Debates of June 10th, 2014

Opposition Motion—Income Splitting

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Mr. Speaker, it is disappointing when we see the Gini index. It took its biggest bump when Paul Martin cancelled the affordable housing program. That is the kind of redistribution of wealth that actually makes Canada a more equal place and when we balance the books of the poorest people in Canada, we will get increases in inequality.

I realize the member is very proud of that record, but I think it is terrible. That will stop at an NDP government.

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, I would like to thank my colleague for his highly relevant speech. Obviously, I support all of his remarks on personal finances.

However, I would like additional clarification on this policy, or how the Conservatives make policy. They never consult anyone. Once again, with this measure, they are getting ready to transfer $2 billion in additional expenditures to the provinces without seeking their opinion on the matter.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Mr. Speaker, that is a very relevant question. I think it is distressing Canadians and that is why they are moving away in droves from the Conservative Party. They are sick of being taken advantage of, of being told that the government is going to have income splitting, for example, and then seeing the Conservatives argue among themselves.

Mr. Flaherty, the former finance minister, whom I respected greatly, near the end of his tenure said that this was bad idea. I think he started to listen to the experts. The Conservative Party would do well to do the same, realize it made a mistake in its platform, that it was not a good idea, that it will not go ahead with it, and apologize for it.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I am pleased to stand in the House and defend our opposition day motion that opposes the government's regressive proposal to bring in income splitting, a proposal that will not benefit the vast majority of Canadians, a proposal that will help turn the clock back on women's equality in our country.

Canadians need a break financially. My constituents tell me this often. They work hard and they try their very best, but at the end of the month they still struggle to pay their bills, or afford adequate child care, or afford the rent and sometimes to put food on the table and clothes on their kids' backs. The bottom line is that we must do more to make life more affordable.

The median income in my riding is $45,961. That means half of the people in my riding in Northern Manitoba earn more than that and half earn less.

I represent many people who live in poverty and people who live in communities with chronic and historic unemployment.

The reality is that the Conservative income splitting scheme will not put even $1 back into the pockets of most of the people who I represent. In fact, 62% of Manitobans will not benefit from income splitting one bit.

Income splitting would not be a gift from the Conservative government to taxpayers. It would be a gift to their wealthy friends. It would cost Canadians billions of dollars to implement the income splitting plan and every Canadian would be paying for it while the same could not be said about the benefits. The question that New Democrats are asking is, how is this possibly fair?

The New Democrats know that we can build a robust economy that will bring shared prosperity to all Canadians. Income splitting reveals, yet again, that the Conservatives only want to give tax breaks to their wealthiest of friends.

As the critic for status of women and as the member of Parliament for Churchill, I would call the Conservative income splitting plan nothing more than a smoke screen. It would not help lower income families, single parents or the majority of first nations and Métis people across our country. Not only would it not help the majority of women, it would have the potential to damage gender equality in our country.

I will discuss the many ways that income splitting has the potential to hurt the status of women in our country.

First, income splitting would not help single parents or single people. We know that many single parents, particularly many who live in poverty, are women. In some ways, income splitting would reward married people and punish single people, divorced couples, lone parent families and intergenerational families, meaning families that raise their children with the help of grandparents and other relatives.

In my experience in my visits across my constituency, I meet many kinds of loving, supportive families. The last thing that non-nuclear families need is the federal government promoting a thinly veiled moral bias against them in the form of bad policy and regressive taxes.

This tax break effectively tells people that only if they are married and only if they are in a marriage where one spouse earns considerably less than the other, do they deserve a tax break.

Many days in the House we wonder, given the policies put forward by the government, if we are going back to the 1950s or the 1850s. In the case of the income splitting proposal, the Conservative government is putting forward the classic vision of the 1950s family, one that might be modelled on June and Ward Cleaver. Earlier in the House I heard talk of Don Draper.

The reality is that Canadians have moved on from the 1950s. It is 2014. The reality of the Canadian family is not that of the 1950s. We should be looking at what we need to do to support today's Canadian families rather than imposing a moralistic view of how the government sees families now.

Furthermore, 88% of lone-parent families are headed by women, and women, on average, earn 19% less than men, so when we talk about who benefits from income splitting, we are not only talking about wealthy people, we are often talking about men who are wealthy.

As I mentioned, income splitting will cost the Canadian public $3 billion each year and will deliver no benefit whatsoever to 85% of Canadians. This is a kind of reverse taxation system, where the large majority will pay their taxes into the pockets of the wealthy minority. As well, it would cost our provinces a further $1.9 billion every year.

I have one major question for the government. What else could we possibly be spending that money on? For starters, there could be a national child care strategy that would see every child in Canada receive high-quality, affordable care that could be established for a fraction of what the government wants to spend on income splitting. A truly national early learning program would cost $5 billion over four years.

Child care is currently costing the average family between $900 and $1,200 a month, a debilitating cost that too many Canadian families in this day and age cannot afford.

Let us think of what it would be like to put most of that money into the pockets of Canadian families. Let us think of what it would mean for women to truly have the choice to continue their careers and care for their children as they saw fit, without economic duress being a contributing factor.

