to hockey games or hockey practises or to music lessons. This has all disappeared because we had the good idea that we could live on borrowed money and now it is catching up. I do not want to take too much credit for making things better on borrowed money.

When I look at the latest statistic that a single income family has to pay $7,000 more in taxes than a dual income family it really worries me. That is why things are being geared to a two income family where one member of that family pretty well works full time for the government.

With the Reform's fresh start child care policy we are directing the tax cuts to those families that desperately need it. Under Reform's plan a single income family of four making $30,000 will pay 89 per cent less tax. To me that means a tremendous benefit, that there is that amount of money left to spend on necessities that this family probably was not able to afford before this tax cut. People will appreciate this and will take that into consideration in

the next election because it is the family that still drives the nation. If we do not realize that very soon I think we are in big trouble.

One of the farm papers was mailed to me. In it a gentleman writer portrays what is happening with this Liberal government. It is comic: "You are driving up to Goodale's General Store". Whether there is a store like that I do not know but that is what this writer says: "Your wife has asked you to pick up a loaf of bread. You ask the storekeeper for one loaf of 100 per cent whole wheat but the storekeeper hands you a dozen grade A large eggs. No', you protest,a loaf of bread is what I came in to buy. I do not need eggs. My wife said we need a loaf of bread'. The storekeeper tells you this is better for you. He says `believe me, I have been running this store for three years now and I know what is best for my customers, including you. When I run across something I do not know myself my suppliers explain it to me and tell me what to do. Here are your eggs and that will be $3, please'. Since there is no other general store in this country you will have to take it and like it".

That is what I have seen happening in this political arena for the last three years. We have a government that thinks it knows what is best for families. It tells us: "This is even better for you than you yourself know. It is better that two parents should be working than one paying taxes so we can afford some handouts". I think it is are dead wrong and I will say why.

When I see that 48 per cent of net farm income today is coming from off farm jobs, what is left to the rural lifestyle? Not very much. I must tell this House that not only has the Liberal government increased taxes over the past number of years, but it has really decreased farmer incomes by making certain moves which I believe are disastrous to the farm community.

In 1975-76 when we were told under GATT that we could import 76,000 tonnes of beef, the Liberal government knew better. It increased that to 119,000 tonnes of offshore beef imports. We had a beef industry that was already realizing decreases in prices because of overproduction due to depressed grain prices. This added fuel and the prices continued to slide.

Yesterday I phoned one of the farm input dealers. We got talking about what was happening in the farm scene. He said: "It's sad, Jake. I have had a number of young beef producers come in recently and tell me that they cannot afford to pay their bills. With interest rates at a record low, the lowest in 40 years, the banker is still telling them to liquidate". These people who diversified three or four years ago because of low grain prices are now told that they should liquidate.

What else has happened to these young farmers? We know we had to restructure the western grain transportation subsidies. Every farmer realized that would have to happen. But what did we do? The entrepreneurial young farmers who went into beef production because of low grain prices were excluded from these western grain transportation subsidies because their tame hay farms or silage corn farms did not qualify. They were not able to get funding out of that WGTA payout. They got a double whammy. That is very sad.

Just as these young people started to rebuild their lives with the hope that grain prices would stay low for a number of years, it backfired. The prices went up. Cattle prices went down. Now they are told to liquidate with the lowest interest rates we have seen in a long time. That is not building a country; that is destroying a lifestyle and a country.

Once agriculture is destroyed there is not much left. It drives the engine of a country. It is the backbone of a country and we had better start to realize that.

The marketing of grain prices has also helped to decrease grain prices. We had record high prices last year from January through June. Now we find out through Stats Canada that we have a record carryover of durum wheat and feed grains because of poor weather conditions. This is depressing prices again while young farmers who have started in the livestock industry are being told to go out of business. This means we will need less of these grains when the product is building up. Again we are going to destroy that type of industry.

I cannot imagine it. A young farmer from my province, Mr. McMechan, spent four months in jail because he violated a customs regulation that said he could not export grain without a wheat board export permit. This young farmer sold his grain for the best price he could get, a price that the wheat board was not willing to pay him. So he went to jail. He is not the only one to be prosecuted. There are approximately 300 farmers who are being prosecuted for the same thing. Why? We had record amounts of grain on hand and the wheat board sold 31 per cent less durum last year than the previous year when the demand was tremendous. How is that supposed to build a country?

