Debates of May 28th, 2013

Technical Tax Amendments Act, 2012

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Speaker, it is a rare privilege to have an opportunity to ask my colleague a couple of question.

He talked a lot about tax fairness and equity in his speech. I remember when the Conservatives thought they needed to fix the capital gains exemption for small businesses. They said it had fallen behind inflation, so they upped it by 50%. That was fair, and we did not argue about that.

When does the member think we should deal with fairness in the tax system? The tinkering by the government that the member is talking about with these various components in this technical tax act are simply that. Where do we see the fairness in the system? Where do we see that the actual needs of Canadians are being taken into account when we look at the tax system, how it is set up and how it delivers for Canadians?

When the member and his government talk about the $3,000 per average family, that is not the average family. The $3,000 is quite a bit larger for the more wealthy families and quite a bit smaller for the less wealthy families. Where is the money going in the system? Where is the fairness?

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I appreciate the question from the member opposite for Western Arctic because it is a question about fairness in the tax system. This bill deals with closing the tax loopholes that people are using to avoid paying taxes, whether they be illegal or very aggressive tax plans. When we talk about fairness, we are talking about fairness with respect to those changes we have made to the tax code, so that the legislative piece ensures everyone is paying their fair share.

On a more broad approach to this question, I am glad the member for Western Arctic is interested in tax fairness because that would mean I can look for that member to stand in favour of our budget implementation bills that move forward on closing tax loopholes. If the member is serious about closing tax loopholes and being fair to all taxpayers, I believe he should be supporting our implementation bills, including Bill C-60 when it comes back to the House.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I find it ironic that the question was posed and the member was trying to say it was the opposition who was holding up these bills.

The government and the member know very well that a similar bill was tabled and moved very quickly prior to the last election. It has taken from November 21, 2012 until now, 2013, to table this bill, and now there is a rush to get it through.

I wonder if the member can answer this honestly. Why did it take the government so long to pass such an important bill forward? In 2009, when it was also the government of the day, Sheila Fraser, the then Auditor General, indicated we were lagging in ensuring this type of legislation was in place to deal with this technical aspect. Why did it take it so long? It was not because we were not supporting it.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, let us look at a bit of the history of the bill.

The hon. member mentioned that it was in front of the House before and was moving forward. It was the opposition that forced the election and put an end to that. It was not our party that did that. I think our friends in the third party were active in forcing the election, and it probably did not work out so well for them.

I do agree with the Auditor General's position on this. One point I would like to make, and I am glad the member opposite brought it up, is my personal view that the Auditor General's reports are an opportunity for government and the opposition. They are performance audits, not financial audits. They show where we are doing well and where we are not doing well. They give us, as a government, an opportunity to improve.

This is exactly what we are doing through this bill. We agree 100% with the Auditor General's report on where we should be going with these technical amendments. In the future that will happen, as long as we have a Conservative majority government.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I would like to split my time with the member for Winnipeg North.

The Liberal Party is very happy to support this legislation. It is a very important thing that we have to do here, to legislate some of the changes in the tax code. I do know that these are technical changes.

I would like to talk about something that I was told by someone who worked in the Department of Finance. If we look at how big the tax code was, going back several decades, we can see that it has gotten thicker. To some extent that should be expected because the economy is getting more complicated and there are always new ideas about how to improve the tax system. Sometimes it means that the tax system becomes a bit more complicated, but sometimes we figure out ways to make it easier to comply with the tax code by streamlining the rules.

I know this is an ongoing process. It is somewhat unfortunate that it has been a long time, 2001, since changes were made in legislation. It has been some time in coming, and as my hon. colleague from Burlington mentioned, it is about time. There was a bit of debate at the end of his speech about whether the changes should have occurred earlier, but, such as it is, now is the time that we have on the legislative calendar to make these changes.

It should be an ongoing process to look at the tax code, and to keep thinking about ways we can improve it, streamline it, and decrease the cost of compliance, the time it takes, the resources, and the people who have to be hired to comply with the tax code. As economists know, the payment of taxes, as well as the cost of compliance with potentially complex tax codes, is a dead-weight loss to the economy. It is a loss to our productivity.

If we can avoid it, all of these ways of streamlining our tax system can improve the performance of the economy and result in more wealth for the things we really need, such as health care, pensions, preparing for the future, protecting our natural environment, training our youth, and preparing our economy to compete against the rest of the world so that Canada can remain prosperous.

