Debates of April 15th, 2013

Opposition Motion—Budget 2013

[Shelly Glover, Conservative, Saint Boniface, MB]

Mr. Speaker, I thank my colleague for his question.

People who live in Manitoba—where I am from—or who live close to the border often experience transport problems between the two countries. Our measures for the transport of goods, whether we are talking about imports or exports, have received the support of small, medium and large businesses.

I would like to read a short quote from the Canadian Federation of Independent Business.

I will read it in English so that my colleague can understand exactly what it said without paraphrasing or translating. It said:

Overall, this is a good budget for small business. [The minister] has done a solid job by remaining on course to eliminate the deficit while announcing some important measures for Canada's entrepreneurs.

It mentions measures such as the expansion of the EI hiring credit, and it goes on and on.

We have never seen such support from our stakeholders as we have in budget 2013.

[Lois Brown, Conservative, Parliamentary Secretary to the Minister of International Cooperation]

Mr. Speaker, I thank my colleague for her speech.

Last weekend, the chamber of commerce in my riding hosted an event where I was able to talk to Canadians about the budget speech.

One thing my colleague just spoke about was the impact it has had on business and how business has responded, but she did not talk about the new Canada job grant and I wonder if she could talk to the House about it. The new Canada job grant is going to assist many of our businesses to create jobs. How is that going to help the economy?

[Shelly Glover, Conservative, Saint Boniface, MB]

Mr. Speaker, the parliamentary secretary is absolutely correct. I, as well, was in my constituency for the last two weeks, and it was probably the number one positive measure I heard about time and time again. The skills training we have invested in by creating a Canada job grant, by ensuring we are going to provide some opportunities for apprentices—not only in federal construction projects but by encouraging provinces and territories to also expand by using apprentices in their construction and infrastructure projects—was tremendously received. I never heard a single naysayer with regard to the skills training we intend to provide.

Internships are also in the budget. We have so many good measures to help Canadians connect with jobs. I encourage everyone at home to read the budget so they can take advantage of it.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Speaker, I would like to talk about a topic to which the hon. member devoted only one minute of her 20-minute speech on budget 2013. The question before the House is whether the Conservative government has increased taxes by $8 billion over the past five years.

I assume that the Parliamentary Secretary to the Minister of Finance has read the budget. It is interesting to see that a table on page 331 lists all the budget 2013 tax measures. The table is entitled “Cost of Proposed Tax and Tariff Measures”. The word “cost” applies to the government, given that tax cuts lead to a drop in revenue.

Some figures are in parentheses. For the hon. member's sake, I would like to explain that costs in parentheses are negative. That is the revenue that the government makes from tax measures. Among others, there is a dividend tax credit with an amount in parentheses of $2.3 billion over five years. There is also a measure that would scrap the labour-sponsored venture capital corporations tax credit, with an amount of $355 million in parentheses. Similarly, the general preferential tariff has an amount of $1.2 billion in parentheses. If we add up all the figures in parentheses, we end up with a total of $8 billion over the next five years.

Could the Parliamentary Secretary to the Minister of Finance tell us, with a straight face, that there are no tax increases, as she said in her speech?

[Shelly Glover, Conservative, Saint Boniface, MB]

Mr. Speaker, I repeat that there are no tax increases in budget 2013.

What is the hon. member talking about? He is talking about what we do on this side of the House, which guarantees that our tax system is fair. At the moment, our tax system has a number of loopholes that need to be addressed. It is unfortunate that the hon. member is not supporting the government in its efforts to close those loopholes.

That is what we are talking about in budget 2013. We intend to close tax loopholes. We intend to make sure everyone pays their fair share. We do not want to see people take advantage of a tax system that has not been reviewed, and the general preferential tariff regime has not been reviewed since the 1970s.

It is ridiculous that the opposition would create this kind of controversy when the government is doing the right thing. Canadians believe it, we believe it, and we will continue on that path to make sure it happens.

[Stella Ambler, Conservative, Mississauga South, ON]

Mr. Speaker, I thank the parliamentary secretary for that speech, and especially for addressing the misinformation and some of the accusations that are coming from the other side, which are just a little bit over the top. I am glad she gave us some more information about the fact that we are still keeping our promise to balance the budget, and we are doing this without raising taxes.