Sure that farmer violated a law, but in a democracy when we are deprived of selling our product for the best price available, that industry is not going to survive very long. If we are going to provide a democracy where nobody gets a price lower than the next, that is going in the wrong direction.

What are we going to do about this? Are we going to overturn the system? The agriculture minister is asking western grain farmers to either defend the wheat board or totally sell under single desk. This no allowance for an option for people to decide what they want to do.

There is no allowance for competition between grain companies and the single desk marketing system. Competition is what keeps

the system fair and honest. But that seems to be something the government is not interested in doing.

I picked this out of an article in the Ottawa Citizen : ``Canadian families are more like the Cleaver family of the 1950s television than the patchwork of mixed families portrayed in the media during the 1990s. A landmark Statistics Canada survey of 23,000 children found that 83 per cent of the kids under 12 lived in a two parent family in 1994. Only 16.5 per cent lived with a single parent. Moreover, the vast majority of their families were biological families, not reconstructed by marriage or other means''.

The biggest difference between the TV household of the Cleaver family where the mother stayed at home is that today in 36 per cent of the two parent families, both parents have full time jobs. That is a good thing if the mother wants to work or the father wants to work. But what is parenting?

Another article states: "A child's prospects were at least as good with positive parenting in a single or disadvantaged family as with negative parenting in a family with two parents or more money". That tells me that any advantage we can give to the traditional family can improve its lifestyle and standard of living will only be positive for the country. That is what Reform's fresh start family policy does.

Another thing surprised me in a another article on behavioural problems. It stated that a single mother, low income family has 34 per cent more behavioural problems than a two parent family; a 13 per cent difference between the same lifestyle or income because of the parenting. A single mother not in a low income situation has 28 per cent more problems than a two parent family.

Parents are very important in creating good young citizens for the future.

One thing that really impressed me, and I have said it before in this House, was when an RCMP officer from northern Manitoba said: "Jake, it is so much easier to build a good kid than to fix a broken adult". I hope we can do that in this House.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Before going to questions and comments, it is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Mackenzie-Canadian Airlines.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Madam Speaker, I want to pick up on a sentence that the member delivered in his speech when he said: "Any help we"-being the Reform Party-"can give to the traditional family this party supports". I believe that is an accurate phrase from the member's speech. I see the member nodding in agreement.

I would like to suggest humbly that the Reform Party can talk about its commitment to the traditional family. I believe the member is sincere when he talks about that. However, at the same time, I do not think the Reform Party realizes that its campaign that has gone on in this House for the last three years plus on cuts in every sector of government, the lean, mean machine type of approach to government, in fact not only directly but indirectly causes a tremendous assault on the traditional family.

It is important, when we have the opportunity to debate some of these issues, that we realize we have to look not just at the micro issues but at the macro effect. The Reform Party has not been sensitive to traditional family values. It would be interesting to see if the member would say that maybe this is a conversion as we are heading into an election year or something.

Maybe the member could clarify why the Reform Party now believes that its campaign on cuts over the last three years has been an assault on the traditional family and that it is prepared to reconsider that approach and start looking at a more generous approach in using government agencies and departments to look out for the needs of families?

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Madam Speaker, I thank the hon. member for that question. I am very sincere when I say we need to direct our help to low income families.

When I started farming in 1957 I think the national debt was something like $16 or $17 billion. I was able to buy a farm by borrowing the money. I did not have a cent at that time. I paid 6 per cent interest at the bank. The government at that time had brought in a program that gave me 4.5 per cent financing over 29 years. That is what helped me get started.

I was able to expand. On a half section I grew enough product to pay my bills and put a few dollars aside for a rainy day if something went badly wrong because we did not have crop insurance at that time. I was able to raise my family and still have a fairly comfortable livelihood.

Then, all of a sudden, we started to live beyond our means. We needed things we never dreamed we would need. We needed a pickup truck. We needed a car also. Then all of a sudden we realized we were losing implement dealerships and we had to go further and further. Why? Because taxes kept increasing. Taxes went up, up, up.

