Debates of May 29th, 1996

Income Tax Act

[Jim Silye, Reform, Calgary Centre, AB]

It is obvious the member is trying to find a way to get more money into the pockets of Canadians so they can look after the essentials of life, their children, the disabled and the aged and have more disposable income.

The solution is not by increasing the caregiver tax credit. The member also hinted that the solution is tax reform. He talked about the blue ribbon commission which will come up with a pink ribbon prize, I am sure. He is encouraging the finance minister to look further.

I support his efforts to eliminate discrimination against stay at home parents. This motion is too vague. It does not give any amounts and it will probably get shot down the same as my private member's bill did even though they both tried to do the same thing.

He is absolutely right about the tax reform angle he talked about. We have to create a tax free zone and allow the first $8,000, $9,000 or $10,000 of a person's income to be tax free. We should also allow that same amount for a spouse, whether or not that spouse works outside the home. It would be the best way to develop good social programs by leaving the money in the hands of the people who earn it.

Currently the Reform Party is working on a simplified tax system in which the first $8,200 would be tax free along with another $8,200 for a spouse, for a total of $16,400, and $2,000 for each child up to age 16, which would be deductible as well. That would total $20,000 for a family of four which would be zero taxed. Anything above that 21 per cent would be revenue neutral and all the other exemptions and deductions for the wealthy and the loopholes would be gone.

The income would be redistributed from this system of taxation which features a single rate through direct government spending, as is done through the Departments of Transport, Health or HRD. There would be better accountability and visibility of spending. That way we would get to a balanced budget faster and then we could decide how much more money to leave in the hands of the people who are suffering, the people who have specific needs for disabled. If they happen to be low income we could decide how much more we could help them. We could do it through direct

grants. Social workers in the field could find out where those 1 million starving children are.

We spend $9 billion on this complicated, confusing, convoluted tax system we have now. Through five different programs we spend $9 billion on children, subsidizing single parents, child care deductions, day care centres and there are a million children starving? This does not make sense to me.

I respect the efforts and the intent of the motion. However, because of its vagueness and lack of a cost benefit analysis I will be voting against it. It must be more specific. I really believe we should have a system in which the money is directly given to those people identified as being truly in need through direct spending instead of this mirage of the Income Tax Act. Change it, replace it with a simplified flat tax. That is how we could truly solve our social problems and create more hope, growth and expansion in the economy.

[Barry Campbell, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, with all this talk from the member opposite about shooting down bills I am proud to be part of a government that brought in gun control.

I am pleased to address private member's motion M-30. It asks the government to provide a child caregiver tax credit for those who look after preschool children, the disabled, the chronically ill or the aged in the home.

The motion implies that the Income Tax Act somehow discriminates against families that make the choice to provide care at home for the categories of people mentioned earlier. In support of his motion, the member for Mississauga South implied in his remarks that the government does not care about families as much as he does. I know that is not the case.

The motion appears to target the provision of the Income Tax Act which disallows the deduction of child care expenses by one income earner couples. The purpose of the child care expense deduction is to recognize for tax purposes the child care expenses that taxpayers must incur in order to earn income, to attend a recognized educational institution full time or to take an eligible vocational training course.

This deduction provides a way for the tax system to acknowledge that those taxpayers have a lesser capacity to pay taxes than others with an identical income who do not have child care expenses. This deduction ensures up to a limit that income used to pay for child care expenses is not taxable.

In order to assist parents who choose to remain at home to raise their preschool aged children, the federal government introduced a supplement to the child tax benefit. The supplement is a benefit to low and middle income families that have preschool aged children but do not have deductible child care expenses. This year the supplement is $213 for each child six years old or younger and is in addition to the regular benefit of $1,020 per child.

The federal government provides additional assistance to low income families through the working income supplement. This is a component of the child tax benefit. The working income supplement directs assistance to low income families with children by providing an additional annual non-taxable benefit of up to $500. It supplements the employment earnings of families with net incomes below $25,921.

As indicated in the budget presented to the House of Commons on March 6, assistance to low income families will be enriched through a two step doubling of the working income supplement. The maximum annual benefit will be increased from $500 to $750 in July 1997 and to $1,000 in July 1998.

Recall for a moment that the motion suggests tax assistance should be made available to families that provide in home care for elderly relatives or relatives with disabilities. This already happens. Tax assistance for people with disabilities and for families caring for elderly or disabled relatives at home is provided by a number of existing tax measures.

For example, significant benefits are provided to those with a severe and prolonged mental or physical impairment through the disability tax credit. This credit reduces the federal tax of claimants by about $720 and is equivalent to an exemption of $4,233 for those in the 17 per cent tax bracket.

Where the disabled individual has little or no income, the unused amount of the credit may be claimed by a supporting relative. The ability to transfer the disability tax credit recognizes that people with disabilities and low incomes are often supported and cared for by family members.

