Mr. Speaker, I will be splitting my time with the hon. member for Calgary Centre, who has done yeoman's work in fighting for tax fairness for families and I think he deserves some considerable recognition for his efforts in this regard.
I am today moving that, in the opinion of this House, the federal tax system should be reformed to end discrimination against single income families with children.
It really is unfortunate that we need to put forward a motion like this in this place today. As the official opposition, we rise in the House to deal with the gross and inexcusable inequity, one that undermines the basic unit of any healthy society, the family. I speak of an inequity which creates perverse unfairness for struggling, hardworking parents who are doing the most important work of the nation, raising children, raising the next generation.
This inequity is a tax code which treats stay at home parents as though they are second class citizens and which, in the words of the C.D. Howe Institute, gives children the same level of economic importance as disposable consumer items.
We bring this motion forward today after years of advocating tax fairness for families not only as the official opposition giving voice to the concerns of millions of Canadians but in many other organizations across the ideological spectrum.
We come here in a particular context, in the context of comments made this week by the hon. secretary of state for finance who said, as we know, on Tuesday: “If two members of a particular family are both working, first of all they are putting in twice the working hours as stay at home parents”. He furthermore said that they also have twice the expenses, including the expenses of not having someone at home doing the housework, that is, having to pay for maids and nannies, I suppose.
This reflected the views, not just a temporary slip of the tongue but the fundamental views, of this government when it comes to justifying the unjustifiable and inexcusable inequities in the tax code.
It is not an isolated comment. Yesterday I quoted from a memo that the Prime Minister's office distributed in October 1996 wherein it said of the Reform Party's proposal to increase tax deductions for children that the notion that this will encourage parents to quit their jobs and return to the kitchen is naive.
Why is it that the Prime Minister's office believes that parents who work at home raising their children are “in the kitchen”? What kind of negative, prejudicial stereotype is this enforcing about people who are making real economic sacrifices to do what they believe is best by their families?
Again, this was not an isolated comment. I was at a finance committee hearing in Calgary in October of last year when I heard the member for Vancouver—Kingsway say to advocates for tax fairness for families: “Most women can combine career and family life but a lot of women just take the easy way out”. The hon. member for Vancouver—Kingsway, as reported in Hansard , said that stay at home mothers are taking the easy way out. I say shame on the member and anyone who would tolerate that kind of prejudicial remark to these stay at home parents making sacrifices.
The hon. member for St. Paul's in the same kind of fracas with these defenders of stay at home parents characterized them when she said they are perceived—presumably by her—as elite white women. She is talking to these individuals who have come before a finance committee to defend equity and disparaging them as elite white women?
The member for Essex—Windsor in the last parliament said that the Reform Party's notion of tax for stay at home parenting was a nostalgic notion. I ask, not rhetorically but really, what is nostalgic about the choice made today by a third of Canadian parents who choose to give up the second car, the bigger house, the vacation in order to stay at home and raise their kids, and spend as much time as they can bonding with their children and raising the future generation? I submit that there is nothing nostalgic about it. I submit that it is specious to suggest that these people do not work. They are doing the most important work there is to be done in our society.
We could dismiss these slips of the tongue in evidence of the fundamental Liberal philosophy, which is hostile to stay at home parenting, but these comments reflect the real discrimination that exists in the tax code. Rather than hearing empty apologies for these kinds of prejudicial remarks, we want to see this tax system corrected.
What is wrong with this tax system that we are talking about? I will tell the House what is wrong. A family with one income earner who earns $35,000 ends up paying $2,281 more in taxes than a two income family with the same gross income. That is nearly a $2,300 differential for a very modest income family. That is according to federal government budget documents. According to the C.D. Howe Institute, a single income earning family making $50,000 pays about $4,000 more than its double income equivalent or about two-thirds more.
This is not just an aberration. The government made policy changes in its last budget to increase the child care tax deduction, one of the principal offending elements of the tax code in this respect, by increasing it over the last and current fiscal years. It actually increased the disparity, the inequity, the unfairness between two income and single income families with children. That is inexcusable.
People may ask what is the basis for this inequity. First, there is the child care tax deduction which allows those parents who pay for third party day care to deduct a substantial portion, $7,000 per child under the age of 12. That is a deduction which is not available to parents who raise their kids at home, who forgo the second income and do assume a cost, called opportunity cost, the cost of giving up income.
One of the other offensive things this government did was to raise the age under which parents can claim the child care tax deduction for minors. It brought in a $4,000 deduction for children between the ages of 12 and 16. What does this mean? It means that some parents are claiming this deduction to send their kids to hockey school and summer camp, while those parents who are taking care of preschool kids at home get no coverage, no advantage from the tax system. It is just plain wrong.
One of the other offending elements is the basic exemption versus the spousal exemption. The spousal exemption is worth about 20% less than the basic personal exemption. What this says to fathers and mothers who decide to stay at home is that they are second class citizens. Their value to society is deemed to be only 80% of the value of somebody who works outside the home. We say enough of this kind of second class status for people who are staying at home to do what is best for their families.
Those are the principal offensive areas of the tax code. Single income families also end up in higher brackets. They do not get to claim as much RRSP room as the combined room of two income families and so forth. Families do not want it this way.
One of the interesting things we see, according to the Vanier Institute of the Family, is that over the past several years two income families have seen their after tax income stay relatively flat, while single income families have seen their incomes since 1989 go down by 10%. The single income families that tend to be at the lower end of the income scale and that need the help the most are falling further behind because of these inequities, while the double income families that tend to be higher up the income scale are staying at least even with the enormous tax take of the government.
Families do not want it this way. Eighty-two per cent of Canadians in a 1998 Compas poll said they wanted the tax code changed to make it easier for parents with young children to have a parent at home. Ninety per cent of Canadians feel that taxes are too high for parents with children and that this is placing a greater stress on them than it did a generation ago. Eighty-six per cent of Canadians favour a lot or some priority for families with a stay at home parent. Ninety per cent believe the family setting is preferable to day care when asked what is the best for an infant or preschool child.
In a 1991 Decima poll 70% of the women asked said that if they had the choice they would prefer to raise their children at home rather than work outside the home and use day care.
That is what Canadians are saying by overwhelming margins: 70%, 80% and 90%. We do not get that kind of consensus on virtually any other public policy issue. It is very clear that these people are falling behind even though they are working harder and playing by the rules.
What is the remedy? Very simply, we propose to convert the child care tax deduction into a refundable credit and increase the value of that credit to $7,900, which would equalize the playing field. We would also convert the child care tax deduction into a credit. We would raise the spousal amount to be equivalent to the basic personal amount.
That is a starting point, but we need to start this national debate—