Debates of May 14th, 2014

Finance—Main Estimates 2014-15

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, that number is 1.6.

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

Mr. Chair, can the minister tell us the tax multiplier used for investments in housing in the latest budget?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, it is about 1.7.

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

Mr. Chair, could the minister confirm the tax multiplier used for EI premiums in the latest budget?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, I do not have that figure with me right now, but I can send it to the member.

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

Mr. Chair, in 2011, the tax multiplier for measures related to EI premiums was 0.6.

Can the minister tell us the tax multiplier used for measures related to personal income tax in the latest budget?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, it was approximately 1.5.

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

Mr. Chair, could the minister tell us the tax multiplier used for measures related to corporate income tax in the latest budget?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, I cannot.

However, if the hon. member has the figures, then why is he asking these questions?

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

Mr. Chair, I do not have the figures for 2014. I have the figures for 2011. That is why I am asking about the latest tax multipliers used by the Department of Finance to prepare the budget and the latest budget. I will therefore repeat my question.

Does the minister know what tax multiplier was used for measures related to corporate income tax in the latest budget?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, I do not have the exact figures. I know that they are not very high but that they will have a significant long-term impact.

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

Mr. Chair, in 2011 the tax multiplier used was 0.3. In other words, a $1 reduction in corporate taxes meant economic growth of only 30¢ on the dollar.

According to the finance department, investments in housing, infrastructure, low-income households and unemployed workers have a much higher tax multiplier than the measures taken by the government since 2011, which focus mainly on personal and corporate income tax and the reduction of EI premiums.

Knowing that, why does the government choose the least effective measures when preparing its budget rather than much more effective measures that would promote economic growth?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, we have done many things to stimulate the economy.

Some initiatives have a short-term impact and others have a long-term impact. Our government's solid record on tax relief includes many things. I can name them if I have the time to do so.

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

Mr. Chair, with regard to economic stimulus, I have just shown the minister that measures that target housing, low-income families and the unemployed, as well as investments in infrastructure, are much more effective, according to data from the Department of Finance, than the measures adopted by the government.

Once again, why does the government choose only the least effective measures?

[The Deputy Chair, Conservative, Barry Devolin]

Order, please.

There seems to have been a problem with the translation, but I believe it is functioning now. Would the member restate the question?

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

Mr. Chair, the minister is telling us that he prefers measures with a lower fiscal multiplier, measures that have less of an impact, such as cutting personal and corporate income taxes and lowering premiums.

The Department of Finance is telling us that investments in infrastructure and housing and measures targeting low-income households and the unemployed are most effective in stimulating economic growth.

Why are less effective measures chosen over more effective measures, which the government does not seem to prefer?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, first of all, I would like to give out 2 numbers: Montreal, 2; Boston, 0.

Lowering corporate taxes is one of the fiscal measures with the highest multiplier in the long term. That is indicated by the multipliers in the 2009 budget.

Furthermore, our studies on finance show that cutting corporate taxes is the most efficient way to stimulate long-term growth.

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

Mr. Chair, what the minister is not saying is that measures such as reducing access to employment insurance harm economic growth and contribute to widening economic inequalities.

Two weeks ago, an OECD report showed that income inequality in Canada was among the worst in developed countries: 12.2% of the current income in Canada goes to the top 1%. Only the United States, the United Kingdom and Germany are worse.

Why is this government ignoring the reality of the growing income inequality?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, the numbers prove the opposite.

Canadian families in all income groups have seen increases of about 10% or more in their real after-tax, after-transfer income since 2006. Lower income families have seen their real income increase by 14%. That is quite significant.

It should also be noted that in 2011, Canadian families in all income groups had a higher income than before the recession. As a result of the balanced growth in the different income groups, income inequality has not increased in Canada since 2006.

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

Mr. Chair, unfortunately, the minister is choosing the figures that suit him, but he is ignoring other statistics.

Statistics Canada, among others, finds that the share of total income in Canada that goes to the 20% wealthiest people has increased from 43.9% to 44.4% since 2006, while the income of the remaining 80% has decreased from 32% to 31.7%.

Again, how can the minister deny that there is a growing income inequality in the country?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, clearly, the hon. member is also being selective about which figures he mentions.

However, there are many international studies that show that the income gap between the poor and the middle class is not greater in Canada than it is in other countries. One study shows that, from one generation to another, there is more mobility in Canada than in the United States, England and Australia.

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

Mr. Chair, there is much less than in other European countries.

He is saying that I am being selective about the figures I mention, but I have others from Statistics Canada. According to Statistics Canada, the Gini coefficient—an index developed specifically to measure income inequality after taxes—has increased from 0.318 to 0.324 since the Conservatives took office.

Once again, how can the minister ignore these statistics and the reality of growing income inequality?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, as I said, job creation and the continued well-being of Canadians are important priorities for our government.

As I explained, the real income of families in the low-income category has increased by 14% since 2006. What is more, the ratio of Canadians living in low-income families dropped to the lowest it has been in 30 years. That is remarkable.

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

Mr. Chair, it is too bad that he has to repeat the statistics he gave me in response to my first question.

I will switch to English. Could the minister tell us if in his opinion the current housing market is heating or cooling?

[Joe Oliver, Conservative, Eglinton—Lawrence, ON]

Mr. Chair, I do not make forecasts and I am not a market prognosticator. What we have said is that the government is focused on providing long-term stability in Canada's housing market and, reflecting this, the government has adjusted the rules for government-backed mortgage insurance on four occasions since 2008.

The most recent changes were implemented in July of 2012. There were more changes more recently, and I can run through those changes for the member.