Mr. Speaker, I am pleased to enter into debate on the issue of Bill C-10 and, more important, to support passage of the bill.
It is appropriate to review what has happened and why it has become a problem. The Canada-U.S. tax treaty was amended and came into effect on January 1, 1996. Unintentionally social security benefits and disability benefits of some Canadians who worked in the United States for part of their working lives were taxed by the U.S. government at roughly 25.5%. We basically did the same for American residents who were receiving Canadian benefits.
The problem is that Canada has a very fair and reasonable system of taxation which allows non-residents to file tax returns in our country and to seek a refund of the taxes if they were not in fact taxable. Unfortunately the United States does not have a similar system of refund.
As a consequence a good number of seniors—as was mentioned today it is upwards of 85,000—discovered that suddenly taxes were being deducted from them that they had no real way of getting back.
In my riding and across the country I have dealt with many seniors who are concerned about the issue. I spoke to a woman in my riding, Ellen Mowat, whose total income was about $14,000. Of that amount, $10,000 was social security benefits. The result was that it increased her taxes to $2,500, and the woman was only receiving a total of $14,000 in income.
Statistics Canada says that low income cutoffs for people are about $25,000. Clearly Mrs. Mowat would be considered to be in poverty. Yet at the same time she had this problem of over $2,500 a year being deducted from her income.
I had letters from Mrs. Leona Jeremy of Middleton, Nova Scotia. It was the same situation. She had $14,000 of income and was paying over $1,000 a year in taxes. It goes on and on. Les Stevens, a resident in my riding, had a total income of $12,000 a year and was paying $1,000 in tax through this retrogressive tax the United States imposed. He had no way of getting it back.
It is interesting to note, in spite of some of the comments of the Reform Party today, that none of those people will pay any more taxes under these changes. In spite of some of the things the Reform Party has been saying today about tax increases, the bottom line is that these people will not be paying any more taxes. In fact they are entitled to a refund of their taxes.
I will address some of the other issues presented today. One is the income inclusion amount in Canadian taxes. It is true the income inclusion amount has been increased from 50% to 85%. When I say “income inclusion amount” I am talking about people in Canada receiving social security benefits from the United States being required to report 85% of that income for tax purposes.
The Reform Party went on and on about the 85%. The reality is that it was already at 50%, so there has been an increase in the income inclusion amount of over 35%.
We should think about what it means. People in some jurisdictions will be heavily influenced, such as Windsor and other border cities. There could be someone receiving Canada pension benefits and paying 100 cents on the dollar on their taxes because of the income inclusion factor being 100%. Another person receiving a U.S. pension could still report only 85% of it. How could anything be more fair? Many would suggest it should be higher.
Once again the Reform Party is taking little shreds of evidence and turning it into a fiasco. Of the 85,000 seniors who will be affected very few will pay more taxes.
The law came into effect on January 1, 1996. What has happened in the interim? Taxes have actually been held back. Mrs. Mowat is missing $1,000. It goes on and on. For over two years these people on meagre incomes have had thousands of dollars held back by the U.S. government. Our Minister of Finance has taken on their cause and negotiated with his American counterpart to relieve the problem.
It is interesting the U.S. Senate committee has already accepted the proposal without amendment and is pushing it through the U.S. Congress. Here we have the Reform Party saying that it will delay it and wants to amend it.
Who are Reform members talking about protecting? Are they talking about Mrs. Mowat? Are they talking about low income seniors across the country who are out this money? No. They are talking about the very highest income earners. That is with whom the Reform Party is siding.
The Reform Party is stating today that it is prepared to delay the legislation? Why? So a few people who do not want to pay do not have to recognize 85% of that income on their tax returns and only have to recognize 50%, even though every other senior in the country receiving a Canadian pension has to recognize 100%. Reform members are talking about these people. They want to protect them. That is atrocious.
Reform members spoke about people who could not afford to get in their cars to go and get groceries. The U.S. government has $5,000 of Mrs. Mowat's money and she is only making something like $15,000 a year. What does the Reform Party say to Mrs. Mowat? It will somehow delay the legislation. Tell me how that is being responsible.
The Reform Party talks about the progressivity of the system. We have a progressive system. I have worked with the Canadian Association of Retired Persons. The Reform Party is saying that it will get on the case and really study it. It will drag its feet through parliament.
Where were Reformers when this was going on in the 35th parliament? I did not hear them asking how they could help these poor people. It was members on this side of the House and members of the Bloc who asked how we could resolve the problem.
On various occasions the Minister of Finance went down there to negotiate with his American counterparts. He told them that the problem had to be resolved because it was hurting Canadian seniors.
The Reform Party is a great wall of silence. When does the Reform Party become interested in this issue? When we talk about increasing the income inclusion amount from 50% to 85% of the 85,000 seniors affected by this. I heard the member for Calgary Southeast say the number of people affected was 10,000. He did not say 85,000. He said it was, at most, 10,000 who may see their taxes increase. It is those 10,000 who the Reform Party is concerned about. It is not the 75,000 sitting out there who may well become deceased while they wait for this process that the Reform Party is now talking about dragging through the House of Commons.
Most people can see what the real issue is today. The government is asking for this bill to be fast tracked because we want to get that money back in the hands of seniors.