With regard to the general preferential tariff the NDP is talking about, why was there this need to modernize and review it? I understand that, but could the parliamentary secretary tell me how that will impact what we have done to close these tax loopholes, how that will impact the people of Mississauga South, the people of Saint Boniface, and the average Canadian? Why did we do this and why was it a good thing?

[Shelly Glover, Conservative, Saint Boniface, MB]

Mr. Speaker, I care about how it affects Canadians and Canadian families. In fact, Canadian families are benefiting from about $3,200 total every single year of tax income that used to be collected. Under this government, we have been able to reduce taxes 150 ways so that they could keep that money in their own pockets.

The general preferential tariffs is a regime that has not been looked at since the 1970s, and it was meant for poor countries where there are companies working so that we could help them. The budget will change that, so that booming economies like China, India, and Brazil are not benefiting from what was intended for poor countries. Essentially, individual Canadians and Canadian families, while we are working with the Retail Council of Canada, will see that consumers will benefit from lower costs of goods, thanks to measures that--

[The Acting Speaker, Conservative, Bruce Stanton]

Resuming debate, the hon. member for Kings—Hants.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, it is a pleasure to rise today to speak to the opposition motion condemning certain tax increases in budget 2013.

I will be sharing my time with the hon. member for Malpeque.

As many Canadians know, the Conservatives promised in the last election that if they were re-elected they would not raise taxes on Canadian consumers and families. They made that promise three times, in fact, in their platform. However, with budget 2013 the Conservatives have clearly broken that promise. They are raising taxes, which are tariffs but are actual taxes, on goods imported from other countries. These tariffs are a hidden tax on just about everything. It is really a hidden tax because Canadians do not see these taxes on receipts. For instance, the HST, GST, provincial sales tax, or consumption taxes are more transparent to Canadians. Instead, these import taxes are included in the sticker price, hidden from Canadians.

Budget 2013 increases some tariffs while decreasing others, but the Conservatives' talking points only deal with the tariffs that are going down. The reality is that the budget reduces tariffs on 37 items while increasing tariffs on almost 1,300 products. Overall, it is clear that Canadian consumers will be worse off. Another thing to consider is that when tariffs go up and retailers increase the sticker prices, Canadians have to pay more. However, when tariffs go down, the full savings are not always passed on to the consumer.

Mike Moffatt is a business professor at Western University and has been doing a tremendous job on educating Canadians on these tax increases in the most recent federal budget. He has done this in spite of contradictory information from the Conservative government. Professor Moffatt has written that “Canadian consumers will be feeling a major hit to their pocketbooks” as a result of these tax increases. He stated that “the tariff changes make it more expensive to raise a child” in Canada. He pointed out that Conservative tax increases will make it more expensive to buy baby carriages, school supplies, children's bicycles, tricycles, and wagons.

He also said that “Canadian consumers will be paying tens of millions more to furnish their homes” because the Conservatives are raising taxes on everything from coffee and tea makers to rugs with synthetic fibres, paint brushes, rollers, plastic tableware, and household goods. He estimates that higher tariffs on imported wigs will cost Canadians an additional $4.6 million per year, which is shameful when we think that a lot of the people requiring wigs are cancer patients. Therefore, the Conservatives are actually taxing people at the most vulnerable times in their lives. Conservatives are increasing taxes on hospital parking, which will, of course, make it more expensive for Canadians to get treatment or to visit sick loved ones.

In terms of Canadian retailers, these higher taxes do not just hurt consumers and Canadian middle-class families. They hurt Canadian retailers. The increase to import taxes in budget 2013 will widen the price gap between Canada and the U.S. For example, certain shoes will go from being duty free to having an extra tax of 18%. When the Canadian price is increased by 18% while the U.S. price stays the same, it is going to encourage more cross-border shopping and will particularly hurt retailers in border communities. This is on top of the Conservative move last year to increase the amount that Canadians can bring back from the U.S. duty free, a move that also encourages more Canadians to do more shopping in the U.S. and, as such, hurts retailers in Canadian border communities in particular. Cross-border shopping hurts Canadian retailers, specifically small businesses that are operating on very small margins. It hurts Canadians who depend on the retail sector for their jobs and it is not clear why the Conservatives would want to put these jobs at risk.

There is another perhaps unintended consequence of these tax increases on imports. Caught in budget 2013 changes are employers and employees in least-developed countries, as well as the Canadian businesses that have been working with them as part of their supply chain. Under the current rules, manufacturers in least-developed countries can use some inputs from GPT countries and still qualify for lower tariffs. For example, shoemakers in Bangladesh or Cambodia could use fabrics from China and still meet the rules of origin for least-developed countries.

