Mr. Speaker, on March 17, I asked the Minister of Finance why he continued to discourage people from saving for retirement.
I explained to the House that a number of financial experts were discouraging middle class Canadians over 50 from investing in RRSPs. With the new seniors benefit, the money they save today will not make up for the tax they will have to pay later.
This is only one of the weaknesses in the seniors benefit the Minister of Finance announced over two years ago.
Many have been critical of it. Here are some of their concerns. With current marginal tax rates, the recovery of 20% of income over $26,000 means that middle income seniors would have a marginal income tax rate of 60% to 70%.
Middle income Canadians will no longer have anything to gain by saving for their old age. Seniors choosing to remain in the labour market will discover they are keeping only 30% of their salary.
When the income of a couple entitles them to the benefit, the husband and the wife will each receive a cheque, but the wife's entitlement to a pension will depend on the husband's income.
A study commissioned by the Canadian Real Estate Association also revealed that seniors who live alone and who have an income exceeding $31,000 will see their financial situation deteriorate, as well as couples with a total income of $26,000.
When there is an increase from the present situation, that increase will not exceed $120 a year in most cases. However, middle income seniors could lose from $3,000 to $7,000 a year compared to what they are getting under the present system.
Even middle income seniors who choose to stay with the old system will pay more taxes since the age credit and the pension benefit credit will be abolished when the new seniors benefit is implemented.
Indeed, with the implementation of the seniors benefit, the Liberals propose to abolish the old age pension, the pension benefit credit, the age credit and the guaranteed income supplement.
They are still refusing to provide a thorough analysis of the impact of these measures on tomorrow's retirees.
Instead of encouraging individual responsibility, the proposed benefit will discourage everybody from saving for their retirement, except for the wealthiest people. It will also prompt a lot of seniors to get out of the labour force since they would keep only 30% of their salary.
The Progressive Conservative Party intends to force the government to fully disclose to Canadians the financial impact of the proposed seniors benefit. Canadians of all ages must understand the consequences of this new benefit.
We must prevent the government from destroying the foundations of our national retirement income system.
I encourage all Canadians to write to their respective MPs to express their opposition to the new seniors benefit proposed by the finance minister and to tell the minister to get his hands out of their pockets.