House of Commons Hansard #232 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was tariffs.
Sadia Groguhé NDP Saint-Lambert, QC
Mr. Speaker, I would like to congratulate my colleague for her speech and point out that the Conservatives have broken their promise by introducing, in the 2013 budget, additional taxes on goods, which will impact household budgets and consumers. This will have an impact on consumption and the economy.
I would like my colleague to talk about household debt and the other repercussions that this budget will have on households.
Peggy Nash NDP Parkdale—High Park, ON
Mr. Speaker, I would like to thank my colleague, who asked an excellent question.
Canadian consumer debt has hit a record high. It will be very difficult for consumers to pay more for so many of the goods they need.
This government is being hypocritical because Canadians will be paying more and its friends will be exempt from these taxes, which do not apply to the one percent.
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, it is a great pleasure and honour to speak to this issue on this opposition day, particularly since my speech follows those of three of my colleagues with whom I have the great pleasure of working on the Standing Committee on Finance. I would like to thank the hon. member for Victoria for bringing this issue before the House of Commons, because it is very important.
I am also pleased that my three colleagues from the Standing Committee on Finance have played fair by leaving a few factors for me to address. Given their considerable expertise, I might not have had much to offer the House. Fortunately, I can address some very specific issues related to the budget.
I am well aware that some, if not most, Conservative government members like living in the past. However, at some point, they need to get with the times and adopt measures that are relevant to Canada's current conditions.
I certainly agree with some government members who claim that the general preferential tariff or GPT regime needed to be modernized. Unfortunately, these changes are too late for some countries. In fact, one could easily say that the changes are 20 years too late for some of them.
What is more, the government is applying the new regime to a wide range of countries, some of which still need the GPT. This is a really unfortunate aspect of the budget and is symptomatic of the government's complete unwillingness to consider any insight that could help it to implement measures that would assist Canadian families and companies. Perhaps the government is naive or just ignorant in its very narrow perspective, its blindness as to what is going on with the economy. We will continue to work, to keep an eye on the issue and to demonstrate the government's ignorance.
When I say that this measure is 20 years too late, I am thinking about certain specific countries and the overall erosion of Canada's industrial sector. Hundreds of thousands of jobs were very quickly lost under this Conservative government.
Unfortunately, the current Conservative government, already very worn out by its mandate, is not the only one to have abandoned our industry and allowed the destruction of entire sectors of the Canadian economy, thereby forcing thousands, if not millions, of families into temporary or even permanent poverty in some regions of Canada. This measure will only exacerbate the problem. Indeed, especially considering the product categories that will be affected, the proposed regime can even be compared to a flat tax that will hit the middle class and our small and medium-sized businesses most of all.
I say this because, as the member for Beauport—Limoilou, I know very well which sectors and segments of the population will be directly affected and hit hard by this in their daily lives.
Part of the Beauport—Limoilou riding is located in downtown Quebec City. I am referring specifically to Limoilou. It is a very dense urban area that has been experiencing quite a baby boom. Many young families are coming to settle down in Limoilou. To put it simply, and to paint a clear picture, strollers are practically taking over the streets.
When we look at the list of products that will be affected by the tariffs, it includes things like strollers, tricycles and, probably the most shocking, plastic school supplies.
I am so glad to still be a young man, at barely 46 years old. Nevertheless, it has been quite a while since I finished my studies. Still, I do remember the good old days, when I was in elementary and then high school. For instance, at the time, I had to buy a geometry kit, and it was marked “Made in Canada”.
Clearly, everyone agrees that the various sectors of our economy are operating under conditions that are forcing them to adapt. Certain changes have taken place that have forced some companies to shut down, while still others have had to cut back their operations. However, the reprehensible abandonment of many industry sectors in the face of justifiable and inevitable globalization—for which the government should have positioned itself so as to be able to adapt—is almost criminal. This has driven many people in a number of our large communities into an abyss that they just cannot get out of.