However, by removing China from the GPT list without making consequential changes to the rules for the least-developed countries, that shoemaker in Bangladesh or Cambodia will no longer qualify for duty-free treatment. Instead, his shoes will face an import tax of 18%, which will go directly to the Conservative government. It is worse for the Canadian consumer and it is worse for impoverished labourers in the developing world.

It is not just these taxes and these tariffs that the Conservatives are increasing in the budget. Despite their promise not to raise taxes, they have raised EI premiums three times since the last election. EI premiums are a payroll tax that every worker and employer must pay. Conservatives have been known to call it a job-killing payroll tax. The current Minister of Finance said in the past, “For many businesses, an increase in payroll taxes would make it harder to sustain existing jobs.” The Minister of Foreign Affairs went further. He said, “That is what Canadians do not want, a job-killing payroll tax increase…Those of us on this side of the House will not buy into that socialist scheme to raise taxes.”

I am a little surprised that the foreign minister is now, based on his own words, adopting a socialist scheme. In fact, the Conservatives have raised payroll taxes three times. Just when the New Democrats have moved beyond socialism, the Conservatives seem to have embraced it, based on their own words.

Raising EI premiums is another Conservative broken promise. The Conservatives raised the EI tax rate in budget 2011, they did it in budget 2012, and they have done it in budget 2013. In fact, the Conservatives have raised the EI tax rate by 8.7% since the last election. For average workers, that is almost $150 more per year taken off their paycheques. It is $150 less for them to use to pay the bills or to put food on the table.

The tax increases in budget 2013 will make life tougher for middle-class Canadian families at a very tough time. Canadian households have watched their incomes flatline over the last several years, while the cost of living is going up. At the same time, household debt has skyrocketed, as families take out second mortgages or turn to credit cards to try to make ends meet.

Canadian families now owe a record $1.67 for every dollar of annual income. They are barely making ends meet today, with record low interest rates, and they are petrified as to what will happen in the future as rates will inevitably rise. They are worried about the Minister of Finance's recent demand that banks increase their mortgage prices, as though the last few years have not been hard enough for middle-class families. The minister asked Manulife to increase its mortgage rate from 2.89% to 3.09% and asked for other banks to follow suit.

What does that mean for a Canadian family with a $400,000 mortgage? It means an additional $12,000 out of their pockets over the next five years. That is an extra $12,000 that a Canadian family will not have to put toward their children's education or for their retirement. They will not have that money to help pay basic expenses or to make ends meet. It is also an extra $12,000 in bank profits, simply because the finance minister decided to meddle in mortgage prices.

In terms of other broken promises, the Prime Minister said he would “preserve the old age security, the guaranteed income supplement, and the Canada pension plan, and all projected future increases to these programs”. We all know that in budget 2012, the Conservatives broke that promise. Instead of preserving old age security and the guaranteed income supplement, they cut it by raising the age of eligibility from 65 to 67, hurting the most vulnerable seniors. We know that 40% of seniors receiving OAS make less than $20,000 per year and that 53% make less than $25,000 per year.

It is clear that Conservative broken promises will make it harder for Canadian middle-class families to make ends meet. We know that these latest tax hikes in budget 2013 on imported goods are going to disproportionately affect young families by making it more expensive for them to buy shoes and bicycles for their children. The hikes will also make it more expensive to buy basic furnishings for their homes.

This comes at a time when middle-class Canadian families are struggling. It is a time when young Canadians are struggling to find work. Education costs, student debt, and the lack of opportunities are creating a situation where almost 30% of young Canadians between the ages of 25 and 29 are living back at home. There is a lot of hardship out there and this is no time for the Conservatives to be raising taxes on middle-class families, on young families that are struggling today.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Mr. Speaker, my colleague is absolutely right, particularly in the last part of what he said.

Governments have to make some choices. They can either raise taxes and tariffs, as the government has done in the budget, or they can spend money elsewhere.

