Madam Speaker, I want to touch on the issue of the CPP as a tax increase. We all know we are talking about semantics. Generically we refer to deductions on someone's paycheque as payroll taxes.
As a chartered accountant I look at the income statement or the revenue and expenses of a government. If Canada pension plan contributions by employees and employers are collected by the government, why it is that those premiums do not get added to government revenues?
Let us look at the definition of a tax. A tax is something that increases government revenues. The member will well know Canada pension plan premiums do not increase government revenue. They go into an investment fund for the future benefit of those contributing to the Canada pension plan.
In order to sustain the Canada pension plan program for all Canadians and put it on a stable footing forever premiums have to go up. Today's pensioners are getting about $8 for every $1 going in. If the premiums go up for individuals, all other things remaining equal, it is a greater deduction on their personal tax returns. This means they will pay less tax on the same level of income, which again reduces government revenue.
Even corporations that have to match the employee's contribution to CPP will be paying a little more over the years as the premiums increase to make sure those benefits can be provided. That means the deductions for businesses on employee benefits will go up. Corporations will pay a little less income tax than they otherwise would, all other things remaining equal.
On balance, we know the CPP premiums do not go into revenue. We also know that individuals and corporations are paying less tax because of the CPP increases, which means that the deficit actually has increased for the Government of Canada simply by raising CPP premiums.
The irony, though, is simply that CPP premiums do not go to government revenue and do not reduce the deficit. I ask the member to answer this question. If it does not go to government revenue and it does not reduce the deficit, how can we call it a tax?