Mr. Speaker, it is a pleasure to rise and address once again Bill C-28. We are speaking to the amendment in this case.
The first priority or perhaps at least a very important priority of any legislator is to ensure that we do our best along with our colleagues to create a foundation on which we can build a strong economy in this country. I know colleagues would agree with that.
I think we have an obligation to ensure that the legislation that passes through this House does indeed do that and contributes in some way to doing that. Sadly I do not believe that Bill C-28 really does that, certainly not in the current context. I think Canada's economic foundation is crumbling and cracking for a number of reasons.
First of all we believe very strongly that Canada's $583.2 billion debt is just about out of control. We know that our taxes are far too high. We also know that we spend billions on wasteful programs and that spending is largely unfocused. It does not go to the things that are priorities with Canadians.
Those are some of the reasons we oppose not only this legislation but a number of the initiatives of the government. It simply is not focusing on the things that are most important or doing the things that will prepare a foundation upon which to build a strong, healthy, sustainable economy.
Let me speak specifically to some of these concerns. I mentioned a minute ago that our foundation was crumbling and cracking. One of the reasons for that is the situation we had with our debt of $583.2 billion.
What hon. colleagues around the House will know is that we spend about $45 billion a year just to pay the interest on the debt. It is an unbelievable amount of money. It is the largest cheque the finance minister will write every year. It is a lot more than we spend on employment insurance and old age security combined. It is far bigger than that amount. It is a tremendous amount of money.
I point out that for average families it means they have to pay taxes that are $6,000 higher than they would be if they did not have pay that interest. Average families have to pay $6,000 in taxes just to pay their share of interest on the debt. It is an unbelievable amount of money. If we compare that with our friends south of the border, their debt, as huge as it is, is about 40% less per capita than the Canadian debt.
It is a staggering amount. That is about 70% of the gross domestic product. If we combine it with what the debt of the provinces it is close to 100% of the gross domestic product. It is one of the worst levels of debt in the world. It is a huge problem.
Bill C-28 does nothing to address it. Nor did the budget which recently came done. Not only are we saddling the present generation and all the people who are struggling to make the economy move with this debt but we are saddling the next generation, the people who are yet to be born. It is wrong. It is immoral to cast a huge burden of debt on to their shoulders before they are even born. These people will not get a chance to benefit from the goods and services that were purchased with that credit. However they will be saddled with the debt. Reformers oppose Bill C-28 for that reason. We think the lack of a plan to deal with debt is a very serious omission.
I want to make an argument that is maybe a little less academic, a little less abstract, a little more practical and important in present terms with respect to the need to deal with the problem of debt.
Not very long ago in Asia we saw a dramatic meltdown of its economies. Some of the currencies saw a devaluation in the order of 55%, a tremendous devaluation. There are tremendous economic problems in Asia.
The result was that area of the world, which represents about one-third of the entire economy of the world, saw money flee from there to get away from the uncertain economic conditions and go to other parts of the world. It went to the places where the countries had strong foundations, which is precisely what we are talking about, a strong economic foundation.
Did it come to Canada, one of the countries that should be one of the richest in the world given our vast array of natural resources? No, it did not. It went to the United States. That money went to the United States, our biggest trading partner, with the result that we saw our dollar fall relative to the American dollar, which meant that we had to pay more for all kinds of imports.
The way the Bank of Canada reacted to it also hurt Canadians. The Bank of Canada, in a effort to shore up the dollar, raised interest rates which hurt all Canadians. That is a direct impact of high levels of debt on ordinary Canadians. When that kind of situation exists, in a sense it is a form of taxation on Canadians. It means they have less money for the things they care about doing, the things most people and families consider to be important like buying groceries, paying the mortgage, paying the rent, paying the car loan and setting aside some money for retirement and putting the kids through university. However, we were denied that to some degree because of what happened as a direct result of having a high level of debt.
Let me again say that Bill C-28 does not deal with debt or present any plan to deal with the debt at a time when Canada is in a very precarious situation with respect to its debt. Therefore we oppose the bill for that reason.
Let me speak a bit more directly to the amendment moved by the Bloc Quebecois which deals with the issue of taxes. Bill C-28 is an omnibus bill which deals with a number of things that have to do with the Income Tax Act. However it concerns Reformers any time a bill amending the Income Tax Act does not do anything on one hand to simplify taxation or on the other hand to lower the level of taxes Canadians have to pay. Sadly Bill C-28 does not do that.
Specifically in Bill C-28 is a clause that could potentially confer some benefits on Canadian shipping companies. The Bloc Quebecois has raised this amendment because it is concerned the finance minister, who sponsored the bill and who has interests in a shipping company, could potentially have some benefit from clause 241 in Bill C-28.