I do not know who, on the government side, could answer the legitimate questions that young families in Limoilou, people in their 20s and 30s, are asking. These families have chosen to live downtown, near their workplace, and they have chosen to stand up for a good quality of life. However, they are going to have to deal with tariff hikes, which are a type of forced tax that the government is applying improperly. We should not be surprised by what this government is doing. This is exactly the type of unilateral measure that the Conservatives implement, just like those they imposed on the provinces with regard to health transfers.
The government does not consult Canadians and does not even examine the issues. The measures that it implements seem to be the result of the sort of misguided inspiration that comes from too little sleep. It is really shameful.
As I had the opportunity to mention today, I have the great privilege of being a member of the Standing Committee on Finance, and I have also had the opportunity to serve on the Standing Committee on International Trade. On many occasions, I took the time to speak out against the government's shameful naivety when it comes to international trade. Our country is suffering a great deal as a result of this government's extremely simplistic views and policies.
Take China, for example. It is one of the countries that is being targeted by the changes to the tariff regime. A country's place in the economy deserves to be debated in order to determine the role it must play. However, when the government lets things go, does not react and does not take into account the conditions that exist in other countries of the world, it should not be surprised when it gets results as poor as those we are currently getting.
I would like to talk about China since this country's success is in large part due to the fact that it is an extremely interventionist country. It is therefore rather ironic that the government is trying to teach everyone a lesson without even taking into account the objective conditions of the world economic order. I am not necessarily asking the government to be protectionist, but it must be aware that it has to do something when other countries fail to engage in fair play. This is the kind of thing that the NDP will not just put up with. On the contrary, when countries seek to attack Canada, the NDP will react and respond.
In conclusion, I would like to say that China has taken a very interventionist approach when it comes to currency. It has kept the value of its currency very low. It has taken a very interventionist approach to job and business creation and has paid out massive subsidies in the guise of loans to companies by Chinese banks that did not even require repayment.
Now our core industry has been ravaged. This measure comes too late, is completely useless and places an unnecessary burden on our small and medium-sized businesses as well as our families.
Why is the government increasing taxes like this?
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, I want to take the opportunity just to highlight some inconsistency within the Conservative government. In the most recent budget, the Conservatives would take the liberty of decreasing 37 different tariffs. Canadians were told in many forums that the Government of Canada took great pride in the fact that it would reduce tariffs. What the Conservatives did not say at the time is that they would actually increase more than 1,300 tariffs at the same time within the same budget. That increase in tariffs would generate hundreds of millions of dollars annually in different forms of revenue.
Might the member provide some comment on why the Conservatives might have been a little selective in terms of exactly what message they were trying to send Canadians on the whole issue of tariffs, when in fact quite the opposite might be the case, where the Conservatives would increase so many, compared to decreasing?
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I would like to thank the member for Winnipeg North for his question.
The government is likely suffering from selective memory, no doubt caused by its communications department, which has such a negative influence. That is my hypothesis. I cannot say for sure that that is the precise explanation in response to my colleague's question.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, I have a very simple question for my colleague. I heard the speeches from government members who completely denied that there are any new taxes in this budget. However, we can see that over five years, there will be $8 billion in new taxes that will be taken directly out of Canadians' pockets.
The government seems to be focusing on one thing in particular, and that is the fact that 72 countries will no longer be covered by the general preferential tariff, which is an import tax that is lower for certain countries. The government is focusing on China, India and Brazil, but it is also considering many other countries—such as Kazakhstan, Thailand, the Dominican Republic and Namibia—as being fully developed.
Could my colleague tell us why the government is focusing on certain countries, which we could very well debate, but is denying the fact that it is amending the general preferential tariff for other countries that are not fully developed?
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I would like to thank my colleague from Rimouski-Neigette—Témiscouata—Les Basques for his question. In my opinion, he can speak to this better than I can because he has been a member of the Standing Committee on Finance longer than I have.
It would be really extraordinary if we could have an honest and frank debate with this government, either in this place or at committee. We cannot criticize the government for picking its battles, but we can criticize it for refusing to inform Canadians and the major players in our economy about a number of its policies. It is truly deplorable, it is downright dishonest and, as some of my colleagues have already mentioned, it is pure hypocrisy.
