moved:
Motion No. 1
That Bill C-28 be amended, in Clause 178, by replacing lines 35 to 40 on page 315 with the following:
“Canada;”
Madam Speaker, I am pleased to stand today to debate Bill C-28, and in particular Motion No. 1
I should start by saying that I object to this bill on three grounds primarily.
First, it is a bill that discusses income tax without providing any tax relief for Canadians. Second, it is a bill that talks about income tax but does not provide people with a simplification of the tax codes, something that has become very confusing for many people. Finally, it is a bill that really typifies this government's aimless approach to dealing with the problems of the nation. It is a bill that really does major on the minors.
Specifically, Madam Speaker, let me speak to the motion that you have just read. This motion attempts to roll back what I believe is a real attack on the sovereignty of other levels of government by the federal government. Essentially what the government is proposing to do is to circumscribe the ability of municipalities to raise revenues for their constituents, for the people of their cities, villages and towns, through subsidiary corporations. There are many such organizations like that in Canada today.
I want to explain to the House and to people who are watching this via television why it is really important that municipalities continue to have the ability to raise these revenues without having them taxed by the federal government.
First, I want to point out that it was the federal government, going back to the 1993 election, which made a solemn commitment that it would not cut transfer payments to the provinces. During the leaders' debate we know that our current Prime Minister, when asked about cutting federal transfer payments for health care, said “I said yesterday, replying to Mr. Bouchard, that I promise they will not go down and I hope that we will be able to increase them”. The rest is history.
We know that the Prime Minister did not meet his commitment. He did not come anywhere close. In fact he cut transfer payments in total by about $6 billion. The result was that the provinces had $6 billion less money for health care and higher education.
What did they do? They had to find some way to save money as well, so they started to make cuts. One of the areas that was hit were the municipalities. Municipalities were hit and were unable, in many cases, to provide some of the services that they typically had been providing. At the same time the government was expecting them to pick up even more services. Traditional services which they used to fund, they were unable to fund. At the same time provincial governments were asking them to pick up new services. In fact the federal government was doing the same thing.
We now see in this particular piece of legislation, Bill C-28, the federal government proposing to tax another level of government, something which I think is wrong. I think it is incorrect, particularly when this level of government, which is the level of government closest to the people, the one that is best able to judge, the level of government that does the best job of delivering services, is being asked to pick up more of the load. It is wrong for the federal government to propose to take away revenues that they earn through their subsidiaries in their own municipalities. It is absolutely wrong, but that is precisely what the government is proposing to do.
That is not the end of it. The final point, and maybe the most important point, is that these taxes inevitably always are passed on to the consumer. We know that. Every member in this House knows it. We know that when corporations are taxed, those corporations pass taxes on to the consumer. That is precisely what will happen this time as well.
We know that this government has a penchant for raising taxes. We know that we have the highest personal income taxes in the G-7 already. They are 56% higher than the G-7 average. We know that if we were to be competitive with the United States in terms of tax levels we would have to have a tax cut in this country of over $35 billion.
I know my colleagues across the way will say that we must take into account what happened in the last budget, which reduced taxes by partially eliminating the 3% surtax. Indeed it did. But what they did not tell us in the budget is that they just finished increasing payroll taxes through the Canada pension plan premiums which people have to pay.
In fact, that tax increase will be the largest tax increase in Canadian history.
What the government does not talk about is the phenomenon of bracket creep, an inflation tax that happens every year. This year alone bracket creep will more than wipe out any tax relief that the government is proposing to give us through its reduction in the surtax. Eight hundred and eighty million dollars is what the government surtax would give Canadians in tax relief. On the other hand, bracket creep would take $1 billion out of their pockets. Canadians, just on that level alone, are coming out as net losers.
We say to our friends in the government that increasing taxes is not a way to help anybody. When are they going to learn? When are they going to figure that out? We have had 107 tax increases since the Tories and the Liberals came to power. We have staggering levels of taxation.
At the Liberal convention this weekend we heard Liberals saying that we must have tax relief. When is the government over there going to wake up and figure out that it is time for Canadians to have some tax relief? I am sick to death of seeing the government come up with new and creative ways to tax Canadians. That is essentially what it has done with this provision in Bill C-28. This is yet another sneaky, back door way of increasing taxes.
I hope my colleagues around the House, who are concerned about the government's trampling on other jurisdictions, understand that what the government is essentially doing is proposing to tax another level of government, proposing to invade its jurisdiction and to invade its sovereignty. That is wrong and it is unproductive. It does not help when we are trying to build and unite a nation. However, that is precisely what the government is doing.
I sat on the finance committee when this bill made its way through Parliament in the last Parliament. We heard a representative from the Federation of Canadian Municipalities who spoke against this particular provision because they could see what was going to happen. The government is again coming up with a new way to rip money out of taxpayers' pockets. It is wrong. We need to stand up against this sort of creeping taxation that the government has relied on to suck ever more money out of taxpayers' pockets.
I was looking through some documents a few minutes ago and noted that between 1993 and, according to the government's own projections, 1999 we will have seen federal income tax revenues rise by over 40%.
My friends will say that was growth in the economy. Give me a break. Growth in the economy would not even be half of that. It would not even come close to accounting for that massive increase in income taxes. This is an increase of over $20 million. It is a 40% increase. Where did that come from? It came from these sorts of sneaky, back door taxes that this government has used 36 times in order to get more money out of the pockets of Canadians.
It is no wonder we had people standing up at the Liberal convention chiding the government and telling it we need to have lower taxes in this country.
I will simply conclude by saying to my friends across the way and to my colleagues around the House that this is an important issue for municipalities. They are already struggling to provide services that used to be provided by other levels of government. They are struggling to provide basic infrastructure for their constituents. Let us not approve this and further circumscribe the ability of municipalities to provide those services.
Let us go the other way. Let us ensure that the government starts to fulfil some of its promises that it made in previous elections to provide greater transfers to other levels of government which do a far better job of delivering services than a big, fat, bloated central government in Ottawa. Let us hold this government to those promises.