The amount of taxes that today have to be paid by a young family running a half section farm is unbelievable. They have to have an outside job or they cannot survive on a half section farm. They need at least a two section farm to make it viable.

If you cannot raise half a million dollars today you cannot start farming because of over taxation, because of all the government programs.

In 1957 I needed $10,000 to buy a farm which my dad put up for me. That is all I needed. Today you cannot even buy a garden tractor for that. Why? Tell me why. We have the same land, we have the same natural resources but we have lived beyond our means.

Canada's debt is $600 billion. It will never be paid in my lifetime or that of my children or my grandchildren. That is debt we borrowed on the backs of future generations. We must give the consumer some buying power.

In 1991 a family could buy an average sized car with 28 weeks of work. In 1996 statisticians tell us that it takes 36 weeks to buy the same type of car. How are consumers supposed to be able to buy the products that they need? Sixty per cent of the domestic economy is still driven by consumer spending.

When the prime interest rate is at 3.5 per cent and consumers cannot afford to spend, something is wrong in the country. The buying power is gone to a few elite people. That is why we are directing this tax credit to the lower income families because an $850 tax credit to that family buys a lot of stuff for them as compared to the elite.

The other thing that has happened is that today a lot of high paid people are running corporations. These multimillionaires do not pay a cent of tax. They do not even need this tax credit. However, our $600 billion debt has to have the interest paid on it. Who is paying it? The middle income earners, the low income earners.

With our new fresh start program we will take almost one million people out of that tax bracket, or at least lower it for 89 per cent to give them some buying power. When they have buying power then the economy is going to start booming again like it did in the fifties and the sixties.

We have to realize that we have had 40 years of Conservative and Liberal governments that had a lot of good ideas and we are bankrupt. If a farmer or a businessman had that debt load compared to his income as the government has today he would be foreclosed on.

I see the hon. member wants to ask another question, so I will give him some time.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Madam Speaker, I agree with many parts of the member's comments. I agree with the statement that consumer spending is what drives a big part of this economy. I think the member mentioned that close to 60 per cent of the economy is made up of consumer spending.

That leads me to ask the member a question about monetary policy. I personally believe that one of the real challenges we have in the House is to review the whole monetary policy, in other words, the management of the distribution of money in this country. As a member pointed out a couple of days ago, the Bank of Canada is totally independent of this Chamber. The relationship with banks is such that they can decide basically on their own what monetary policy is all about in this country.

I would like to ask the member, one of the leaders of the Reform Party, if he would agree that the issue of monetary policy needs serious debate in this Chamber.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Madam Speaker, I thank the hon. member for his question. I happen to agree with him, but I do not have the answers. I am a farmer. I am not a financial wizard. However, I know that if I spend more than I make I will get into financial difficulty.

That is what this country has done. It has spent more money than it has received in revenue. It has had to borrow. Whether we blame that on the Bank Act or whether we blame it on the people who run the government and who should look after the Bank Act is the question. I believe it is the government who is to blame. It has allowed the banks to get a crippling hold on us. When you owe banks money they own you. When we do not owe them money they come to us to borrow it. That is the big problem. I hope I have clarified that somewhat.

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, I am very pleased to be able to speak today on the Reform Party motion which calls for the child care tax deduction to be converted to a tax credit.

I was interested in the comments of my colleague, the member for Broadview-Greenwood, when he asked the Reform Party member who spoke earlier about this new generosity of spirit as it relates to social programs. It seems to be a new position which has been taken by the Reform Party. I thought I heard a hint of increase in corporate taxes as well.

I will be sharing my time today with the hon. member for Parry Sound-Muskoka.

As members have said today, when the Reform Party refers to a child care tax deduction, I believe it is really referring to the child care expense deduction. It is a matter of terminology and wording, but it is a point which should be clarified.

I am firmly committed to child care programs. I support a strong federal government role in the area of child care support. In fact, the government is on record as supporting a national child care program. The obstacle, certainly in the province of Ontario, is getting the provincial government to agree to cost share the program. Some would say that if the provincial governments will not cost share, why does the federal government not move unilaterally? I believe it would be wrong to do that. I do not see any rationale, in terms of fiscal policy or public policy, which would indicate that the federal government should unilaterally move on a

national day care program, even though I feel strongly that we need one.