Fin Donnelly NDP New Westminster—Coquitlam, BC
Mr. Speaker, the heart of our opposition day motion is talking about fairness and about being up front with Canadians. I know my colleague has spoken about this, but I want to talk about my province of British Columbia, where we had a provincial government that brought in a tax about which it was not up front with British Columbians. I wonder if the federal Conservatives are actually taking a page out of the provincial B.C. Liberals' book, by which they introduced the HST and were not up front with British Columbians. I wonder if that is what the Conservatives are doing here by not being up front about the tariffs and the taxes. Could the hon. member talk about that?
Raymond Côté NDP Beauport—Limoilou, QC
Mr. Speaker, I would like to thank my colleague from New Westminster—Coquitlam for his question. I am surprised that there have been no questions about the GST from my Conservative colleagues. That is clearly because our answer was too good and it would have been useless to ask the question again. Therefore, I hope we will not waste any time on that.
I will nevertheless comment on this matter because it is important. With regard to the GST and the health transfers I talked about, if an NDP government were to come to power, it would take the time, unlike the current government, to consult the provinces before taking action on these and other issues. That is something the government refuses to do.
That message was loud and clear.
Opposition Motion—Budget 2013Business of SupplyGovernment Orders
Kamloops—Thompson—Cariboo B.C.
Conservative
Cathy McLeod ConservativeParliamentary Secretary to the Minister of National Revenue
Mr. Speaker, as Parliamentary Secretary to the Minister of National Revenue, I am pleased to stand today against the NDP's opposition day motion. It is another opportunity to remind Canadians of the NDP's record on taxes. That record speaks for itself.
Time and time again, NDP members stand in this place and vote no against our Conservative government's actions to lower the tax burden, protesting efforts to leave Canadian families and businesses with more money to help them grow our economy. Even worse, the NDP continues to call for billions in new taxes on Canadians; that is, from a carbon tax that would raise the price of everything, to a $10-billion-a-year tax hike on businesses.
Unlike the NDP, our Conservative government believes that leaving more money in the pockets of hard-working Canadians is the right thing to do, and we have the record to prove it.
Since coming to office in 2006, we have cut taxes more than 150 times, reducing taxes in every way that government collects them. Actually, I just noted that, in one of the NDP mail-outs to its constituents, the whip encourages Canadians to ensure that they take advantage of these tax reduction opportunities. Even in its mail-outs to its constituents, the NDP is acknowledging the very important measures we have provided. It was quite gratifying to see the NDP actually sending out that mail-out.
We have cut taxes more than 150 times, and we have reduced them in every way that government collects them. We have removed more than one million Canadians from the tax rolls altogether, and the overall tax burden on Canadians is now at the lowest point in more than five decades.
Today, I would like to highlight some of these important measures that our government has done to support job-creating businesses across Canada—tax relief that the NDP consistently opposes.
Our approach to business taxation follows simple logic. Lower taxes make Canada's economy stronger and create stable, long-term jobs. Today, Canada has the best record of jobs and growth and recovery among the G7 nations. We can see how that plan is meshing and is working. In fact, a recent study by KPMG concluded that Canada's total business tax costs—business income taxes, capital taxes, sales taxes, property taxes and wage-based taxes—are more than 40% lower than those in the United States. Again, I just think we need to compare how Canada is doing against the United States fiscally and in terms of our net GDP-to-debt ratio in order to know our plan is working.
In short, our government has created an environment that encourages new investments, growth and job creation, one that ensures Canada has the strongest fiscal position and the lowest business tax costs in the G7.
When we consider our Conservative government's unparalleled commitment to lowering taxes, especially for job-creating small businesses, the NDP motion is a scary prospect for Canadians.
The NDP position is very well known. Theopposition House leader , the member for Skeena—Bulkley Valley, in British Columbia, summed it up best when he said, “...tax cutting is seen to be a failed strategy...”. That is absolutely wrong.
Let me now highlight some of our government's key initiatives that demonstrate our continuing leadership in lowering taxes for businesses, all of which, again I have to point out, the NDP voted against.
