Madam Speaker, I appreciate the opportunity to speak in the prebudget debate. There are a few points that I would like to bring to the attention of the House.
I would like to begin by saying that there are a number of voices across Canada that are calling for fair family taxation and these voices continue to increase every year. Meanwhile, we see a finance minister who has continued to ignore the voices of these families. In fact the changes he has proposed have actually made the situation worse.
Reformers have called for fairer tax treatment for families right from the beginning. I want to add to our voice the voices of many current think tanks and study groups that have reported on the impact of the current government's taxation policies on the family.
Let us consider what two recent independent studies discovered.
A recent 1998 Compas poll commissioned by Southam News and the National Foundation for Family Research and Education found that 90% of respondents felt that taxes being too high for parents with children is a more serious stress now than a generation ago; 82% of Canadians felt it should be a priority for the government to change the tax law to make it easier for parents with young children to afford to have one parent at home; and 78% felt that not enough respect for the efforts parents put into raising children is now more serious than a decade ago. Those are high percentages.
Even the December report from the Canadian Council on Social Development, which was titled The Progress of Canada's Children: 1998 Highlights called for reform of the tax system to make it more equitable for low and moderate family income earners.
There is another unique group of voices that is coming together to raise the volume on the call to fairness and family taxation. This new group, The Family Tax Coalition, is made up of 10 national family organizations, academics and financial experts.
Let me read their recommendations. These are national groups with tens of thousands of members right across Canada. This is their very simple set of recommendations that they have lobbied for independently for years, but have now come together as the family tax coalition. They state:
Tax concessions for the care of dependent children should be distributed equitably to all Canadian families.... Given this discrimination, most dual-income families with dependent children share common ground with single-income families. Tax fairness for all families must include these measures:
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Base taxation on family income, through either income splitting or joint filing;
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Convert the child care expense deduction into a refundable child tax credit for all children;
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Make the spousal exemption equal to the existing personal exemption;
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Give homemakers access to an independent RRSP.
Those were their four recommendations.
I would like to speak about the first one. One of their key recommendations for fair family taxation is the conversion of the child care expense deduction that we currently have into a refundable, and I emphasize the word refundable, child tax credit for all children.
Let me explain the refundable child tax credit option that Reform has long endorsed and championed. What this means is that when income tax is calculated there is a certain amount of tax payable. The refundable tax credit would be subtracted directly from the tax payable so that the hard dollars taken out of pockets would be decreased. This would be a direct advantage in hard dollars to every person who is paying tax.
What about the person who is not paying tax or has no taxable income? Because it is a refundable tax credit—and this is an important concept for people to grasp—it would be paid to the family that did not have any taxable income. In that way, it is equitable to all families. All families are given the credit. In certain cases where there is no tax payable, they would receive the refund.
Then the parents can determine what is the best option for the rearing of their children, whether it be institutionalized daycare or a grandparent or one parent staying at home. It recognizes that parents are the best ones to make the decision for their children rather than being biased in one direction or another by discriminatory tax policies.
All the voices of this coalition are consistent with that of Reform. The Reform Party has called for the current child care expense deduction program which rewards only third party child care to be replaced with the child care expense credit I have spoken about. It would provide a consistent benefit to all parents regardless of the type of child care chosen.
The key here is to let the parents decide. Leave the money with the taxpayer and let the parents decide. Reform has called for this for many years. Why? Because it is fair and it is what families want. The volume is getting louder.
Based on last year, the finance minister is determined not to listen. What did he do in the last budget? He increased the tax deduction incentive for receipted third party daycare. Again, he told those who care for their own children in their own home or with the help of an extended family member that there is no value in that. This is very troubling at a time when people are becoming increasingly aware of how valuable family health is and the parental attachment to society's health.
The family tax coalition also called for the spousal exemption to be equal to the personal exemption. Today it is not. The spousal exemption is substantially lower. The current tax treatment sends a message that a stay at home spouse is less than a whole person.
This is why Reform has long called for equalization of the spousal exemption to the same level as the personal exemption. Year after year the call has fallen on the seemingly deaf ears of the finance minister. Will he continue to treat single income earner families unfairly and knowingly endorse a system that has the single income family paying almost a third more in income tax?
Unfortunately, it seems to me that this government is more inclined to fund child advocates who, after receiving funding for their programs, seldom seem to recognize that children live within families and that helping families through tax relief and equitable tax treatment helps the children.
In a recent Compas poll 92% of the respondents said that families with children today are under more stress than families of 50 years ago and 89% felt that divorce and family breakdown is now more serious.
Stress on families is high. Often financial stress is a key factor in family breakdown. What is the biggest budget item for the Canadian family? You guessed it, Madam Speaker. Taxation is the biggest item in the family budget. According to Statistics Canada, personal taxes make up the largest share of the household budget. It is greater than shelter. It is greater than transportation. It is far greater than food.
The C.D. Howe Institute report “Giving Mom and Dad a Break: Returning fairness to families in Canada's tax and transfer system” of November 1988 points out another way the finance minister ensures that he gets the most from families who pay the least.
Allow me to quote from the institute's report. “The take portion of Canada's tax system, the revenue raising part, assesses tax on an individual basis, while the give portion, the many spending programs associated with the income tax, calculates benefits on a family basis. Is this inconsistency defensible?”
The point here is that this government and the finance minister are determined to maximize taxes from families and minimize benefits.
I will wrap up with a few final comments.
The tax policy sends a message about what the government thinks is important. It is long overdue for the tax policy of this government to serve to strengthen families rather than to undermine them. In order to achieve fairer family taxation within Canada's tax system, the government must make these changes in the next budget.