Debates of Feb. 28th, 2008

Financial Statement of Minister of Finance

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, to continue with my speech, I was comparing the spending habits of the government to that of Paris Hilton but at least Paris Hilton has the virtue of spending her own money, money she did not work for but inherited, just like the government. The present government inherited a huge sum of money. It is not the government's money but it is spending it like crazy drunks.

When we look at the commentary in the Globe and Mail yesterday, it reads:

After two years of free spending and big tax cuts, [the Minister of Finance] has now produced a finance minister's version of Old Mother Hubbard.

In the nursery rhyme, Mother Hubbard can't find a bone for her poor dog in her bare cupboard. In hard-pressed Ottawa, where 2008-09 revenues are expected to fall below 2007-08 levels, [the Minister of Finance] is facing the consequences of almost emptying his own cupboard in last fall's economic statement, especially with his one-percentage-point cut to the GST.

Now, as the economy slows markedly, he has to scrounge, pinching pennies and dodging the very real and continuing risk of a deficit.

In Ontario, we have seen this movie before. It was a horror flick then and it is a horror flick now. The Minister of Finance, along with Mike Harris, reduced revenues substantially in Ontario. When the people of Ontario gave them the exit sign, the cupboard was in fact bare and Mr. McGuinty inherited an almost $6 billion deficit.

However, there were a few tricks in-between times. In one budget before the election, the Ontario government wanted to ensure it would not show a deficit so it sold off some rather valuable assets to cover up its profligate ways, the main asset being Highway 407. It sold the highway for about 25% of its value. The eventual purchaser flipped the highway two or three years later and made a handsome little profit.

The Minister of Finance has no money left so what does he do? He creates a diversion and has this taxpayer savings plan thing. Most properly advised investors will invest their money in an RRSP, which will use up a fairly substantial chunk of money and they will get a tax break. They will have their interest and earnings tax free until they take it out. If they have any money after that, they can invest it in an RESP and receive government assistance with any moneys they invest. After that, which I am sure one or two people in this chamber might actually have money left over after that, they will put money into this taxpayer savings plan.

It is a wonderful plan for those who are in the upper 1% of earners in this country, but for the balance of the people in this country, it is virtually a useless plan. It is a great show about absolutely nothing. It will cost the treasury $5 million in foregone revenue in the first year. Do members know what the average person will get on a 4% return? He or she will get a savings of $92.

If I were to go to my local bank and ask that one of these things be set up for me, the bank would be delighted to do so. However, do members know what the bank will do? It will charge me a fee of $200 to run a $5,000 plan for which I will save $92. Therefore, if I were to invest in one of these things, assuming I have any money left over in the first place, I would be down $100 by doing it in the way in which the finance minister plans to do it.

The other huge contradiction on which the Conservatives have not quite picked up is that they do this monster cut in the GST, which encourages consumption and discourages productivity, and then they encourage savings with this pathetic little plan. Either they want consumption or they want savings. This budget is much to do about nothing as--

[The Deputy Speaker, NDP, Bill Blaikie]

Sorry to interrupt the hon. member. That is the second time in 24 hours and I feel really badly about it.

Questions and comments, the hon. member for Burlington.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, my colleague, who is on the finance committee with me, talked about the tax-free savings account and used derogatory language around that account.

We are not the leaders in the world on this. Britain has had it for over a decade and it has been shown to be a useful financial tool for those who have money, for those in the middle income and for low income earners.

With regard to the information that we have been receiving over the last number of days of how well this program works in England, could the member tell us why it will not work in Canada? Why will that system, which works in a country that is very similar to ours in terms of the financial break-out and the ability to have financial tools, not work in Canada?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I would like the government to get its act together just once. This is the third try and it still cannot seem to get its act together. It weights all of its tax relief to a consumption tax reduction, which encourages consumption and reduces savings. Now we have savings at virtually zero and, in many cases, a negative savings rate, which is not good for a country.

On a tax point, the GST brings in about $5 billion on an annual basis. In effect, the Conservatives forgo revenue of $5 billion on consumption and then they tell us to look at this keen little plan they have where they forego $5 million on savings.

The government cannot get its act together and that is the point. It is not that in theory this is not a good idea but those guys do not even know how to apply good economic theory.

[Chuck Strahl, Conservative, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non-Status Indians]

Mr. Speaker, I appreciated the hon. member's analogy to Old Mother Hubbard and a few other things, but the question that is kind of burning in me, after listening to that kind of scathing denunciation of the budget, just like the scathing denunciation of our fall update and all the tax relief that Canadian consumers have been able to enjoy and all of the stimulus for the economy that came from that, will the hon. member, in the end, actually support the budget?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, it is an amusing government because it really does not want to govern. It just wants to enjoy itself. It seems to keep loading the pistol, handing it to us, spinning the chamber and telling us to shoot it because it wants to be shot. The Conservatives seem to want the Liberal Party to put them out of their misery.

There is such good fun watching those people squirm. Every day that they are here, they are asking us to shoot them and put them out of their misery. They are saying that it is an incompetent government and that they know the Canadian people deserve better.

When the Canadian people decide that they are prepared to go to election, that will be the day that we will do what the Conservatives are asking us to do.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I have two question for my colleague on the savings account.