I raise this example, because income splitting is not a take it or leave it program. With its price tag, it is either/or. We could either have our government spend our money on income splitting for the wealthiest, or we could have a national child care program, university tuition subsidies, a national housing strategy, or increased health transfers. Indeed, for the price of income splitting, we could have a bit of all of these things, and each one of these factors would contribute vastly to people's individual finances, their family's well-being, and the strength of our economy as a whole.

We know that increasing women's equal participation in the labour force has a multiplier effect on the economy that would increase our GDP by billions of dollars. Child care is not only the right thing to do to give parents choices but is the economically smart thing to do for our communities and our country.

Income splitting would hurt the status of women in other ways the Conservatives do not want us to know about. When higher income earners, mostly men, transfer a larger portion of income to a spouse, it makes it look as if the lower-income person is actually earning more than they are. Statistically, as I noted earlier, in Canada, due to the gender wage gap, this would likely be the female spouse. Income splitting would work to artificially inflate a woman's income. This would give us a false sense of data. We would lose sight of the persistent challenge women have in this country: earning equal wages. It would get even worse. When a couple broke up, it would seem as though one spouse earned more than they did throughout the partnership. This could have an effect on how much alimony or child support they would earn and could also have an effect on their child tax benefit once they were single. I can see this placing thousands of women in financially precarious situations, brought to them entirely by the government's plan for income splitting.

For these reasons and more, I am proud to stand alongside my New Democrat colleagues in opposition to the government's plan for income splitting. We want our taxes to work toward the collective good and for the health and prosperity of all Canadians.

Conservatives, it is clear, want a system that benefits the few, not the many, and I believe that Canadians understand fundamentally how unfair that is.

[Gary Goodyear, Conservative, Minister of State (Federal Economic Development Agency for Southern Ontario)]

Mr. Speaker, I find the rationale behind the member's speech quite disturbing, frankly. By her logic, she feels that we should not give child tax benefits, because some Canadians do not have children, and we should not give tax reductions to seniors, because not all Canadians are seniors.

We gave tax credits and tax benefits to families with children and families without children. We gave tax benefits to single people, to married people, to students, to farmers, to fishermen, and to firemen.

Of the 180-plus tax reductions for Canadians in every sector, of every age, of every type of family, with kids, with no kids, seniors with kids, which one did that member vote for? Would she name me one?

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, to riff off one of the words my colleague used, “disturbing”, if we want to talk about what is disturbing, it is how the Conservatives are so willing to spend $3 billion each year for something that would benefit 15% of Canadians, and some hardly so, at the expense of investing it in programs and strategies that would benefit all Canadians, including child care, housing, and employment and training strategies.

[Gary Goodyear, Conservative, Cambridge, ON]

Like the GST cut?

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I know my colleague is hesitant to hear what I have to say, because it is easier to think that income splitting is going to sound good. Canadians are getting to know the truth. This is an idea that they understand is fundamentally unfair, and I can guarantee that if they tell Canadians they could spend $3 billion on something that would benefit them, they sure would not be mentioning income splitting.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, in a previous question I asked someone on the government side, I mentioned the fact that 14% of people stood to make some kind of gain from the income-splitting promise the government made way back in 2011 but that 86% of Canadians would not benefit in any way whatsoever. I have to say that I was floored by her comment, and I would like to hear what my hon. colleague has to say about it. That member on the government side actually asked what was the matter with defending the 14% of Canadians who would actually benefit from this and whether I had anything against that 14%.

Did I misunderstand that comment, or is that what I actually heard?

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I thank my colleague for that question, and I look forward to reading Hansard to see that insightful comment.

What we are seeing from the Conservative government is a real misreading of what matters to Canadians, but we cannot just leave it there. I made the comment in my speech that this is fundamentally about a vision of Canada they adhere to every single day. It is a vision where a few wealthy people, who also happen to be some of the Conservatives' friends, benefit. It is a vision where women in our country are worse off. It is a vision of leaving people at the margins and not investing in the kinds of programs that would benefit them and their communities across the country, no matter their income level, no matter where they live or who they are. It is a fundamentally unfair vision.

I share the concern of so many Canadians that our country is becoming more and more unequal. I would say that this is a warning sign. We know that as countries become more unequal, things become more difficult for people who live in these countries, if we look at health indicators and indicators of well-being.

We have work to do here to turn the tide. Sadly, the Conservative government is keen on creating a more unequal Canada, whether in terms of gender equality or in terms of income inequality.

I am proud to stand with the NDP, not just to fight against that inequality but to propose ways we can take our Canada back, our country back, and build a better country for all.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, I will be sharing my time with the very hard-working member for Mississauga—Erindale, the Parliamentary Secretary to the Minister of Justice.

Mr. Speaker, I am pleased to respond to the motion proposed by the hon. member for Skeena—Bulkley Valley. Today I would like to reassure the hon. member that our government's top priority is what matters most to Canadians, jobs and economic growth, while ensuring that all Canadians have the opportunity to share in the benefits of a strong economy.