Canadians understand that a competitive business tax plays a key role in supporting businesses in all sectors of the economy to invest, grow and thrive. Our government has implemented broad-based tax reductions that support investment and growth. These cuts are delivering more than $60 billion of tax relief to job-creating businesses over a six-year period, ending in 2013-14.
For example, to spur investment and productivity, we have reduced the federal business tax rate to 15% in 2012 from 21% in 2007, which is amazing support for our corporations. The small business tax rate was reduced to 11%, and the amount of income eligible for this lower rate was increased to $500,000 in 2009.
Canada's system of international taxation was improved to better support cross-border trade and investments. These actions are part of a policy framework that increases the productive capacity of the Canadian economy as well as Canadian living standards.
Lower business tax rates and other tax changes have increased investment in Canada and reduced the costs of expanding, giving businesses strong incentives to invest and hire in Canada.
Our government's low-tax plan is helping to guide the Canadian economy along the path of sustainable economic growth. Real business investment in Canada is now 8.1% higher than its pre-recession peak, while no other G7 country has even returned to its pre-recession levels. Again, having a positive business environment encourages people to come and invest. It encourages the job creators in the country that produce the wealth for those important social services program and the things we value.
More examples include tax relief for new manufacturing machinery and equipment that will help businesses invest for the future. The accelerated capital cost allowance for machinery and equipment used in the manufacturing and processing sector was first introduced in budget 2007 and extended in budget 2008, budget 2009 and budget 2011 in response to the ongoing global economic challenges.
The ACCA allows businesses to write off eligible investments faster, providing them with the support they need to retool and remain competitive. Canadian businesses from across the country have applauded this measure, which is very important in helping them to expand. Indeed, as the finance committee heard from witnesses from across the country, this was a consistent message in terms of ways that we could support the business communities. In total, more than 25,000 businesses in the manufacturing and processing sectors, employing Canadians in all regions of the country, have taken advantage of the accelerated capital cost allowance since it was first introduced in 2007.
On the advice of the Canadian Manufacturing Coalition and others, we will provide $1.4 billion of tax relief over four years to the manufacturing and processing sectors through a two-year extension of a temporary accelerated capital cost allowance for new investment in machinery and equipment. This tax relief will encourage manufacturers and processors to accelerate and undertake additional investment in machinery and equipment, making their operations more productive and globally competitive. It will enable manufacturing and processing companies to plan and invest over the coming years and help create jobs in a sector that has been particularly hard hit by the global recession.
Key measures introduced by our government are already delivering substantial tax relief to small businesses and small business owners. Reductions in the small business tax rate to 11% and increases in the small business income limit to $500,000 are estimated to provide small businesses more than $2 billion in tax relief in 2013 and more than $10.4 billion over the 2008-09 to 2013-14 period.
I would like to give an example. A small Canadian controlled private corporation, with $500,000 in taxable income, has seen its federal corporate tax bill decline by more than one-third, from $83,600 in 2006 to $55,000 in 2013. That is a tax saving of over 30%, or $28,600, that can be reinvested in the business to fuel the growth and expansion that creates new jobs.
Again, I have to point out that the NDP shamefully voted against all those tax reductions for small businesses.
However, we are doing even more than this. The lifetime capital gains exemption on qualified small business shares was increased to $750,000. It was at $500,000 in budget 2007. We are looking at the first increase in an exemption since 1988.
This LCGE, as it is known in short form, is estimated to be delivering almost $1 billion of federal tax relief annually to small business owners, farmers and fishermen, and certainly every one of us in our ridings see the challenges small business owners face and the very important role they play in our communities. They are the first people supporting jobs, training for young people and communities and the many endeavours undertaken. It is a giant first step in 2013 and will go up to $800,000 in 2014. In addition, to ensure that the value does not erode over time, we will index a new $800,000 LCGE limit to inflation, which is for the first time ever, something members of the finance committee heard people across Canada ask for.