First I want to ensure that I have the point right. Is he saying that the government put in measures to get consumers to consume a whole bunch of money and go into debt but now a remedy is needed to neutralize that so it has two programs to get zero net gain?

Second, in the member's calculation, how much would a person make in one month? First it would need to be a rich person to have $5,000 to put away, but how much would that rich person make by putting $5,000 away every month for a year?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, the estimate is that in a year a person would earn about $200 at 4% tax free, roughly speaking.

If one were at the maximum rate, which would be close to 50%, then one would save in the order of $100. Others have worked it out to be about $90. A person could save $90 over the course of the year, which would be tax deferred. That would be wonderful if a person does in fact have the $17,000 or $18,000 to invest in an RRSP, and I do not know how many thousands of dollars a person would need to invest in their kid's savings, et cetera.

For those people who can put $25,000 or $30,000 away in savings, although I do not know too many people in this chamber who can actually do that let alone the people who are watching on television, but I would say that was good for them. It is a wonderful thing for them but it actually will affect very few people.

One can see it in the government's estimates. It expects the treasury to have forgone revenue of $5 million. That is not even a rounding error in federal budget matters. Therefore, we have this rampant contradiction here. The government weights up the consumption tax and then it unloads on the savings tax. It would be nice if it could actually get it together.

[Garth Turner, Liberal, Halton, ON]

Mr. Speaker, I will follow up a little and continue on a theme about which my colleague has just talked. It is the tax-free savings plan. I have a few comments on that and then a few comments on the government's fiscal position at the moment.

The Minister of Finance put forward the tax-free savings plan as being the centrepiece of this budget. As we know, it will allow Canadians to put $5,000 into a tax-free account. There will be unlimited carry forward room. In other words, if taxpayers do not put in a certain amount of their contribution in any one year, they can carry it forward to another. Tax-free withdrawals can be made at any time.

It is in essence a glorified savings account. The minister made a point in his budget speech of saying that it was the first major investment vehicle that the government had introduced since the advent of the RRSP.

On the surface, there are some decent aspects to it, and in a moment I will go into what they are and where this came from. However, I will also make the point clear for Canadians who are watching, who may have read or heard a little about the tax-free plan and who may think this is a panacea for them and a useful financial tool.

In carrying on with what my colleague had to say, I want to ensure people understand this. This is no substitute for the RRSP. There is no tax deduction for contributions made to this plan. This is a very significant aspect that the Minister of Finance I do not think brought out clearly enough. There is no spousal plan involved with the tax-free plan. In other words, one cannot establish a plan for one's spouse and contribute in his or her name. The $5,000 limit is roughly three times less than that which is allowed by the RRSP.

Who benefits? This is the key point. The Minister of Finance, by putting this into the very first sentence of his budget speech, gave the impression that all Canadians would benefit from his new after tax savings plan. However, it is not the case. The only people who truly will benefit from the use of this new tax plan are those who are already fully invested in RRSPs. Why would one possibly invest in a tax-free savings plan, if one had $2,000 extra, as opposed to invest that $2,000 in an RRSP? If people put into an RRSP, they will get back up to half of their contribution amount, $1,000, which they can then deduct from their taxable income.

With this plan, there is no such tax advantage. Why would one do it? Why would people without money do it? Obviously they would not. As my colleague said a moment ago, the national savings rate today is zero, nothing. In fact, most Canadian families are spending more money than they take in. The average Canadian family today is $116 in debt for every $100 in assets.

That is a condemnation of the way the country is being run. We are being run on debt. Families are being forced into more and more debt to get through month by month to ensure they can gas up the minivan, send their kids to school programs and make the mortgage payment on very expensive real estate today. This is not a society in which the Canadians are gaining wealth. Why would they put money into a tax-free savings plan when they do not have it?

Most of my constituents are financially stressed. Not only that, when we take a look at this tax-free savings plan as opposed, as I said a minute ago, to the RRSP, we need to consider how much money people actually put into an RRSP today. It is 7% of the amount of money that they could put in. We are all allowed a certain amount. Ninety-three per cent of the amount of money overall collectively that Canadians could put into RRSPs every year they do not. Why, when there is such an advantage? They do not have the money. Therefore, what is the point of a tax-free savings plan?

We sat in the finance committee yesterday. I see my colleague from Burlington across the way. He sat at the table as well. This question was asked of an official from the Canada Revenue Agency. “How much money is it actually going to cost the tax collector of this country to run this new vaunted plan that the Minister of Finance has announced?” The official had no idea what the administrative costs would be. It could be hundreds of millions of dollars to set this up. We do not know.

Who pays for that? My constituents, constituents who do not have savings and cannot put money into an RRSP. Therefore, why would they put it into a tax-free savings plan? It may be a great idea for the Minister of Finance because it sounds good, but when the first sentence of his budget speech hits the ground, it means absolutely nothing.

Where did this plan come from? It has been around for a bit. In fact, I have an admission to make. When I was a Conservative member of Parliament, and I apologize for that but I admit it freely, I submitted to the minister of finance a report that I wrote. In the report, I talked about a tax-free savings plan and told the minister of finance that perhaps he should set one up, that it was not a panacea but did have some advantages.

