Mr. Speaker, I am pleased to comment on Bill C-28.
I am a member of the finance committee. The committee recently completed a tour. We went from Whitehorse to Vancouver to Fort McMurray to Saskatoon and Portage la Prairie and then out on the east coast to St. John's, Halifax, Quebec City and Toronto. We wound up yesterday afternoon. I think we heard from over 400 witnesses. After a while we got a flavour of what Canadians seem to think about this budget. I have to say that they do not seem to think too much of this budget. In fact, after a while there were patterns that developed in the testimony.
I would have thought that thee Chamber of Commerce would have been an organization that would instinctively or intuitively support Conservative budgets. That organization had some rather critical things to say about this particular budget. The Chamber of Commerce said:
We note that Budget 2006 introduced piecemeal personal tax credits for a myriad of items. We believe this only serves to complicate the tax system--
And we all know that the Income Tax Act of Canada is a pretty complicated statute to begin with.
and relief should be delivered more broadly through rate reduction on increasing the bracket thresholds where the next tax rate is levied.
We ask whether the 1% reduction in the Goods and Services Tax rate was the “correct” method to effect a decrease in overall personal tax burdens. Generally, consumption taxes are preferable to income taxes, therefore we recommend reductions to personal income taxes rather than consumption taxes.
This was from a group that I would respectfully suggest is one of the key supporters of the Conservative Party.
We turn to the bill before us and we see immediately what it is that these people are talking about.
The first one is the new Canada employment credit. That sounds like a good idea on the face of it. If a person's income is from something other than employment, for example, a pension, investments, or things of that nature, this tax credit is utterly useless to that person. What is the point? Why would the government do that as opposed to bumping up the personal base exemption or reducing rates generally overall? We want to favour this over that. It speaks to the Chamber of Commerce position that the government has introduced a myriad of tax credits that end up complicating the system way beyond where it needs to be.
There is a textbook tax credit. That is just great. That is just wonderful. A student has 80 bucks worth of tax credits and a $5,000 tuition bill. That is a choice one makes. An $80 tax credit for goodness' sake is going to buy one textbook. That is great. The student can buy the textbook, but he or she cannot get into the school.
Witness after witness would say to the committee that this is lunacy. What people need is better access. That request would come generally from the student groups. They had some good ideas, all of which were ignored in the budget. The university side and the college faculty side want better infrastructure.
What they are really panicked about, and they should be, is that the various foundations that were funded over 13 years of Liberal government, those funds are not being replenished. As a consequence, the universities are afraid that the brain gain that we have had in the last few years will reverse itself again and become a brain drain. This could happen because there is no money available for the new applications that researchers put in.
Those folks are highly mobile people. They can do their research in California as well as they can do it in Toronto. They can do their research in New York as well as they can do it in Halifax. If we do not keep these foundations well funded with the ability to provide grants to do the leading edge research which has made Canada the number one publicly funded research country in the world, then these folks will find other places in which to do their research. What did the Conservative Party offer? An $80 book credit.
Then we come to public transit passes. That sounds great, but it is going to cost something in the order of about $900 million. It will cost $900 million to, in theory, increase ridership by 5%. That is a pretty expensive increase in ridership, $900 million on an annual basis. That does not build one kilometre of subway in my riding, not one kilometre. It does not even build a station. It does not replace any of the TTC buses in my riding, in the city of Toronto or in the GTA. It does none of that.
That is great; I have my tax credit. I am now going to get a tax deduction after I file my tax return, which has become so complicated that I now have to hire somebody to prepare my return. I am going to hand it in but I am not going to take the bus because the bus has flat tires all the time. These are utterly brilliant choices.
Then there is a credit for trades tool expenses. I kind of like that. What is wrong with that? Folks should be able to deduct their tool expenses. If one really thought about it for more than two minutes, one would say that a deduction for employment expenses should be broadly based because most people do not make their living in the trades. Most people make their living in services. We are becoming a services oriented country, so this particular credit is useless to most people.
The children's fitness tax credit is another one. I play hockey. My kid is a swimmer. I paid literally thousands of dollars annually for my daughter to swim. She is a nationally rated swimmer and now swims with McMaster University. I am going to get that credit. I kind of like that idea. I am happy about that, but my other daughter who dances is not going to get a credit. If any of my other children were participating in artistic endeavours, the credit would not be there.
Witness after witness after witness said that dance should be included, painting should be included and all kinds of other activities should be included. No one is ever going to make everybody happy. That is why it is crazy to try to do this.
I do not know whether you caught this, Mr. Speaker. The report to the Minister of Finance on how to handle this was released. The “Report of the Expert Panel for the Children's Fitness Tax Credit” states:
Fees for camps that emphasize physical activity theme.
That sounds simple.
To qualify, the camp program would need to last at least five consecutive days--
--not four--
--during which at least 50% of the activity during the program hours of each day would involve physical activity.
I do not know about you, Mr. Speaker, but I send my kids to camp and I am not sure my kids would qualify. The counsellors run the kids from dawn to dusk and make them do all kinds of things, but the activities are not always physical. Sometimes there are activities for painting, sometimes there are activities for learning about the woods and nature and things such as that. Those camps will not qualify.
This is going to be administratively ridiculous. No one is going to be able to keep track. It will place an administrative burden on all of these camps and then there will have to be a huge audit scheme to find out whether in fact a particular camp at a particular time had a five day program which involved physical fitness and physical fitness only.
In conclusion, the way to go is the way the Liberals set out in our November update, which was to raise the basic personal exemption and lower tax rates across the board if we want to do something in the area of tax relief for Canadians. This hodgepodge, mishmash, myriad of tax credits is administratively ridiculous and simply adds to Canadians' burdens rather than detracts from them.