Madam Speaker, I am happy to rise to speak to Bill C-223 moved by the member for Portage—Lisgar which sets out to provide mortgage interest tax reliefs to first time home buyers, up to a maximum of $100,000.
It is important that we all recognize the importance of encouraging home ownership. We know that not only a house but a home is an important part of how we provide a good start for our kids and for our families in general. We all share in the concern and the concept that we need to do everything we can to encourage home ownership.
The question is how we go about doing this, in a fair, equitable and affordable way. It is not surprising that the Reform Party would take an issue of some complexity and present a simplistic and unworkable solution to it.
The Reform Party constantly sees complex things as simple. In fact, it consider everything to be simple. Some things are not quite as simple as they appear. Some things require more sophisticated responses than that put forward.
We need to ensure that families can find affordable and good quality homes. The question is how to do that. We know that over the years one of the main disincentives, especially to young families trying to afford homes, has been a high interest rate policy. We now find this reduced. Consequently one of the pressures on home ownership has been reduced.
Let us talk about what this bill does or perhaps what it does not do. First, it does not recognize regional disparities across the country. A $100,000 home in one part of the country may be a mansion whereas in another part of the country may not be much of a house at all. Why treat those who in one part of the country can buy a huge home for $100,000 the same as those who cannot find a very large place in a more expensive community? To treat different circumstances the same way is simplistic and simply will not work.
What about the way in which the bill works? The Reform Party would like to suggest that this is not terribly expensive, that it will encourage growth in the home building market. No doubt it will. We need to cost these issues out. As the parliamentary secretary indicated, this measure would cost $3 billion a year.
As he indicated, and even the Reform Party must know, that money has to come from somewhere. It would come from taxes paid by those who are not covered by this benefit, and I suppose those who are covered by the benefit might have to pay taxes on other things in order to make up that $3 billion difference, or a reduction in services provided to society as a whole through government programs.
That is money provided then by those who do not benefit from this particular provision. I ask why is it fair, why is it acceptable, why is it desirable to have those who cannot afford to have a home subsidize those who can. When was that fair? When was that acceptable? It is clearly simplistic, but when was it acceptable?
What would happen if mortgage rates increased? That is not beyond the realm of possibility. Then the cost would increase even further.
The point has been made that there is no horizontal equity here. What about the person who bought a house some time before 1994 who is struggling to keep that home together and provide a good family life for their children? They will not benefit from this program, even though they may live right next door to somebody who will. One family will benefit to the extent perhaps of $6,000, $7,000 or $8,000 a year in mortgage payment tax credits, tax reductions or tax expenses, whereas the family next door will not. That seems to me to be not only patently unfair but patently absurd as well.
We have a situation which is not fair across groups. It is not fair across families in similar circumstances and it represents a significant tax break to some Canadians who are rather better off than others. We have to ask where would that money come from and how much is involved.
The member who proposed the bill mentioned the United States situation. Some mention has been made of capital gains on principal residences in the United States as a part of that total tax package. I wonder whether the Reform Party through this bill is suggesting that indeed we should have capital gains taxes on principal residences because I am sure Canadians would be interested to learn that.
It is important to recognize the validity of encouraging home ownership. We need to do that, but we need to do it in a fair, equitable and relatively inexpensive way. This bill is an expensive and unfair way and as a result I think will not see the light of day.