In that prebudget report I recommended to the minister of finance that this might be a decent idea, not a panacea. However, I also said that we needed an income tax cut. That is the primary centrepiece of any tax reform that means anything to my constituents and certainly most Canadians.

This is a good idea. If I were, for example, a dentist making $300,000 a year, or a member of Parliament making $150,000, in other words, three times more than the average family income, I might think this is a great idea. If I had an MP's pension, indexed for the rest of my life, then I would say this would be a good idea. Actually, I probably will use this because I have an MP's pension, unlike most Canadians. When people have pensions it means their RRSP withdrawals will be taxed at the maximum marginal rate. Therefore, why would they put money into an RRSP if they are privileged, like members in the chamber, and have an indexed pension? They would not.

It is only for the people who have maxed out their RRSP, who are in the top 1% of the income tax bracket, who are rich dentists with a lot of income. Only those people will find that they can put another $5,000 of their after tax income in a plan, earn interest tax free and take it out any time. They are laughing at CRA because they have just reduced their taxable income.

Why would the government want to reduce the taxable income of the top 1% of wage earners in the country and call it the centrepiece of a budget for all Canadians? It is a shame. That is not benefiting my constituents because my constituents do not make what I make. They make the average Canadian salary, which happens to be $62,000 a year per family. For those people, this does absolutely nothing. It is shameful.

A couple of experts have looked at this plan. For example, Cleo Hamel, an H&R Block senior tax analyst, said:

All it means is that someone who can put money into a savings account won't get penalized for it. You have to find some kind of savings account that pays you anything...Where are seniors and the poor going to have a chance to save that kind of money?

Marc Lee from the Canadian Centre for Policy Alternatives, another senior economist, commented on it.

By the way, we are joined by one of Canada's pre-eminent economists who sits beside me in the chamber. The member spoke eloquently yesterday about the deficiencies of this plan. We must heed the words of these people who know what they are talking about.

Marc Lee said:

If you have an extra five grand kicking around, this gives you somewhere to park it for the rest of your life...It's something that will only be useful for people who've maxed out the RRSP room.

Economist Derek Holt of RBC said, “It's more about optics than it is about substance”.

If the government wanted to do something to actually benefit Canadians, if it wanted to give some tax relief, it would have cut income tax. If it wanted to get some justice, it would have restored income trusts to the previous pre-horror state they were in last October 2006. If the government truly cared about all Canadians, it would not take us to the knife's edge of deficit. I am not impressed.

We do not believe this budget is enough to bring the government down, but it is part of a collectivity of actions which will very soon, I am sure, result in its very well-deserved demise.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, it is very curious on the other side how members are very keen to know what the Liberal Party will do, when in fact they keep handing us this gun and telling us to shoot them. It is kind of a curious question from the other side, is it not? For a party that offered a former member of Parliament a serious sum of money to vote a particular way, is that not curious?

I would interested in hearing the hon. member's comments in that regard.

[Garth Turner, Liberal, Halton, ON]

Mr. Speaker, I was as shocked, as I think anyone in the House was, when I watched the news last night and heard the shocking allegation that a former member of the House had been offered some kind of financial incentive to vote in opposition to the government of the day, which was a Liberal government. It is very regrettable, indeed.

It goes right to the question not only of morality and ethics, but also to the legality of such an action, to the character of the people in a party who would make that kind of an offer. It speaks volumes to the character of the particular member who rebuffed it. That the former member is to be congratulated for his integrity, and that integrity now stands in very sharp contrast to that of the members opposite.

[Chuck Strahl, Conservative, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non-Status Indians]

Mr. Speaker, we are off topic. Not only are we off topic, but the last two hon. members have repeated scurrilous accusations that are untrue. In fact, if they were to examine the record, which they probably will not bother to do, they would find that the honourable person, Chuck Cadman, when asked by a reporter after that vote if anyone had offered him inducements, he said, “Absolutely not. He said that was not the case, that he voted because he believed what he was doing was the right thing and he followed through on it, and good for him.

That is what he said. It will not make any difference to the Liberals. I expect a full court press again today on absolutely baseless accusations. However, this is not the first time they have been guilty of that.

However, what I am most interested in is this. The hon. member mentioned that the idea of a tax-free savings account was his. It is kind of like Al Gore being responsible for the Internet. However, he said it was his idea and the doggone Conservatives stole it. Now that they have stolen it, it is a bad idea. His constituents do not want it. They do not like it. It is an awful thing and only members of Parliament likely will take advantage of it.

How can he support this budget now? Is that not the question, really? It must burn him up. It was his idea and the Conservatives adopted it. That makes it a bad idea now. The Conservatives are scalawags of some sort.

The question is kind of bumbling. How is he going to answer that in a byelection? He said that when members crossed the floor, like he did, the honourable thing would be to stand in a byelection and stand for what they believe.

When he stands in that byelection, and I do not know when it will be, but soon I would think, will he be in favour of that tax-free account or against it? It was his idea, kind of like the Al Gore and the Internet, and different things. When it all comes down to it, because he is not going to stand in a byelection right now, how will he stand when the vote comes for the actual budget? That is really is the test. Does he believe it or not? I have some sneaking suspicion that because he is a principled man he will fold like a deck of cards and support the budget.

Could he comment on that?