Perhaps members of the Reform Party will talk to their colleagues at Queen's Park. They certainly seem to have their ear on many issues. Maybe they could convince them that they should move swiftly to co-operate with the federal government on a child care program.

Coming back to the specific motion which is before the House today, not unlike many Reform Party initiatives, it provides no relief to the individuals in our society who need the help most. Converting the child care expense deduction to a tax credit benefits only those who are paying income tax. Members of the Reform Party can talk about numbers here and numbers there and who benefits and who does not, but the fact remains that if it is changed to a tax credit, or even if it is an income tax deduction, it only affects people who are paying income tax.

I would like to speak about the individuals in my riding who are on unemployment insurance or welfare. They would not benefit from what is being proposed in this motion. These are the people who need it the most. Let me provide a specific example.

In my riding in Etobicoke North there are many members of the Somali community and many single parents, many mothers separated from their husbands with large families to support and maintain. In many cases they have no child care support so they cannot leave their dwelling to learn English. If they could learn English, they could better integrate into Canadian society. A child care tax credit with respect will do nothing for these individuals. There are many other individuals in our society who are in the same predicament.

Besides this major reservation of mine for this motion, the motion states that the Income Tax Act currently has a bias against parents caring for their children. Nothing could be further from the truth. Our government currently provides nearly $1 billion in tax assistance to families who provide care in the home for dependants. This is in addition to the $5 billion that the federal government provides in child tax benefit assistance.

Let me describe first the assistance the Income Tax Act provides to both parents and children and to persons with disabilities and families caring for elderly or disabled relatives. The child care expense deduction, which has been referred to today by my colleagues opposite, helps parents with modest incomes with child care expenses they incur while earning income or attending school full time or taking an eligible vocational training course.

In addition to the regular child tax benefit of $1,020 for each child, the child tax benefit supplement helps parents who choose to remain in the home to raise preschool age children. Assistance is provided to modest income families who have preschool age children but do not have deductible child care expenses. The supplement is $213 for each child six years old or younger.

Some of the Reform Party members earlier spoke of their models and of consultants who have run the numbers. I can say that the models I am familiar with indicate that the motion before us today would really impact beneficially 25 per cent of those people in this predicament and need.

The working income supplement is another. It helps low income working class families meet some of the extra costs related to earning employment income with a non-taxable benefit of up to $500. Changes introduced in the 1996 budget will double the supplement to $1,000. The working income supplement is available to two income families as well as single earner families where one spouse stays at home as a caregiver.

The Income Tax Act also provides assistance to persons with disabilities and to families caring for elderly or disabled relatives.

The disability tax credit provides important benefits for persons suffering from long term mental or physical disabilities. It reduces applicants' federal tax by approximately $720 and is equivalent to a tax rate of 17 per cent. The unused portion of the credit can be transferred to a parent contributing to the support of the disabled person.

Additionally we have the medical expense tax credit which provides tax relief to those with extraordinary medical expenses by providing a credit for medical expenses up to $5,000 in respect of part time attendant care expenses. This is specifically intended to help families caring for elderly or disabled relatives at home by providing tax assistance for part time or temporary attendant care. Families who care for elderly or disabled relatives can claim the unused amounts of the credit.

Persons caring for disabled relatives may also claim a disabled dependent credit, which was significantly increased in the 1996 budget. The credit reduces the federal tax payable by a maximum of $400, or the equivalent of a maximum deduction of $2,352 for a person whose income is in the 17 per cent tax bracket.

The Reform Party motion states that the government should convert the child care tax credit, meaning I believe as I stated earlier, the child care expense deduction to a tax credit. However, there is no discussion of the cost to the government of such a tax

expenditure. I find this most surprising from the Reform Party because it is supposed to be a fiscally responsible party. Perhaps I should not be surprised given its recent flip-flop from its focus on the deficit to its focus on tax reductions.

In the next few weeks I will supporting Bill C-214, a private member's bill proposed by the hon. member for Durham which calls for a full disclosure of costs for all legislation introduced into this House.

I have stated before in this House that the best social policies are jobs in a healthy economy. When the Minister of Finance brings in his budget next year I am quite confident he will not introduce measures such as this one to assist individuals in our society who do not need help or those who are already benefiting significantly from benefits already in the Income Tax Act. For this reason, I will not be supporting the motion.

