Debates of May 10th, 1999

Income Tax Amendments Act, 1998

[An hon. member]

How's Manning doing?

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I would like to ask the member who is speaking to ask me an intelligent question and I will try to give him an answer.

[Deepak Obhrai, Reform, Calgary East, AB]

Mr. Speaker, this is the third time I have risen to speak about the budget announced by the federal government. Bill C-72 reflects what has been brought in by the budget. It deals with what I would call piecemeal tax relief for Canadians.

The government says it is giving a non-refundable tax credit for interest paid on student loans. I do not think any Canadian would have a problem with that. The government is proposing changes to the registered education savings plan. I do not think anyone would have much of a problem with that. This is a small step toward correcting the problem of high debt loads which students pay.

In my last speech to this House I talked about the problems facing students. We see the government again addressing this issue in a piecemeal way. The government is claiming credit by saying it is addressing the heavy tax burden from which Canadians are demanding relief.

The government estimated that it expects a $3 billion surplus in the budget. Most forecasters are now expecting that the 1998-99 balance could be anywhere between $7 billion and $12 billion. The government is not really looking at the money that is forecast and it does not have a proper plan to provide tax relief to Canadians.

My colleagues from the NDP and the Conservatives talked today about income tax reform to address all of the issues. They feel that tax credits should not be the driving force.

My concern is that we could have tax reform, but we do not want tax reform where, in the final analysis, the bottom line remains the same and the government gets more money from Canadians. There is no point in tax reform which transfers the burden from one group to another group. What Canadians are asking for is real tax relief.

Today in the Montreal Gazette there is an article with the heading “I do not pay my taxes joyfully”. This arose from the fact that Reverend Bill Phipps said we should pay our taxes joyfully. In the article the writer talks about how much tax he had to pay after he did his income tax return. His bottom line, after indirect taxes, service fees and all of the taxes that are taken from his pay cheque, came to 60%. Sixty per cent of our income is going toward taxes. I do not think there is any Canadian who would say that they would joyfully pay 60% of their income toward taxes when they feel there is no return from the federal government.

There was another news item in the paper today saying that when the premiers meet at their annual conference in Montreal, productivity and tax reduction will be at the top of the agenda.

We have heard the business community screaming about high taxes. Now we have the business community, the provinces and Canadians talking about high taxes. I do not know whether my colleagues on the other side, when they go back to their ridings, have constituents coming into their offices talking about high taxes, but they are coming into my office talking about high taxes. Students are talking about high taxes.

Today we have heard government members and the parliamentary secretary giving great facts and figures on how they are addressing this issue. However, nothing has happened in 1998 and 1999 with respect to tax relief. If we were to take their figures, in 1999-2000 the total tax relief will be around $55 million. That is a positive aspect for all Canadians. When we take it further, in the year 2000 we will have bracket creep, which the government does not wish to talk about. The bracket creep will increase and will take more money away from Canadians. They will be paying more taxes than they are now. Where is this tax relief they are talking about?

Then we add to that the CPP increase. No matter what we want to say, the mismanagement of the CPP has resulted in a negative balance and it is a tax that Canadians are paying.

While the government wants to say that it has been addressing the demand for tax relief, more and more Canadians are saying that it is not fair. There is no tax relief for them. There is just a manipulation of accounting procedures. My colleague just spoke about the accounting procedures that the government employed, which everyone is questioning, including the auditor general.

Where is the tax relief that the government talks about? I sat here this morning and heard the many points on tax relief that the government talked about. However, when we look at what is happening out there, tax relief is not there for Canadians. How long will Canadians wait before this government addresses the issue?

We hear from the finance minister that he would like to take a cautious approach. He is keeping money in the contingency fund. Now we see that the surplus will jump from $7 billion to $12 billion. What will the government do with the surplus?

The government likes to put forward the argument that if it gave tax relief the social services which Canadians dearly love, especially health care, would somehow face a crisis. I would say that health care is facing a crisis already because of the cuts the government implemented. Now it is putting money back, but it is only what it took away. What about expansion? Canadians are getting older and older. It is not sufficient to put back the money the government took away. The health care system is looking for more solutions and more money because more and more Canadians are getting older. That is why we have a health care crisis. When huge surpluses are being racked up by this government it is wrong to say that if tax relief is given somehow it will impact the health care system.