[Garth Turner, Liberal, Halton, ON]

Mr. Speaker, one hardly knows where to start.

I see the hon. minister has been delivered a copy of the budget report, which was delivered by me in April 2006. I guess he did not read because I did attribute that particular idea. The genesis of it is clearly written in that report. Now he can read it and ensure he knows what the facts are.

In terms of Mr. Cadman, it is interesting to note that no Liberal has made an allegation against Mr. Cadman. It was made by the CBC, the National Post, The Canadian Press, the Toronto Star, the author of a new book called Like A Rock: The Chuck Cadman Story , a biography of Mr. Cadman, and in fact Mr. Cadman's widow.

The hon. member should become educated before he stands and continues to make a fool of himself.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I will be sharing my time with the member of Parliament for Niagara West—Glanbrook. He has been a mentor to me, as I am a new member of Parliament who was elected a couple of years ago. The member for Niagara West--Glanbrook has done an excellent job of helping me understand my role as a member of Parliament and I am very happy to share my time with him.

Today I am here to talk about the 2008 budget that was presented by the finance minister. It is called “Responsible Leadership”. It is somewhat difficult for opposition members to understand what that means, but that is what the budget is all about. It is about leadership; it is about balance; it is about prudence; and it is about making a difference for all Canadians.

In my 10 minutes I want to talk about a number of things that are in the budget that deal directly with my constituents in Burlington and why I think this budget is good news for them and how it will affect them not only locally, but nationally.

The first thing I want to talk about is the announcement in the budget that we will continue our work on cutting the debt. Canada's debt is almost $455 billion. That is a mortgage that not only I will be paying, but my kids, their kids and their kids will be paying as well. It is our responsibility as government to continue to pay down the debt, the same as any family would have the responsibility to reduce its debt.

In his speech, an opposition member talked about how important it is to try to get Canadians to reduce their debt. It is just as important for this government, when it has the cash, to reduce the debt aggressively. I am proud of this government for reducing the debt not just this year, but in every year that we have been in government. That is important.

Advantage Canada will help people in our ridings. Every interest dollar we save by reducing the debt will be returned to individual Canadians and businesses in tax cuts. We are reducing debt and saving people taxes at the same time. It is a great plan. I am very much in favour of our continuing along this line.

The budget also announced the concept of the tax-free savings account. We heard briefly about the tax-free savings account from my colleagues on the finance committee. This will be a great opportunity for Canadians to save money.

We have all identified that saving is an issue. A new vehicle is needed. The last real vehicle was the RRSP and it was developed before I was born.

[Omar Alghabra]

How old are you?

[Mike Wallace, Conservative, Burlington, ON]

I am 44, I think.

We have waited over four decades to get a new financial tool for people to save money to invest in their future. The difference between the tax-free savings account and an RRSP is that money will be available to families, to seniors, to the working poor, when they need it, and it will be a way for them to save on paying taxes on their hard-earned money.

I am in favour of the tax-free savings account. Some work has to be done to put it on the ground, but it will be there within the year. I am happy that we have taken the initiative to give this vehicle the opportunity to exist in Canada.

It exists in other parts of the world. We should take note that we are not experimenting with people's money here. We know it works in Great Britain. We know it works in the United States. We know it works not just for the wealthy, as the previous speaker said, but it works for all income levels. It is a vehicle for people to save taxes, to save their money, and then decide, based on those savings, what is important to them, whether it is a house renovation, whether it is education, whether it is to supplement their retirement income when cashing in their RRSPs. This opportunity does not exist now but it will exist in the future and I am very excited about that happening.

When I am back in my riding, I try to tour one plant a week. I visited one last week. The accelerated capital cost allowance, which has been in place for two years and was announced as a two year program, has been very well received by business people in my riding. I am chair of the marine caucus. I am chair of the interparty steel caucus. I am part of the auto caucus.

Everywhere I go, people in industry are telling me that the accelerated capital cost allowance is a good thing, but they want it extended. We are extending it. I promoted the extension of it in the prebudget consultations. We heard from a number of Canadians who wanted it to happen. We are delivering.

It will be a great stimulus for companies to invest in and develop new technologies, buy equipment and create jobs. Government does not create jobs. Companies create jobs. They are not big evil entities. They are people. Every company is made up of people. We are helping those people create jobs for other Canadians through this program. I am very excited about it.

In my riding of Burlington, we are fortunate that we have a really good educational system. I am very proud of the educational system there. My daughters are both teenagers in high school and have gone through it. One is about to finish in the next couple of years.

We need a better system for student loans and student grants. It is too disjointed at present. I made that argument at committee. I had an opportunity to make that argument in front of the finance minister. I have made that argument in front of the student groups who have come to see me. In this country, for those who do not know, there are two schools of thought in the students' groups. They do not get along. I think there should be one plan for loans and grants.

I am very proud that this budget adds a tremendous amount of money to that program. We are reconstituting the Canada student grants system with $350 million, going to $430 million by 2012. In addition we are going to have $123 million in the student loans program.

We are providing students the opportunity to improve their education, to develop themselves so they can be more productive, so Canadians can be more productive. We compete in a global marketplace, as we all know. Education will be a key component of how we compete in the future as a country. I am very happy that we are spending a tremendous amount of money in that area and focusing on an improved system to make sure that it is easy, efficient and effective for students to further their education.