[Jim Abbott, Reform, Kootenay East, BC]

Madam Speaker, I suspect that this hon. gentleman, as every other one of the Liberals who have stood up, have not taken the time to look at the Reform's actual document, the fresh start for Canadians. In taking a look at it they would realize that there is a very specific plan.

Let me talk specifically about the fact that we would be increasing the basic amount of the basic personal deduction from $6,456 to $7,900.

I have two questions and I will keep them very short. I wonder if this member and every other member of the Liberal caucus is aware of this fact. Since 1983-and we always say, Liberal, Tory, same old story, and the Tories started this-they decided that they were going to de-index the relationship of the basic personal exemption from anything to do with inflation unless it exceeded 3 per cent. This was really cute because obviously if inflation only went to 2.9 per cent, then the basic exemption would not increase. It was a very subtle and quiet way and one which most Canadians were not aware of that if there had been full indexing as originally had been envisioned with the basic exemption, that in fact the basic exemption today instead of being $6,400 and change would be $7,800 and change.

It is no coincidence then that the Reform Party is simply giving back to Canadians that which the Liberals and the Tories have taken away. When we increase the basic exemption from $6,400 to $7,900 we change the fact that the people at the low end of the scale who are earning for the sake of argument, $500, $600 or $1,000 a month, would suddenly find themselves not paying any tax at all. That by the way is also part of the story where we are increasing the spousal amount from $5,380 to $7,900 as well.

I wonder if the member is also aware of the way that he and the Tories have been very quietly taking money from people. In fact we have been accused of doing a flip-flop on the $4 billion to be able to support health care and the Reform Party position is that after we have achieved a balanced budget we would then proceed to put $4 billion back into health care. It is he and his colleagues over a two year period who have removed $7 billion from that package, yet they have the audacity to say that we are the people who are doing the cuts. It is the Liberals who have done the cuts and the Reform Party is going to put the cuts back where they should never have been taken from in the first place.

Is the member aware of the fact that this basic exemption creep has been happening as a result of the traditional old parties just taking more and more money out of Canadians' pockets? Is he also aware of the fact that it is he and his colleagues who have removed $7 billion from health care funding in Canada?

[Roy Cullen, Liberal, Etobicoke North, ON]

Madam Speaker, on the first question I would comment in a couple of ways, first on the indexing of the basic exemption. I have not seen the member's numbers. Frankly I am not sure if he is planning to give us the fresh start document as a stocking stuffer but I would be glad to read it over the holidays.

The member opposite was talking about the rate of inflation in Canada monetary policy. It is clear that inflation has been kept to a very low level. I would be surprised if those numbers even if indexing went forward would produce the kind of difference the member is talking about but I would be glad to look at his numbers.

As a government we would like to implement a lot of things and do more with tax but our job is to reduce the deficit. It is quite intriguing that the member talks about the Reform plan to first balance the budget and then put money into social programs. It was only six or eight months ago that the Reform Party was talking about reducing or completely eliminating the national debt. It was only in the last election that the Reform Party was talking of cuts of $12 billion out of social programs. In addition to what the finance minister had in his fiscal plan, now the member is talking about putting money into social programs. This new approach I find refreshing but it is a little inconsistent.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

Madam Speaker, I appreciate the opportunity to rise in debate on this motion by the third party.

We can probably begin the debate by certainly agreeing that everybody in this House and indeed every Canadian in the land would support the concept that we need to help children in Canadian society. I do not think anybody would disagree with that. However the way that the Reform Party has made this suggestion does not totally provide all of the facts and ramifications to the Canadian people. It is important that we do just that.

First of all, the actual concept of how this would work is not spelled out either in the resolution nor is it spelled out that I can see in the Reform's particular plan. Reform talked about it being turned into a tax credit. Is it an equivalent tax credit or is it a tax credit for the amount of the deduction? They are not clear about that and it makes a tremendous amount of difference on the economic impact of this item.

Is it going to be a refundable or non-refundable tax credit? Again not only is that an important concept in terms of the fiscal ramifications but the way Reform is planning to work this socially makes a big difference on whether it is refundable or non-refundable.