Representatives of job-creating businesses, large and small, have told us time and time again that this tax relief is crucial in helping them expand their operations and hire more Canadians, but again opposition members are just not listening. Maybe they will take note of the words of Jayson Myers, president and CEO of the Canadian Manufacturers & Exporters, who explained:
—business tax cuts are benefiting Canadians in very important ways....While...tax rates have fallen, the amount of money businesses are paying to government is--in fact--increasing because their investments have made them more competitive, more profitable, and have allowed them to grow.
That is a really important illustration of how lower taxes actually can generate higher revenue.
Not only that, but the Canadian Manufacturers & Exporters has stated unequivocally:
If governments had not provided tax relief for Canadian businesses, the recession would have been deeper and unemployment would have certainly been higher.
I cannot imagine a clearer message from Canada's job creators and yet opposition members' wilful ignorance on taxes prevails.
Perhaps the NDP member for Windsor West had his head in the sand when he remarked in the House:
—the reality is that the tax cuts are not even the number one thing the corporations are asking for...tax cuts are not the priority.
That was a very puzzling statement. The bottom line is that when it comes to job creation, our Conservative government is listening to Canadians who are telling us what works while the NDP cannot seem to shake off some ideological commitment to higher taxes.
Since 2006, our government's number one priority has been creating jobs for Canadians and I am proud that we followed through on this commitment again in budget 2013, especially when it comes to small businesses. In recognition of the critical role that small businesses play as job creators in the Canadian economy, the economic action plan proposes to extend for one year the temporary hiring credit for small businesses. This temporary credit will be available to an estimated 560,000 employers, allowing small businesses to reinvest approximately $225 million in job creation in 2013.
Certainly, in my role as parliamentary secretary, I am especially pleased that economic action plan 2013 has announced that CRA will take even more action to reduce red tape and improve services for small businesses. For example, CRA has created a dedicated team that is responsible for coordinating and addressing small business issues. The CRA has mandated the team to ensure that the agency takes a small business lens approach to service improvements, with a renewed and enhanced focus on cutting red tape. This focus on engagement with small business stakeholders will ensure that the perspectives of the small business community are continuously taken into account in every aspect of the work that CRA does.
Last summer, when I conducted round tables across the country, I heard that we need to do a little more. Again, we are looking at a wide range of additional electronic services for businesses to be implemented to build on the success and help businesses get what they need faster, reduce paperwork, save time and help the environment.
I would like to provide another example. In April 2013 business owners can choose to go paperless and rely exclusively on electronic notices stored in the secure “My Business Account” portal, accompanied by emails directly from the Canada Revenue Agency.
I am also pleased to tell Parliament that CRA is expanding its small business focus across all operations and moving toward a “tell us once” approach, so that small businesses will not have to submit the same information several times.
Under our Conservative government, the CRA is helping small business owners avoid costly and time consuming audits by raising awareness of their tax obligations in order to get them the help they need right from the start.
Canada's entrepreneurs and risk-takers are confronted with the many challenges of a globally competitive marketplace each and every day. These entrepreneurs need their government to be a partner in achieving success through lower taxes, not an impediment caused by the NDP's plans for higher taxes and reckless spending.
Job creators know that in our government they have a partner. Since 2006, we have designed and implemented policies aimed at driving the economy to its full potential for the benefit of all Canadians.
Economic action plan 2013 sets a path to return to balanced budgets by 2015, which will strengthen Canada's fiscal advantage and spur long-term jobs and growth.
Today, Canada's is universally recognized for its resilience through the global recession and recovery, its low tax environment, its highly educated and skilled labour force, its natural resource endowment and a financial sector that is the envy of the world.
However, we cannot become complacent. In a fast-changing, competitive global economy, Canadians must continually aim higher to avoid falling behind.
Together, the initiatives in economic action plan 2013 build on previous government action to reinforce the fundamental strengths of the Canadian economy. The results so far dramatically highlight the wisdom and effectiveness of our decisions, with 900,000 net new jobs, the best record in the G7.
Even better, Canada stands among just a handful of nations with a AAA credit rating. Canada remains one of the most welcoming and profitable places in the world for international business and foreign direct investments.
