Mr. Speaker, as I rise today to speak to Bill C-60, the Conservatives' first bill to implement budget 2013, I find it sad to have to remind Canadians that the bill imposes significant, in fact massive, tax hikes on middle-class Canadian families, who are already struggling to make ends meet. This is on top of massive tax increases that were included in the Conservatives' last three budgets. The Conservatives are raising taxes, because they need the money to cover for their waste and mismanagement. Unfortunately, the bill will only increase that wasteful spending by actually increasing the number of bloated ministers' offices, while at the same time cutting vital services middle-class Canadian families need. Finally, the bill does nothing to help young Canadians, who are desperate to find paid work.
As the House has heard, Bill C-60 is an omnibus bill that lumps together a large number of unrelated measures. These measures are being combined into one single bill on which we can vote yes or no. With a bill of this size and scope, with 233 different clauses, after all, it is bound to include some measures that we, in fact, may support.
For example, we are broadly supportive of some of the following measures: removing the deduction on disability benefits from the war veterans allowance; expanding the adoption expense tax credit; introducing a tax credit for first-time donors, although it is ironic that this first-time donor tax credit is not going to be utilized by too many young Canadians, given the fact that most young Canadians are having difficulty even finding jobs and opportunities or making ends meet; combatting tax evasion; extending the capital cost allowance again this year, although we would recommend that the government, instead of extending it for two years, should follow the advice of Canadian manufacturers and extend it for five years; expanding the GST and HST exemption for home care services; reducing tariffs on baby clothing and sporting equipment; supporting organizations such as Indspire, Canada Youth Business Foundation, Genome Canada, Nature Conservancy of Canada, Pallium Foundation of Canada and the Canadian National Institute for the Blind; providing funding for Nunavut housing; increasing the gas tax by 2% per year; reversing the Conservatives' earlier policy on the temporary foreign worker programs; and correcting the Conservatives' mistakes in terms of earlier changes made to registered disability savings plans when they rammed Bill C-38 through Parliament last year.
Given a chance to vote on some of these measures individually, we might, in fact, vote yes on some of them. Unfortunately, due to the approach taken by the Conservatives with this omnibus legislation, they have lumped some of these more reasonable measures in with massive tax increases on middle-class Canadians.
One measure alone, the proposed change to the dividend tax credit, will raise taxes on small business owners by over $2.3 billion over the next five years. This massive tax hike will hurt 750,000 Canadians, who will watch their tax bills go up by an average of more than $3,000 each, and it will put Canadian jobs and small businesses at risk. We cannot take $2.3 billion out of the economy without it hurting small businesses and hurting job creation in Canada. Remember, this tax hike is on top of the Conservatives' annual increase of EI premiums. Each and every year, the Conservatives increase the amount of money they take out of the economy through EI payroll tax increases by more than $600 million.
Bill C-60 also raises taxes on credit unions by $75 million per year. This is a direct attack on rural and small-town Canada, because credit unions play a vital role in the economies of small towns and communities across Canada.
The Conservatives seem to have forgotten that the goal of tax breaks for credit unions is to ensure that they can compete with big banks.
The fact is, credit unions are smaller and they face challenges that the big banks do not. That is why the tax deduction for credit unions ensures that only smaller institutions can qualify for this credit.
If the Conservatives believe that the deduction was not being used properly they could have proposed changes to the qualifying rules. It is not fair to punish all credit unions and the Canadians who depend on them by getting rid of this tax deduction altogether.
Bill C-60 also increases other taxes, some that will mean significant price increases for Canadian families and others that would nickel and dime Canadians who are already struggling just to make ends meet. The legislation would add GST or HST to the costs of certain health care services that Canadians already pay out of pocket.
For example, victims of crime would now pay GST or HST on the medical work that they need to establish their case in court, such as X-rays and lab work, which are not cheap to begin with. Bill C-60 would punish these victims by raising the costs of their medical expenses by up to 15%. I cannot understand for the life of me why the Conservative members of Parliament would want to punish victims of crime.
Bill C-60 would not only raise GST and HST on these health care services, it would make these increases retroactive to March 22. Doctors would now need to collect HST from their patients, and they are not sure which of the services would be subject to sales tax. There is a lot of confusion because the government has said that the tax is going up on health care services for non-health care purposes. What exactly does that mean?