There are other areas where the government could cut waste. It has been identified many times in this House that the government could cut taxes and it would have no impact at all on many of the social services and health services we have in this country.

It is interesting that the federal government is the last one to address this issue. The provinces have already started to address the issue of tax cuts. They understand that the burden on the Canadian taxpayer is very heavy. The federal government is the only one that does not seem to realize or understand the feelings of Canadians.

Bill C-72, which the Liberals call a housekeeping bill, we would oppose. We oppose it not because there is no tax relief in it, because we understand that there is some small tax relief, but because it does not address general, overall tax relief for Canadians.

[The Acting Speaker (Mr. McClelland)]

Questions and comments? Questions et commentaires. Resuming debate. On debate the hon. member for Port Moody—Coquitlam—Port Coquitlam.

[Lou Sekora, Liberal, Port Moody—Coquitlam, BC]

Mr. Speaker, I listened to opposition members talk about the budget and a few other things. I have been here for only a year. I came from a city where I was a council member and a mayor for many years. All we hear from members opposite is crying and complaining about many things, but they never come up with any solutions.

We have surpluses in Canada for the first time in many, many years, and a balanced budget. The fact is that the federal government paid down the debt load by $30 billion just the other day. The debt load is coming down. We have a balanced budget and a few other things.

Members opposite mentioned health care. The premiers are very happy with the money the provinces received for health care.

Members opposite mentioned high income taxes. B.C., where I come from, has an income tax rate which is 15% higher than any other province. Ontario lowered its income taxes, but the Ontario government borrowed the money to do that. Does it make sense to borrow money to give people a break? This government will do it the way it should be done. When there is money in the budget it will lower taxes.

Does the member not believe in a balanced budget? With all the things he is crying about and with what he is complaining about that is happening or is not happening, I would like to ask him where the money would come from.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I rise on a point of order. I am a little confused. I believe this was a speech and it was a very short speech, but I was getting ready to ask a question of him since I think he just made a speech and we should now be in questions and comments on his speech. Is that correct?

[The Acting Speaker (Mr. McClelland)]

That is a really good point of order. After two years it is the first point of order that has been a real point of order. It is a point of order because I recognized the hon. member for Port Moody—Coquitlam—Port Coquitlam. I believe I asked three times for questions or debate and I recognized the member on debate and so it was. The hon. member for Elk Island has a question to pose to the member for Port Moody—Coquitlam—Port Coquitlam.

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, I rise on a point of order. The government side would have no objection to the member for Elk Island answering the questions of the member for Port Moody—Coquitlam—Port Coquitlam.

[The Acting Speaker (Mr. McClelland)]

Let us sort it out then. Was the question asked of the member for Calgary East?

[An hon. member]

Yes.

[The Acting Speaker (Mr. McClelland)]

In that case we will take it on advisement that the hon. member was rising on questions and comments and that the question was directed to the member for Calgary East.

[Deepak Obhrai, Reform, Calgary East, AB]

Mr. Speaker, I understand it is questions and comments and I am so happy to see the member finally ask a question. I was sitting here for such a long time and he would not rise to ask a question. I am so glad he rose to ask me a clear question. He asks what party I am in. I am from the official opposition which will keep him in line.

He talks about a balanced budget. No wonder he has not been asking any questions. He does not know his facts. Of course we all believe in balanced budgets but the issue is that when there is so much surplus, where is the tax credit? That is the issue. Canadians are saying enough of this tax burden. Where are you in coming along and saying yes—

[The Acting Speaker (Mr. McClelland)]

I am sorry but I have a responsibility to interrupt to ensure things do not get out of hand. Please address each other through the Chair.

[Deepak Obhrai, Reform, Calgary East, AB]

Mr. Speaker, my apologies. I should talk through the Chair.

The debate today is not about a balanced budget. The debate is about tax relief. The government is talking about the tax relief it has given out. That is what we are talking about. We would like to point out to the hon. member that the tax relief his government is talking about is piecemeal tax relief and it is not what Canadians are looking for. There is a huge debate going on among Canadians including businessmen and students. They are all saying that there has to be an approach taken by the government that addresses this basic question. The bottom line is Canadians are saying to get off their backs.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I am pleased to address Bill C-72. The title of the bill is sort of scary in itself. Bill C-72 is an act to amend the Income Tax Act and implement measures announced in the February 1998 budget.

