Mr. Speaker, I am pleased to rise in debate on Motion No. 306. I want to commend the hon. member for Winnipeg Transcona for what is a well intentioned and commendable effort.
His objective clearly is to provide some form of tax relief for families in need to assist them in making choices for their families with respect to youth activities.
First of all, I see several technical flaws with the motion. For instance, the motion fails to define what constitutes youth activities, fails to define youth. There is no standard definition of youth in any of the tax statutes.
The cost of this tax expenditure is nowhere defined in the motion. Therefore while I think it is well intentioned, the motion itself has not been well thought out.
My principal objection is that the motion seeks to make choices for parents by defining exactly what kind of activities they can use to reduce their taxes payable. I think this is entirely the wrong approach.
The hon. member has touched on a very real problem. Families with children have experienced a shrinking disposable income now for over 15 years in this country.
Year after year they find there is less money at the end of the day in their bank accounts, in their wallets and in their cheque books to fund the kinds of important activities for their children and families, activities that supplement the basic education of children in the school system.
He is right in pointing out the plethora of fundraising activities which families find themselves participating in to finance recreational programs and other educational athletic programs and so forth. But the hon. member for Winnipeg—Transcona suggested during his remarks that instead of Girl Guides and minor hockey teams going out and raising these moneys by selling chocolate bars and cookies, the funding for these programs should come from the public treasury.
With all due respect to the hon. member, there actually is some value in young people learning that there is no such thing as a free lunch. To suggest that Girl Guides should apply to the federal government for a grant as opposed to going out and trying to sell their wares, to learn about the free enterprise system, to learn about charity and learn about the reliance on other people's good will is misguided indeed.
My principal objection is that the motion seeks to apply a band-aid where radical surgery is needed with respect to the taxation faced by Canadian families. Canadian families on average now spend more on taxation than they do on food, shelter and clothing combined. As I have said in this place many times, I think quite frankly such a tax burden is morally questionable, a burden that consumes more than the basic necessities of an average family. The family tax index which calculates the total burden of all direct and indirect taxes on average families suggests that the average Canadian family spends over 40% of its annual income on taxation to the three levels of government.
Just last week the C.D. Howe Institute released a new study which suggested that the average marginal tax rate faced by Canadian families was over 53%. Essentially what we have done in this Parliament and in this country is create a situation where families are working harder and harder. We have more two income families leaving children at home alone in the young formative years in order to go out into the workforce to pay for the taxes that have been levied on them by politicians in this place.
The solution to that problem, the solution to the frustration faced by so many families in financing the basic needs of their children is not to use the tax code as an instrument of social engineering. It is not for politicians in this legislature or any other legislative assembly to pick and choose which activities are more deserving of exemption from taxation than others. Picking and choosing certain activities is a form of social engineering. What we ought to strive to do in this Parliament is to let families make the choices that they need to make according to their own priorities. It is the principle of choice, it is the principle of freedom which ought to animate all the decisions we make in this place, particularly with respect to the tax system.
The Income Tax Act was introduced in this place as a temporary war tax act in 1917 to finance the needs of the then Dominion of Canada during the great war. It was a temporary act which totalled 12 pages. It read 12 pages in length. Today's Income Tax Act now numbers over 1,300 pages and includes several hundred more pages of associated regulations which deal with the application of this hugely complicated tax code.
We now employ over 43,000 bureaucrats in the Department of National Revenue to administer that 13,000 page tax code.
It took 43,000 bureaucrats to administer a tax code so complex and so lengthy that no person in this country understands it. I dare say those of us here who write those tax laws have never read a substantial portion let along the entire Income Tax Act. I suggest that even the most expert tax authorities in this country do not have a comprehensive understanding of the behemoth, the monster we have created in the Income Tax Act.
The reason this tax code grows and grows is well intentioned but ultimately shortsighted efforts like the motion before us today. Parliamentarians and governments have sought to use the tax code as an instrument of social engineering, placing level on level and layer on layer of complexity to create innumerable deductions, exemptions, credits, write-offs and loopholes in the system. Each one of these creates new complexities within the legislation which requires more bureaucrats to administer it. This creates a greater need for private sector tax practitioners to interpret it and apply it. Meanwhile the poor bedraggled taxpayer at the end of the year is faced with an incomprehensible requirement.
It is interesting that we are discussing this as we approach the end of the tax year. Millions of Canadian families are going to be sitting around their kitchen tables late at night with their pocket calculators, pencils and their reams of paper trying to understand this byzantine, incomprehensible, opaque tax code we have imposed on them because of the innumerable regulations, exemptions, deductions and credits which have been inspired by motions like the one before us today.
What my colleagues and I in the Reform caucus propose to do is rather than carving out little loopholes in the tax code, as the hon. member for Winnipeg Transcona proposes, we propose to deliver general tax relief to all Canadian families. This will enable them to make choices about how to dispose of their scarce income. We would do this by raising the basic personal exemption to $7,900 not for some families like this government has proposed but for all families. We would raise the spousal amount to $7,900.
We would convert the current child care tax deduction which discriminates against traditional families to a refundable credit available to all families. In sum, we would deliver $2,000 of tax relief for the average Canadian family. This would be appreciably greater for low income families with children at home. Let families make the decisions by allowing them to keep more of the money they have earned rather than taking it from them and using the tax code to engineer social outcomes.