I have heard a lot from my constituents. There is a large contingent of seniors in my riding and they are not shy to come and talk to me, or send emails, or phone me on issues that face them. An issue facing a large number of them, and which, to be perfectly frank, I did not know about until I got elected, is that the amount that people are allowed to earn and still get the GIS supplement has not changed in years. That amount was $500. In this budget we are increasing it to $3,500. Seniors who are interested can supplement their income. They have been asking me for it. The finance minister in this budget is delivering on it.

There are many good things in this budget that I need 20 more minutes, but I am sharing my time so I will go through the last few things quickly.

There is the automotive innovative fund of $250 million. Burlington is beside Oakville where Ford's head office is. A tremendous number of Ford workers live in my riding. This fund will help Ford become more innovative and develop new technologies that will be better for the environment, better for our country and make the company much more competitive.

Regarding the gas tax, I used to be a municipal councillor. We are making the gas tax a permanent fixture for municipalities. It was asked for and we delivered.

People have been asking for a 10 year passport since I was elected. We are delivering on a 10 year passport in 2011.

People are asking for more security on the streets. We are spending $400 million with the provinces and territories to recruit 2,500 new police officers.

Finally, a big issue for me is transit. I am a big supporter of public transit. This government has committed $500 million to new transit programs. I am very proud of our commitment. I am hoping to see it continue. That is all I have to say at this point.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, I used to think that the members of the other party on the other side were simplistic and simple-minded, especially in economics, but what I have found is that they over complicate things, which I guess is a sign of muddled thinking.

Two years ago and last year the government cut the GST in order to, the Conservatives say, stimulate spending in advance of a recession they did not know existed. Now they are creating this fictitious vehicle to stimulate saving. Why not give people the choice and instead of having two separate measures, one for consumption and one for savings, just cut income taxes? Forget the GST cut. Just cut income taxes. Forget this kind of gimmick that they have invented. Why not just give people the choice? The Conservatives always talk about choice but they do not give a choice. They create all kinds of vehicles that complicate life, but make a lot of money no doubt for the banks when they have to start charging fees for these tax-free savings accounts.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, obviously I have to make it simple for the opposition members to understand it, so let me put it this way. The Liberals really cannot come up with an argument against the tax-free savings plan. Even one of their own members wants to take credit for developing the concept. They are grasping.

Let me remind the member that as Conservatives, we do believe in tax cuts and balanced budgets. Since taking office, we have delivered nearly $200 billion in tax relief, including cuts in sales tax, personal income tax and business taxes. As a Conservative government we will continue to do our work on reducing the tax burden.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, I was a bit surprised to hear about help being provided to seniors in this budget. After all, the government still owes them $3.2 billion in unclaimed guaranteed income supplement benefits because the system was too complicated.

The Liberal government at the time always refused make retroactive payments and give seniors the money they were owed. Seemingly thoughtful, the Conservatives promised during the campaign to give seniors that money, but then reneged on their promise. They have betrayed seniors and they have still not followed through in this budget.

It is not that it could not afford to pay. It was swimming in surpluses, but chose to pay the banks before paying seniors the money they were owed. That is absolutely shameful. It is shameful to ask those seniors who do not have enough money to live on to get a job at the local McDonald's and tell them that the first $2,000 or $3,000 they earn will not be taxable.

I would like an explanation as to why that promise was broken.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I wish the member opposite had been with me in my riding last week. I held a seminar on taxes for seniors. Well over 200 people came. I had to have a second sitting because there were so many people. I made the mistake of not having a big enough room.

Pension income splitting is so popular. All those people who came out thanked the government for allowing them to split their pension income. It makes a difference for Burlingtonians. It is a savings of thousand and thousands of dollars. I was not the one saying this. There were presentations by staff members of Canada Revenue Agency and Service Canada. They talked about the good news for seniors and the tax deductions that did not exist before, whether it is the pension income splitting, the pension income deduction, the credit they get going from $1,000 to $2,000. It is the first time in many years that any government has increased that, and we did it. There is the personal tax deduction that every Canadian gets. Those are just three points that they were making.

We have done a great job for seniors. We continue to work for seniors.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Mr. Speaker, it is my pleasure to rise in the House today and speak to budget 2008 as introduced by the Minister of Finance on Tuesday. This is the government's third balanced budget in a row. It is balanced, focused and prudent. I can say that not only am I excited by it but I am encouraged by the direction this government is taking.

It is a pleasure for me to speak on this budget because it not only will assist the residents in my riding of Niagara West—Glanbrook but it will indeed benefit all Canadians.

Responsible leadership is an appropriate title for this budget. It is a document that reflects the strong and responsible leadership that this Prime Minister, this Minister of Finance, and indeed this Conservative government continue to demonstrate with the public finances of Canada.

Canadians are guided by the values of compassion, kindness and generosity. In keeping with that mandate, our government is providing significant support for our individuals, families, workers and our seniors.

To date our government has taken actions that will provide nearly $200 billion in tax relief over this and the next five years, $140 billion of which will be for individuals, families and seniors.

This past summer I had the special honour of hosting the hon. Marjory LeBreton, the Secretary of State for Seniors, in my community where she toured numerous seniors facilities and spoke with the residents.