Regardless of which way the Reform come at it, and to be fair to the Canadian people they ought to be saying which way they want to approach this, this is going to be a tremendous cost to the Canadian taxpayer. Estimates I have received from various sources range from $1 billion up to $12 billion. I think that $5 billion to put this plan in place is probably a pretty good bet. Is it worth $5 billion? Perhaps, but what the Reform Party fails to tell us in the House and Canadians in general is where it is going to get that $5 billion. What will Reform cut? What is Reform going to take it away from? How is it going to fund this?

The Reform Party talks about honesty and integrity in government, yet it makes a major proposal like this one and it does not clearly identify where that money is going to come from. Reform ought to do that. I will get to Reform's green book in just a minute.

The expanded plan is going to deal with 25 per cent of Canadian families. Those families have a need and a requirement as do all families in Canada. I have a lot of difficulty when we are putting in a program like this one. We could very well be introducing it for-and I have often heard this expression before-these millionaires who would be able to get tax breaks and so on. There are going to be those individuals who will benefit from it.

The Reform Party should agree and I think most Canadians would agree that in a time of limited financial resources we should use those resources for those Canadians who need it most. That is why we have a tax system with a child tax benefit built into it which that. It helps those Canadians who need it most. Quite frankly we should not be surprised that the Reform Party's proposal is not well costed or does not make a lot of economic sense. This is evident when we look at its overall economic policy and the suggestions in its new fresh start.

In summary, the fresh start proposal suggests cutting taxes, putting $4 billion of new money into health care and balancing the budget. They will do all this at the same time, starting with the $24 billion deficit we have today. That is the basis of what Reformers are trying to sell to the Canadian people. However Canadian people know and basic math tells them that it will not to work.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

It is magic.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

A good word for it.

The party opposite suggests that some things be done for Canadian families. Reform will reduce our support of health care so we will only fund core health care services. This means individuals will need supplementary private medical insurance to supplement that core.

Reformers would make changes to the EI program and have talked about eliminating parental leave. That is hardly a policy that supports family. They will eliminate the Canada pension plan. They want to replace it with RRSPs. Again individuals will have to buy into their own plans. It seems the people who will be helped by this will be the banks and insurance companies that sell RRSPs and private insurance. Perhaps they are the beneficiaries.

I agree with the party across the way that low income families will get tax cuts. That is absolutely right. However high income families will get even bigger tax cuts, and that is not the way we work in this country. When we have limited financial resources we make sure Canadians who need the help most receive the most help.

Several times in today's debate we have heard members opposite hark back to the good old days of the fifties and sixties. That speaks volumes. It shows the Reform Party looks to the past. It is not capable of handling the present and certainly has no vision for the future.

More than that, it shows the Reform Party does not understand the basic fabric of Canada. It does not understand that we are more than individuals, that we are more than just small islands unto ourselves, or that Canadians form a society. For 50 years we have recognized that we have a collective responsibility to each other, that one Canadian helps another Canadian who helps another Canadian, and that we have the vehicles in government to allow that to happen.

That is why Canadians support an old age security system paid for by general tax revenue. That is why they support a public pension plan so the wealthiest Canadians are not the only ones who can afford a pension. That is why Canadians support public health care, to ensure every Canadian has an opportunity for health care and not just the wealthy.

That is what the fabric of Canada is about. That is what Canadians support and that is why Canadians elected a Liberal government and will elect a Liberal government again.

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

Madam Speaker, I love those caring, sharing Liberals:

"From each according to his ability to each according to his needs". I think I heard that before somewhere.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

Come on across.

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

That was a quote from Karl Marx. It is a pity the hon. member was not here during the day when all this was being debated. He would have heard the answers to most of the questions he raised in his little diatribe.

[Jim Abbott, Reform, Kootenay East, BC]

He has never read his red book.

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

He should have read the background material, the fresh start booklet and the independent analysis stating that our numbers work, that the cuts we have suggested can me made without, as he says, tearing the heart out of our social programs.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

I never said that.

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

I am paraphrasing with a little hyperbole. Let us take one specific example the Liberals love, the false accusation that the Reform Party is out to destroy medicare.

Which government cut $6 billion out of the transfers to the provinces in the last three and a half years?

[An hon. member]

That would not be the Liberals.