I will focus on another provision of the act to further indicate things the act already provides for the categories of people mentioned by the hon. member in support of this motion. The medical expense tax credit is another such provision. It provides tax relief to those with extraordinary medical expenses by providing a tax credit for medical expenses in excess of a certain percentage of a taxpayer's net income.

The medical expense tax credit reduces the federal tax of a claimant by 17 per cent of qualifying unreimbursed expenses that exceed 3 per cent of net income or up to $1,614.

Among the many expenses that qualify for this credit is up to $5,000 in respite or part time attendant care expenses. This is specifically intended to assist families caring for elderly or disabled relatives at home. Tax assistance is provided for part time or temporary attendant care. Families caring for elderly relatives or

relatives with disabilities may also benefit from the ability to claim unused amounts of the credit.

Individuals supporting relatives with a disability may also claim the infirm dependant credit. This credit was significantly enriched in the budget presented to the House on March 6, 1996.

According to the income of the dependant, this credit reduces the federal tax of a supporting relative by up to $400 and is equivalent to a deduction of as much as $2,352 for those with incomes in the 17 per cent tax bracket.

Through all of these measures, the federal tax system provides a significant amount of tax assistance to families that decide to provide care in the home for preschool aged children, the disabled and the elderly.

I have given the House this evening a great deal of information about various programs which are already contained in the Income Tax Act. An hon. member opposite asked about cost. Let me state for the record that the programs I have outlined already provide $1.4 billion in support to families that decide to provide care in the home for preschool aged children, the disabled and the elderly. These are substantial amounts of money available to families that support the disabled and the elderly. One of the problems with the hon. member's motion is that we do not know what it would cost.

I urge the House to withhold support for private member's Motion No. 30.

[Ovid Jackson, Liberal, Parliamentary Secretary to President of the Treasury Board]

Mr. Speaker, it is my pleasure this evening to speak to Motion No. 30. I welcome the opportunity to speak to the motion which was put forward by my hon. friend, the member for Mississauga South.

The motion asks the government to provide a caregiver tax credit for those who provide care in the home for preschool aged children, the disabled, the chronically ill and the elderly. The tax system already provides a significant amount of assistance to families that provide care in the home for their dependants.

For parents with children, the child care expense deduction helps those with modest incomes with child care expenses they incur while at work, attending school full time or taking an eligible vocational training course.

The supplement to the child tax benefit helps parents who choose to remain in the home to raise their preschool children. It provides assistance to low and middle income families that have preschool aged children but do not have deductible child care expenses.

This year the supplement is $213 for each child who is six years old or younger and is in addition to the regular benefit of $1,020 for each child.

The working income supplement, the WIS, a component of the child tax benefit, helps low income working families meet some of the extra costs related to earning employment income, such as child care and transportation to work. It is a non-taxable benefit of up to $500.

Changes introduced in the 1996 budget will double this supplement to $1,000 by 1998, increasing the benefits to more than 700,000 working families by an average of $350 a year. While the WIS is available to two-income families, it is also available to the single earner families where one spouse stays at home as a caregiver.

For people with disabilities and families caring for elderly or disabled relatives, the disability tax credit provides significant benefits to those with a severe and prolonged mental or physical impairment. The credit reduces the federal tax of claimants by about $750 and is equivalent to an exemption of $4,235 for those in the 17 per cent tax bracket. The unused amount of the credit can be transferred to the supporting relative to recognize that people with disabilities and low incomes are often supported and cared for by family members.

The medical expense tax credit provides tax relief for those with extraordinary medical expenses by providing a tax credit for medical expenses in excess of a certain percentage of a taxpayer's net income. Among the many expenses that qualify for this credit is up to $5,000 in respite, or 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.

Individuals supporting relatives with a disability can also claim the infirm dependant credit which was significantly enriched in the 1996 budget. Depending on the income of the dependant, the credit reduces the federal tax of a supporting relative by up to $400 and is equivalent to the deduction of up to $2,353 for those with incomes in the 17 per cent bracket.

Through all these measures the federal tax system provided $1.4 billion in tax assistance in 1996 to families with preschool aged children, the disabled and the elderly.

My colleague's motion to introduce a caregiver tax credit does not indicate how much such a credit would cost taxpayers, nor are there sufficient details to estimate the proposed cost. If the proposed credits were to cost more than the current level of tax assistance, the government would have to reduce spending on other programs in order to avoid an increase in the deficit.

For these reasons the government cannot support private member's Motion M-30.

On another note, there is no question that all of us would like to have a perfect family situation. We would like to have children reared in an environment that is caring and nurturing, where they get all the tools they require to become good citizens. The government works on many fronts. There are moneys in the Department of Health. There are moneys in the HRD department. There are income tax benefits. All of these are used collectively to try to improve the situation of Canadian families.

Where children are reared properly with a lot of nurturing and caring there is certainly a good community. If we travel around this world and see an environment where people are doing well, where there are many jobs and the environment is good there is less crime. When a country is functioning properly children are treated properly. They get the correct nurturing, they get the correct education and they develop. A country's chief resource is its people. It is people and ideas. It is not physical structures.

