Mr. Speaker, I would like to split my time with my colleague from Edmonton Centre.
I am very pleased to have this opportunity to rise and speak on behalf of Bill C-28, the budget implementation act, which, as the title indicates, is designed to implement certain measures outlined in our budget 2006.
On January 23, Canadians voted for change: a change in government, a change in fiscal accountability, and a change in fiscal management. These are changes to the benefit of all Canadians.
With that change came the direct support for our new government's five priorities. These priorities were outlined in the Speech from the Throne as well as in budget 2006, delivered by the finance minister on May 2.
On June 22, Bill C-13, the first budget implementation act, was given royal assent and many of our fiscal promises were fulfilled. These measures included reducing the GST from 7% to 6% and introducing a $1,200 per year universal child care benefit for parents of children under the age of six.
We introduced other tax cuts as well, tax cuts that Canadians have not seen before. Our first budget cut taxes by an incredible $20 billion over two years. Yes, $20 billion over two years. Our budget offered more in tax cuts than the four previous Liberal budgets combined.
Canadians are very happy with our budget, and I am happy to say that not one of the opposition parties opposed our budget when it came to a final vote, not one. They grumbled at first, but then they studied our budget and saw the great benefit of our government's budget to Canadians. In the end, they did not oppose it, so our budget has the support of Canadians and of the opposition.
I am pleased to be here today supporting the second budget implementation act, Bill C-28. We want to keep rolling out the tax cuts for Canadians and, in doing so, show Canadians that when we make a promise, we keep it.
The action taken with Bill C-28 will cut taxes for pensioners, families, students, users of public transit, and each and every worker in Canada. These measures will make a real difference to Canadians by focusing on their priorities, priorities like lowering taxes for working families, assisting small and medium sized businesses achieve real growth, and helping tradespeople, students, families and seniors.
In short, Bill C-28 delivers on our budget and delivers real tax relief for Canadians. This government recognizes that Canadians pay too much tax. As a colleague of mine previously reported, according to the Fraser Institute, while the average family's income has gone up 1,100% since 1961, its taxes have shot up a whopping 1,600%, outstripping the growth in income.
As I mentioned, this is a new government with a new respect for our fellow Canadians. We need only look at the measures in Bill C-28 to see exactly how we are putting more money back into the pockets of hard-working taxpayers.
Working Canadians are the foundation of Canada's economic growth. However, choosing to work also means additional costs, costs for everything from uniforms and safety gear to computers and various supplies. For some, particularly low income Canadians, these additional costs can impose a barrier to joining the workforce. For others, work related employment expenses are another factor that limits the rewards of their hard work.
In recognition of this, budget 2006 introduced the Canada employment credit, a new employment expense tax credit for employees' work expenses. A credit on employment income of up to $500 will be provided effective July 1, 2006. The amount of employment income eligible for credit will rise to $1,000 effective January 1, 2007.
Budget 2006 also recognizes that creating an environment for more and better jobs and for strong economic growth depends on having a competitive tax system. The engines of our economy, our wealth creators, are businesses, both small and large, and they should not have to face the heavy burden of overtaxation. The businesses that feel this burden most are small and medium sized businesses. They create jobs and are the backbone of our country's economy.
In my riding of Glengarry—Prescott—Russell, small and medium sized businesses are essential. They are the economic backbone of my riding: farms, farm equipment retailers, manufacturing, industry, pharmacies, grocers, et cetera. Without their success, ridings like mine would struggle. Many of us are employed by them. Small to medium sized business is responsible for the majority of all new jobs created in Canada. Whether we live in an urban riding or a rural riding, all of us turn to small businesses for services, and our future economic growth will depend a great deal on their success.
An important way that Canada's federal income tax system supports the growth of small businesses is through a lower tax rate on the first $300,000 of qualifying income earned by a Canadian-controlled corporation. This helps these small businesses retain more of their earnings for reinvestment and expansion, thereby helping to create jobs and promote economic growth in Canada.
With the passing of Bill C-28, and effective January 1, 2007, the threshold for small businesses will be increased from $300,000 to $400,000. In concert, the 12% rate for eligible small business income will be reduced to 11.5% in 2008 and then down to 11% in 2009. It is estimated that these changes will reduce government taxation on these businesses by $10 million in 2006-07 and $80 million in 2007-08.
There is more.
Hon. members from all ridings know that Canada is facing a serious shortage of tradespeople: carpenters, plumbers, electricians, cooks and others. Our government is taking action to encourage apprenticeships and to support apprentices in their training.
Specifically, we will help companies hire apprentices with a new apprenticeship job creation tax of up to $2,000 per apprentice. We will create a new apprenticeship incentive grant of $1,000 per year for the first two years of a red seal apprenticeship program and other programs.
Through these actions, our Conservative government will be investing more than $500 million over the next two years, which will help approximately 100,000 apprentices.
We will also help apprentices and tradespeople with the heavy burden of buying the tools they need to do their jobs. Our government will invest $155 million over the next two years for a cost of tools deduction, which will help approximately 700,000 tradespeople in Canada.
In regard to our seniors, members will no doubt agree that some seniors struggle to live on a small fixed income. As I travel throughout my riding, I often hear seniors ask, “Why does the government not do something to help seniors, those of us on a fixed income?” I am always pleased to state that this is exactly what we are doing. We are providing real tax relief to seniors.
The most important measure involves a doubling to $2,000 from $1,000 of the amount on which the pension income credit is calculated. A deduction for the first $1,000 was introduced in 1975, but since its introduction the amount has remained unchanged. That is unbelievable.
It took our new Conservative government to do something for our seniors to rectify this problem. We recognize and understand the difficulty faced by seniors on fixed pension incomes. To provide greater tax assistance to those who have saved for their retirement, budget 2006 increased to $2,000 the maximum amount of eligible pension income that can be claimed under the pension income credit, effective for 2006 and subsequent taxation years.
The measure will benefit nearly 2.7 million taxpayers receiving eligible pension income, providing up to $155 per pensioner, but not only that, it will remove approximately 85,000 pensioners from the tax rolls. This is real action to the benefit of our seniors.
In regard to Canadian families, they are the very foundation of our society and they play a vital role in the development of our communities. This is why it is important that we reduce their tax burden as much as possible.
One of the ways we are doing this is with the children's fitness tax credit. The health and fitness of our children is very important. As the government, we want to promote physical fitness among children and we want to do it by supporting families directly.
We take families seriously and we take physical fitness seriously. Budget 2006 provides a children's fitness tax credit effective January 1, 2007. The credit will be provided on up to $500 of eligible fees for programs of physical activity for each child under the age of 16.
I am the father of five children. They are involved in fitness activities such as soccer, basketball and highland and Celtic dance. I am pleased to state that finally we have a government that listens to families, that works together with families and that helps families with their real expenses. This is a great tax credit for families. It encourages and supports physical fitness and it is my sincere hope that the opposition parties will support it.
Lastly, I would like to highlight what we are doing for students. We believe that our post-secondary students need to be supported in their hard work in pursuit of academic excellence. Currently, the first $3,000 in scholarship, fellowship and bursary income received by a post-secondary student is not taxed, but any amounts above $3,000 are taxed. Students do not need this. They do not need to be paying tax on scholarships, fellowships and bursaries. They need to use that money toward their education.
I am very pleased to highlight that our new government understands the financial challenges that post-secondary students face and that we are on their side. We want them to succeed in their studies by alleviating financial pressures, which is why Bill C-28 proposes a complete exemption for scholarship income received by students.