Mr. Speaker, I rise in strong opposition to the $4.6 billion tax increase that Bill C-48 proposes to collect from all Canadians.
I remind the Liberal-NDP socialist coalition that contrary to what misinformation is spread about business taxation and who does or does not benefit when business taxes are reduced, corporations do not pay taxes. People pay taxes.
What this socialist pact accomplishes in Bill C-48 is a double hit. By reducing productivity and maintaining the high level of taxation on business, while at the same time increasing taxes on Canadians by $4.6 billion, the net effect of the damage is magnified.
Forget about the discussion of a surplus and the Liberal-NDP illusion that the $4.6 billion is spending, not new taxes, that it is the budget surplus, the budget surplus is a myth. There is no budget surplus. The long term debt for Canada exceeds half a trillion dollars.
Canada has a serious deficit when it comes to health care, our military, municipal infrastructure and services, just to name a few. There is no surplus. Talk of a surplus is a hoax that is being perpetuated on the people of Canada by a scandal ridden administration that is out of control and reduced to buying votes with taxpayer dollars.
The Liberal-NDP out of control spending coalition is hoping that most Canadians have forgotten or do not remember the last time this pair teamed up to ruin the country's finances. The last time there was a minority government where the NDP propped up the Liberals was in 1972.
Between 1972-73 and 1974-75 fiscal years, spending jumped by 50%. While spending jumped by 50%, taxes jumped by 52% over the same period of time. From October 1972 to July 1974, the inflation rate more than doubled, from 5.2% to 11.1%.
The rise in inflation led to chartered bank prime rates almost doubling. They climbed from 6% to 11% and the rate on a five year mortgage during the same time climbed to 11.37%.
Canadians need to look at the fiscal record of the last Liberal-NDP accord to appreciate why I and the Conservatives oppose and have consistently opposed the totally irresponsible way the finances of Canada are being run by a government intent on buying support from the NDP in order to cling to power.
We should make no doubt about it, Bill C-48 represents crass, last minute deal making of the worst kind. What makes thoughtful Canadians critical of the Liberal-NDP spending pact is that it represents a huge tax increase. In this case, the Liberal Party is throwing taxpayer dollars at the NDP to buy its support.
The worst part of this misuse of taxpayer dollars is that while lofty goals are being stated on where the new taxes will be spent, there has been no thought and no plan that the intended spending will actually end up in the pockets of those who are the intended recipients.
Of particular interest to my constituents in the riding of Renfrew—Nipissing—Pembroke is the plan for families with children and helping those children receive a post-secondary education.
I have been listening with interest to the comments made by the NDP finance critic when the statement is made that the $4.6 billion tax increase will benefit students. Specifically, it is alleged that the Liberal-NDP budget would allocate $1.5 billion to lower tuition costs for students. However this is false because with the hasty way this deal to increase spending was put together, there was no indication of how the $1.5 billion would be spent, much less where.
Let us contemplate for a moment that cash was allocated to reduce tuition, which is the line being pushed by the NDP. In an example provided by Mr. Alex Usher, vice-president of the Educational Policy Institute, let us consider the following.
Let us take a student of sufficient affluence with no grants or loans. Let us assume the student's tuition and fees are about $5,000. Her net cost is $5,000 minus the value of her tuition tax credit, to net out at about $3,800. Now let us give this same student a 10% reduction in tuition. Her cost now would be $4,500 with a net after tax benefit of $380. With a $500 tuition reduction, the affluent student would be better off by $3,800.
Now let us take a high needs student, such as a single independent student, with costs minus resources of $9,000 in Ontario. This student has tuition and fees of $5,000. As with the more affluent youth, the net cost after tax would be $3,800. Now if he has $9,000 in loans, of which anything over $7,000 would be remitted at the end of the year, meaning that effectively he would be carrying a $7,000 loan and a $2,000 grant.
Let me show members what happens when tuition costs are lowered by 10%, which may or may not be the percentage in the budget payoff to the NDP to prop up the Liberals. At a 10% tuition reduction, costs would go down by $500. Therefore the need drops by $500, dropping the student's loan from $9,000 to $8,500. In Ontario, because the threshold remains the same, this student would still have a $7,000 loan but $1,500 in grants. Therefore by not planning or consulting with the province, the student is no better off because the $500 gained through the lower tuition fees would get clawed back by the student aid program, and it does not end there.
Thanks to the tax department, both students would lose $120 of the $500 benefit due to the decrease in the tax credit. Therefore giving a high needs student a $500 break on tuition would mean taking away $500 in grants and $120 in the tuition tax credit.
To summarize, reducing a high needs student's tuition by $500 would make him worse off by $120. What we now have is a Liberal-NDP education policy for post-secondary students where the students are worse off than before the decision was made to increase taxes by $4.6 billion. The $1.5 billion, according to the NDP finance critic, being directed at tuition costs is doing more harm than doing nothing at all. This is a policy where kids who do not need something benefit while the students actually in need lose something.
That is but one example of why Bill C-48 is bad public policy. Bill C-48 hurts students. This budget tax increase hurts all Canadians. The Liberal-NDP approach to spending, without an adequate plan, is something we oppose in the Conservative Party.
I urge all members of the House to opposed Bill C-48, this $4.6 billion tax increase. It hurts all students and it hurts their families.