Mr. Speaker, I welcome this opportunity to comment on Bill C-305. The subject of the bill is the income tax treatment of social security benefits that some residents of Canada receive from the government of the United States.
I applaud my colleague, the hon. member for Essex, for his initiative to provide a higher standard of living for Canadian retirees. Indeed, this government has taken action directly to raise their standard of living. It is, of course, important to approach such issues in a disciplined and focused manner. We have to set priorities and take action where we see the potential for the greatest gains overall, gains in terms of fairness, gains in terms of raising standards of living, and gains also in terms of unleashing Canada's long term economic potential, something that will be essential if we were to guarantee secure support for all tomorrow's seniors and today's seniors as well.
One of this government's key priorities is tax relief. Canadians have been shouldering an unduly heavy tax burden for far too long, but we are working hard to lighten that load. In budget 2006 we delivered on our promise to double the pension income that can be claimed tax free to $2,000. This relief will benefit the nearly 2.7 million taxpayers who receive eligible pension income and it will take 85,000 of them completely off the tax rolls. That is certainly not all. Retired Canadians, like other Canadians, will benefit from many of the tax relief measures in our first budget. This includes dropping the GST rate by one percentage point to 6%, effective last July 1.
The GST cut will make a real difference to Canadians. In fact, it will benefit all Canadians by close to $9 billion over two years, even those who do not earn enough to pay personal income tax. In fact, the National Anti-Poverty Organization, as well as academics and think tanks have undertaken research on the distributional effects of various tax cuts. They have found that lower income families pay about 8% of the money collected from the GST, but only half a per cent of income taxes. Conversely, the richest families, those with incomes over $100,000, pay about 4% of all GST and 10% of income taxes.
In consequence, according to the National Anti-Poverty Organization, the general principle is clear. Families with incomes under about $50,000, which include many, many seniors, will gain more benefit from reductions in the GST than from reductions in income tax.
Also, even though we reduced the GST rate, we have kept the GST credit at current levels to further protect low and modest income Canadians, including seniors. In fact, including the GST cut, budget 2006 delivered almost $20 billion in tax relief for individual Canadians over two years. That is more tax relief in one budget than in the last four budgets of the previous government.
All Canadian taxpayers, including seniors, will benefit from permanent increases in the basic personal amount, the amount of income Canadians can earn without paying federal income taxes. By 2009, this amount is legislated to reach $10,000.
All taxpayers will also benefit from the permanent reduction to 15.5% in the lowest personal income tax rate. This is the rate that applies on the first $36,400 of income.
Providing a secure retirement for seniors will also mean investing to ensure a strong, productive and growing economy in the future. It is vitally important that Canada's economy is poised to meet the challenges of an aging population in an increasingly competitive economy. Again, this government is taking action, focusing our investments on the highest priorities.
Budget 2006 proposed measures to help federally regulated, defined benefit pension plans make an orderly return to full funding while protecting the security of pension benefits. Budget 2006 also took important steps toward building a competitive tax system. This is a key priority if Canada is to continue on the path to more and better jobs and stronger economic growth.
For a start, we delivered on tax relief that was only promised by others, but never delivered. In particular, we eliminated the federal capital tax as of January 2006. We will eliminate the corporate surtax, starting in 2008. We will reduce the general corporate tax rate. These proposed reductions will allow Canada to regain the solid statutory tax advantage that we had prior to the 2004 tax changes in the United States. This is important since 85% of Canada's trade, and we are a trading nation, is primarily with the U.S.
In terms of health, budget 2006 provides $1 billion over the next five years to improve Canada's ability to respond to a pandemic or other health emergencies to which seniors may be particularly vulnerable. We have set aside an additional $52 million per year for the next five years to implement a Canadian strategy for cancer control.
Finally, seniors deserve to feel safe in their homes and communities. The 2006 budget provides over $200 million in funding to vigorously combat crime. This includes funding to hire an additional 1,000 RCMP officers and federal prosecutors. It includes enhanced training for the RCMP and also provides funding for crime prevention in communities.
Early in my remarks I flagged the importance of identifying priorities and acting on them. All the things I have mentioned, reducing the tax burden, increasing spending on health and on ensuring safety in our communities, including ensuring that our economy continues to flourish, and supporting the benefits we provide to seniors and to other Canadians, are very important. We must ensure that we not only identify priorities but have the importance to act on them as well.
This brings us back to the private member's bill before us today. My hon. colleague from Essex has raised an important issue. We believe this issue deserves to be considered, along with many other potential budget priorities that are on the minds of each and every member of the House. The goal must always be to proceed in a fair and balanced way for all seniors and for all Canadians.