It scares the pants off me whenever the government starts talking about income tax changes and implementing its budget proposals. What was even more frightening was when the Parliamentary Secretary to the Minister of Finance talked about the fact that this was just not a one year approach, that the government's approach back in 1993-94 was going to be a continuing approach. It certainly has been.

We saw the tax increases by the Liberal government start in 1994. At that time we gave it the benefit of the doubt. We thought maybe just for that year we would see the income tax increases the government was proposing, but in fact we have seen them every year since the Liberals have been in power. The parliamentary secretary has certainly given credibility to the tax increase plan the government had back in 1994 when he said that it was not a one year approach.

I am sure the Canadian people have a little bit of a problem with the income tax increases that have been brought in by the government since 1994. As a matter of fact, there has been almost $40 billion of increased taxation since the government came in. That was brought about by some 38 or 39 individual tax increases.

To see the members of the Liberal government stand and talk about tax decreases or tax relief is a shock in itself. It makes one wonder what kind of horror movies they have been watching that would demand this huge turnaround in their thinking, which we cannot take with much credibility anyway.

The other frightening thing the parliamentary secretary said this morning was that the government has eliminated the deficit and that it is not borrowing any more to balance the books. The Liberal line is “We do not borrow any more; we have eliminated the deficit”.

The real story is the Liberals have raided the EI premium surplus fund to the tune of well over $20 billion. They have simply taken the money despite the fact that the current premium of $2.55 per $100 of earnings has been described as being far too high by their own people within the EI commission. The EI commissioner has clearly said that a premium of $2.00 per $100—

[An hon. member]

It is down from $3.05.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, the hon. member says it is down from $3.05. That is good. I am glad they brought it down from $3.05 to $2.55. The fact is they suddenly stopped. They stopped within 55 cents per $100 of what the EI commissioner said was sufficient to maintain the EI fund as well as to provide for a rainy day fund in case there was a dramatic decrease in the economy and more people were claiming benefits. It is still several billions of dollars ahead of what is required to sustain the fund and provide for EI benefits.

While we are on the subject, the Liberal government has cut benefits to EI payees, to the workers in Canada. It has cut benefits by almost 40%. Almost 40% of the benefits that were available to workers in Canada before the government came to power in 1993 have been eliminated. Millions of Canadian workers are still paying the price for the plan they had in 1993 but the benefits of the plan have been cut by about 40% by the government. That is one of the ways the Liberals managed to eliminate the deficit and of course it is another tax increase.

Now the Liberals are planning on scooping, I think the number is about $30 billion, from the public service pension fund. One has to ask if this government simply has no shame when it comes to scooping money. These funds were contributed, yes by the government, but in good part by the public servants themselves who work for the government.

The government says no, it has this surplus and it is not going to use it to enhance the retirement benefits of the public servants. Rather it is going to take it all out of there because after all, it is in its bank so it can do it. That is a pretty high-handed attitude from this Liberal government which has always claimed that it is a government which is there to represent the people and to reflect in its policies the wishes of the Canadian people.

I see the hon. member for Port Moody—Coquitlam—Port Coquitlam is in the audience. I am glad he is because obviously he needs as much exposure to debate in the House as he can possibly get so he can catch up to the rest of us.

What we have here is a give them a dime take another dollar type of government. This government is like someone who will take the whole jug of water away from someone who is about to embark on a desert trip.

[Lou Sekora, Liberal, Port Moody—Coquitlam, BC]

What about a brain transplant.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Is it not amazing that when the hon. member for Port Moody—Coquitlam—Port Coquitlam comes into the House and listens to reasoned rational debate which he has no answer for, his only response can be incoherent babble. If the hon. member really wants to find out what his government is doing rather than simply what it tells him, he might listen to the debate that is coming forth.

It was also interesting to hear the Parliamentary Secretary to the Minister of Finance talk about the raising of the tax exemption for firefighters and volunteers from $500 to $1,000. That is good and we certainly support that.

