Debates of May 28th, 2008

Finance—Main Estimates 2008-09

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, speaking about skating to where the puck is going to be compared to where it has been, I am told it is 1:0 for Pittsburgh. Sydney Crosby scored with two minutes left in the first period. That is for the eight or nine Canadians who are not watching the game, but who are actually watching us do this in this place. That is a great Canadian taking action there.

We have reduced taxes of all kinds. We have also done something else and that is create the tax free savings account. This was something that needed to be done. In Canada we did not have a savings vehicle outside of the retirement savings vehicle and the RESP, not to mention the registered disability savings plan which this government created.

This tax free savings account is terrific. It has been called by various commentators a jewel and a gem. If Bill C-50 were to pass when it comes back to the House within the next day or two, what it means is as of January 1, 2009, Canadians 18 years of age or over would be able to contribute $5,000 a year tax paid into a fund and have any kind of gains, dividends, or accumulated interest within the fund, and have it paid out whenever they want. This is a tremendous advantage.

Over time this is going to mean something like 90% of the savings of Canadians would be sheltered from taxation through one plan or another, especially for young people, but also for people of moderate means. During the first five years there will be no clawback. It is a terrific idea for Canadians to save money. I look forward to Canadians starting to save money through tax free savings accounts starting January 1, 2009.

[The Deputy Chair, Conservative, Royal Galipeau]

I would like to inform the hon. member for Lévis—Bellechasse that he has two minutes remaining.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Chair, the minister has just enlightened me. He has pointed out that before the measure introduced in the 2008 budget, Canadians were penalized for saving. Savings were taxed. Now, I understand that there is the tax free savings account. A tax measure exists now so that the average Canadian can set money aside, money that will be sheltered from taxes.

I would like to know how the minister thinks this measure will encourage Canadians to save more.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, I knew the tax free savings account had to be a good idea because when he was a Conservative, the hon. member for Halton said that this is a good idea, something he had long advocated for. So I know it is a good idea as do the Canadian Chamber of Commerce, the CD Howe Institute, the Winnipeg Free Press and the economists at BMO.

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 said, “--the savings account, for one, that is an inspired measure”.

It is the most significant tax change with respect to savings and sheltering savings since the RRSP was brought in, in 1957. So it has been many years since then, but members opposite will observe in the next couple of years what an important tax measure this is for Canadians from coast to coast to coast, those 18 years of age or over. I sure hope they will support it when it comes to the House for a vote with Bill C-50 later this week or next week.

[Garth Turner, Liberal, Halton, ON]

Mr. Chair, I will be splitting my time with the hon. member for Willowdale and the hon. member for Notre-Dame-de-Grâce—Lachine.

I do respect the Minister of Finance. I certainly respect anyone who is a minister and carries a load, particularly the finance portfolio. I admire him for standing here tonight and answering all these questions even though we know he has to. He has to face people who want to see him fail or see him embarrassed, and it is not easy being under attack. We all know that. I think that mindless partisanship is probably poisoning this House, so tonight I would like to pose some questions to the minister in the spirit of non-partisanship. I will do that because they are not even my questions.

Earlier today I asked on a blog if average Canadians would send in questions for the minister. These are Canadians who will probably never have an opportunity to meet this gentleman and never would have an opportunity to stand here and ask him questions. I have a few from average individuals.

This question is from Ben: Was the decision to break the solemn income trust election promise vetted by the Prime Minister? Will the minister confirm that the Prime Minister was an essential part of the decision making process that did so much damage to Canadians?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, I know that the member speaks of non-partisanship. I thought he would speak in his own case of multi-partisanship since he has belonged to several parties in this place.

As I recall, and I may be wrong and I am sure the hon. member will correct me, he actually voted in favour of the change with respect to income trusts. I think he also supported the GST reduction. In fact, he said that families who make less benefit more than wealthier ones from the GST cut. The member for Markham—Unionville should get that in a heartbeat. There he was lecturing his colleague, the finance critic for the Liberals.

Of course, I cannot disclose any matters that go on in terms of cabinet discussions.

[Garth Turner, Liberal, Halton, ON]

Mr. Chair, I am sure Ben would have found that most instructive and fulsome. It is unfortunate he chose to answer that way.

Let us try again. This is another question actually from the same person. He follows up, “Please ask him”, the minister, “how we the people can identify the promises made during the next election that are true and sincere as opposed to the ones uttered in the quest for power”.

