Thank you, Mr. Speaker. I did refer to the bill and I also am following up on some of the points the hon. member made in his own speech.
To resume that part of my speech, what I said is that not only is it patently false to say that the Conservatives cut income taxes when all Canadians know they raised them, and not only is it patently false to say that they took people off the tax rolls when all Canadians know they put them on the tax rolls, but it is also doing a general disservice to politicians from all political parties because it feeds this notion that politicians cannot be trusted.
There is another point I would like to allude to. In his speech, the hon. member talked about income trusts. My contention is that the government did two things wrong. First of all, there is absolutely no doubt that the Conservatives broke their promise. They said as clearly as it is possible to say that they would not tax income trusts, and then they did. As a consequence, one million-plus Canadians lost some $25 billion of their hard-earned savings, some $25,000 per person on average.
However, as if that was not bad enough, the second crime, the second indecency, is that this action was executed extremely incompetently. The evidence shows, and the witnesses that appeared before the finance committee will agree, that the government simply did not think through the consequences of its action.
The government thought there was a problem to address and, let us give it the benefit of the doubt, there was. Let us take that assumption, but the government addressed that problem by dropping a nuclear bomb on the industry unnecessarily, not only breaking its promise but destroying billions of dollars in savings by Canadians when it could have addressed those challenges in a much more surgical approach, which is what our Liberal proposal is doing.
I think the evidence shows conclusively that the finance minister not only broke the Prime Minister's promise, but he did not think through the consequences of his action. So it is not just that he destroyed $25 billion of Canadians' wealth, but he did it unnecessarily, because there were surgical, cleaner, more subtle methods available, which he chose not to use. So yes, he acted decisively, but he ended up being decisively wrong.
Part of the proof of my position is that he keeps changing his story on the subject of income trusts. First of all, in the early days he said we had to stop Bell and Telus because otherwise it would cost taxpayers $800 million in lost revenues. That was the basis for his action. Then, a little while later, Bell and Telus came out with statements saying that as corporations they would pay no tax or negligible tax for the foreseeable future. Whoops. That argument had to be jettisoned.
The finance minister had to scramble and find another argument so he said it was tax fairness, that income trusts would cost the government $500 million a year of lost revenue so we had to stop it or else corporations and income trusts would not pay their fair share and the burden would be shifted to families. That was his second argument.
However, we then had all those witnesses before the finance committee. About four of them testified that those numbers were totally wrong. Not one witness came to the defence of the finance department in terms of the numbers. They did in other matters, but I am talking about the $500 million number. The only witnesses there were against the finance department. The most credible witness, one who has worked with the department and has used the same methodology, said the cost was not $500 million a year but $32 million a year. Whoops. Another argument went out the window.
If the finance minister truly believed his story about tax fairness, he would release the numbers, but in spite of repeated requests from Liberals, the Bloc and other members of the committee, all we get is a blacked-out censored document with not one legible number. That is the government's defence of its basic argument for destroying those savings of Canadians.
He does not have a leg to stand on. His first argument about Telus and Bell was shown to be wrong. He then switched to his second argument, which was shown to be wrong. Now he is starting to talk about governance. There may be governance problems, but that has absolutely nothing to do with the central issue before us, which is why he so unfairly destroyed $25 billion in hard-earned savings of Canadians.
The government is guilty not only of breaking a promise, which is bad enough, but of acting incompetently, acting before it thought, not thinking it through and, in so doing, unnecessarily destroying $25 billion of the hard-earned wealth of Canadians, and also unnecessarily destroying a vehicle for savings, income trusts, which is extraordinarily important to seniors because it offers a higher yield than is available from many assets.
The seniors who have to live on the savings they have accumulated throughout a long working life to pay the bills are in a bad way, because the government destroyed income trusts. Not only did it did not fix the problem, it acted with such irresponsible and incompetent behaviour by dropping a nuclear bomb on it that it destroyed all those savings of Canadians. It took away this instrument that was extremely valuable for Canadian seniors. It is destroying a sector which, many studies have shown, and with which the Governor of the Bank of Canada agrees, improves the productivity in the energy sector. This is a disaster.