It is interesting to note that since 1994 the government has taken another $2,200 in personal income taxes out of the pockets of the firefighters and other volunteers who serve our citizens so well. It has taken another $2,200 in net personal taxes from the firefighters and then it has turned around and given them another $500 in tax exemptions, which would be worth maybe about $200 or $300 in actual net taxes. The firemen after six years of Liberal government are still at a net tax deficit of around $1,800. Would it not be nice if it had left the paycheques of the firefighters alone?

The government has an insatiable appetite for taxing Canadians. We are as you well know, Mr. Speaker, the country with the highest personal income tax in all the G-8 countries. I know you are aware of that, Mr. Speaker, and I know that it really rubs against the grain of your fiscal conservative thinking. I know that you are a free enterpriser, Mr. Speaker. I know you hate income tax. I know you can hardly stand it when you are in that chair listening to the government talk about how good it is to the Canadian taxpayer. Mr. Speaker, I sympathize with your job when you have that bunch standing up in the House today talking about just how tax friendly they are to Canadians.

The government has never yet addressed the question of the unfair taxation of Canadian families, particularly two parent families who have one single income in the household. The other day I pointed out one example and I will do so again for the benefit of the Liberals who have trouble understanding things when they are told just once.

On one side of the street lives the Jones family: two parents, two kids and two incomes. On the other side of the street lives the Smith family: two parents, two kids and one income. Both families earn a household income of $60,000 a year. Everything is the same except one household has two jobs.

The big difference is that the Smith family has made sacrifices because they have realized that in their particular case there is value in having a parent at home to help on a full time basis with the guidance of the children. Because they have made that decision they will pay about $5,000 more in personal income taxes than the Jones family who live on the other side of the street.

We are not saying that either side has made the wrong decision or the right decision. It was their decision to make. What we want to know is why the so-called Canadian, family friendly government thinks it is fair to penalize the Smith family with one parent staying at home to the tune of $5,000 each and every year out of their income tax?

The government has not addressed that yet. That is tax discrimination of one of the very worst kinds. Most members know what I am talking about even if the member for Port Moody—Coquitlam—Port Coquitlam is still having problems figuring out what day of the week it is.

The Liberals have an unfair, unclear, incomprehensible and unacceptable tax code. Canadians have been looking to the government for some sort of tax relief. Middle income Canadians, who are by far the biggest supporters to the personal tax revenue the government grabs every year, have not had a tax break and are still waiting.

Middle income families have contributed about 70% to the personal income tax of the government. They are wondering why they are still being penalized while everyone else is getting a tax break. They want to know why wealthy Canadians and poorer Canadians get a tax break but middle income Canadians do not.

The message is that the government really is not the caring government that it says it is.

Unfortunately, despite two sterling examples in the country, the provinces of Ontario and Alberta, the government has not realized, despite examples from all over the world and particularly in the United States, that there is a direct connection between high tax levels and high unemployment as well as a direct connection between low tax levels, low unemployment and a buoyant economy.

The provinces of Alberta and Ontario have given tax relief to their working residents and their economies have boomed. More jobs have been created in Ontario. The biggest portion of jobs that the Liberal government likes to crow about were created in the provinces of Ontario and Alberta, the very two provinces that gave their residents real and substantial tax breaks. The government stands up and takes the credit for that. That is insane. Has it no shame?

The provinces with the lowest unemployment in the country are the ones that have given their residents substantial tax relief. They have done it and have still allowed for increased spending in education and in health care.

Mr. Klein in Alberta and Mr. Harris in Ontario have done well. I know Mike Harris will be the winner in this coming Ontario election because he has lived up to his promises. He has a very buoyant economy. He has had to address the health care and education problems created by the NDP under the leadership of Bob Rae when he was the premier. The problems fell into Mike Harris' basket after the people of Ontario threw out the NDP and their disastrous performers. I just cannot wait until June 3 when we will see Mike Harris, the tax cutting premier of Ontario, returned as premier again.

The Liberals still do not get the message. They do not know the direct correlation between low taxes, low unemployment and a buoyant economy. Our party has a lot of problems with the way Liberals run the finances of the country.

I was in Port Moody—Coquitlam not too long ago and met with some of the people who voted for the member for Port Moody—Coquitlam—Port Coquitlam. They told me how glad they were that their former mayor was now in Ottawa. They said they were very happy to see him leave town. They also said that they had not cared what party he was running for, they voted for him to get him out of town. They were just beaming because he was not the mayor anymore and he was a long way from Port Moody—Coquitlam.