As an example, something my staff and I have worked very hard on is going through all the points from this secretive government to find out exactly how much the President of the Treasury Board spent from the G8 legacy fund in his riding during that time. I will not go through all the items, but maybe I will have a chance later on to do that. I may be missing some, but it comes to $45,758,945 that was spent from the G8 legacy fund in his riding. If he had not done that, would he have had to raise taxes now? Would my friend comment on that?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I appreciate the question from the hon. member because he is absolutely right. It is about choices. In fact, hosting the G8 and the G20 actually cost Canadian taxpayers and Canadian families over $1.2 billion. This is in addition to the fact that the Conservative government has spent, since being elected, over $600 million on government advertising, much of it focused on self-promotional advertising, which ought to be paid for by the Conservative Party.

The hon. member is quite right. This money comes from somewhere. It is effectively tax dollars that hard-working Canadian middle-class families are sending to Ottawa and are expecting us to manage it well. The government has given Canadian record levels of deficit through a combination of high spending and bad fiscal management. That comes at a real cost to Canadian families that are struggling to make ends meet.

[Shelly Glover, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I want to ask my colleague from the finance committee a very simple question and I would like him to answer it.

First, he talked about the general preferential tariff regime, which has not been altered since the 1970s, when it was created to help companies in poor countries. Since the 1970s, there are countries like China, India, Brazil, and we could go on and on, that are no longer poor countries. They are in fact what the Canadian Manufacturers & Exporters would term as the new industrial powerhouses.

Therefore, could my colleague simply answer why he believes China, India, Brazil and these other industrial powerhouses deserve a special tariff like other countries that are poor?

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, there is a saying that “If it walks like a duck and quacks like a duck, it's probably a duck”. If it raises the cost for Canadians to make ends meet and makes it more expensive for Canadian middle-class families to buy goods, it is probably a tax.

The reality is that this is a tax hike. The parliamentary secretary cannot deny this is a tax hit that, as Mike Moffatt, business professor at Western and an expert in this area, has said will “make it more expensive to raise a child” in Canada. It is a tax hike on vulnerable, middle-class families with children.

It is a sneaky tax hike because it is hidden, but through the motion today opposition members are uncovering this for Canadians. We are providing a service to Canadians by letting them know the Conservatives are actually sneaking in taxes.

Why would the Conservatives actually boast about the reduction in tariffs on 37 goods and not even mention the effects of the increase in tariffs on 1,300? The reality is that they have raised payroll taxes and taxes on basic goods that Canadian families need. They do not want to talk about this, but we will not let them get away with it because for middle-income families, these taxes will make it tougher to make ends meet.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I am pleased to support today's motion, which condemns the many tax hikes introduced by the tired, old, weary Conservative government.

The current Prime Minister is no longer fit to govern. All he seems to do is undermine the middle class, reduce services to Canadians and maintain the tax breaks for corporations that are sitting on $560 billion of cash, while not creating jobs, not increasing productivity and not investing in new technology. That is not a vision for Canada. That is a disaster for middle-class Canadians and it is driving our economy in the wrong direction. Now we see more tax hikes in budget 2013, or as the government would like to portray, in Canada's action plan 2013.

The Minister of Canadian Heritage, who just perked up, loves to advertise, not quite as much as the Conservative Party, but he does like to use taxpayer money for action plan ads. When Canadians watch those ads, they should remind themselves that they paid for them, and they do come at a cost. Every time they see them, they should think of the increased taxes on the small things that affect them.

My colleague from Kings—Hants just outlined the 1,300 products that would increase in cost as a result. Canadians should think of the high youth unemployment in our country when they see those Canada action plan ads, the high youth unemployment that is a result of the government's handling of the economy and the job market. They should think as well of the attack on seasonal industries and seasonal workers by the increasing taxation through EI premiums on both employers and employees.

My colleague from Kings—Hants in summary basically has said that the budget increases tariffs on a host of consumer goods, imposes the GST on pay parking at hospitals and colleges, increases taxes on small credit unions and continues employment insurance tax increases on Canadian workers and employers. It is not going the right way.

The issue of the removal of the preferential tariffs is a decision the government has made in the same manner it has made most of its decisions, in secret in a sneaky kind of way. The announcement contained in the budget of March 21, 2013, on pages 134 and 135 relating to the general preferential tariff, is worth noting. The Minister of Finance, in a statement on December 21, 2012, indicated the department was accepting submissions in the consultation period concerning the issue of preferential tariffs between December 21, 2012 and February 13, 2013. The budget was presented on March 21. Who was consulted in that period? Again, Canadians have no way of knowing, no matter how one slices it, how this decision will cost them in consumer goods. How was that decision made?