By lowering taxes, reducing red tape and removing barriers to trade and investment, we have made Canada one of the most welcoming and profitable places in the world for international business and foreign direct investments.
The facts are clear. We stand for low taxes and private sector growth. The NDP stands for high taxes and big government. The NDP plans massive new taxes, be it a carbon tax that would raise the price of everything or massive new business tax hikes.
For these reasons, I know the NDP motion will be rejected by Parliament.
Peggy Nash NDP Parkdale—High Park, ON
Mr. Speaker, my colleague and I sit together on the finance committee so I know she has read budget 2013. She has read pages 331 and 332 and has seen the increase in taxes on hospital parking, on credit unions, on shoes, on iPods.
Why are Conservatives breaking their promise? Why are they increasing taxes on Canadians, but letting tax cheats and profitable corporations slip through the tax net? Why are they doing that?
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Mr. Speaker, I object to the premise of that question. We have absolutely presented a plan to Canadians, a plan to return to balanced budgets by 2015 and a plan to return to balanced budgets by maintaining transfers to provinces and not raising taxes for our business owners, our corporations. That has been our commitment as government.
NDP members have sat on the committee. The member has heard the very important testimony regarding the importance of closing tax loopholes. Tools will be given to the CRA in economic action plan 2013 to go after those tax cheats.
Marc Garneau Liberal Westmount—Ville-Marie, QC
Mr. Speaker, whilst I sympathize with my hon. colleague when she talks about some of the tax increases that the NDP want to talk about, I would sure like to hear about what she and her government plan to do for the over $100 million they have added to the national debt since they came to power. That, to me, is very much more pertinent at this time.
When is a tax not a tax? When is a premium increase for employment insurance, which is a payroll tax, not as tax? When is adding tariffs to over 1,000 items to generate about $300 million not a tax?
I would like to know what the government calls the tax and how it supposedly, that low-tax government, refuses to recognize that payroll taxes and tariff increases are not taxes.
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Mr. Speaker, the member for Westmount—Ville-Marie was sitting in the House in 2008 when we were in a global recession. People were concerned. What I heard was the opposition saying spend more money. I hate to imagine what the deficit would have been had we listened. We chose to do targeted, timely spending, along with our G7 counterparts. It worked. We had a plan.
We are turning back to balanced budgets. I am glad we were the government of the day. Had we not been at the helm, the deficit would have been absolutely phenomenal had we listened to the opposition.
Opposition Motion—Budget 2013Business of SupplyGovernment Orders
Conservative
Brad Butt Conservative Mississauga—Streetsville, ON
Mr. Speaker, I want to thank the parliamentary secretary for a clear and good response to an irresponsible motion put forward by the opposition today. I do not think the opposition understands the difference between tariffs and taxes and other revenue measures governments proceed with.
I would like to give the parliamentary secretary an opportunity to highlight some of the tariff reductions and why there are reductions in those tariffs for countries with which we have free trade agreements and fair trade agreements verses countries that have benefited from these other tariffs for many years whose situations have not changed.
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Mr. Speaker, that is an important question. It was very well received in terms of the removal of tariffs from baby clothes and sporting goods equipment.
It is more important to remember that the foreign aid program was created in 1970 to give special help to poor countries. It had not been reviewed since the 1970s. It meant that countries such as China and South Korea were receiving privileged access to our markets when competing against small businesses.
Again, I have to say that I think the opposition should speak with the Canadian manufacturing sector about its concerns. The government has provided many important measures that support the Canadian manufacturing industry. Again, it is not giving special preferential treatment to those countries that no longer need it.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, the Minister of Finance mentioned several times that Budget 2013 would have no new taxes. The Minister of State for Finance gave the same answer when he was asked about Budget 2013 in the House.
When the Conservative government creates tax credits—the so-called boutique tax credits—for arts or sports for example, it talks about tax cuts that benefit Canadians. When tax credits are scrapped, it pretends not to notice.