I have also had the privilege of hosting numerous town halls, round table discussions and meetings with hundreds of constituents where I have heard firsthand what was important to them. It is from these discussions and others like these through some of my colleagues, other members of caucus, and that other government officials had across the country that led to many of the actions that our government has taken on behalf of Canadians.

Let me for a moment highlight some of the milestones that this Conservative government has introduced. For the first time in Canadian history we introduced pension income splitting for seniors and pensioners.

We are providing $60 million to fully exempt the first $3,500 of earned income from the GIS calculation to extend further benefits to seniors. This is up from a current maximum exemption of $500.

We are giving older workers the choice to stay in the labour market by permitting phased retirement. We are increasing the age limit from 69 to 71 for converting their registered retirement savings plans to strengthen incentives for older Canadians to work and save.

We are doubling the amount of pension income eligibility for the pension income credit which benefits nearly 2.7 million pensioners.

We are significantly enhancing the flexibility to withdraw funds from life income funds to ensure that holders of these funds will have the flexibility they need to manage their retirement savings according to their circumstances.

We are providing $282 million over the next two years to expand the veterans independence program to support the survivors of veterans.

We have introduced a new $1,000 Canada employment credit for all working Canadians.

We are increasing the basic personal exemption to $9,600 retroactive to January 1, 2007. This basic personal amount will be increased to $10,100 on January 1, 2009. We have decreased the lowest personal income tax rate to 15%. We have decreased the GST by 2%, resulting in total savings to Canadians of approximately $12 billion alone in 2008.

We have provided a universal child care benefit which provides all families $100 a month, regardless of income, for each child under the age of six.

We are providing a new $550 million per year working income tax benefit of up to $500 for individuals or $1,000 for families. This will reward and strengthen incentives to work for an estimated 1.2 million low income people, helping people over the welfare wall.

We are helping parents and others save toward long term financial security of persons with severe disabilities with a new registered disability savings plan.

We are providing a new $2,000 child tax credit that will provide up to $306 per child of tax relief to more than 3 million Canadian families.

We are ending the marriage penalty by increasing the basic spousal amount to provide up to $300 of tax relief for a supporting spouse or single taxpayer that is supporting a child or relative.

We are strengthening the registered education savings plan by eliminating the $4,000 limit on annual contributions and increasing the lifetime contribution to $50,000 from $42,000.

We are also providing $350 million for a new Canada student grant program beginning in 2009 and increasing it annually to $430 million by 2012-13.

This budget is indeed balanced, focused and prudent. Here are a few comments from organizations with regard to the budget. The Canadian Association of Retired Persons which works on behalf of Canadians seniors said, “CARP commends the [...] government for listening to many of its recommendations over the years and taking steps in the right direction for the 50 plus Canadians”.

The Investment Industry Association of Canada states in its press release, “The IIAC commends the federal Minister of Finance on his responsible budget in difficult and uncertain times that preserves fiscal integrity and builds on the government's pro-growth productivity agenda”.

The Canadian Federation of Independent Business which represents over 100,000 business owners applauded the government's pledge to slash the federal debt.

The reason for such praise of the budget is well warranted. Specifically worth noting in budget 2008, which has been talked about some of my other colleagues, is the introduction of the tax-free savings account.

This is the most important federally driven personal finance innovation since the introduction of the registered retirement savings plan. This flexible, registered, general purpose account will allow Canadians to watch their savings, including interest income, dividend payments and capital gains, grow tax free by allowing all Canadians age 18 and over an investment vehicle that will allow them to build their savings tax free and investments in principals of up to $5,000 a year.

While an RRSP is a tax-free account designed for retirement years, this account is one that Canadians can use to build their savings tax free and that can be used to meet the sudden demands for money that we have all faced.

An RRSP is primarily intended for retirement but the tax-free savings account is like an RRSP for everything else in one's life, Whether that demand be for renovation, a new vehicle or a well-deserved vacation, the withdrawal can be made without penalty and paid back at any time. No wonder this announcement has garnered so much wide praise.

The Council of Chief Executives stated, “The introduction of the tax-free savings account creates a flexibility of a new vehicle for encouraging savings and investments and has a minimal impact on the treasury”.

Our government already believes that Canadians know what is best in managing their own personal finances and the TFSA is another tool that we are giving them to ensure greater choices, greater flexibility and most importantly, greater rates of return.

Another important aspect of the budget that I wish to draw to the attention of members is the importance of the long overdue changes the budget brings to the employment insurance program.

For too many years there have been huge surpluses that were arbitrarily deposited in general spending and this was a sign that employees and employers were paying too much money. Instead of fulfilling the original plan for the EI program that was to be an insurance policy, it had become a huge tax revenue program placed on the backs of Canadian employers and their hard working employees.

In 2007 our Speech from the Throne committed the government to correct this unacceptable situation and I am pleased that in budget 2008 it does just that.

By setting up a new independent crown corporation, the Canada employment insurance financing board, the employment insurance program will become what it was designed to be, a revenue neutral entity in the long term that is there to help employees deal with employment loss and to help them return to gainful employment.

By having a separate account, there will be transparency that has been sorely lacking. Any EI surpluses going forward will be held and invested until they are needed for EI costs.

