Mr. Speaker, I would like to say a few words in this debate in terms of some of the important tax issues that are being implemented by this legislation.
When we look at the taxation system, Mr. Speaker, I think you would agree even from the Alberta perspective that the tax system must be fair in how it treats ordinary people. I also hope you would agree that the tax system should be very progressive.
We should have a tax system that taxes people on their ability to pay. We have moved away from that a bit in the last few years in terms of what the Mulroney government did when it reduced the number of marginal tax brackets from seven to three. Now we have a 16% tax bracket, a 26% tax bracket and a 29% tax bracket. The 26% would be rolled back to 23% which will make it a bit more progressive.
One thing I have been advocating is that we should make it a bit more progressive. If I had my way on the drawing board, I would return to maybe not seven tax brackets, but five marginal tax rates. There would be a bit more progressivity in the system. The United States has more tax brackets than we have.
We should also raise the basic exemption for Canadians to an amount much higher than what it is today. Today I think it is $6,700 or $6,800 for Canadians across the board. I would like to see it go up to $10,000 or $12,000 in terms of making it more progressive. Also, lower income people would not be taxed to the same extent as they are today. It would take many more people off the tax rolls.
I do not want to speak for too long. My friend in the Conservative Party from Nova Scotia wants to say a few words before we adjourn, so I will try to keep my comments to about 10 minutes. Perhaps you could give me the nod at that time, Mr. Speaker.
There are a couple of things which I think should be talked about a bit more in this country. Often the comparison is made by more conservative minded politicians, in particular the people in the Canadian Alliance, that taxes in Canada are so much higher than in the United States.
A study came out in the news today which compares income tax rates in Canada and the United States. I am sick and tired of comparing apples and oranges, just comparing tax rates in isolation. The study says that in general the tax rates in the United States are lower than those in Canada. I will give a couple of examples.
In 1997 a family with an income of $40,000 paid about $6,900 in income tax in Canada. In the United States they paid about $5,200 in income tax.
If we look across the board we find that the percentage in this country is a bit higher in every bracket, high, middle or low than it is in the United States. What is forgotten are some of the other costs of living in the United States.
For example, in the United States if one is lucky enough to get health care, one may have to pay $1,000 U.S. a month. Health care in Canada is paid through general revenue and general taxes. That is one of the benefits of our taxes. The taxes are a bit higher and one reason for it is we do not have health in the private sector. We do not have private premiums. We do not have a user fee or a user tax on health care. In the United States it costs perhaps $1,000 a month to get health care.
Also in that country around 40 million people or more are not insured. There are about 100 million people who are underinsured in the United States for health care. That is a radical difference between our country and the United States.
If the average family is paying an extra $2,000 or $3,000 in taxes a year, health care by itself will more than eliminate the gap between the American taxpayer and the Canadian taxpayer. If one is paying $1,000 U.S. per month in premiums for health insurance, that adds up to $12,000 to $13,000 U.S. or about $18,000 Canadian per year for health insurance. Our health insurance comes out of general revenues from the provincial governments in the main but also from the federal government under a cost sharing plan. That is one of the benefits of being in Canada.
I want to throw two other arguments on the table as well. It is rather facetious just to compare the tax rates of the two countries.
Canada has a much lower crime rate than the United States. That makes our cost of living lower than that of the United States in terms of policing costs. It makes insurance costs in Canada lower because the crime rate is radically lower. We do not have to carry a handgun or weapons or have the insecurity in most parts of the country that we see in the United States. Again, when making tax comparisons, an issue like crime is not factored in in terms of the higher costs south of the border.
The third area is education. Everyone knows it costs an awful lot more to send a young person to university in the United States than it does here. Tuition fees are too high here; we all agree on that. Many of us are lobbying the federal government to put more money into post-secondary education and are lobbying the provinces to make sure they put more money into it and tuition fees are lowered to make university education more accessible to everyone.