The hon. member for Westmount—Ville-Marie asked a very relevant question that the government member did not answer. What is considered a tax credit or a new tax? In the budget, there is $8 billion in new taxes and in reduced or cancelled tax credits. The member said that there were no corporate tax increases, but there is an increase of $2.3 billion over the next five years, and that is only from scrapping the dividend tax credit for small and medium-sized businesses.
Can the Parliamentary Secretary to the Minister of National Revenue look us in the eye and say that there are no tax increases? If she cannot, what is her definition of a tax? The government does not seem to know, even though it governs a G8 country. That makes no sense at all.
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Mr. Speaker, I hope the opposition will support economic action plan 2013. It can see the clear work we have done to create tax fairness for all Canadians. We have taken some important measures in terms of tax loopholes. We have given the Canada Revenue Agency some important tools to help in its ability to crack down on tax evasion and the use of offshore tax havens.
I also briefly want to talk to the tax credit issue. Today the whip of the NDP is publishing and celebrating our tax credits and is making sure that her constituents are aware of them. I am glad to see that she recognizes how valuable these tax credits are to members of her riding. It is good to see the NDP celebrating some of the important measures we have taken in our budget.
Joan Crockatt Conservative Calgary Centre, AB
Mr. Speaker, these tax credits are an important issue that many Canadians may not be fully aware of. I wonder if the member could fill us in on the tax credit for new home buyers. My son is in that particular position, and I know that people of his generation need to know what programs are out there for them.
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Mr. Speaker, we absolutely recognize that our young adults have challenges in terms of buying that first home. Therefore, we have measures that really provide support for those first-time home buyers.
Importantly, the bigger picture is that we are ensuring that they are going to get the training to do the jobs that need to be done. There are important measures, whether they are changes supporting the Canada student loan program or the Canada job grant program that would be available. Of course, the member mentioned a measure we are particularly proud of, and that is the tax credit for first-time home buyers.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, I would like to ask a very quick question about tax credits.
How can the Parliamentary Secretary to the Minister of National Revenue say that creating a tax credit will reduce taxes for Canadians, but that scrapping a tax credit will not increase the tax burden for them?
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Mr. Speaker, we certainly believe in a system of tax fairness. The member has sat with me on the finance committee and has heard of some fairly aggressive tax planning practices. The aggressiveness is perhaps legal but is above the spirit of what we are trying to do with our tax system.
I ask that he support the very important measures in the budget that focus on closing tax loopholes and on creating tax fairness for all Canadians.
Sadia Groguhé NDP Saint-Lambert, QC
Mr. Speaker, I will be sharing my time with the member for Sudbury.
I want to begin by thanking my colleague, the hon. member for Victoria, for moving this motion. He is giving us an opportunity to elaborate on certain aspects of the budget brought down by the Minister of Finance.
During the election campaign, the Prime Minister publicly and formally promised Canadians there would be no new taxes. Not even six months ago, his Minister of Finance reiterated that promise in anticipation of budget 2013-14. Meanwhile, they accuse their adversaries of wanting to increase the tax burden and they claim to be standing up for the taxpayer. We now know that was just malarkey. In reality, the Conservatives were secretly preparing massive tax hikes that affect all Canadians.
With support from the Prime Minister, the Minister of Finance went against every one of this government's public positions and basically increased Canadians' tax burden. The Minister of State for Finance challenged us to find tax increases in the budget. We found them handily.
No less than 1,290 types of products will be subject to higher tariffs. These new tariffs on a wide range of sectors in more than 70 countries are significant: 5% more for bicycles, 11% for scissors, 3% for strollers, 6% for table fans, 10% for vinegar and so forth. There is even a new 5% tax on iPods even though the Conservatives falsely accused the official opposition of promoting such a measure. This is another example of the government's hypocrisy when it comes to economics.
Generally speaking, we are not talking about luxury items here. We are talking about standard consumer products that are used by the majority of Canadian households. It is not the importers of these products who are going to absorb the bulk of these new tariffs. It is the consumer who is going to be stuck with the bill. It is not just consumers who are going to feel the impact of this unjustified measure. Retailers located close to the Canada-U.S. border are going to see their sales decline again because of this new price gap.