My hon. colleague from Burlington also mentioned a couple of things that I would like to refer to. He mentioned something I hear quite often from the government members, about tax savings to the typical family of $3,000 a year. However, what they fail to mention is that if we look a little more closely, these tax savings correspond to a family of four with two working parents and an income of $100,000 a year. Unfortunately, that is not the average family in a lot of places. In my riding, the median household income is only $60,000 per year.

My hon. colleague from Burlington raised a misleading figure in his speech. I know that it is not relevant to the topic of this bill, but I think that since my hon. colleague spent some time praising the government's tax policy, I should rebut what he is saying.

The problem is not only that the typical family does not make $100,000 a year and will not have received the $3,000 in tax cuts the government claims. Let us say that a family makes $100,000 a year. The family might have saved $3,000 a year in taxes. Multiply that by five years and it is about $15,000 in tax savings, but at the same time, this family of four's per capita share of the national debt has increased by $16,000. It turns out that it happens to be a little bit more than the tax savings. Even this family of four that is not typical that the Conservative government likes to use as a point of illustration is actually worse off once we take into account the fact that their share of the national debt has increased by more than the claimed tax savings. It is important to take the time in the House to rebut some of the myths propagated by the Conservative government. I appreciate this opportunity to have the time to do that.

I would like to address another issue in response to the speech by my hon. colleague from Burlington, and I must say that it was a good speech. It did not sound like a lot of speeches in the House, when people are reading and it sounds very mechanical and like words somebody else wrote. The member's speech was not one of those speeches. He follows the fine tradition in the House of speaking one's mind and speaking one's own words. I want to commend my colleague from Burlington for that.

I want to get back to another one of my colleague's claims, because he talked a lot about tax fairness. Tax fairness can be difficult to define. We heard from the member for Western Arctic, who asked questions of my hon. colleague from Burlington about the northern residence income tax deduction.

Depending on one's point of view, one can disagree about what is fair, what is not fair and what changes need to be made to make the tax code fairer.

One of the problems with the income tax changes the Conservative government has proposed and that the Conservative Party proposed in a past election campaign is the non-refundable tax credits for things such as art lessons, physical activity camps for kids, certain kinds of lessons for adults and tax-free savings accounts. I am very happy for my hon. colleague from Burlington's daughter who is now thinking about a tax-free savings account, which means that she is gainfully employed, which means that my hon. colleague is undoubtedly very proud and in many respects has done a good job as a father. However, the tax-free savings account is essentially a tax cut for people who have an income, and it is a bigger tax cut for people who have a larger income. It is debatable, and I would argue that it does not quite move in the direction of fairness. With many of the tax cuts the government has given to Canadians, people with higher incomes have benefited more than they really needed to if we were only thinking of fairness.

I had to take that time to respond to the speech by my hon. colleague from Burlington to say that it is not obvious to say what is fair and what is not. There is an argument to be made that what the government has done is not quite fair.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I thank my colleague from Kingston and the Islands for his speech and for opening the door for me to ask a question that does not actually relate to the bill in front of us. It is based on the member's speech.

There is an important distinction between refundable tax credits and non-refundable tax credits. Before we took office, I looked at how many tax credits were fully refundable, and there were very few refundable tax credits. I would say that there were three. A non-refundable tax credit means that people have to actually pay tax to get the credit. Is it fair that if people do not pay tax, they get a tax credit? Is that not the purpose of a tax credit?

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, in many ways, this is a very profound question about what tax fairness is. I think many people of the Conservative persuasion would say that what people deserve to have is whatever income they have. It is because they did the work, and they earned the income, so they really should be keeping all of it and the government should not have any of it. That is sort of the starting point for a lot of Conservative thought.

What I would say about a different way of approaching things, and I should say that it is a characteristically Liberal Party way of thinking about it, is that people's success in life and in society, in particular their economic and financial success and well-being, is half luck and half hard work.

The income I earn is half hard work, because I worked hard in school, followed my parents' advice, worked hard when I got a job and earned it, and I deserve something. However, when I look back at my own life, I have to say that I was lucky in many respects. I was lucky to live in Canada, where there is a good education system, good infrastructure and a lot of opportunity.

It is a very rich country. I was fortunate to grow up in Canada and to benefit from the institutions and traditions that have been set up here in Canada. I have been very fortunate to grow up in a certain part of Canada that offered me a lot of opportunity.