The finance minister and some Liberal members have suggested that although the finance minister may have sponsored the bill he did so unwittingly and did not seek to profit from the legislation. I accept that because I think it is correct. I do not think he would do that on purpose.
I want to set that whole argument aside for a moment. I think there is a more important principle at stake when we talk about a situation where Canada's finance minister has to shelter assets offshore because taxes in Canada are too high. It is one of the great ironies in the country today and it is almost unremarked upon by the media. Truly it is a great irony when the finance minister of the Government of Canada, through completely legal means, has done very well for himself. In order to do some of the things he has done, he had to have his assets registered offshore in other regimes where taxes are more favourable. He is not alone in doing this. Many other companies do this.
Members of the House should reflect on why it is necessary for companies in Canada to do that if they want to succeed. It raises some questions. It raises a very important question that is brought home to regular Canadians every day when they sit down to do their books. Taxes are simply too high in Canada today. They are staggering.
We have personal income taxes in Canada today that are 56% higher than the G-7 average. It is much higher than the Americans, the Japanese, the British, the Germans and even the French. We have staggering levels of taxation.
What the government proposed in the recent budget did little to help. All it did was slow down the rate of growth in taxes. When the government brought in its budget, it brought in some measures that introduced tax relief which it talked about in the budget. However, it did not talk about the fact that in the last few months it had raised taxes far more than any tax relief would benefit Canadians through the measures in the budget. Through the Canada pension plan premium increase we will see the largest tax hike in Canadian history. We will see those premiums rise by 73%.
On the other hand, we know that every year a silent tax increase occurs that not many Canadians are aware of. I refer to the phenomenon of bracket creep, a situation where because of the deindexation of the tax system many Canadians automatically are pushed into higher tax brackets every year as a result of cost of living increases that essentially leave them worse off. In fact, bracket creep alone this year will wipe out all the benefit given to people through any of the tax measures introduced in the budget. The tax measures, according to the government's own 1998-99 budget documents, will lower taxes by about $880 million, but bracket creep alone will increase taxes by more than $1 billion. With that measure alone Canadians are worse off.
What does this do to the ordinary Canadian? I want to relate a story. I was in my office on Friday talking with a constituent, a man who is on disability. He is receiving Canada pension plan disability. His name is Lawrence Weston. Mr. Weston said “Please use my example in the House if it suits you”.
He has an income of just over $13,000. He gets a bit of money from workers' compensation as well. He has literally thousands of dollars in expenses because of his medical problems. He is diabetic. He has had a number of surgical operations on his eyes and he is slowly going blind. He cannot work. If he goes to work, if he tries to do anything, his disability income disappears immediately.
He is in a situation where he makes just over $13,000. He still pays about $400 a year in personal income tax in Canada today, even with all his medical expenses. He cannot, believe it or not, take advantage of the disability credit in the income tax system. One almost has to be dead to take advantage of that credit. One probably has to be in the morgue for three days to be able to take advantage of that credit.
I do not know how many people have come into my office, people who are severely disabled and have tried to apply for it but cannot get it. It is virtually impossible to get. Mr. Weston could not get it so he is in a situation now where he has to come up with $400 and does not know how he will do it.
If my friends across the way are truly concerned about people who are simply not making it today, they should start to lower taxes in a meaningful way. Not everybody can, like the finance minister, find tax relief by moving assets offshore. It is not something the rest of us can do.
It does not just end with people like Lawrence Weston. Many other people are in exactly the same position. I received an e-mail the other day from a woman who had just retired as a nurse. It is the same sort of situation. She is complaining about the high level of taxes that she has to pay, a staggering level of taxes. We receive mail all the time. Often in this place I have quoted from letters we have received from people who are just barely making it but still paying all kinds of taxes.
Let us consider for a moment some of the businesses out there. For example, a Canadian Tire franchisee who is trying to make it cannot avoid taxes by all of a sudden flying a flag over the business saying that it is now Bahamian Tire or Panamanian Tire simply to avoid the high level of taxes in this country.
That cannot be done. People would like to do it; donut shop owners would like to be able to do that but cannot. That is left to a few people and luckily the finance minister was able to do that. I do not blame him one bit. He is doing exactly what business people will do if they have a chance to do it. They are trying to find a way to shelter their income. They do not want to pay taxes. Everybody does it. People take advantage of loopholes in the tax system all the time. If we can, we use RRSPs. If they can, they shelter income offshore.
Should we not have a tax regime that draws investment to the country? Should we not have a tax regime that encourages people to come and invest in Canada? My friend, the member for Peace River, pointed out the other day that for the first time ever in the history of Canada Canadians are investing more money outside Canada than foreigners are investing inside Canada.