The Canadian Restaurant and Foodservices Association said, “It is significant that this inappropriate practice is coming to an end, and with a sound governance structure for the new crown corporation, this announcement should result in EI premium savings for both employers and employees”.

This budget has many merits indeed. I congratulate the finance minister and his staff on a job well done. They have continued to balance the many important and varied needs of Canadians with the necessity for continued fiscal prudence.

Our government has accomplished much in the last three budgets including reducing debt, returning billions of dollars back to hard working Canadians through tax cuts, and increasing transfer payments to provinces to deal with infrastructure investments.

Going forward, the outlook looks bright. While it is true there are many uncertainties on the horizon as global economies that we are linked to have begun to slowdown, our own economy continues to perform remarkably well.

Given the prudence and the sound choices of the Minister of Finance, I am confident that we are prepared to meet and overcome future challenges. Our government continues to provide clear direction, fiscal foresight and welcome tax relief. Our government continues to provide responsible leadership, not only for the people of Niagara West—Glanbrook but indeed for all Canadians.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I would like to ask my colleague a question about the tax-free savings account. When the government or the Conservative Party makes an announcement that seems interesting, my natural reflex is to wonder what is behind it.

The member is aware that people often do not invest the full amount they could in their registered retirement savings plan, or RRSP. In fact, most people could put more money into their RRSP. If all the people who, according to the government, are prepared to invest in a tax-free savings account were to decide overnight to make the maximum allowable contribution to an RRSP, this would have a fairly serious impact on public finances.

At first glance, I wondered whether the government was trying to create a diversion so that people would invest in tax-free savings accounts instead of their RRSP. This would not have as dramatic an impact on government revenues in a given year. If everyone made the maximum allowable contribution to their RRSP, this would have a huge impact. The Conservative government might even have a monumental deficit as early as next year.

I know that there may be advantages to this tax-free savings account, but most people who do not have much financial freedom and are unable to contribute to both their RRSP and a savings account will have to consult a financial planner. I do not know whether the Conservative members are getting ready to leave their jobs here and go into financial planning. In any event, people will have to think twice before investing in such an account.

I would like to know what the Conservative Party's real intentions are. Are they trying to create a diversion in order to convince people not to invest in their RRSP, because in the short term that deprives the government of money and flexibility?

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Mr. Speaker, this is a good question. This sets aside what the fundamental difference is of this government versus other parties in that we believe in choice.

We believe that Canadians are smart enough and wise enough to choose for themselves what they would invest in. We believe this offers a great option not only to those who would choose an RRSP or retirement fund which is basically just tax deferral. The taxes need to be paid at some point in time, so that just defers it until potentially the end of life, but what we find and believe can happen is this would be a new way to encourage Canadians to save.

We realize there are many things that happen along the way and for Canadians starting a new family or needing to renovate, or buy a house, sometimes cash is at a premium. Quite frankly, a tax-free savings account would provide the flexibility that the RRSP does not provide at this point in time because that money is locked in. There are huge penalties to pay in terms of taxes when that money is cashed out.

This government believes that a dollar left in the hands of our constituents is better than a dollar left in the hand of government. We believe individuals know what is best for their families. They know what is most prudent and what makes the most amount of sense.

This vehicle has been demonstrated to work around the world, so once again, it is not anything new but certainly something that will create the flexibility, will give people an opportunity to make the choices they want to make, and to save as they see fit.

Of course, because it is tax-free, over time people may choose this vehicle instead of an RRSP. Once again, it will be their choice to save as they will and this will create some options for individuals who do not have the same needs and issues as other individuals.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Speaker, I wish to inform you that I will be sharing my time with the hon. member for Haute-Gaspésie—La Mitis—Matane—Matapédia.

I was listening to the Conservative colleague who spoke just before me and he said that the budget, presented by the Minister of Finance, will help Canadians. I would like to finish his sentence by saying that it might help Canadians, but it will not help Quebeckers. This budget completely ignores Quebec's traditional demands, which have been expressed by a number of stakeholders in Quebec.

In reaction to this budget, the Leader of the Bloc Québécois said that it does not provide any significant gains for Quebec. That is why I am saying it gives absolutely nothing to Quebeckers. There is no reason for the Bloc Québécois to vote in favour of this budget. Through its budget, the Conservative government is truly showing its right-wing ideology, which does not reflect the interests and values of Quebec. We really see that in this budget.

Yesterday morning, a number of newspapers in Quebec reported on the general sentiment about this budget in Quebec. Alain Dubuc, from La Presse, summed up this sentiment quite well:

This lack of vision can be explained by the conservative philosophy of the [name of prime minister]government, which does not believe in the role of the state and avoids economic intervention like the plague. It is an outdated conservatism that is not found anywhere else in the west.

We feel that it is Quebeckers who will foot the bill for this ideology. This budget utterly lacks vision. The crisis in the manufacturing and forestry industries is getting worse and thousands of workers are paying the price. I know all about it because if there is a riding that has depended on the forestry industry for years, where the economy for the most part is centred on forestry and manufacturing, it is my riding of Saint-Maurice—Champlain.

