Mr. Speaker, my hon. colleague from Medicine Hat was speaking moments ago about the bracket creep which is a serious systemic flaw in our tax system.
I raised a question in this place on November 18 last year of the government about a revenue department report, which had been released the previous day, indicating income taxes paid by the average taxpayer went up by 10% largely because the government had kept in place Brian Mulroney's hidden tax grab called bracket creep which the OECD says is hammering our economy. I went on to say that if the finance minister will not commit to broad based tax relief, will he at least commit to stop raising taxes through the hidden tax grab called bracket creep.
I look forward to following up on that question today. As the hon. member mentioned, in the budget released yesterday there was a claim that there was tax relief for Canadians, particularly low and modest income Canadians. In fact, when one takes into account the effect of the deindexation of the tax brackets, this sneaky, back door, malicious tax increase imposed on Canadians by the Tory party in 1986, one will find more Canadians paying taxes next year than they did last year and more Canadians paying more taxes than they ever did before.
This is how bracket creep works. The basic exemptions in the tax system and the marginal rates are only indexed for inflation over 3%. We have had inflation, fortunately, under 3% thanks to the strict monetary policy of the Bank of Canada for several years now. This means that in all the natural wage raises that people get, they are getting bumped up into the tax brackets which they previously did not have to pay. This is why Canadians are now paying taxes on just $6,500 of income.
The leader of the opposition said in this place that these taxes are hidden and sneaky. You don not really notice them until you get the bill. They are practically invisible. However, the sneakiest tax increase of all was the deindexation of personal income tax. The minister keeps quiet about this. The finance minister did not even mention it in his budget this year. It is a very simple decision that will cost Canadians billions of dollars more annually but he kept quiet about it. Here again, low and middle income Canadians will carry the heaviest burden.
The leader of the opposition went on to say that such underhanded and clandestine deindexation represents the most massive and heavy tax increase in Canada's history. It will cost Canadians billions of dollars. Sneaky, hidden, silent and automatic.
That was not the current Leader of the Opposition. That was the Right Hon. John Turner in this place on February 20, 1987. That was the former leader of the Liberal Party of Canada.
Another Liberal member at the time said: “The finance minister told us there was no tax increases in this budget. That statement is false because taxes are going up in this country because of the deindexation of deductions which this government has done in its past budgets”.
Which Liberal member said that? It was the hon. member for Kingston and the Islands. I gather he is still a Liberal member. Mr. Speaker, I can share your outrage which is why I close with a request for the parliamentary secretary to justify why this government is taking billions more out of the pockets of Canadians, and I know you will join me today in that request as you did in 1987, Mr. Speaker.