Mr. Speaker, I would like to mention at the outset that I will be splitting my time with the hon. member for St. Paul's.
I would also like to thank the House for this opportunity to speak on the motion as put forward by the Progressive Conservative Party. I will take the opportunity at this point to read the motion into the record:
That, in the opinion of this House, the government should take steps to alleviate the burden of poverty in Canada by encouraging self-sufficiency and self-reliance and, to that end, should increase the basic income tax credit to $10,000, index the tax brackets and index the child tax benefit.
My first observation is that this is a bit of a jumble. We are dealing with tax credits, we are dealing with poverty, we are dealing with indexation, we are dealing with a variety of tax credits. Frankly I have even heard members speak about homelessness in this whole debate. About the only problem that is not here is that of original sin.
If we eliminate from the motion the concept of poverty, I think the motion starts to make a little more sense. Really the motion does not deal with poverty. It deals with the person who cannot find enough money from month to month to make ends meet.
In order to make any sense of this motion, I believe it should simply deal with the efficacy of tax credits, the efficacy of the child tax benefit as a means by which fairness can be introduced into the tax system. If I may be permitted, I would like to restate the motion along those lines and address that issue.
The real question then becomes as to what this government has done in order to alleviate the working poor, the person who really cannot make it from month to month and is forever in danger of slipping into poverty.
At the outset it is not really rocket science. The first thing we should do is move up the threshold at which taxes get paid. When means were available this government at the first opportunity moved up that threshold. The last move on the threshold was $500 which eliminated about 400,000 Canadians from the tax rolls. That is a great number of Canadians to remove from the tax rolls and alleviate them from paying any taxes at all.
The other measure that was introduced in the last budget which will alleviate poverty was with respect to another 13 million taxpayers who no longer have to pay the 3% surtax on incomes below $50,000. Hopefully the 1999 budget will go the entire route and eliminate that surtax in its entirety. It was after all a surtax that was introduced for the purpose of deficit elimination. The deficit is now eliminated and has been eliminated for two years running now, and it is appropriate to eliminate that tax.
The 1998 budget also helped families with child care expenses by significantly increasing the limits of the child care expense deduction from $5,000 to $7,000 for children under seven, and from $3,000 to $4,000 for children seven to sixteen. These measures will add to tax relief for approximately 65,000 working families in Canada.
May I say as a point of general observation that I for one am not as thrilled about that particular child tax expense credit because it has two flaws as I see it. First, it has Revenue Canada preferring the arrangements that families might make with respect to children in one manner over another which I do not think is any business of Revenue Canada. Second, one has to have a very decent income in order to maximize out on this particular benefit.
While I support the government's initiative in this area, it seems to me in some respects a bit of a crude instrument in terms of achieving certain benefits to taxpaying families which might otherwise be done in another fashion.
The government introduced other initiatives to assist low and middle income families as well. Effective July 1, 1998, $1.7 billion per year was introduced in the child tax benefit. It provides $1,625 for the first child and $1,425 for each child thereafter.
When those cheques started to go through the system in July of last year I received quite a number of telephone calls at my constituency office. The calls were to the effect: “Thank you for that cheque. It really helps. This month my family and I will not have to go to the food bank. This month we will catch up on some of our bills. This month we will be able to avoid the embarrassment of being so close to continually slipping into debt”. I received quite a number of calls along that line.
About two weeks later I received an additional set of calls. This time it was calls from the people on social assistance. The people on social assistance in the province of Ontario were cut back by an equal amount of money.
We had the worst of all possible worlds. We had raised expectations. We had met expectations with money and by another branch of another government had taken those moneys away. Those expectations and that reality were dashed. I can still hear those conversations in my constituency office. People were literally crying on the phone that they had to go back to the food bank for another month and saw no hope.
The Liberal caucus put a lot of political capital into that initiative. As a Liberal member on this side of the House I am very proud to see that initiative adopted by this government. However I am very frustrated that initiative was in some respects defeated by a government that has no commitment to the reduction and alleviation of child poverty in the province of Ontario.
That is why I take some encouragement, though I must admit some skeptical encouragement, from the social union discussions. I am hopeful that kind of undercutting will not occur in the future once this government takes a particular initiative in an area to relieve child poverty or any other kind of poverty which is perceived to be in the national interest.
I do not think the government wants to micromanage a provincial economy or a provincial government's priorities. It does not want to be in the position of backfilling tax cuts, tax cuts which are ideologically driven, tax cuts which are a priority to all other priorities. It also does not want to be in a position of having its initiatives in the national interest being defeated simultaneously. I am skeptical but I am hopeful these social union talks will go in a direction so these kinds of initiatives are not defeated.
In summary, the motion does not deserve to be supported. It is poorly drafted. It looks like it was a bushel basket that everyone got around and threw a whole bunch of stuff into. It is not a coherent motion. It tries to connect tax credits and poverty. When one is in poverty and not filing tax returns and has no income, tax credits are the least of one's worries. One certainly is not terribly interested in indexation and all of the ratcheting up that might be going on simultaneously.
Moving up the threshold by $500 was a smart move on the part of the government. It simply eliminated 400,000 taxpayers from the roles. It gave additional relief to something in the order of 4.6 million Canadians just by moving up $500.
Tax credits, be they for children or poverty or otherwise, are limited in their usefulness because one needs to have an income in order to use them. They are also limited in their usefulness because provincial governments ideologically driven in other directions can defeat them by their own policies. Partially eliminating the 3% tax on $50,000 incomes is worth $1.4 billion and is a relief to 90% of all tax filers. Hopefully the budget will see it completely eliminated.
These are not motions, not even poorly drafted motions. These are concrete measures which the government has achieved. That is why I am urging all members to speak to the motion and to defeat it.