Beyond the secrecy and the sneaky way of increasing taxes, let us look at the wider issue, and that is the Conservative government's record on international trade generally. Taxes and trade are part of the government's agenda. There are some key facts that we should consider.

According to Statistics Canada, our country continues to be marred by a continual merchandise trade deficit. In the most recent Statistics Canada publication on merchandise trade, which was tabled on April 5 of this year, Canada's merchandise trade deficit increased for the first two months of 2013. What is most disturbing is that our exports are 5.1% lower than in 2008, the year the global economic crisis began. This means that in spite of the rhetoric of the government, 39 of the last 51 months have seen the country marred by a trade deficit.

Prior to the Conservative government assuming office, Canada had been experiencing trade surpluses since the 1970s. According to the World Bank, since 2009 Canada had been running an ever-increasing current account trade deficit. The facts reveal that Canada, when compared to 17 of the other strongest economies, has consistently been at the bottom of the list in terms of trade performance.

A recent report from the CIBC has found that the hyper-trade negotiating agenda of the Conservative government has failed to live up to expectations. The report found that Canada remained dependent on our United States trading partner and that in spite of the Conservative government turning away from the United States toward other markets, the result was that non-U.S. trade had actually declined on a year-over-year basis.

In the past five years all of the growth in terms of exports to developing countries has been with China. The past decade has seen our exports stall while our imports have increased by 45%, which translates into what the CIBC describes as a lost decade for exports.

The government claims that it brings in trade. Some would ask why I would talk about trade when we are talking about tariffs. Tariffs and trade go together. The government claimed that 2013 would be the year of trade. However, when it comes to trade, there has been an absolute failure on the part of the government. There has also been an utter failure on the part of the government when it comes to how tariffs and taxes affect middle-class and low-income Canadians, as my colleague from Kings—Hants has outlined so well.

Just to sum up on trade, I want to quote from a business press article published in 2009 entitled “Trade deficit Canada's first since 1976”, which states:

That grim assessment was borne out yesterday in data that show Canada recorded its first trade deficit in 32 years, reflecting the sudden collapse of U.S. demand and commodity prices.

I raise that point because the government talks a line on trade as it talks a line on taxes, yet it fails when it comes to trade and taxes.

To explain specifically, budget 2013 has removed the general preferential tariff rate for 72 countries from which Canada imports goods. The GPT is at least 3% lower than the most favoured nation tariff rate, but is generally substantially lower than that on most goods. It is estimated that the increased tariffs will provide an additional $333 million of revenue per year for the government.

For the information of Canadians, the $333 million of revenue for the government, whether that is on bicycles, consumer goods, shoes and products that Canadians need and use, is revenue coming the wallets of consumers. The motion claims that the government is increasing taxes through tariff measures on ordinary Canadians, while it tries to claim otherwise.

In summary, the Conservative government is failing on the trade issue, and clearly, it is failing on one of the most important issues that affect Canadians, and that is the cost to Canadian consumers and the middle class.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I thank my colleague from Malpeque for his speech. I had the pleasure of serving with him on the Standing Committee on International Trade, and I would like to thank him for contributing to the debate on the issue that has been raised so suddenly in the House of Commons.

The only unfortunate aspect is that the Liberals were very slow to react to this specific issue. Therefore, I am very pleased to see them following our lead. However, I would like to know why it took them so long to react. Were they distracted by the leadership race?

This might also concern the type of measures adopted by this government, which might have been appropriate for various products in a certain era and with respect to certain countries, but which are no longer appropriate because our industrial fabric has been destroyed.

I will let my colleague respond.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I was worried there for a moment. I thought I was seeing a socialist, but maybe I was not. As the Minister of Canadian Heritage said, which I want to mirror, did you ever hear the like?

To answer the question, the way these tariffs were handled by the Government of Canada was very sneaky. It was done in secret. As was mentioned, in budget 2013 the government blew heartily about the 37 goods it was reducing tariffs on, but it failed to mention the 1,300 products it was increasing tariffs on, which will mean a greater cost to Canadians.

The Liberal Party has been out there on this issue with our critic for finance. We will always be out there on issues that affect Canadians from coast to coast to coast. We have a leadership and a party that believes in the unity of this country. We put in place the Clarity Act so that nobody could break up the country--

[The Acting Speaker, Conservative, Bruce Stanton]

Questions and comments, the hon. Minister of Canadian Heritage.

