Mr. Speaker, on Friday, when I spoke to the budget implementation bill, there was quite a bit of animation in the House. In fact, when I got into the subject matter of how the government had repackaged other legislation from the prior Parliament and taken it as its own, it brought a very resounding cry of foul from the Minister of Transport, who proceeded to try to shout me down so I could not get the rest of my examples on the record. He suggested that somehow this was scary.
Because he used the word “scary”, it made me think of what I should talk about in the last couple of minutes of my speech, which is what happened two Halloweens ago with the income trust taxation broken promise. I have presented petitions in the House on this matter because it is important to Canadians.
In the last election the Prime Minister promised that he would never tax income trusts. In some of the literature that he circulated he said, “There is no greater fraud than a promise not kept”. What happened? He broke the promise and he imposed a 31.5% punitive tax, which permanently wiped out over $25 billion of the hard-earned retirement savings of over two million Canadians, particularly seniors.
It is interesting to note that seniors are some of the largest and broadest investors in income trusts for one reason. About 30% of seniors have a registered pension plan income. This is income for pension purposes from a corporate plan. I am not talking about RRSPs; I am talking from a company pension plan.
The Minister of Finance at the same time he announced the government would tax income trusts at this usurious rate, he also announced pension income splitting for seniors, which he hoped would take away the sting of what had happened.
Now that the forms and explanations are out, it is clear that only 30% of seniors have pension income that is eligible to be split. Seniors cannot split RRSP income or RRIF income. The Canadian pension plan can be split, but for other reasons. Of the 30%, if we take out all those seniors who do not have a partner to split it with and if we take out all those seniors who are already at the lowest marginal tax rate, the number of seniors eligible for pension income splitting is down somewhere between 12% and 14%, based on the economic and financial analysis done for us.
Therefore, the only people who will benefit from pension income splitting are the highest income earning Canadians. Those who have the highest marginal rates will be able to split their pension income, up to half of it, with a spouse, for instance, who works in the home or does not have employment income.
We can see there was a caution or a concern about taxing income trusts. There was a very pathetic attempt to suggest to seniors that the government would offset this by income splitting. In fact, the most vulnerable in our society, low income seniors, will not benefit from pension income splitting. I raise this because this is absolutely reflective of the kind of values the government has when it comes to treating Canadians. It tells them one thing, but it does another.
I believe the income trust broken promise is the biggest scandal that has ever hit Canada. It hurt seniors and we just do not hit seniors.