Would couples who are struggling with fertility issues now have to pay taxes for certain lab work? Would Canadians have to pay taxes on doctors' notes they need for school or work? Would parents who have a child with special needs now have to pay tax on medical assessments they need in order to get a decision from a school board? Are the Conservatives now placing a tax on mental health services? We do not know.
While the Conservatives were quick to introduce this tax hike on health care services, they have been slow to provide Canadian doctors and their patients with the information they need.
Earlier this week the Canadian Psychological Association wrote to finance committee members asking for clarification. They wrote:
This announcement has created some confusion for psychologists, many of whom are small business owners, regarding which services are and are not HST-exempt. There is some urgency to the need for clarity given that changes outlined in the budget are retroactive to March 21st, 2013. Many of our members have spoken with their accountants but, unfortunately, this has yielded contradictory information and direction.
This type of confusion is the direct result of poorly thought out and hasty decisions brought forward by a government that is desperate to raise taxes and has not done its homework. It is what happens when a government becomes arrogant and refuses to hold public consultations and ignores the very Canadians who are most impacted by government decisions.
There are more tax hikes. Bill C-60 would increase taxes on safety deposit boxes.
Now the Conservatives will want to focus this debate on a few tiny tax decreases in the bill. For instance, they want to focus on tariff reductions for sporting equipment, those tariff reductions that we incidentally would support. However, it was my Liberal colleague, the member for Cape Breton—Canso, who stood in the House last November and demanded that the government remove these tariffs.
While this budget would reduce a few tariffs, it would increase many more. There is a net increase by $250 million per year in tariff taxes on Canadians. For every $1 in tariff reductions in this budget, there are $4 in tariff increases.
It is the Conservatives' tax increases that we do not support. These tax increases, otherwise known as tariff increases, which are import taxes, are a hidden tax on just about everything. Taxes on almost 1,300 different types of products would go up, everything from basic toiletries like toothpaste to home furnishings. The Conservatives would raise taxes on everything, including the kitchen sink. The fact is the import tax on kitchen sinks would more than double as a result of this budget.
The Conservatives have claimed that they are increasing these taxes because they do not want to help Chinese companies. That argument is ridiculous. It is not the Chinese companies that would be paying these taxes. It is middle-class Canadian families who are already struggling to make ends meet.
Second, if the tariff increases were not just simply a naked attempt by the Conservatives to take more money out of hard-working Canadians, then we would also see tax decreases in the budget in order to compensate Canadians.
When we tally it up, budget 2013 includes much more in the way of punishing tax increases than the pittance of tax relief. In fact, we could say there is a thimblefull of tax relief in a sea of tax hikes in this Conservative budget.
If we add up all the tax changes listed on the back of the budget, we would see that there is a net tax increase in every one of the next five years. This year, budget 2013 would impose a net tax increase of $65 million. Next year it would be a net tax increase of $615 million.
Over the next five years, the Conservatives' budget 2013 would impose a net tax increase of more than $3.3 billion. That is $3.3 billion of money earned by hard-working Canadians that the Conservatives would now be taking out of the economy. It is $3.3 billion less for Canadian families to spend on food, transportation or mortgage payments. That is on top of the almost $6.5 billion net increase in taxes imposed in the previous three budgets.
Combined, it is almost $10 billion in net tax increases on Canadians since budget 2010. That is $10 billion more that the Conservatives are taking out of the Canadian economy. It is $10 billion less in the hands of Canadian families and investors.
The government can do two things to help create jobs: cut taxes and increase public spending.
In fact, the Conservatives are doing the opposite. They are raising taxes while cutting public investment. It is no wonder that they are not creating enough jobs for young Canadians.
The Parliamentary Budget Officer has forecast that the last two Conservative budgets will kill far more jobs than they create. According to the interim PBO, tax increases and spending measures in budgets 2012 and 2013 would have a net effect of 12,000 fewer jobs this year, 33,000 fewer jobs next year and 67,000 fewer jobs by 2017.
It is little wonder that the Conservatives cannot match the job creation record of the previous Liberal government. Under Prime Ministers Chrétien and Martin, the Liberals consistently lowered taxes and helped create 3.5 million net new jobs in Canada.
Looking at just the last seven years of the Liberal administration, there were over two million net new jobs created. Compare this with the Conservatives. Only 1.3 million net new jobs have been created in the last seven years.
