Mr. Speaker, I thank the hon. member for bringing forward this proposal. It is helpful for us to debate changes to the Canadian tax system because the reality is that we have not had a meaningful study or evaluation of our personal tax system in Canada since 1971 with the Carter commission. The reality is if we were to try to find one word that would sum up what has changed in Canada since 1971 in terms of the Canadian and global economies, that word would be “everything”. Therefore, we do need a meaningful study, review and reform of the Canadian personal tax system.
Unfortunately, we are having these kinds of one-off discussions around the tax system due to the lack of leadership on the government side to take this important issue seriously and have a meaningful debate and discussion about changes that would build a fairer tax system and, potentially, a more globally-competitive one at the same time.
The parliamentary secretary said that the tax system should be based on fairness. He also said that we should not be picking winners and losers. I cannot help but go back to those comments and reflect on recent Conservative government policy in some ways, because he is saying that the taxes should be based on fairness and that we should not be picking winners and losers.
Recent boutique tax credits introduced by the Conservative government, whether for volunteer firefighters or family caregivers or, going back a bit further, the disability tax credit, discriminate against the lowest income Canadians because they are non-refundable tax credits. As such they do not benefit low-income Canadians. That is not consistent with the idea of a tax system based on fairness. I also do not think it is consistent with the idea that we would not pick winners and losers. The reality is that the Conservatives are picking winners and losers and the losers are low-income Canadians, which is absolutely inconsistent with the principles the member just articulated.
If we simply made those tax credits refundable we would include low-income Canadians in the category of Canadians and Canadian families who would benefit from them. I would ask the parliamentary secretary and the government to reflect on that. If fairness is the principle, if not picking winners and lowers is the principle, then we ought to at least make those tax credits fully refundable to start.
Now I want to speak specifically to Bill C-427 and the idea of income averaging for artists, because it is important to realize that all of our cultural artists, such as musicians, painters, sculptors and authors, face huge challenges and tremendously cyclical income curves over the period of their careers. They will work for years and not make any money, and then one year will have a really good year and be in a top marginal tax bracket. That is why I think we should move this to committee and have it studied. It is important to realize that this is an important issue for our cultural community, that the current system, as it stands, is not fair and that changing it to reflect the incredible variance in incomes of cultural creators makes a lot of sense.
Where I would agree in some ways agree with the Conservative parliamentary secretary is that we ought to consider income averaging in other areas. However, his idea is that if we are not doing it for everyone right now then we cannot do it for anyone. I think that is wrong. Income averaging in the cultural community can actually create a model that can ultimately be applied more broadly.
I will give an example. A few years ago I met with a constituent who I think had a grade 7 education. He was a physical labourer who had been injured in the workforce. After that injury, he went to workers compensation in Nova Scotia to apply for compensation.
He fought for his compensation for four years and ultimately was compensated. I think at the time he got over $100,000, which at that time put him in the top marginal tax bracket. As such, he was taxed at the highest marginal tax rate, after having had basically no income for four or five years. In that case I would argue that having been deprived of his income or capacity to work for those years because of a workplace injury and then having received a lump sum cheque to compensate for that lost income, he ought to have been able to qualify for income averaging.
I am using that example not as a reason why we should oppose the bill but why we should both support the bill and consider income averaging more broadly. That is where I agree with the Parliamentary Secretary to the Minister of Heritage. There are other groups within society that could benefit from this.
That brings me back to the original point. Why are we not having a more thorough discussion on the need to reform our Canadian tax system and taking a look at issues of fairness? For example, yesterday in the House we debated the issue of income inequality and equality of opportunity. There are direct impediments in our tax system to equality and upward mobility. Moreover, there do exist areas where members of the Conservative Party, the New Democratic Party, the Liberal Party and the Bloc would agree. These are some areas where if common sense were applied to the Canadian tax system, it would yield a simpler system. We could actually have a simpler tax system.
I understand the argument that this bill would create a more complicated tax system, but it is difficult to understand the Conservatives' point that they are opposed to any complications in the Canadian tax system when they continually introduce boutique tax credits, which actually further complicate the Canadian tax system. I studied taxation in university, and I remember it was an open book exam. I remember the size of the textbook. The Canadian tax code was pretty voluminous way back then. I shudder at the thought of what the Conservatives have done to that puppy since 2006.
The reality is that income averaging for artists makes sense. That is why in 2008, in our Liberal platform, we actually called for this. We said:
Support for Canada's arts and culture must also extend to support for artists themselves. That is why a Liberal government will provide income averaging for artists drawing on the inspiration of Quebec's income-averaging provisions. This will ensure that the tax system will better reflect the peaks and valleys of the artistic work cycle. This is an important tool for helping this country's writers, artists and musicians continue to excel.
Of course, Quebec has led the way on this. I have been acquainted with and introduced to the Quebec culture by having married a Quebecker. Prior to that, as an anglophone born and raised in Nova Scotia, I was not aware of groups like Les Trois Accords, or films like C.R.A.Z.Y., or La Grande Séduction, or programs like Tout le monde en parle, as an example. What I am very much impressed with and what I think all Canadians can learn from is what Quebec has done to support, foster and strengthen culture. I say this because when two million Quebeckers watch Tout le monde en parle on a Sunday night, it is a lesson to the rest of us as to what happens when we actually get behind a cultural entity. The reality is that there is a network of stars that far too many anglophone Canadians have not had the opportunity to enjoy and be immersed in. Having married into a Quebec family, I have had that great luxury and privilege.
We can learn from what Quebec has done in this area. I thank my colleague from the province of Quebec for having brought this forward. He is someone with great experience in this area. I hope that the Conservatives actually demonstrate some flexibility in recognizing that we can learn from this and move forward. This can be a start toward a fairer tax system and perhaps income averaging that can apply outside of cultural areas in the future.