[James Moore, Conservative, Minister of Canadian Heritage and Official Languages]

Mr. Speaker, the truth is that if our government were raising taxes, the Liberals would be supporting it. Our government has lowered taxes for Canadians in every way in which the Government of Canada collects taxes. In fact, a family of four today has $3,200 more in its pocket than it did when our government first came into office. If the hon. member really believes in putting more money in families' pockets, he must really hate himself for not having supported those tax cuts.

With regard to jobs, Canada is leading the world with the best job numbers in all of the G7. If jobs are his priority, he must really hate himself for not supporting our government.

With regard to government ads, he said that the government is wasting money on government ads. We are spending less money on government ads than the Liberals did when they were in government. If he is against government ads, he must really hate himself for his track record.

He talked about the importance of deficits. The truth is that our government has cut the deficit in half. As a matter of fact, when we did our stimulus spending, the Liberals opposite all voted in favour of that spending and said that we should be spending more. If he is against deficit spending, boy he really must hate himself for voting for our economic action plan.

With regard to trade, Canada is at the table of the TPP, the Trans-Pacific Partnership. We are negotiating the Canada-Europe trade agreement. We have signed over 32 blue sky agreements, opening up the skies for Canadian consumers, driving down costs and creating more options for Canadians. If he really wants to participate in a debate, it would be nice if he knew just a little bit about what has actually taken place over the past seven years.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I wonder where that member has been for the last seven years. I believe that when the Conservatives came to power, they had a surplus, which our party, while in government, left them. They had a surplus of $13 billion. Ever since, we have seen deficits from that government.

There really was not a question there. We see a lot of smoke and mirrors in that question and a lot of propaganda. The fact is that youth unemployment is the highest it has ever been. Services are cut worse than they have ever been in Canada.

The member wants to talk about trade. Let us talk about trade. That is a government that said that CETA would be signed a little over a year ago, and now the Conservatives are claiming that it is going to be the summer before it is signed. Canada is playing second fiddle to the United States and Europe in negotiations.

That is a government that failed to sign an FTA with South Korea, which is costing the Canadian beef and hog industry in this country $1 billion in trade. We are losing $1 billion in trade in that market as a result of that government's terrible record on trade.

The member should be ashamed for even standing up and talking about trade, because the Conservatives have been an utter failure.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, I want to, first of all, thank my NDP colleague from Victoria for introducing and supporting the debate on this important opposition day motion. I also want to say that I will be splitting my time with my colleague, the member for Beauport—Limoilou.

I am very pleased to speak on this important motion today. At heart, what we are talking about is taxes, but ultimately, it is about hypocrisy on the part of the government. I would go even further and say that it is hypocrisy and disregard for Canadians and the difficult times that so many Canadians find themselves in.

Let me start with hypocrisy. The current Prime Minister promised that during his term as prime minister, there would be no new taxes. That was echoed by the Minister of Finance when he said in this particular budget that there would be no tax increases. Let me just clarify with a couple of quotes.

I give you my word: As long as I will be prime minister,...there will be no new taxes.

Further:

You know, there's two schools of economics on this, one is that there are some good taxes and the other is that no taxes are good taxes. I'm in the latter category. I don't believe any taxes are good taxes.

That was the Prime Minister who said that.

The Minister of Finance, in his budget speech just this year, said, “We will not raise taxes”.

It is profound hypocrisy to then, in this budget, forget this promise and raise taxes for Canadians that will mean nearly $8 billion out of their pockets. The Conservatives are raising taxes on over 1,200 types of goods that will hit Canadians right in the pocketbook, things Canadians have to pay for every day—basic goods and services—whether it is school products for kids, household utensils or bicycles. Even iPods are not exempt. The list of taxes is quite significant. Over 80% of consumer goods will be affected. They include baby carriages, school supplies, as I said, shoes, clothes, and many other consumer products in a time of a still very fragile economic situation. The economy is still in a fragile state, and to have this kind of tax on everything is very difficult for consumers.

I want to emphasize the iPod tax, which is, of course, buried among the taxes listed in budget 2013. It is a new 5% tax on MP3 players and iPods that are coming into Canada. To emphasize the hypocrisy of this tax, I want to cite the Minister of Industry and the Minister of Canadian Heritage and Official Languages, who, in December 2010, said:

During this fragile economic recovery, the last thing Canadian families and consumers need is a massive new tax on iPods.

