Madam Speaker, the motion before us calling on the House to consider making employer provided transit passes an income tax exempt benefit was recently brought to my attention by one of my constituents. While I was aware that this issue was being debated in the House, I will admit that before the meeting with my constituent, I had not invested much time in understanding the issue completely.
Mary Jane Dawson came into my office with her children over the Christmas break to talk to me about why she felt this was an important initiative and one which deserved my support and the support of the Reform caucus. Her young children, Riley and Kelsy, also had very strong views about this motion. They were concerned about the state of the environment and about the impact of emissions on global warming, air quality and health.
As a member of the Reform caucus, I believe strongly that I should work to best represent my constituents within the framework of Reform Party principles that were established in a democratic grassroots process. However, as any member of my caucus can attest to, it is not always possible to determine the views of our constituents on each and every issue. At best we attempt to gauge public opinion by the number of letters that cross our desks or the number of people who phone or visit our offices. It is not very scientific, but I believe this is a useful guide.
The visit I had with Ms. Dawson and her children forced me to examine the issue more closely and determine whether I could support the motion and still stay committed to the policies that have been painstakingly developed by thousands of average Canadians across the country.
There is no question that this motion would add to the complexity of the tax code. What this country needs is tax cuts and not more tax exemptions.
The Reform Party would work to create a flatter, simpler and fairer tax system. We would also remove 1.2 million Canadians earning less than $30,000 a year from the tax rolls completely. This means that seniors, students and other low income Canadians will have more money in their pockets. This would enable them to purchase transit passes or pay for other transportation needs with their own money.
But we do not live in a perfect world and we do not have a Reform government in power until the next election. What we have is a Liberal government that is taxing hard working Canadians into poverty. Let us look at the Liberal record.
Income taxes under the Liberal government are 56% higher than the average of our G-7 partners. The average Canadian family paid about $21,000 in total taxes in 1996. For 1998 the government will collect $19 billion more in income taxes alone than it collected in 1993, a 37% increase. Bracket creep, the deindexing of the personal income tax system, has sucked an extra $13.4 billion from taxpayers. In 1997 alone, Canadian taxpayers paid $4.3 billion more than they would have had the system been indexed in 1993.
According to Statistics Canada, between 1989 and 1995 real after tax family incomes fell by $3,461 from $41,000 to approximately $37,000.
In the first two quarters of 1997, governments took two of every three dollars of additional personal income earned by Canadians in direct taxes alone.
Low income Canadians who earn more than $6,456 are taxed at 17% of their income.
Finally, Canadians pay indirectly for the cost of Canada's burdensome regulatory environment, which cost Canadians the equivalent to 12% of GDP.
This is a shameful Liberal record. This is why the advocates for the working poor are looking for ways to give low income working Canadians a break with tax exempt transit passes.
If we let the poor keep what little they earn, we give them the means and motive by which to improve their lot in life. If we tax them into poverty to feed an insatiable bureaucracy, we breed dependency and destroy hope. How can the poor be expected to pick themselves up by the bootstraps when this Liberal government has stolen their boots?
This is the dilemma I face. I can work hard to push for tax cuts and to ensure that a Reform government with its sound economic plan forms the next government. But what do I tell the overtaxed working Canadians in my riding who find it difficult to meet their transportation needs today?
To work out this problem, I thought about the infamous Peter and Paul. When the government spends money, it takes that money from Peter and gives it to Paul. Since Peter has worked hard to earn his money, it can be argued that taking the money from him is not a very nice thing to do. Furthermore, Peter might not even like Paul or the things that Paul does with the money he is given. This compounds the offensiveness of the original taking.
For this very simple reason, the members of the Reform caucus look at government spending with a healthy dose of suspicion. Unless tax dollars are being spent on programs with very broad base support, such as health care, it becomes very difficult to justify the expenditure. However, since Peter has the right to keep the rewards of his labour, allowing him a tax exempt benefit does not place an unfair burden on Paul. It does however place a burden on the government which is forced to either look for revenue elsewhere or reduce expenditures.
Given that Canadians endure the highest tax rates in the G-7, finding additional revenue in the form of increased tax levels would probably not find much support with the general public. This leaves us only with one other option: decreasing expenditures.
In a letter to the Canadian Urban Transit Association the finance minister estimated that the cost of implementing the tax exempt transit passes would be $140 million for the federal and provincial governments. I want to make it clear that this is $140 million of forsaken revenue, not $140 million of spending. The difference here is very important. When the government spends $140 million it takes the money from Peter and gives it to Paul. When it forsakes $140 million, it simply leaves that money in Peter's pocket.
The question of course is how does the government compensate for the $140 million shortfall? It should do this by cutting the fat.
I do not believe that any member of the House can claim there does not exist at least $140 million in waste in the federal government. Our party has identified $15 billion in federal government waste that we would like to eliminate when we form government. If we can find $15 billion in waste, surely the Liberals across the way can find a measly $140 million.
My hon. colleague from Calgary Southeast, our chief critic for revenue, has made it clear that he will not be supporting this motion. I respect his position. He believes, as I do, that the tax system should be transparent, fair and simple. However, I believe we must make a clear distinction between those looking for relief from taxes and those looking for government grants and subsidies.
Canadians should be allowed to enjoy the benefits of their labour without undue tax penalties. If employers wish to provide transit passes as part of their remuneration packages, why should low income Canadians be taxed on this?
What I am proposing is that in this environment of tax oppression we should look at an interim policy option that gives working Canadians a break until Reform can form the government and give Canadians serious tax relief.
On a different matter, Canadians who choose to use public transportation because they wish to make as benign an impact on the environment as they can should have the freedom to make that choice. Canadians must be allowed to make choices. Tax relief will help them make choices and act on values they hold, whether those values involve environmental preservation or the independence that comes from owning a car. It is that choice that I will defend. It is that choice that is in peril if the Liberal government continues to tax Canadians to death.
On the advice of my constituents and based on the belief that low income Canadians need tax relief, I will be supporting this motion. I would ask the members of my caucus to review the arguments presented by myself and the chief critic for revenue to determine for themselves how they will vote.
The Reform Party does not believe in making Private Members' Business partisan politics. We believe in free votes. Especially when it comes to Private Members' Business we do not believe in making it partisan business. I note the member from the Conservative Party spoke earlier on behalf of his whole party. I encourage all members in the House to give this motion consideration as I have, speaking against one of my own colleagues. I think the motion has merit and deserves support.