Mr. Speaker, I have to say I was speaking really fast. When I saw you give the one minute warning I felt as if I had only been speaking for about three minutes. Then I started to increase the speed, but I will now slow down a little to get in the rest of my comments.
I was addressing the increase in RRSP contributions the government will allow in Bill C-28 if it is approved. This will cost about $295 million. As I said earlier, it will be used by people who earn more than $75,000 a year, which is about 5% of Canadians. This has to concern us because if we looked at an overall assessment of taxation and income, we would see that there is a widening gap between people who are very wealthy and people who are very poor in Canadian society.
A study released by the Canadian Council on Social Development last November found that the wealth of the poorest 20% of couples with children under 18 went down by 51.4% between 1984 and 1999, whereas that of the wealthiest 20% of couples at the highest end increased by 42.7%. There are other studies by the Canadian Centre for Policy Alternatives that bear out those findings. They point out that between 1970 and 1999 the wealth of the richest 10% of family units in Canada rose by a whopping 122%.
I want to contrast that kind of statistic and the proposal in this budget to allow a fairly major increase in RRSP contributions to seniors who are locked into fixed income support programs after retirement. They are the people who feel the worst effect of rising costs in our society. Many of those retirees spent their whole lives in the workforce helping Canada to be a prosperous and productive nation. They are now being forced back to work after retirement just to survive from day to day.
This is unacceptable and is not something we should accept as the status quo. It is not something we should accept as inevitable because it brings us right back to the structures of the budget and our taxation system.
There is a very strong argument to be made that over the last few decades there has been a massive shift in taxation from corporations to individuals. There has been a massive shift in taxation to provide more and more breaks for people who are wealthy and placing a greater burden on people who are at the lower end of the economic scale. Again I would argue this is not something that is inevitable; it is a matter of public policy that is determined by the Liberal government.
In the case of the RRSPs and the increase that is being allowed, obviously a lot of lobbying was done by various organizations on that basis. Our feeling in the NDP is that the government should have resisted that kind of pressure and those kinds of rewards that will benefit people who are actually doing very well and are very well off.
About one-third of Canada's seniors have such low incomes that they actually receive the guaranteed income supplement. What is astounding about that fact which we raised in the House just the other day is that the seniors who get the GIS--and there are a few hundred thousand seniors who do not get the GIS because they do not even know about it even though they may qualify--but the astounding thing is if seniors on GIS receive a little extra income over and above that for whatever reason, they are taxed at a rate of 75%, which would be the highest tax bracket in this country.
When we contrast that with this issue of an increase in RRSP contributions and the cuts being made for businesses for the capital tax, we begin to see the very stark reality of a government that clearly is making decisions based upon rewards and favours for people who already have huge benefits, and that is to the detriment of and certainly will have an incredible impact on people who have disabilities, as my colleague from Dartmouth spoke about earlier. That is where the hurt will really be.
These amendments try to redress that problem by eliminating these clauses in Bill C-28. I hope that members will consider these amendments. If we believe in the principle of equity in our tax system, they should be approved.