However, that is exactly what the government has introduced. This is going to be hitting more than 80% of Canadian products, things such as safety deposit boxes and insurance programs and even more substantial programs, such as labour-sponsored venture capital corporations, which are investment bodies that create jobs and help build communities across this country.

I have spoken to chambers of commerce and investors who are very concerned that the government has simply misunderstood what these venture capital corporations are about. It saw the word “labour” and thought maybe it would just be attacking unions by raising taxes on these labour-sponsored funds rather than attacking communities and jobs and upsetting business and the investment community.

The government has also raised taxes on credit unions. We believe that competition is a healthy thing, including in the financial sector; credit unions provide healthy competition for the major banks in this country, but instead the government has opted for a cash grab that is going to impact the operation of credit unions across this country. Again, I do not know whether this is just an exercise in hypocrisy or whether they really do not like credit unions, because the impact of this tax on credit unions is going to be significant.

In sum, Conservatives are increasing the costs on average Canadians, but let us look at the record of the government when it comes to profitable companies and when it comes to the wealthy in this country. We have seen the current government, like the Liberal government before it, cutting tens of billions of dollars in taxes on profitable corporations. At the same time, it has turned a blind eye to tax havens and money going offshore that could be contributing to the public coffers. Maybe it would mean Canadians would not have to be taxed on iPods, bicycles and kids' shoes.

Fully one-quarter of all Canadian foreign direct investments has gone into tax havens. In 2011 alone, Canadians invested, so to speak, $53.3 billion in Barbados and $25.8 billion in the Cayman Islands. Is this money that should be here in Canada, being taxed and contributing the public good in this country? Would that not be a fair way to treat Canadian tax dollars?

At a time when nearly 1.4 million Canadians are unemployed and when in March alone Canadians lost 54,000 full-time jobs, we have seen a record increase in temporary foreign workers. They have tripled in number. Companies are allowed to pay them 15% less than Canadian workers, so we are seeing the suppression of Canadian wages and the undermining of jobs and taxes here in Canada at the same time as the dinging of average consumers in the pocketbook, which will affect every Canadian family across this country.

It is the height of hypocrisy. It is a betrayal of the needs of Canadians during this fragile economic period.

We believe that fair is fair. We should all be contributing fairly to the good of this country to make sure that our social programs and services run in a manner that Canadians want to see and contribute to the public good right across this country.

[Cathy McLeod, Conservative, Parliamentary Secretary to the Minister of National Revenue]

Mr. Speaker, I would like to acknowledge my colleague who just gave the speech, but I wonder if she would acknowledge that the general preferential tariff was established in the 1970s and has not been thoroughly reviewed since that time. It gave an advantage to countries like China and South Korea, which had privileged access to Canada in terms of competing with Canadian businesses. It seems a bit like crocodile tears when the opposition members say we do not provide the necessary support to Canadian businesses while on the other hand they are against the changes we are proposing, which will actually make it much more fair in terms of competing.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, in terms of fairness, perhaps the hon. member could answer this question: at a time when Canada is not collecting substantial amounts of tax dollars from offshore tax havens, why is the government undermining the Canada Revenue Agency by losing the jobs of 3,000 people who could be reviewing this tax leakage or tax gap and collecting taxes from those who are storing money offshore, so that average Canadians would not be hit so hard in their pocketbooks?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I would like to return to the idea of average middle-class Canadians, who are to be hit profoundly by this indirect tax increase. That is really what it is, as the member for Malpeque clearly indicated. Additional revenue in the hundreds of millions of dollars is going to be coming in; that revenue is coming in from somewhere, and it is coming from the pockets of Canadians from coast to coast to coast.

One of the other things being impacted is the price gap between U.S. products and Canadian products and the impact it has on jobs in Canada. I am wondering if the member might want to comment on that issue.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Mr. Speaker, the member is absolutely right: retailers in Canada, especially those along the border with the United States, are already hit hard by a price differential between our two countries that makes no sense. There is no justification for it in most cases, and now they will be faced with a double whammy by these tax increases by the government.

Why is the government doing it? It is because it has an artificial political deadline of balancing the books by 2015, prior to the next election. That is the political commitment it has made. Where will it get the money? It will grab it out of the pockets of average Canadians, rather than making its friends pay their fair share of taxes and contribute to the national good and welfare.

[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.