For years now we have felt like the Conservative government is completely absent from any sort of “aid” process. We can feel it. People expected this government, which had a $10.3 billion surplus at its disposal, to allocate that money to help companies and workers, but it did not. People are dismayed and desperate.

This budget utterly lacks vision. It will not help families. Entire regions are in crisis, families are in crisis, and elderly people living below the poverty line feel that the federal government has abandoned them, even deceived them. During the last election campaign, the Conservatives promised to grant full retroactivity to those who had been cheated out of their fair share of the guaranteed income supplement, or who did not have access to it for various reasons. The Conservatives promised fully retroactive reimbursement, but they did not keep that promise even though they had $10 billion at their disposal. That is incomprehensible.

Things are happening. Education should be public priority number one, because we know there will be a shortage of skilled labour. Institutions are also chronically underfunded. There is nothing in this budget to suggest that the government is planning to increase transfers for post-secondary education. It looks as though the Conservative government missed the boat on this issue.

When it comes to the environment, humanity is struggling with one of the greatest environmental challenges in history. Everyone knows this. Increased greenhouse gases are having a negative impact on all human beings. Canada produces a lot of greenhouse gases, especially in the west and Alberta. Those emissions raise our national average. Quebec produces far less greenhouse gas emissions.

Quebec loses out on that score.

And now, to culture. The Quebec nation is a francophone nation that accounts for less than 2% of the population of North America. The government is well aware that the survival of the Quebec nation depends on cultural development, but there is nothing in the budget to improve the cultural system despite the benefits to be had from promoting francophone and Quebec culture more energetically.

It is clear that the challenges are great and the needs desperate. Yet we have a government full of dinosaurs that wants to use $10 billion to pay off the debt. Nobody in Quebec agrees with that. It is a crazy thing to do. This must be some kind of budget fanaticism. Whether the Liberals admit it or not, this kind of fanaticism is very bad for Quebec and for Canada, I am sure. Many Quebec commentators agree. Here is what Messrs. Dupuis and St-Maurice of the Desjardins group said:

Considering the massive needs in terms of urban infrastructure, environment, health and education, and the difficulties many provinces have balancing their budgets, we suggested that the government use any surplus beyond that objective to improve our competitiveness, help the provinces struggling to balance their budgets or help municipalities address their growing infrastructure needs.

The Conservative government listened to no one, blinded by its own ideology. It turned a deaf ear to Quebec.

I would also like to share some remarks made by Quebec's finance minister, Ms. Jérôme-Forget. She said that the Conservative government makes choices that do not reflect Quebec's priorities. She went on to say:

I am disappointed because there was a $20 billion margin in the context of an economic slowdown. We were hoping the government would do more for older workers and for the manufacturing and forestry industries in Quebec.

The leader of the Action démocratique du Québec, a friend of the Conservatives, also said that the aid for the manufacturing and forestry industries was not enough. As well, he mentioned the $1 billion shortfall in post-secondary education transfers. He was of course alluding to the issue of the fiscal imbalance, which is nowhere near resolved, if only because of this major oversight by the Conservative government in its budget.

The day after the budget was tabled, the president and CEO of the Quebec Forest Industry Council said:

I have no doubt that the Harper government has just thrown in the towel and wants market forces to clean up the forestry industry, instead of providing support that could have prevented some of the problems.

That is the reality. Soon, there will be more problems, and more businesses in Quebec's manufacturing and forestry industries will shut down. Once again, there will be more completely senseless human tragedies, when the government could have intervened.

All things considered, the worst injustice of all is being committed against our seniors. When he was in opposition, the Prime Minister had promised to pay back seniors who had been cheated out of the guaranteed income supplement, as I mentioned earlier. The Prime Minister broke that promise. He turned his back on our seniors and the most vulnerable among them. Those who receive the guaranteed income supplement are indeed vulnerable people. The only thing they are being promised is that they can go to work to earn $3,500 instead of $500. These people, at 68, 69 or 70 years old, who have very little in the way of a support network and are often physically unwell, are being told that, if they need more money, they can work for a pittance at Wal-Mart or some other such place. That is the only way the government wants to help them. It is absolutely unbelievable.

I have talked about culture, the environment and our seniors.

Everyone knows how often the Bloc Québécois has repeated that the government also abandoned the Kyoto protocol and that it absolutely must reinvest to ensure that we can one day do our share. Quebec is doing its share. We expect the same thing from the Conservative government, so it can help us continue.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, the member made some great points about things that were not in the budget, such as putting back the $5 billion taken from first nations in the Kelowna accord, the $10 billion taken from Canadians in need, from the child care programs that were all cancelled, and from the many greenhouse gas programs cut by the government.

First, I want to compliment the government on listening to our repeated demands to have the northern tax benefit allowance increased. I talked to the finance minister personally. We put in a lot of petitions, some from Yukon municipalities. We are very happy that the government listened to us.

However, what the government did not listen to and what I would like to ask the member about is tourism and museums. As members know, the government took away the GST rebate for individual travellers coming up through my riding in motor homes et cetera. That has hurt our tourism industry. The Canadian Tourism Commission and the Yukon tourism industry made a big submission on that.

The government has also cut museum funding, which is very important for tourism with regard to all the little community museums. There is nothing in the budget to rectify this disastrous problem stemming from previous budgets.

I would like the member to comment on those two items.