Mr. Speaker, I rise in the House today to speak against Private Member's Motion No. 198 regarding the indexation of the child tax benefit.
I acknowledge and am proud that this government is now on sound economic footing. This stability has been attained through reworking government priorities and maintaining good fiscal management.
Throughout the pre-budget hearings in the fall it was brought to the attention of the Standing Committee on Finance that this good news was achieved at a cost; a social cost in some cases.
This motion calls for a review of the level at which the child tax benefit is indexed.
On the face of it the motion sounds plausible. However, there are some compelling reasons why, after giving it thought, it cannot go forward.
First, income tax has been and will continue to be reviewed to make strategic adjustments.
Second, there is a trigger. The Income Tax Act states that the child tax benefit will be indexed each year by the amount which the annual change in the consumer price index exceeds 3%. This policy of partial indexation is consistent with the treatment of most other parameters of the personal tax system and is respectful of the fiscal problems which are facing the federal government.
Third, there is the option available in the Income Tax Act, as it now stands, to allow discretionary adjustments to the child tax benefit as needed.
Finally, this government is committed to listening to the people's request to make strategic investments.
For these reasons I would have to ask the question: Why, when this government has shown commitments to low and middle income families and to combating child poverty, would the member opposite suggest a review? I can only assume that the change the member is calling for is for that of full indexation of the child tax benefit.
The current policy of partial indexation in the tax system applies to the basic personal credit, spousal credit, tax bracket and others. For this reason it would be difficult to go to full indexing for some parameters and not for others. As the member opposite mentioned, there are not poor children, but poor families, and I believe this needs to be looked at in a holistic manner.
The full indexation of the child tax benefit in other parameters would mean a cost of about $850 million per year. On a cumulative scale, this would mean $1.7 billion a year, and so on. The full indexation of the child tax benefit alone would mean, with the inflation rate of 1.6% per year, a cost of about $160 million a year, and would keep building.
This type of yearly commitment is not one which would be withdrawn once it was made. This commitment would threaten the government's program to restore and maintain fiscal balance and would therefore not be prudent at this time.
This government has stated that it will review its policy of partial indexation once its fiscal position makes it appropriate. In the meantime, government policy has been strategic and targeted to assistance in priority areas, like families.
Although the government has maintained its position on partial indexing, it has made related adjustments to address the needs of low and middle income families. This government has made and will make improvements to the child tax benefit. This includes an increase of $850 million in assistance provided to low income families through child tax benefit implemented over the past two budgets.
We have promised a further enrichment of child benefits of the same magnitude during this current mandate. This is just one of many initiatives that this government has made. These actions demonstrate that assistance to families, particularly aimed at low and modest income levels, is and will continue to be a priority for this government.
Throughout the prebudget hearings we heard from Canadians. Canadians are looking to this government for leadership. They are relying on the delivery of policies that are sustainable and funding that will endure.
Canadians asked for strategic reinvestment in programs. The government is answering this request slowly and carefully. Have we done enough? No, not yet. Can we do more? Yes, we can and we will. However, this government cannot and will not put Canadians at the risk of bankruptcy as past governments have done.
This motion deals with exactly the type of uncalculated economic commitment which made this government's corrective fiscal actions a necessity.
Although child poverty is on the mind of almost every member in this House, regardless of party, this is not the step to take and I believe this is not the time to take it.