Many Canadians have dropped out of the workforce altogether. A lot of young Canadians are giving up. A lot of young Canadians are working in unpaid internships, and the Conservatives simply have not created the jobs young Canadians need at a time when we have lost a lot of good-paying manufacturing jobs and there have been a lot of Canadians who have gone from full-time jobs to part-time work. That is why Canadian families are falling behind.
Why are the Conservatives, during this time of economic uncertainty and challenge, raising taxes? It is to pay for the Conservatives' wasteful spending and mismanagement of public resources.
In this budget, we get more waste from the Conservatives. Budget 2013 does nothing to curb the Conservatives' addiction to partisan government advertising. Canadians are sick and tired of watching the Conservatives throw their money away on partisan economic action plan ads. We know that these ads are not a good use of taxpayers' money. The Conservatives know that they do not provide good value for the taxpayers.
Last year the government commissioned a poll to see if the economic action plans were working. These are the ads the government took out ostensibly to promote measures in the budget. Here is the result. While 23% of Canadians who saw the ad could remember the phrase, “economic action plan”, far fewer Canadians actually knew what the ads were about.
Half as many thought the ads were about Canada or the governing Conservative Party. They did not relate them to the budget at all. While almost 5% of Canadians could remember that the ads included arrows that pointed up, less than 1% of Canadians knew the ads were about the federal budget.
In fact, when the survey went further and asked whether or not it affected the behaviour of Canadians who watched them, 92% said the ads did not affect their behaviour whatsoever. There was no result for them whatsoever as a result of watching these ads. They said that the ads had not provided them with any useful information. Ninety-two per cent of Canadians said that.
Of the people who did something, more than one in five “expressed my disbelief”. I am quoting from the actual survey commissioned by the finance department. Apparently, expressing one's disbelief about the economic action plan ads was such a popular option in the survey that it actually got its own category in the results.
Unfortunately, there is nothing in this legislation that would help wean the Conservatives off this wasteful use of partisan advertising. There is another area of spending that is covered in Bill C-60 that reflects the disconnect between the Conservative priorities and those of Canadian families: the number of parliamentary secretaries and the size of the cabinet.
The bill would not only increase the number of parliamentary secretaries, it would actually add three more cabinet positions to the list of salaried ministers. This means the Prime Minister would continue to increase the size of his cabinet and that these cabinet ministers and their parliamentary secretaries could continue to give pay increases to their Conservative staffers. If we compare this to the plight that an awful lot of young Canadians face today, it would seem that the Conservatives are only interested, in terms of young Canadians, in helping young Conservative staffers, because it seems that they are leaving everyone else out of the equation totally.
In fact, only two measures would really will help young Canadians in this budget overall; well, I would say three.
First is the Canada Youth Business Foundation. I think, broadly, that investment is a positive investment. It is not nearly enough. There is so much more that needs to be done to foster entrepreneurialism in Canada.
Second, one could argue that expanding ministers' officers would create more jobs for young Conservative staffers. I guess we could say that is helping somebody out.
Third, at a time when young Canadians cannot find work, when the youth job numbers are five points worse than they were five years ago--last summer we had the worst summer jobs numbers since Statistics Canada started tracking these numbers--the Conservatives have come up with a new super donor credit for young Canadians who contribute. It is pretty hard for young Canadians to contribute when they are suffering under staggering consumer debt. Over 30% of them between the ages of 25 to 29 are living at home, with their parents, because they cannot pay for their own apartment, yet what do the Conservatives do? They say, “We're going to help these people. We're going to make them great philanthropists.”
There are not too many young Canadians I know who are going to have wings of hospitals named after them in the near future. The reality is unless the Conservatives are talking about kids with trust funds or something, I do not know too many young Canadians who are in a position to give significant donations to charities or who have tax planners telling them how to do that in a tax-efficient manner. That shows us how out of touch the Conservatives are with middle-class Canadian families.
The reality is young Canadians are suffering. We risk losing a generation of potential in Canada as a result of Conservative inaction.
Nothing speaks more to the degree to which the government is out of touch with the needs and the realities of young Canadians than the fact that one of the few measures it puts in the budget to help young Canadians would help them become philanthropists, at a time when they cannot even make ends meet or pay for their own apartment or get out of debt from their student loans.
In summary, the bill would do nothing significant to help young Canadians who are struggling, it would punish middle-class Canadians with massive tax increases, and it would continue with wasteful spending that reflects the Conservatives' interest in politics and not in the people of Canada. Therefore, we cannot support the budget implementation act.