Our Liberal proposal, instead of imposing a draconian 31.5%, imposes a modest 10% tax that is refundable to all Canadian residents. That is enough, our experts have shown, to cover any tax leakage and ensure tax fairness. Experts tell us that will return to the Canadians who have suffered this terrible loss at the hands of the government some two-thirds of the $25 billion that has been lost.
I am disappointed that the NDP is refusing to join with the Bloc and the Liberals to force the government to change. The NDP, which prides itself historically as the party of social democracy, is abandoning in their hour of need those hundreds of thousands of Canadians who have lost millions of dollars. If the NDP were to join forces with the Bloc and the Liberals, we would come to a solution which would at least mitigate some of the terrible damage done by the government and would at least help the seniors and others, who have lost thousands of dollars each and billions of dollars in total, to recover part of those losses.
If the NDP, with its social democratic roots, were simply to come to the aid of those hundreds of thousands of Canadians in their hour of need, those Canadians who have suffered a grievous loss as a consequence of the behaviour of the government, then we would have the votes in Parliament to force the government to change its policy. But the NDP so far, probably because it is so low in the polls that it is desperately afraid of an election and feels it has no choice but to support the government, is refusing to do the rational, sensitive, caring thing, which is to come to the aid of the hundreds of thousands of Canadians who, because of the incompetent broken promise of the government, have seen their saving go down disastrously.
There is another thing I would like to comment on. I have just spoken for several minutes on income trusts and demonstrated not only the broken promise but the incompetence of the government and the fact that it did not think through the consequences of its actions. It is very important for a finance minister of any party, likely to be Conservative or Liberal because I do not think the NDP or the Bloc will be in government any time soon, but whatever party the finance minister belongs to, I think that person should think through the consequences of his or her actions before acting.
There was a really important situation affecting the livelihood of a million-plus Canadians and the finance minister simply did not think it through. I guess he likes to look decisive, but he ended up being decisively wrong and unnecessarily costing all of those hard-working Canadians some $25 billion in losses.
I think it is shameful that the government broke its promise and behaved incompetently, but I would add that it is equally shameful that the NDP, which purports to be the party of social democracy, is refusing to come to the assistance of those hundreds of thousands of Canadians in their moment of need.
However, it is not as if that is the only negative thing that one can say about this government. I would remind the member opposite that his finance minister is one of the gang of three who were senior members of the Harris-Eves cabinet. I would remind all members opposite of their fiscal record.
I would remind the member opposite of the 2003 Ontario budget. It was a pre-election budget, no doubt full of election goodies, but according to the government of day, of which the current finance minister was a very senior member, it was a balanced budget. People would vote for this government, the government hoped, because it was handing out all sorts of goodies and running a balanced budget. We Liberals believe in balanced budgets and have had surpluses for many years consecutively. The mere act of running on a balanced budget is not bad, except we know what happened. They lost.
Dalton McGuinty's government came in. That in itself was a good thing, but then the government called in the auditors and said, “Tell us. Is this really a balanced budget?” The auditors went through all the items in the budget with a fine-tooth comb and issued a report. Do members know what the auditors said? That it was not a balanced budget at all. It was full of lies. In reality, there was a $5.6 billion deficit. Now, that is at the level of the Ontario government, but could members imagine how big the deficit would be if this finance minister learned from his earlier trickery, tried to repeat the same thing at the federal level and left an even bigger mess?
Those members ran on a balanced budget. It ended up that the auditors came in and there was a $5.6 billion mess that Dalton McGuinty and his government had to clean up.
That is the Conservative way. It is exactly what happened in 1993 with the Mulroney government and the Kim Campbell government. Do members remember that? The Conservatives ended up with two seats. Do members remember what their deficit was? It was $42 billion. It makes the Harris-Eves gang look like misers with only a $5.6 billion deficit. However, that was at the Ontario level.