I am honoured to stand in the House today to speak to Bill C-22, an act to amend the Income Tax Act. Actually it was the Liberal Party election act. Members will recall that the finance minister announced most of the provisions that we are dealing with today just days before the election was called. Of course he had no idea that the election would be called four days later. After he did his economic update and announced these things in the House in October 2000, it came as a total surprise to him that lo and behold the Prime Minister announced an election.
I would like to begin by asking a simple rhetorical question. If there are policies that are necessary just before an election, how come those policies are not necessary between elections? Therein lies a very important question.
We have dealt with it over and over. We dealt with it not long ago when we were dealing with the equalization act. Suddenly it was necessary to lift the cap. It was done because there was an election coming. Believe it or not, the voters bought into it. A whole bunch of them in Atlantic Canada replaced sitting members with Liberal members because the Prime Minister said that the cap would be lifted.
When the legislation came in we dealt with it in the House. We did indeed lift the cap but for one year. We had some questions about the whole equalization process. We thought it should be revisited in order to look at it rationally because it was a very convoluted system. The opposition parties suggested that if it was good for an election year to lift the cap, it should be good policy to lift the cap in the long term. The government said no to that amendment.
All the Liberal members stood on command and voted against the amendment. That is a curiosity to me. If it is good economic policy we should be doing it, whether or not there is an election. If it is not good economic policy then we should be able to communicate to Canadian taxpayers why it cannot be done, and hopefully they would then trust that we would be fiscally responsible in managing their money properly. That is how we would gain their support.
Now we have Bill C-22, an act to amend the Income Tax Act. It goes on from there, but really it is a bill to enact the provisions of the Liberal fall election campaign in 2000. Our party is leaning toward supporting the direction the Liberals are going in. After many years, being a grassroots party and representing the wishes and sometimes the demands of Canadian voters and taxpayers, we brought to the House the wishes of Canadians on fiscal matters.
The Liberal government loves to tax and spend. It loves to take money out of the pockets of taxpayers and then roll it out during an election campaign so that hopefully it can stay in power, which is its overarching principle. Four days before the election was called the Liberals said that what the Canadian Alliance was saying was right on. The polls told them that. If they wanted to win the election, they had to do these things during the election period so that they could get re-elected.
The government introduced a number of measures, some of which are included in the bill. We are now debating what the government promised, just by coincidence, four days before the election was called.
I would like to say a little about those things. First I want to give very low marks to the Liberals but high marks to their communication department. They have spin doctors who work very well. They are able to communicate with straight faces to the Canadian people that there is a $100 billion tax cut. One billion dollars is an awful lot of money and $100 billion is massive. It boggles the mind.
I have sometimes used this example when I talk to students and we talk about the way in which governments spend money, and the way they tax and so on. Sometimes we also talk about the debt. When the Liberals came into power they inherited a debt of around $520 billion. They allowed it to grow to almost $580 billion.
We will be very fortunate if by the end of the government's mandate, say in the year 2004, although the Prime Minister will probably call an election in 2003, but certainly by the end of 2004, we will be back down to the debt level that we were in 1993 when it took power. However, the spin doctors are able to convince Canadians that the Liberals are excellent stewards of the public money. They are telling Canadians to trust them because they will manage our money properly, notwithstanding that the debt is much higher than it was when they took over.
I said that the magnitude is in the billions of dollars. I do not have the exact numbers before me because I was not planning on using this example. However, when I talk to students about $1 billion I ask them how long it would take them if they had to spend $1 million at a rate of $1 per second? Some of them guess a bit and then I tell them the answer. As I recall, if they started at midnight on January 1 it would take them until January 11 or 12 before the money would be gone, approximately 11.5 days to get rid of $1 million at $1 a second.
Then I ask them how long it would take them to spend $1 billion? Again, they guess and then I tell them the answer. I tell them that to spend $1 billion at the rate of $1 per second would take until September, 31 years later. That is how long it would take to get rid of $1 billion.
Here we have a government claiming through its spin doctors a tax cut of $100 billion. That is spin doctoring at its finest. The $100 billion includes a lot of money that it just decided not to take.
I will give another example. Let us say I decided to give my wife some money to spend on a house, which I know she would love, and told her that I was going to give her $20,000 more than I planned to give her. Under my breath I would mutter that I was planning on taking $18,000 away from her. She could say that $20,000 was great but the fact is it would only be $2,000 because it would include the $18,000 that I was going to take out of the housing fund.
This is what the government has done. It is claiming $100 billion in tax relief, but included in that is a whole lot of money that is represented by money that it could have taken but which it has now decided not to take.
For example, a couple of years ago the government announced that it was restoring indexation. There was no mention made of it being retroactive, so perpetually taxpayers were still suffering the removal of indexation on the tax rates over the last number of years because the government flattened the thing out. We were paying a whole lot more taxes because of bracket creep. When the government reintroduced it, it started from the present position and did not go back. Therefore, the errors of the previous years continue to be perpetuated.
One of the things the government is claiming is that due to indexation this is a tax cut. It is not a tax cut at all. The government said that it would take $10,000 from each taxpayer and now it is saying that it will only take $8,000. In that case, the government is calling this a $2,000 tax cut but it is still taking the $8,000. To call that a tax cut is inaccurate.