Bill C-72 is not representative of a government that really cares about the tax levels of the Canadian people. Our party—

[An hon. member]

What party is that?

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

—Her Majesty's Official Opposition, the party that returned here in 1997 with 60 seats. Despite the forecast and predictions of the Liberals that we would be wiped out, we are back in the official opposition position.

Our party could never support Bill C-72 because it represents everything that is detrimental to a buoyant economy. It has been well said by economists in the country that were it not for our export market, our country would be in serious problems because we do not have a domestic economy.

We should be very thankful that the U.S. is so buoyant right now. Its consumption of so much of our Canadian goods and services is giving our economy a bit of a boost. Why is it able to help us by buying our products? It is because its economy is booming. Why is it booming? It is because its tax levels are far lower in every area than they are in this country. We will unequivocally oppose Bill C-72.

[Charles Hubbard, Liberal, Miramichi, NB]

Mr. Speaker, I have heard a lot of discussion, debate and lectures on taxation and on monetary and fiscal policy, but I have never heard such a rambling diatribe of information as I have just heard in the House.

We have to come reality. We are not here to speak for 10 minutes and consume the 10 minutes. We are here to present facts, realities and some conclusions to the Canadian people.

After listening to the member talking about the two families, I cannot help but wonder what the attitude and policy is of the Reform Party. It seems to show that two low income families should pay the same amount of taxes as one major income earner family.

Would the member comment on how his party could come to the conclusion that two families, being compared in terms of total income, one where two people each earn $20,000 a year, should pay the same income tax as a single earner earning $40,000 per year. Could the member please inform the House of his thinking, his logic in coming to that conclusion?

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I guess the member for Port Moody—Coquitlam—Port Coquitlam was making too much noise for the hon. member to really understand what I was saying.

We are talking about total household incomes. The money comes into only one place, whether it is earned by one parent or two in that family. The family on one side of the street happen to have two parents working with a total household income of $40,000. The family living on the other side of the street, the Smith Family, have only one parent working but also have a total household income of $40,000. No family is making more money than the other.

The Liberals do not understand that the disposable income left in the hands of the $40,000 one income family after the taxman gets hold of the paycheque is about $3,500 less to buy shoes for the kids, to put food on the table, to buy clothes and school supplies and to send their kids to what little recreation they are able to afford. That is the tax discrimination I was talking about. I do not know why the member did not understand that. There is no difference in household income.

The difference is the discrimination that comes when the tax man comes a-calling on their gross paycheque. Why should this family, when they have one parent at home but the same income as the other one, be dinged an extra $3,500 or so, simply because they have made sacrifices to have one parent at home to help full time in the guidance of bringing up the children? Who can argue against that? Only the Liberals can.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I was very interested in my colleague's speech. He has a way of putting into simple words a very important concept and that is that Canadians are taxed to the hilt and they are sick and tired of it.

One thing that rather interested me was the way the government keeps doing its accounting and trying to communicate to Canadians that they are doing just fine and everything is tickety-boo, everything is clicking along whether it is or not, because the communications do not always agree with it.

I was quite surprised to hear the member from Port Moody—Coquitlam announce that the government has paid down $30 billion on the debt because I had not heard about that. It was news to me, but maybe I just have not picked up the newspaper today to read this announcement.

I made a phone call asking about this and apparently it is true. Can my colleague who just spoke comment on where he thinks this money came from? Does he know anything about this? How wonderful that the government is paying off the debt.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I thank the member for Elk Island for the question. I think it raises another very serious question. If the Liberal government has paid the $30 billion, that is fine, but where did it get it from? Where did it come up with $30 billion.

I suspect the government has already taken the $30 billion out of the public service pension fund. Let me say that again. Has the government already taken the $30 billion out of the public service pension fund without bringing it forward to the House first in some form of a bill that would allow them to do it?

Maybe the parliamentary secretary to the government House leader can tell us—and this would be scary in itself—whether the government can simply scoop that $30 billion without bringing it to the House for a vote, a vote which of course the Liberal majority would ram through anyway?

Can the government simply take that $30 billion without bringing it before the House? I pose that as a question to the hon. parliamentary secretary.