I do not deserve to keep all of what I earn. I have a responsibility to pay back something. That is another way of looking at taxes. That is why it makes sense that tax fairness might mean taxing people with higher incomes a little bit more, and taxing—

[The Speaker, Conservative, Andrew Scheer]

Order. I know the hon. member for Davenport would like to ask a question of the member for Kingston and the Islands, so I will stop him there. The hon. member for Davenport.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, during this debate we have heard the government side consistently trumpet their supposed handling, in a good way, of the economy.

In light of current scandals, some of the other scandals have sort of gone down the list, making way for bigger scandals. One is the missing $3.1 billion. There is a responsibility to disclose and reveal where that $3.1 billion is. We are not even talking about $50 million for gazebos.

I wonder if my hon. colleague would like to comment on some of the fiscal mismanagement of the government in light of the comments the government has made during this debate about their so-called prowess in the field of fiscal management.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, my hon. colleague from Davenport brings up a very important point, which is that we are somehow unable to account for $3.1 billion the government has spent.

My hon. colleague is right that the government, or any of us, should not brag too much about all the great things we have done when there are problems we need to solve. It is important to advocate for the things we try to do and that we believe in, so we have to cut a little slack to anybody who stands up and speaks and tries to advocate for a certain position.

On the subject of the $3.1 billion, I think it will be very important to sit down and try to find out why it is we have $3.1 billion missing and to make sure that Parliament has a really good picture of what spending it is approving on exactly what programs. That is the recommendation the experts at committee and in this House have given to avoid this happening in the future.

We really need to know exactly what programs we are approving when we vote. Many people who study Parliament believe that we should reform the approval process for spending.

[Paul Calandra, Conservative, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, I am lucky, again, to rise today to speak to such an important bill before the House. Last week, I had the opportunity to speak to Bill S-12, an act to amend the Statutory Instruments Act, which was, of course, another very important piece of legislation we had before the House. That bill, like this one, was about red tape. It was about modernizing our system.

When I talked about that last week, I talked about how the opposition was not in favour of our reducing red tape. It did not like to talk about red tape, because when there is red tape, it confuses people and it makes government even more confusing and out of the reach of Canadians. Whenever a government brings forward a motion or a piece of legislation that would make it easier for Canadians to work, that would make it easier for Canadians to access their government, we know that the opposition will not be in favour of it.

I want to reference something the member for Kingston and the Islands talked about, in response to the member for Davenport, on the $3 billion this government and the previous Liberal government spent on anti-terrorism, safety and security in the country following the tragic events of 9/11.

We know that the opposition members often do not read legislation that is tabled in the House. Sometimes they make their decisions with respect to legislation before it is even tabled. We are seeing that with the current debate on the museum of history bill. Before the legislation was even tabled, they decided that they were going to vote against it. The same goes for our budgets, our economic action plans. Each and every year, before the budget is even tabled in the House of Commons, they make the decision that they are not going to read it and will just vote against it. No matter how many good things are in those plans for Canadians, no matter how many investments we are making for the Canadian economy and the people of Canada, they always make their decision, before it is even tabled, to vote against.

Specifically, when we talk about that $3.1 billion, again, what opposition members are saying is that they do not have the time or the desire or perhaps even the knowledge to go back and look at the Public Accounts of Canada and see what was tabled in the House. If they would do that, they would be able to find an account for all of those monies we put on the table, and the previous Liberal government put on the table, with respect to preserving and protecting Canadians. That is, ultimately, one of the most fundamental activities of government. It is to ensure the safety and security of its people. We are not going to do the job for the NDP members. I am sure that they can do it on their own.

Why are technical tax amendments important? This has been something we have been faced with for many years. We have not updated or amended our technical tax amendments since 2001, if I am not mistaken. I know that the hard-working Parliamentary Secretary to the Minister of Finance has been doing some exceptional work on this.

The member for Kingston and the Islands talked about how great a speech the member for Burlington gave. However, even more important than the speech he gave is the work he has been doing for his community and for all members of Parliament with respect to getting us out of this global economic downturn we have faced. He has shown tremendous leadership, and I want to thank him for that and congratulate him as well. The member from Kingston referenced what a great father he is, and he truly is. He should be very proud of his family. I know there are great things ahead for them.

This is something Parliament has had before it for a number of years. It was never done. I do not know why the previous Liberal government never brought this forward. I will give the Liberals the benefit of the doubt and assume that they care about small business. I will assume that they care about Canadian families. I guess it just was not a priority for them. They were busy doing other things, so they never got around to looking at the things that would actually protect and enhance our economy. They were busy. They had the sponsorship scandal and were looking for $40 million that they have yet to find. They never got around to it.