I like the general objectives of the motion of my colleague, the member for Mississauga South but obviously there are mechanisms currently within the system. After the deficit is looked after we may be able to look in that direction in the future.

[The Acting Speaker (Mr. Kilger)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. Kilger)]

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Kilger)]

All those in favour of the amendment will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. Kilger)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. Kilger)]

In my opinion the nays have it.

And more than five members having risen:

[The Acting Speaker (Mr. Kilger)]

Pursuant to order adopted earlier today, the recorded division on the amendment stands deferred until Monday evening, at 9.30 p.m.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, on April 30 I put a question to the Minister of Transport about the Quebec bridge. As the reply did not satisfy me or the people of the Quebec City area, I hope that I will receive a better answer today from the minister or his representative.

Members will remember my question. In earlier replies, the minister kept repeating: "The Quebec bridge belongs to CN, and CN is now a private company. Since it is a private company, I, as the Minister of Transport, have no responsibility".

This is precisely what we want to challenge. In my question, I referred to the bridge between New Brunswick and Prince Edward Island, in which the federal government has invested $2.1 billion, although it is being built by a private enterprise, a consortium. We were trying to show that there was a double standard. After all, the Quebec City area has six times the population of Prince Edward Island.

Today, I would like to argue my point, since we have a few minutes. Why should the federal government continue? It cannot, in our view, invoke the transfer of responsibility to CN because of privatization for the following reasons.

CN was to receive in exchange for one dollar lands worth $30 million for reconstruction and architectural restoration of the Quebec bridge, according to an agreement entered into in July, 1993. Earlier this year it was learned that Jocelyne Bourgon, of the Privy Council, the highest public servant in that body, had stated in a December 1993 letter to the Quebec deputy minister of transport, Mr Lalande, that the land would be fully transferred to CN only over a five year period.

In addition, the grant deed was signed only on November 7, 1995 by the federal Minister of Transport. This means, therefore, that the lands will not be fully deeded over the CN before November of the year 2000. The considerable neglect of the bridge occurred during the time that the federal government was still the owner.

By 1998, the federal government will have invested, and I give you these figures just as an example, $250 million in the Champlain bridge and the Jacques-Cartier bridge, both located in the province of Quebec. So, we think the federal government should do the same for the Quebec bridge.

Contrary to what the minister stated, the Government of Quebec has indicated that it was ready to reopen the agreement concerning vehicular traffic on the bridge, provided the federal government also makes a commitment within an agreement with both the CN and the Quebec Department of Transport.

The Quebec Department of Transport is ready to provide $1.5 million a year, over the next 16 years, even if its current contribution is only $25,000. Also, earlier this year, the Quebec bridge was designated a historic national landmark by the Minister of Canadian Heritage. Soon, Unesco will be designating the bridge as a world heritage site.

Under these circumstances, I do not think the federal government can argue that it is no longer its responsibility, as I said at the beginning, since it has yet to meet all the commitments it made to the CN.

Therefore, I would ask the representative of the minister not to give us the same arguments the minister used to turn down my request and to tell us if he has found the time, since the last time I asked a question on this issue, to meet with the Quebec Minister of Transport, who I know is very willing to do something about this whole situation.

I think the argument he used in his answer was also suitably addressed. So, can the federal government tell us what it intends to do about repairs to the Quebec bridge?

[Stan Keyes, Liberal, Parliamentary Secretary to Minister of Transport]

Mr. Speaker, I consider it a privilege to address the question from the hon. member for Lévis concerning the government's responsibility for the Quebec bridge. I have had the occasion to drive over the magnificent structure and I have had the opportunity to be on a boat and pass under this historic landmark.

The hon. member for Lévis can ask the question time and time again, but we cannot change the facts. The Quebec bridge has been conveyed to CN along with other entrusted properties. In return, CN accepted a number of commitments, including as the new owner of the bridge, responsibility for a major maintenance program. CN is also committed to the 1993 agreement which transfers to it approximately 78,000 acres by July 1998 and not the year 2000 as was suggested by the hon. member for Lévis.

Despite the fact that the lands are located in six different provinces and jurisdictions, I am pleased to report that CN has made significant progress. Close to 20,000 acres have already been transferred.

Let me remind the hon. member that CN as owner of the bridge must restore this magnificent structure in order to ensure its long term viability. I reiterate that the bridge is CN's responsibility and I am confident it will fulfil its commitment as owner. CN has issued tenders already for more than $1.5 million worth of work which will be undertaken this summer. There will be other significant expenditures by the company in the future.

As the hon. member is aware, the deteriorating physical appearance of the bridge is due in large part to the thousands of vehicles, the vehicular traffic that uses it daily. The hon. member should urge his provincial colleagues to acknowledge that the bridge's main purpose is a highway linking the north and south shore. He should urge his provincial counterparts to sit down with CN to negotiate an accelerated maintenance program that will see the main users pay a fair share.

[The Acting Speaker (Mr. Kilger)]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24.

(The House adjourned at 6.55 p.m.)