Furthermore, we have the child tax benefit. It is true that in the legislation the child tax benefit would be increased but that is not a tax cut. It is an expenditure. It is a case of the government thinking of a way to spend some money on behalf of families. In a way, I have some sympathy for that position but it cannot properly or legitimately call it a tax cut. That is spin doctoring and it is not acceptable in terms of the actual message that is being put out there.
The bottom line is that the actual tax cut is not $100 billion. It is actually closer to $50 billion and that is spread over five years.
We have a whole bunch of questions with respect to the bill but the government has decided to go ahead with it. We know its members will vote for it and it will happen. I will concede that families with children would get more money from the spending program and so for them it is an advantage. For families without children, such as in the case of my wife and I whose children are grown up and have left home, there would be no tax cut. It is a spin doctoring myth.
The bill also has implications in the area of tax rates. We talk about the single tax rate. The opposition and some of the other parties, and when I talk of opposition I mean the Liberals who are in opposition to us, totally misrepresented what a single tax rate does.
Our plan was to have one rate of tax at 17% and then subsequently we revised it so that it would apply only to $100,000 of taxable income. That still included all of the present deductions. None of them were to be taken away. However, instead of talking with Canadians and honestly debating its plan versus ours, the government has totally distorted what it said about our plan and then proceeded to knock it.
It is really an unfair thing. It is as if we have two car dealers and one dealer, trying to promote his product, says that the wheels fall off his competitor's cars as soon as they are driven 10,000 kilometres. It is not true but that is what he says would happen. He repeats it over and over again and then asks, with great passion, whether the customer wants to buy a car with wheels that fall off after being driven 10,000 kilometres. The customer says, no, and the car dealer suggests that the customer buy his car.
That is what those Liberals did. I almost used a bad adjective, but thankfully I caught myself. They took our plan, totally distorted what it did, developed animosity against that caricature of what we were proposing and asked Canadians to vote for them.
There are still thousands of Canadians who want to trust their governments. They want to trust their politicians. During an election campaign when these things are said Canadians think that if their trusted government leaders are saying something it must be right so they therefore believe them.
I will take a ten second diversion to say that the same distortions happened when the Minister of Citizenship and Immigration said what she said. That was a hurtful and total distortion for a person like myself whose family members have worked all around the world with people of all kinds of different backgrounds, helping them. To be labelled the way the immigration minister labelled us and then have Canadians say they would not vote for us because we were scary is hurtful and wrong.
If we want Canadians to trust us we have to start dealing openly and honestly with them. We have to tell them the truth and start debating the Liberal proposal versus ours. That unfortunately has not happened. I resent this.
I taught mathematics and computing for 31 years in my life prior to becoming a parliamentarian and when people misuse math I get just about as upset as I do when they describe me in pejorative terms. The government had Canadians persuaded, and this is one thing in the bill, that it would reduce the lower tax rate from 17% to 16%. It had the gall to go to Canadians, say it was reducing the rate to 16% and claim that was even better than the Canadian Alliance proposal.
However, it was worse than that. In every category, including that first category at the low rate, our tax plan would have given Canadian taxpayers a greater tax break. The reason was simple. Even though our rate was 17%, it was on less of taxpayers' income. We proposed, for example, that a two parent family with two kids would not pay any income tax on the first $26,000 of their earnings. The Liberals ignored that. They ignored the fact that we would increase the exemption. All they did was talk about the fact that they would reduce the lower rate to 16% from 17%.
I resent it when people trade on a misrepresentation of mathematical facts. This is what the government has done and this is what we would be passing with Bill C-22. If we pass the bill later today we would be approving the reduction of that rate to 16%. Canadians would get a smaller tax break than they would have had they voted for us because of the fact that the Liberals have a great deal of expertise in messaging, in telling people “this is what is” when in fact it is just the opposite.
In passing Bill C-22 the Liberals ought to send out a press release to say that while they would be reducing the income tax rates and going from three levels to four, while they would be decreasing the 17% rate to 16%, the 25% rate to 22%, the 29% rate to 26%, and retaining the 29% rate for everything over $100,000, there is something else. I would like that press release from the Liberal government to also say in bold letters at the bottom of the page “Please note that Canadians were hoodwinked into voting for a party that proposed this bill and got it pushed through the House and that it gives taxpayers a smaller tax break than, first, they deserve, and second, what the Canadian Alliance would have given them”. That is what the press release should say. I am expecting the Minister of Finance to put that on the bottom of the press release later today or next week when this bill is finally passed.
I am sure that will happen. I see the parliamentary secretary over there grinning from ear to ear, which of course shows compliance with my present request.
The fact of the matter is that a $100 billion tax cut is a $50 billion tax cut or even a little less if we look at how much the taxes are actually being cut. The rest is spin doctoring. The fact of the matter is that this would produce a tax cut smaller than the tax cut we would have provided.
There are some other provisions in the bill with which I happen to agree. There is a disability tax credit. There is also the issue of children. Families have big expenses when raising children. The government is going in the right direction here by making it slightly easier for families, but it does not come anywhere near recognizing the actual costs of raising children. We would have substantially increased the deduction for children. The government has not done that. The taxpayers would still pay taxes on the money and if they qualify they get a tax credit. Most people in the middle income bracket with two earners have the promise of a child benefit for which they are not eligible. Their taxes would stay the same. The government is not reducing the taxes yet is announcing with this bill that taxes would be reduced.
I regret that my time is up, Madam Speaker, but thank you for giving me the time to express my views on the bill. I will vote against the bill for the reasons I have articulated.