When we came into office, we knew that we had to consult with Canadians. We knew that it was important. We sat down with big businesses, small businesses and medium businesses. These are the people who actually generate wealth, create jobs and help make our economy strong so that Canadians can be proud of their economy and so we can create jobs and investments for communities. We sat down with them.

Quite honestly, we do not take enough time in this place to recognize the hard work of those members of Parliament who sacrifice so much, as the Parliamentary Secretary to the Minister of Finance does. It goes without saying that Canadians all over and people the world over know that we have the best Minister of Finance and Minister of State for Finance globally. They have been recognized as such, but there are also the parliamentary secretary and the entire finance committee.

When the global economic downtown occurred back in 2008, we had to take bold, decisive action. I remember that time, because in the 2007 year-end interviews, the Prime Minister at the time said there were going to be difficult times ahead and that we had to make sure to position the Canadian economy for what could be difficult times in the global economy. I remember the debate at that time.

I remember the opposition parties clamouring. They were upset because we had decided at that time that we were going to pay down debt. They said we should not be paying down debt but spending.

They did not say that we should spending by investing in tax cuts for Canadians; they said we should find programs and just spend, but we took a different track. We said that we had to pay down debt, because we knew that something could be coming in the global economy.

I recall how the opposition parties said we were crazy. However, when the global economic downturn hit, we were prepared, because we had made investments.

What are the types of investments that we made? We said it is not a bad thing to put more money in the pockets of Canadians. It is not a bad thing to invest in tax cuts for families. It is not a bad thing to invest in tax cuts for businesses, the people who create and generate wealth in this country. Therefore, we reduced the GST from 7% to 6% to 5%. What did that do? It put more money in the pockets of Canadians, and what did Canadians do? They went out into their communities and shopped and spent money and supported all of these small businesses across the country that actually create wealth, opportunity and jobs.

Let us talk about people like Frank from Frank's & Son Barber Shop in my riding. Here are two guys who work extraordinarily hard. Last week I had the extraordinary pleasure to be able to talk about my mother and father, who owned a pizza store, and how hard they worked. I know you will recall that, Mr. Speaker, because I was up speaking literally moments after the NDP once again tried to adjourn debate on important pieces of legislation. It was nine o'clock and they were starting to get sleepy, so they made the decision that they wanted to close down Parliament because they were tired.

I went back to my riding that weekend and I just could not understand how it could be. I thought how the member for Oshawa represents a lot of union members. I know that the member for Oakville represents a lot of union members. I know that all of Brampton, where there are a lot of union members, is represented by hard-working Conservative members of Parliament. I know that in those areas, and even in my own riding, there are lots of union members. I also know that in those ridings, they do not think about going home early. They work hard, as all Canadians do, and they want to succeed.

I asked myself how it was possible that the NDP could get tired by nine o'clock every night and want to adjourn debate. I could not figure it out.

It then dawned on me that what we have in the NDP caucus are not the actual hard-working men and women who work the lines, such as the people at Ford, Chrysler or GM in the member for Oakville's riding. These are not the people who actually work on the assembly lines; these are the big union bosses over there, so they are actually not used to working past five o'clock. They are used to telling other people how they should think and what they should do, but they do not have a clue about hard work. Then it dawned on me that, yes, that is why they have to go home at 9:30 every night: they are tired because they have never worked past five o'clock. Then I started to get it.

Then I started to read some of the things that they were talking about, some of the things that they were—

[The Speaker, Conservative, Andrew Scheer]

Order, please. The hon. member for Davenport is rising on a point of order.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, I always find the member opposite incredibly entertaining, both in camera and in public. I am looking forward to his winding up the soliloquy and preamble and meandering speech and getting back to the issue at hand.

[The Speaker, Conservative, Andrew Scheer]

I think the hon. member is making a point of relevance.

I would remind the hon. parliamentary secretary that at third reading the House tries to stay a little bit closer to the subject matter of the bill than at other stages of the bill, so I hope he will get his remarks back around to the bill before the House.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Mr. Speaker, I have actually been on target all the time. I was talking about families; they get taxed. They pay taxes and they want an easier tax system. I talked about small business; the owners pay taxes, they want an easier tax code and they want us to eliminate red tape. Those are all important to Canadians. When I talk about the hard-working men and women who work on the assembly line at Ford, GM or Chrysler, they pay taxes.