This is an ironic choice by a government that falsely claims to defend taxpayers and help the economy. Unfortunately for Canadians, the Conservatives did not stop there.
In addition to these tariff increases, the government is eliminating the 15% tax credit for money invested in labour-sponsored venture capital corporations. The government got this money back over a three-year period because businesses grew and formerly unemployed workers paid more taxes. Instead of addressing the fact that Canada is behind when it comes to venture capital, the Conservatives decided to go after Canadian taxpayers.
I want to point out that the government is eliminating the preferential tax rates for co-operatives. This means that co-operatives such as Mouvement Desjardins will support fewer small and medium-sized businesses and fewer projects. This also means less money in the pockets of depositors, who are once again being affected by the Conservatives' policies. Add to that the end of the tax exemption for things such as parking and safety deposit box rentals.
As a result of these measures, taxpayers will have less wiggle room and will have to either spend less or go more into debt, which is never good news for the economy. Over a period of just five years, the 2013-14 budget is increasing the tax burden by $7.8 billion.
This burden will go from $500 million this year to $2.3 billion before the end of the decade. Between 2010 and 2018, the Conservatives will have increased the tax burden by nearly $20 billion.
The public is the government's first victim. After cutting all federal government services to the public in their 2012-13 budget, the Conservatives are now dipping into taxpayers' pockets. Now, Canadians will be paying more for fewer services. The Conservatives will have to take responsibility for this.
This government made a choice. True to form, it decided to spare major corporations and the wealthy and force the general public to suffer the consequences. The main impact of the $12 billion in tax cuts for the private sector was to increase the financial reserves of Canadian businesses from $185 billion to $575 billion over a period of 10 years. While major corporations will benefit from the Conservatives' handouts, Canadians will be paying more to live their lives. This is completely unacceptable.
Why make Canadian taxpayers suffer because of the government's budget cuts? Why cut the number of employees at the Canada Revenue Agency by 6% when the government is losing tens of billions of dollars to tax evasion? Why eliminate tax cuts that stimulate the Canadian economy when the economic outlook is still uncertain?
The current motion condemns this situation. We want to speak out against this government's poor choices. The latest budget cuts will affect people's day-to-day lives. This wide range of new taxes will undoubtedly impact consumer confidence and debt levels.
The Conservatives refuse to admit that tax cuts for big business severely limited the government's room to manoeuvre but did not have much of an impact on economic growth. They refuse to admit that their decisions are catching up with them and that Canadians are the ones now paying the price.
With that in mind, I ask the members here to support the motion moved by the member for Victoria, thus sending a clear message to the government: the significant tax hikes set out in the latest budget are unacceptable, inappropriate and unjustified.
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
Mr. Speaker, lady luck is not on my side. I asked some very simple questions of government members, but I did not receive a response. It seems that the government, rife with hypocrisy—and I apologize for using that term, but it is truly the case here—is denying the obvious existence of tax increases in this budget and refuses to acknowledge that they are there. My last question was on that exact topic.
The government feels that any kind of tax credit—for things like the arts or sports—constitutes a tax cut. Why then is it refusing to acknowledge that eliminating a tax credit, for businesses or individuals, is therefore a tax increase?
Since I have yet to receive an answer from the government, I would like to ask my colleague that question. Her speech was excellent, by the way. I would like to know why we should not consider the elimination of a tax credit for credit unions or labour-sponsored venture capital corporations, for example, to be a tax increase that will affect the Canadian economy as a whole, which this government is denying?
Sadia Groguhé NDP Saint-Lambert, QC
Mr. Speaker, I thank my hon. colleague for the question.
Indeed, eliminating tax credits is the same as a tax increase. He mentioned certain corporations. If this tax credit is no longer guaranteed, how can those corporations reinvest in our economy if the funds they rely on cannot meet Canada's economic needs?
Furthermore, I completely agree with his comments about hypocrisy regarding the new taxes being imposed on Canadians. These taxes will quite simply put a very serious strain on family budgets, and this will have a significant impact on our economy, in any event.