Mr. Speaker, I am certainly happy to participate in this very important debate on the issue not only of child poverty but of our income tax system.
Once again I think the member for Shefford has brought to the floor of the House her concerns and indeed the concerns of many people in this country to deal with the issue of child poverty.
First I would like to talk about the issue of bracket creep, and issue which has been thrown around the House. I do not think a lot of people fully understand what bracket creep means. Back in 1984 when inflation was something like 10% the then government in its wisdom decided that it would only index the taxation system to the extent that it exceeded three percentage points. At the time that meant a 7% address to the inflationary factor. In those days it did not seem like a big problem.
Of course it is the stated policy today of the Bank of Canada to keep our inflation rate within a very specific band of between 1% and 2%. Consequently the entire inflation that is occurring within the Canadian economy is not being recognized in the income tax system.
It is an insidious growth because of course we think of 3% as not being a lot of money in any one particular year, but obviously over a 10-year period it is a very significant amount. As years have gone by and the issue of bracket creep has constantly impacted on the system this disparity has become greater and greater.
I looked at some of these numbers and the total cost of doing away with the problem in income brackets that it affected. I was struck with how the peaks of this tax had gone from little bumps on the graph to significantly huge amounts, and it continues to do so. These brackets and tax escalation occur around the income tax brackets themselves in a change of income of $30,000 and at $65,000. The total money that our taxation authority gleans from the process is about $840 million. So that is an answer to the Conservatives who refuse to answer the question on how much would it cost to solve this problem.
The real issue is, is that money an entitlement of our tax collection system? Quite frankly it is not. It is taxation on increases in income that never in fact occurred. People's income rose, if they were so fortunate to have it do so in keeping up with inflation and many people were not, but their tax brackets did not. At the same time so did the consumer price index. They have had a constant squeeze on their disposable income and we keep taxing them. There are some tremendous examples of where people whose income rose $900 in a year actually saw their tax burden increase $1,400. That is an overview of the problem.
Quite frankly, I do not think if anybody is honest about it they will think that is not a systemic problem within the taxation system.
The next question is how do we solve it? Those of us who are bold enough and do not have any responsibility for the system itself will say fix it and will pay the $850 million or almost $1 billion.
The reality of government finances is that we cannot fix it all at once. I am very hopeful that we will fix it slowly over a period of time. It has taken since 1984 for it to get embedded in our system. It may take two or three years to get it back out of our system. I think the government's intentions are well founded to try and do that. The members on this side have been veracious in trying to move some of those amendments.
The issue of child poverty is something that bothers all of us. I have heard people in this House asking what the definition is and how do we define it. It gets very difficult. Various people mentioned the United Nations declaration of income levels and said it is very hard to hold the government's feet to the fire because there is no real definition, and we talk about low income cutoffs. That is the problem we in government see reported across Canada.
The reality is that $20,000 can buy more goods in one part of the country than somewhere else. A $20,000 income to somebody living in downtown Toronto no question is poverty. I have had farm clients over the years who made $20,000 and have lived quite well, but of course they are eating their own produce and so forth. When we talk about using low income levels to define poverty there are discrepancies.
There is another thing that has always bothered me about this issue. When people talk about child poverty, I think what they are really talking about is child neglect or child nutritional problems. There must be another way to measure the nutrition of our youth. That is really the problem.
I have talked to nurses and teachers in my riding. I have discovered that it is not necessarily low income people, although there would be a high quotient related to income levels, but there are also people in the so-called middle income bracket whose kids are not getting the proper nutrition. It is a bigger problem than just setting out low income levels.
I would like to get us off this stereotype debate with the New Democratic Party saying to just redistribute all the income and the problem will go away. The issue has changed tremendously over the years between this business about rich and poor, between a knowledge based society and a lack of knowledge society.
When people phone me and say they cannot get a job, that they are living in poverty and so forth, invariably the first question is what is their educational background, how much investment have they personally put into their human capital. If they are in what we think is the high risk area, because we are responsible for the employment insurance system, ages 17 to 24, invariably they have very little education.
What obligations do governments have to solve this so-called disparity between rich and poor? We have to encourage people even at a very young age. Of course, they have to be properly fed for their brains to absorb knowledge, but we have to instil at a very young age and a consistent age a greater celebration of the importance of getting a better education.
I do not have to tell the members here that this is a provincial jurisdiction. This is the problem in this issue. When it comes to our problem, adults are standing outside our doors complaining to us that the provincial education system may well have failed them in the past. How do we as legislators do a quick fix of that? There is no real quick fix. The scholarship millennium fund was hotly debated in this House.
The reality is that is one way in which the federal government can be proactive in looking at people who for some reason whether economic or otherwise cannot get a better education. The government can step in and say we realize we have a basic obligation to you to get you a good education and to ensure that you and your children will be able to plug yourselves into the basic economy and earn a living from it.
We cannot keep thinking about this debate as just a matter of money. It is a matter of human capital. As legislators we should spend a little more time trying to find programs to increase the nutrition of our young people and to ensure they have the skills to make sure this is a problem that will eventually go away.