[Terence Young, Conservative, Oakville, ON]

They pay a lot.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Yes, exactly, Mr. Speaker. As the member for Oakville says, they pay a lot. They work hard, they pay a lot and they expect their members of Parliament to do the exact same thing.

I get why the member for Davenport is so upset. It is because we are calling those members out on the fact that they want to go home at nine o'clock and that working late is tough for them. That speaks volumes to the attitude of the New Democrats. They do not want to talk about taxes. Unless it is about increasing taxes, they do not want to hear about it.

That is why they have lost 16 straight elections in this country. Since their party was founded in 1961, they have lost 16 straight elections. Why is that? It is because nothing they talk about ever resonates with Canadians, because Canadians know that in order to actually govern this country, we have to work with Canadians, listen to Canadians, and listen to small-business owners, medium-business owners, and even big business, the people who create wealth, and see what it is that they need to make the economy succeed.

They need to sit down with families. They need to invest in infrastructure. They need to invest in quality health care, as we do. After decades of Liberal cuts and NDP cuts in the Province of Ontario, we started to turn the tables and to make those important investments.

They talk about closure. The New Democrats have commented that we were bringing in closure again. Why are we bringing in closure? It is because we have to govern. This is a party whose members, when presented with it, actually support this bill. In committee, the New Democrats did not offer any amendments; they support it. However, they are filibustering it because they do not want it to pass.

The members of this party, when presented with a philanthropy bill to say thanks to those Canadians who give their time and money in support of their community, said they cannot give support to pass it because they have to filibuster it. They cannot even pass the simplest pieces of legislation.

Perhaps they want to continue to obstruct because they are so embarrassed by how great this country is doing, by how we are leading the global tide to prosperity, and it does not fit their political agenda. The New Democrats are an angry caucus over there, an angry group of people, because what they would rather do—

[The Speaker, Conservative, Andrew Scheer]

Order, please. The hon. member for Davenport is rising again.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, I am going to rise on that one because, quite frankly, I am a little concerned that the member is going to explode over there with anger and rage. We are here until midnight and we are here for a respectful debate, and that member should wind it back to that way of talking in this House.

[The Speaker, Conservative, Andrew Scheer]

I will again remind the hon. parliamentary secretary that there are opportunities to debate some of the issues that he has been bringing up. We are on third reading stage of Bill C-48. He has about five minutes left, and I trust that the remainder of his time will be spent addressing the actual substance of the bill.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Mr. Speaker, he is right: I am going to explode. I am going to explode with pride in how well this country has been doing under the Conservative government, led by our Prime Minister, and under the policies that our Minister of Finance and our Minister of State for Finance have brought and under all of the good work that Conservatives on both sides of the House have been doing during this time of global economic downturn. Am I going to burst with excitement and pride? Absolutely, I am going to. I thank the hon. member for pointing out how proud I am of this country and everything that we have done.

Once again, because I know the NDP does not understand the relevance of families, it does not understand the relevance of businesses and how they pay taxes, it does not understand—

[The Speaker, Conservative, Andrew Scheer]

The hon. member for LaSalle—Émard on a point of order.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Again, Mr. Speaker, I have to raise a concern. The gentleman is not talking about Bill C-48. He is characterizing and not speaking to the importance of this bill and its different measures. We are in third reading, as the Speaker rightly pointed out. I would like the member to talk specifically about the different measures that are in this bill and to make sure Canadians understand the actions of the government regarding Bill C-48.

[The Speaker, Conservative, Andrew Scheer]

I appreciate the member for LaSalle—Émard raising this point.

I have asked the parliamentary secretary a couple of times to come back to the debate. We will move on to questions and comments. We were going to be interrupted very soon anyway, and this will at least allow a question that will perhaps bring us back to the substance of the bill.

The hon. member for Davenport.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, I listened intently to my hon. colleague's speech. First, he referenced Frank's & Son Barber Shop, and I am wondering if Frank and his son have extended benefits at their place of employment—a workplace pension, in fact, and job security. These are all important measures that any government that cared about working people would be focused on.

I want to draw the member's attention to a comment made by the Minister of Finance on March 1, 2008, when he stated:

If you're going to make a new business investment in Canada...the last place you will go is the province of Ontario.

That is your province. How can you go back to your riding in Ontario and defend your government when it trash talks—