Mr. Speaker, it is an honour to lead off this second reading debate and speak on behalf of our Conservative government on Bill C-50, An Act to implement certain provisions of the budget tabled in Parliament on February 26, 2008 and to enact provisions to preserve the fiscal plan set out in that budget.
Bill C-50 reflects the responsible leadership provided by our Conservative government at home and abroad, leadership that gives Canadians good reason to be confident about the future, despite the economic uncertainty beyond our borders. In fact, we have the strongest fiscal position of any G-7 country.
That position has allowed the government to take important action in support of our long term economic plan entitled, Advantage Canada, a plan that was introduced in 2006 that benefits Canadians today and for the years ahead.
For example, the fall 2007 economic statement took important steps to jump-start the plan by providing broad based tax relief for individuals and business, vitally important measures totalling $60 billion, prudent measures taken at the request of the finance minister and our Prime Minister in anticipation of impending global economic turbulence.
It is important to recognize the actions taken in the economic statement that have been recognized by a wide range of observers as extremely important in the maintenance of Canada's solid economic fundamentals. Observers, like BMO's economist, Doug Porter, who said:
It was brilliantly timed. Just as the economy was running into serious heavy weather we had some serious fiscal stimulus.
The Conference Board of Canada noted that:
The Canadian economy will weather the storm of uncertainty....
...recent changes, such as tax reductions announced by the federal government...will maintain the momentum.
A recent Calgary Herald editorial praised the Conservative government for using the economic statement and stated:
...to strengthen consumer demand, notably the one per cent GST reduction....
...for once a government seems to have been ahead of the curve.
Additionally, we took further action through the $1 billion community development trust, a program that assists workers and communities experiencing difficulty due to international economic volatility.
Budget 2008 directly builds on that important action. It confirms our commitment to strong fiscal management by reducing the federal debt by $10.2 billion in 2007-08. It reduces taxes to the lowest level measured as a share of the economy since the Diefenbaker government. It invests in the future of Canada.
Budget 2008 will support Canada's economy with a plan that is real and one that is committed to responsible spending. Unlike the reckless Liberal opposition that would plunge Canada into a massive $70 billion deficit, our Conservative government is committed to a balanced budget.
We have also made a commitment to Canadians to reduce taxes and we are proud to say that we are keeping that commitment. We are reducing taxes for all Canadians and we are proud of that.
To date, our Conservative government has taken actions that will provide nearly $200 billion in broad based tax relief and $140 billion of that relief will benefit individuals directly. These are permanent reductions that hard-working Canadians will see each and every time they file their income taxes. Taxes will continue to decline thanks to our government's tax-back guarantee. This represents our commitment to dedicate the effective interest savings from federal debt reduction each year to permanent and sustainable personal income tax reductions.
Moreover, I am privileged to be part of a Conservative government that introduced one of the single most important personal savings vehicles ever introduced, one which the C.D. Howe Institute described as a “tax policy gem”: the tax-free savings account. This groundbreaking, flexible and general purpose account will allow Canadians to watch their savings grow tax free. It is an historical first for Canadians and here is how it works.
First, Canadians can contribute up to $5,000 every year to a registered tax-free savings account, plus carry forward any unused portions to future years.
Second, the investment income, including capital gains earned in the plan, will be exempt from income tax, even when withdrawn.
Third, Canadians can withdraw from the account at any time without restriction. Better yet, there are no restrictions on what they can save for.
Finally, the full amount of withdrawals may be recontributed to their tax-free savings account in the future to ensure no loss in a person's total savings room.
The new tax-free savings account will help Canadians save for whatever is important to them. I would encourage Canadians to visit www.fin.gc.ca to find out more about this innovative new program. There is an on-line calculator that will help them deal with this. This will demonstrate just how Canadians can save by investing in this tax-free savings account.
Let me share with my colleagues that the savings can be substantial. For example, assuming a modest 5.5% rate of return, a person contributing $200 a month to one of these new accounts for 20 years could enjoy a tax savings of $11,045 compared to saving in an unregistered account.
Of course, not everyone is able to save each and every year. Those who cannot contribute $5,000 in a given year will be able to carry forward their unused contribution room to future years.
Saving can be difficult, especially for some low and modest income earners, which is why an important component of this proposed legislation is that there will be no clawbacks. This means that neither the income nor the capital gains earned in a tax-free savings account, nor the withdrawals from it, will affect eligibility for federal income tested benefits. As a result, the tax-free savings account will be of tremendous benefit to all Canadians.
The praise for this initiative has been almost universal. The Canadian Taxpayers Federation said:
This is an excellent policy proposal. Canada needs to reward people that save because their investments fuel economic growth and job creation.
The Canadian Federation of Independent Business added that “it was an inspired measure”.
The Canadian Chamber of Commerce heralded the measure, saying it will “encourage savings, a measure which the Chamber has sought for many years” .
Bill C-50 has an important measure to benefit Canada's seniors, measures that build on earlier actions we have taken. Many seniors in Canada are living on a fixed income. This can sometimes make it difficult to make ends meet.
To help those Canadians, our Conservative government has taken action that provides about $5 billion in tax relief each year for seniors and pensioners, including doubling of the pension income amount of $2,000 and increasing the age credit amount by $1,000.
We have also increased the age limit for maturing RPPs and RRSPs and, for the first time ever in Canada, introduced pension income splitting for seniors and pensioners.
We are continuing on that path to supporting seniors in Bill C-50 by increasing the guaranteed income supplement exemption to $3,500 from the current maximum of $500. This means that seniors can earn up to $3,500 before having any GIC benefits reduced. This measure will benefit low and modest income seniors who chose to continue working.
