Mr. Speaker, my speech follows up on the excellent speech by the member for Regina—Lumsden—Lake Centre, but I do want to respond to something. I was challenged earlier by the member for Scarborough Centre to come up with where specifically in the red book it said that the GST would be scrapped. He will be happy to hear that on page 22 of the red book of 1993, the quote that the Liberals will scrap, kill and abolish the GST is:
A Liberal government will replace the GST with a system that generates equivalent revenues, is fairer to consumers and to small business, minimizes disruption to small business, and promotes federal-provincial fiscal cooperation and harmonization.
It is on the record. The member for Scarborough Centre challenged me. I think I am up to the challenge, so we will see if the member for Scarborough Centre is prepared, based on the fact that it is in the red book, to step down from his seat and run again like he said he would. I am looking forward to it.
I would like also to focus my remarks on the portion of today's motion dealing with the deeply flawed Liberal alternative to the government's tax fairness plan, an alternative aptly described by Finn Poschmann of the C.D. Howe Institute as politically funky stew, and elaborate on the extensive tax relief our government has provided to Canadians.
The chief deficiency with the Liberals' alternative plan is that it completely fails to level the playing field between income trusts and corporations. The Liberals would completely ignore the tax revenue losses experienced by the federal and provincial governments, nor would they remove the tax incentive for business and investors to choose the income trust structure over corporate structure.
On October 31, 2006 Canada's new government announced its tax fairness plan. Unlike this motion, it will restore balance and fairness to the federal tax system by creating a level playing field between income trusts and corporations and also deliver over $1 billion of new tax relief annually for Canadians, especially our seniors.
Included in the measures in the tax fairness plan is a distribution tax on distributions from publicly traded income trusts and limited partnerships. Distributions of existing income trusts will not be affected, I repeat, not be affected, by this tax for four years. Also included is a reduction of one-half percentage point in the general corporate income tax rate as of January 2011. At that point in time, the federal general corporate income tax rate will be 18.5%, which makes us the third lowest in the G-7. There is an increase in the age credit amount by $1,000, from $4,066 to $5,066, effective January 1, 2006. The $1,000 increase in the age credit amount will provide tax relief to low and middle income seniors.
For many, pension splitting beginning in 2007 is also in the plan. The pension income splitting measures will allow residents who receive income that qualifies for the pension income tax credit to allocate up to one-half of that income to their spouse or common law partner, thereby significantly reducing the tax on that income. The pension income splitting measure is a move that will directly benefit many of the 20,000 seniors in my riding of St. Catharines, and will benefit thousands more across the country.
The government is committed to tax fairness in this country. It is only right that businesses and individuals in Canada each pay their fair share of tax.
Had the government not acted on the income trust issue, the tax burden would have been unfairly shifted on to the backs of hard-working individuals and families in our country. Our government could not stand by and watch this happen. Ordinary taxpayers needed to be protected. That is why we acted.
Informed opinion from coast to coast has been overwhelmingly in our favour. The federal Daily Gleaner said, “It was the decision we think that will benefit Canadians in the long run”. The Montreal Gazette called it sound public policy, noting that unlike the former Liberal government, we had the discipline to avoid public dithering. The Toronto Star said that the finance minister deserves much credit for doing the right thing by plugging a tax avoidance loophole that he rightly described as a very bad thing for Canada. The Winnipeg Sun said that the Conservative government acted in the best interest of the economy going forward.
Even the Liberal finance critic, the member for Markham—Unionville, said at the time that it was absolutely the right thing to do, to ensure tax fairness and to work for Canada's productivity.
Unlike the Liberal leader, most Canadians clearly get it. In order for Canada to compete and be a leader in the 21st century, we must have a fair and neutral tax system in which all individuals and businesses pay their fair share.
Canada's new government demonstrated its commitment to tax fairness in this country in its most recent budget. The 2007 budget invests in things that make Canada great and reflect the values and beliefs that define us as a nation.
The government is taking important steps to clean up our environment, invest in Canadians, improve our health care system and celebrate our culture.
Canada's new government came into power believing strongly that Canadians pay too much tax. That is why in budget 2007 our government took steps to reduce the tax burden on Canadians and provide over $7 billion in tax relief over the next two fiscal years.
The tax relief provided in budget 2007 builds on the already significant tax relief that the government provided in budget 2006 in which 29 tax reductions amounting to almost $20 billion over two years were made. Budget 2006 provided more tax relief than four previous federal budgets combined.
Canada's new government has also introduced advantage Canada. A key element of the plan is to provide a tax back guarantee to Canadians by dedicating all interest savings from reducing the federal debt to personal income tax reductions. It means that every dollar saved from lower interest payments will be returned to Canadians through personal income tax reductions.
Over the next two fiscal years this will mean $2.4 billion in tax relief. It is made possible by lowering our national mortgage by over $22 billion since being elected, debt reduction that works out to more than $700 per Canadian. After all, why should Canadians not benefit directly from living in the only G-7 nation with a balanced budget?
Here are a few examples of how the government is acting to help hard-working Canadians and businesses:
We are introducing a $2,000 per child tax credit that will help families get ahead. For a typical family with two children, it will mean up to $620 in tax savings. This tax credit will help alleviate some of the necessary expenses incurred by Canadian families in raising children.
We are increasing the spousal and other amounts to provide up to $209 of tax relief for a spouse or a single taxpayer supporting a dependent child or relative. We are giving all families the opportunity to enjoy the dignity that comes with having a job and the pride of independence through the working income tax benefit. It will reward and strengthen incentives to work for more than 1.2 million low income Canadians. The maximum benefit is $500 for individuals and $1,000 for families.
We are reducing the federal paper burden for business by 20% by November 2008, by reducing the number of annual tax filings and remittances by over 350,000 small businesses. We are recognizing that businesses need modern technology to be more efficient and buildings that allow them to grow. That is why we proposed changes to the capital cost allowance system that will shorten the writeoff period for computers and non-residential buildings.
Budget 2007 also contains a detailed plan creating a Canadian advantage in global capital markets that will create a stronger and more efficient capital market in our country. The plan will give enterprises of all sizes better access to capital at more competitive costs, provide investors with increased investment choices and create more highly skilled, well paying jobs.
Canada certainly recognizes that attracting investment is as basic to building a strong economy as reducing government debt, lowering taxes and maintaining low, stable and predictable inflation.
Make no mistake that the decision that was taken on October 31 is all about fairness. It is about fairness to Canadian taxpayers and their families who would have been asked to pay more and more. It is about fairness within the corporate sector by removing the tax distortion in favour of income trusts relative to corporations. It is about fairness for all Canadian governments, federal and provincial, by preventing a significant loss of tax revenue.
In summary, it was clear that income trusts had special tax advantages that regular business corporations did not. Although the decision to act on this income trust issue was not an easy one, it was absolutely necessary for the country and for the future generations of Canadians, our children and our grandchildren.