Mr. Speaker, I will spend some time discussing points that were raised. Motion No. 11 put forward by the NDP would eliminate the rate schedule as proposed, which basically means to revert to the existing schedule. The chief actuary has indicated that if we make no changes now the fund will run out by the year 2015. This is what the NDP would call “one of our reasonable amendments”, which is to do nothing. We have to do something. We have to make sure that the Canada pension plan is still there.
The NDP would prefer to apply the funds as well for regional and economic development rather than for investment to provide for the best possible return for Canadians so that we can keep the rates as low as possible and at a steady rate so that it is efficient in meeting the objectives of the bill and of the Canada pension plan as a whole.
The second item on Motion 13 is with regard to the year's basic exemption and the fact that the $3,500 is not indexed. It is important to put in context the amount that we are talking about. Inflation in Canada right now is about 1.7% If the $3,500 exemption on the CPP was indexed, it would result in a reduction of the Canada pension plan premiums otherwise payable by $1.89 for the entire year. The deindexation item with regard to an employee, the maximum for someone making $35,000, is only $1.89. The member who just spoke talked about throwing people into poverty. I am afraid this is not the case.
The last area I want to comment on—I know other members want to speak and the parliamentary secretary would like to comment on these—is with regard to the issue of self-employed persons. As we know, self-employed persons pay both the employee and employer share. Currently they pay the full 5.85% whereas an employee would only pay half of that if they worked for a company.
There are a number of reasons for that. Members should know that under the Income Tax Act self-employed persons have a number of other opportunities within the tax system to reduce their taxable income. It could be with regard to use of automobile, travel, entertainment expenses, tools, clothing and a number of things which are not available to employees. In terms of the assessment of whether or not it is fair that a self-employed person should pay both sides of it, you have to look at the full tax consequences of being a self-employed person.
As a chartered accountant, I can tell you that in certain fields there are a number of direct expenses related to that self-employed income that are deductible. The same levels or kinds of deductions would not be available to an employee. There is a balance of a process of arbitrage which makes these issues not as black and white as the member may indicate.
I would indicate that although there are a number of issues here they are self evident—