The Canadian Association of Retired Persons commends our Conservative government for “listening to many of its recommendations over the years and taking steps in the right direction”.
The Conservative government is also committed to making Canada an even greater place to create and expand a business.
Last fall we set out a long term plan to reduce the federal corporate income tax rate to 15% by 2012. This initiative will give Canada the lowest overall tax rate on new business investment in the G-7 by 2010 and the lowest statutory tax rate in the G-7 by 2012.
As the Canadian Council of Chief Executives declared, and I quote again, “The federal government clearly has done everything it can to reduce tax rates within the boundaries of prudent fiscal management”.
We are also taking targeted action to assist Canada's manufacturers as they face challenging economic circumstances. For instance, in budget 2007 we brought in a temporary accelerated capital cost allowance. This measure is helping Canadian manufacturers make the investments needed to build modern facilities here at home to take on the world.
Budget 2008 proposes to extend temporary accelerated capital cost allowance treatment for three additional years. This extension will provide the manufacturing and processing sector with an additional $1 billion in tax relief by 2012-13.
Bill C-50 contains proposed measures that will provide additional benefits to businesses in Canada. For example, small businesses can face challenges in accessing capital to finance research and development investments.
That is why an enhanced scientific research and experimental development, or SR&ED, with the investment tax credit of 35% will be available to small Canadian controlled private corporations on their first $2 million of qualified expenditures.
During the prebudget consultations many stakeholders noted that access to the enhanced SR&ED investment tax credit is phased out quickly once the taxable capital threshold of $10 million is reached. They suggested that medium-sized businesses should have access to some enhanced benefit. In addition, many suggested that the expenditure limit has not kept pace with technological innovations that have made startup research and development investment more costly.
In response to these concerns, Bill C-50 proposes to increase the expenditure limit from $2 million to $3 million and to increase the upper limit for the taxable capital phase-out range from $15 million to $50 million. The upper limit of the taxable income phase-out range will also be increased from $600,000 to $700,000. Increasing these limits will encourage small and medium-sized Canadian controlled private corporations to grow.
Canadians spoke and this government listened.
Budget 2008 includes new measures to strengthen and ensure the effective implementation of our government's plan to ensure a cleaner, healthier environment for all Canadians.
To that end, Bill C-50 proposes to commit $250 million for carbon capture and storage projects. This will allow for harmful emissions to be stored underground rather than released into the atmosphere.
Public transit is one of the keys to achieving a cleaner and healthier environment. That is why our government, under the leadership of this excellent environment minister who is here with us today, has made significant investments in public transit infrastructure.
Bill C-50 goes even further by proposing an additional $500 million to make further investments in public transit capital infrastructure. These are measures to encourage Canadians to leave their cars at home and assist Canada's municipalities.
The Canadian Urban Transit Association called this support, “a major boost to future access and mobility in Canadian communities”. The Federation of Canadian Municipalities called it, “good news for cities and communities”.
Canadians want a clean environment in which to live. They also want healthy and safe communities. To help ensure that safety, Bill C-50 proposes to build safer communities and put criminals out of business.
Speaking of putting some out of business, I want to take a moment to mention how damaging yesterday's NDP motion would have been had it passed. It would have put legitimate Canadians out of business. We do thank the Liberals for supporting and recognizing that it would have put Canadians out of work, and we do appreciate that support.
Most of all we do appreciate the fact that the Liberals did come and vote last night, but most of all, to support us. I look forward to seeing them in their place when it comes time to vote in favour of Bill C-50 as well.
The bill proposes to provide $400 million to hire 2,500 new front line police officers over the next five years. Support recognized an important step in helping “address the much needed resources for tackling crime”. That was said by the Canadian Police Association, who added that they were also very happy with the commitment that was in budget 2008.
Mr. Speaker, as you are no doubt starting to notice, this is a very comprehensive bill. Time does not permit me to describe all of the details of the measures in Bill C-50, but I would be remiss if I did not mention certain initiatives in it that would help Canada prepare for the future, our youth.
First, in recognition of the importance of education in our future, the bill proposes a new consolidated Canada student grant program to take effect in the fall of 2009. All federal grants will be integrated into one program, a program which will provide more effective support to more students for more years of study. In doing so, this will assist Canadian families who struggle with the cost of higher education.
Bill C-50 proposes an investment of $350 million in 2009-10, rising to $430 million in 2012-13. Additionally, Canadian students and their families also need simple, effective, financial assistance programs. That is why budget 2008 commits $123 million to streamline and modernize the Canada student loans program.
Measures will be put in place to improve service for students in a number of ways, such as: a new service delivery vision that will expand online services; more equitable supports for part time and married students; a new in-study, interest free period for reservists; and an enhanced flexibility for those students experiencing difficulty in debt repayment as well as including those with disabilities.
Canada's students responded enthusiastically to budget 2008. Groups like the College Student Alliance said, “It showed that the federal government is keeping an eye to the future and our future leaders of tomorrow”, or the Canadian Federation of Students who thanked the government for responding to “a longstanding call by students and their families”, probably a call that has been out there for 13 long years.
In order to ensure a strong and secure future for Canada, our immigration policies need to be closely aligned with our labour market needs. That is why our government is also making important new innovations in immigration, including changing the Immigration and Refugee Protection Act. In doing so, we will improve and speed up the application process.
Summing up, this Conservative government has taken care to strengthen Canada's economic fundamentals. The bill is prudent, focused and responsible in order to ensure Canada is well positioned to weather the uncertainty of today's global economy.
The Liberal Party of Canada's continued support for our Conservative government is a clear indication that we are getting the job done. We are on the right track for all Canadians, and on behalf of the government, I thank our Liberal friends for their consistent support of our initiatives, redefining the official opposition, and we congratulate them for that.