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.