[Gary Goodyear, Conservative, Cambridge, ON]

Mr. Chair, on a point of order, I believe that we were assembled here this evening to discuss the estimates for 2008-09. I do not see how these questions have anything to do with the matter before the House tonight.

[The Assistant Deputy Chair, Conservative, Andrew Scheer]

There was a ruling made earlier. I understand there is a little bit of latitude for tonight. Things that fall under the finance department or the finance ministry, in my opinion, would be appropriate. The hon. Minister of Finance has the floor.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, the member for Halton supported the decision of the government with respect to income trusts which was made in the autumn of 2006. In case he has forgotten why he supported it, perhaps I can help him by going back to that time and repeating the reasons it was important to move ahead with that decision.

Sometimes in government difficult decisions need to be taken. In fact, the previous Liberal government had addressed this issue and was going to move ahead with it, but the Liberals changed their minds at the last minute, despite the fact that they knew it was the right public policy to pursue.

Why was it the right public policy? Because we should not have entities in Canada being treated differently for tax purposes and decisions being made for tax purposes rather than business purposes in Canada. We needed to level that playing field.

[Garth Turner, Liberal, Halton, ON]

Mr. Chair, I rise on a point of order. I believe the rules state clearly the minister cannot answer for any longer than the duration of the question posed to him. He exceeded on that.

[The Assistant Deputy Chair, Conservative, Andrew Scheer]

The responses are supposed to mirror the length of time but obviously there are times when the minister might take a little while to wrap up the answer. The hon. member for Halton.

[Garth Turner, Liberal, Halton, ON]

Mr. Chair, Dr. Mike Popovich asked this question, “Ask the minister why he considers RRSPs to be tax exempt in his calculations of tax leakage when it comes to income trusts, when Revenue Canada considers them to be tax deferred”.

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, as the member opposite knows, the income trust situation was one in which we had large Canadian corporations and the directors of those corporations looking at a situation where they felt that their duty to their shareholders to maximize value put them in a position where they would have to decide to change the corporate entity to income trusts. That was going to happen with a number of our--

[Garth Turner, Liberal, Halton, ON]

Mr. Chair, on a point of order, the questions asked of the minister are simple, short, direct questions. We are here to discuss a very specific thing in a very specific forum. Mr. Chair, direct him to answer.

[The Assistant Deputy Chair, Conservative, Andrew Scheer]

It is not for the Chair to decide whether or not the answer fits what the hon. member was expecting, but we will move on now to the hon. member for Willowdale.

[Garth Turner, Liberal, Halton, ON]

Mr. Chair, that was not enough time.

[The Assistant Deputy Chair, Conservative, Andrew Scheer]

Maybe on that clock, but on this clock it was. The hon. member for Willowdale.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Chair, the minister made a statement earlier about certain governments raising taxes and entering into deficits.

I would like to ask the minister, can he tell me who was the last prime minister who inherited deficits and turned them into significant surpluses?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, that would have been in the 1990s. Without looking it up, I would think it would have to have been in the early 1990s when there was a change in government.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Chair, I will help the minister in case his memory seems to be failing him in terms of names. That would have been Jean Chrétien with Paul Martin, both Liberals.

I would--

[The Assistant Deputy Chair, Conservative, Andrew Scheer]

Order. I just want to remind the hon. member that in committee of the whole, the same rules apply about using members' proper names. She has an opportunity now for a follow-up.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Chair, a Liberal prime minister and a Liberal finance minister. My apologies. That was a new member's mistake.

I would like to ask the finance minister, who was the last prime minister who inherited large surpluses and brought government spending close to deficit?

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

Mr. Chair, if the member is criticizing the fact that we have reduced taxes in this country, she can go ahead and criticize.

If she wants to talk about Liberal premiers, I became a member of the provincial legislature in Ontario in 1995. Our government took over from the government of the member for Toronto Centre, who now says he is a Liberal, but he was a member of the NDP then. There was a massive deficit in the province of Ontario and we had to work many years to recover from that deficit just as we would have to here in the future with this new massive carbon tax and the big deficit that the Liberals intend to run.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Chair, I would like to see us adhere to the rule of the answer taking the same amount of time as the question.

I would like to ask the finance minister if he can tell me, who was the last Conservative prime minister to actually show a surplus?