In the United States tuition fees often are around $15,000 U.S. per year. For a unique university such as Columbia it could be perhaps $25,000 U.S. a year for tuition. We are looking at $15,000 to $30,000 Canadian and more in tuition per year for a student in the United States. Someone told me today that the average student debt in the United States is probably over $100,000 U.S. My recollection is that the average student debt in Canada is between $15,000 and $25,000 Canadian.
Again one reason that the student debts and tuition fees are lower in this country is that the money comes out of taxes to a much greater extent than in the United States of America. We are getting some benefit from the taxes that Canadian people are paying.
When we hear the arguments by members in the Canadian Alliance that our taxes are so much higher than the United States, they are really comparing apples and oranges. They are not comparing some of the benefits that we get from the taxes we pay.
There is a very strong argument that we be concerned that there is enough taxpayers' money to ensure that we do have good progressive programs, that we do have social programs, that we do have an infrastructure. There is a role for government and for the mixed economy in this country. The economy should not be left totally to the free market.
I look at some of the leadership candidates of the Canadian Alliance, like Tom Long and others, who believe that almost everything should be left to the so-called free market, that there should not be a role for government. That party is almost anti-government in what it advocates, not so much the former leader of the opposition as Stockwell Day and Tom Long who are on the far right, the extreme radical right.
There is a role for government. If there is a role for government, then we have to have a fair taxation system so we can fund the government programs. The whole issue in Canada is fair taxes and making sure we have a tax rate based on the ability to pay, so that the ordinary citizen pays less in taxes, so that the poorer people do not pay taxes and the wealthier people in some cases pay even higher taxes than they do today.
I will give an example of what I mean. The Bronfman family is one of the wealthiest families in this country. In 1991 the Bronfmans moved a lot of their assets, I believe it was stocks, to the United States from Canada. Officials in the Department of National Revenue, under the previous government, made a ruling that the Bronfmans would not have to pay capital gains tax on the appreciation of their assets when they moved them out of the country to the United States. According to the auditor general and according to information that has now come out in court cases, the Bronfman family basically got a $700 million gift when they moved that money out of Canada into the United States.
On the other hand, if an ordinary bus driver in Kingston, Ontario owes $200 or $300 to the federal government, the Department of National Revenue will track that poor bus driver down and demand that he pay the bill and that he pay interest on top of it, but not the Bronfman family. They got a $700 million tax holiday, a tax gift, because officials in the department of revenue were able to write it off.
We need tax fairness. Four years ago the current government said that it would bring in legislation to change this. That did not happen until a ways and means motion was tabled in the House yesterday. That will bring in some legislative changes promised back in 1996.
This is what I mean when I talk about tax fairness. The Bronfmans with a family trust can get away with a tax gift of $700 million, and the ordinary citizen who owes a few hundred dollars on a tax bill is hounded, searched down, charged a penalty and interest. That is not fair. It is unjust. That is what I mean by tax fairness and equity in terms of how we treat people.
Some people say we should not do it that way, that we should have a flat tax where everyone pays the same tax rate. The Peter Pocklingtons and the wealthier people would pay the same tax rate, such as 17%, as the middle class. That would increase the burden on the middle class or would cut back on government programs, or a combination of both. I do not believe that is tax fairness either.
These are some of the issues I wanted to raise. Before I cede my place on the floor to a member of the Conservative Party, I conclude by saying that the main issue is fairness when it comes to taxes. There should be no special status and no special exemptions for wealthier people or bigger corporations, like the family trusts we have had in the past.
I believe in tax fairness. I believe lower income people need to get a tax break.
I also believe there is a role for government. We need a government that is proactive, a government that will provide leadership in terms of stronger social programs. There is a role for a mixed economy in this country. I think that is the direction most people want to go.
If I read public opinion correctly, I think the ordinary working families believe that large corporations have too much control and too much influence over the agenda of our country. Canadians see the Liberal Party as being a bit wimpy in terms of standing up to the agenda of large corporations. Canadians want the government to have more spunk and more backbone. They want a people's agenda, where people are put first and there is a more equitable distribution of wealth and power. That is the way the ordinary people of Canada want to go.
We have tremendous opportunities. One way to give people opportunities and to build a strong country is to make sure that we have a very fair and equitable tax system.