Just a few years after the worldwide economic crisis, the strength of the Canadian economy today demonstrates that our approach is working. I have seen first-hand how our low-tax plan is benefiting the businesses, families, and communities in my own riding of York Centre. We have created jobs, kept the economy growing, and, I am pleased to note, will be returning to balanced budgets in 2015.

Since we introduced the economic action plan to respond to the global recession, Canada has recovered more than all of the output and all of the jobs lost during the recession. Real GDP is significantly above pre-recession levels, which is the best performance in the G7. Canada has weathered the economic storm, and the world has noticed.

Both the IMF and the OECD expect Canada to be among the strongest-growing economies in the G7 over this year and next, with the strong fundamentals in place to perform well for the next 50 years.

For the sixth year in a row, the World Economic Forum has rated Canada's banking system the world's soundest, and KPMG's “Competitive Alternatives 2014” study ranked Canada the most competitive mature market country for business. Moody's, Fitch, and Standard & Poor's have all reaffirmed their top ratings for Canada, and it is expected that Canada will maintain its AAA rating in the year ahead. Canada has leapt from sixth to second place in Bloomberg's ranking of the most attractive countries for business to grow.

Here is an important fact. Did members know that our government is also recognized internationally for increasing the wealth of middle-class earners? According to a major study conducted by The New York Times, Canada now has the richest middle class in the world. For the first time in history, Canadian middle-class families are better off than those in the United States. The study found that median after-tax income in Canada has never been higher and was higher than any of the other countries surveyed, including France, Australia, and the United Kingdom.

Even if the Liberal leader chooses to ignore the obvious, the facts are clear, and the evidence is overwhelming. Canadian families are better off today under our Conservative government than they were under the previous Liberal governments. Today middle-income earners have more money in their pockets, where it belongs. Millions of Canadians who elected this strong, stable, national Conservative majority government did not just make a smart political choice; they made an informed financial decision, and that decision is paying off.

According to Statistics Canada, Canadian families in all income groups have seen increases of about 10% or more in their take-home pay since our government took power. Statistics Canada data also shows how Canadians' wealth has increased dramatically under the leadership of our Prime Minister. The median net worth of Canadian families has increased by a whopping 44% since 2005. This increase has been led by the middle class.

Why are middle-class income earners doing so well under our Conservative government? One of the biggest reasons is our historic tax relief.

As we all know, the man we know as the world's greatest finance minister, the late Jim Flaherty, delivered historic tax relief for all Canadians. In fact, under his steady hand, our government cut taxes for Canadians 180 times, so the federal tax burden is now the lowest it has been in over 50 years.

The Parliamentary Budget Officer reports that we delivered $30 billion in tax relief, benefiting low- and middle-income Canadians the most. The average family of four will pay nearly $3,400 less in taxes in 2014.

To the NDP members and the Liberals who scoff at this, for some middle-income families that could mean car payments for an entire year. That is right. We have made life more affordable for middle-income families, and the opposition parties have fought us tooth and nail on every proposal our government has put forward to put more money in the hands of middle-income families.

I remember the Liberal leader telling Canadians that budgets just balance themselves. I guess no tough choices, no discipline, and no savings are required for the Liberal leader. Instead, he believes in reckless spending and higher taxes that would eliminate jobs, stall our economic growth, and make it harder for families to get by.

We have done the exact opposite. Since day one we have helped families and kept taxes low. Not only did we lower taxes for families but we cut taxes in each and every way the government collects them, whether personal, consumption, or excise and business taxes. Our tax relief included a reduction in the GST from 7% to 5%. It increased the amount that all Canadians can earn without paying federal income tax and reduced the lowest personal income tax rate to 15% from 16%. The TFSA represents the most important savings vehicle since the introduction of the RRSP. Due to popular demand, we even increased the amounts Canadians can save with their TFSA. More than nine million Canadians have taken advantage of opening up a TFSA account.

I am also pleased to note that last month the finance minister successfully secured commitments from Canada's largest banks to offer no-cost accounts for financially vulnerable Canadians. No-cost accounts will be available to youth, students, seniors qualifying for the GIS, and registered disability savings plan beneficiaries. This fulfills a 2013 Speech from the Throne commitment to expand no-cost basic banking services and to end pay-to-pay policies. This will benefit seven million Canadians.

We have supported financially vulnerable Canadians. We have undertaken unprecedented action to benefit Canadian seniors. We have cut taxes for seniors and pensioners by over $2 billion annually. We introduced pension income splitting and pooled registered pension plans, and launched consultations on a new target benefit pension plan. Our actions have helped remove over 380,000 seniors from the tax rolls. In 2014, a single senior can earn at least $20,000, and a senior couple at least $40,000 before paying any federal income tax.

Our government has also introduced a number of other targeted tax reduction measures. For example, we have helped families with children by introducing the child tax credit, the children's fitness tax credit, and the children's art tax credit. We have introduced the registered disability savings plan to help individuals with severe disabilities and their families save for long-term financial security. We have provided additional annual targeted tax relief for seniors and pensioners by increasing the age credit and pension income credit amounts, and raising the age limit for maturing savings and registered pension plans and registered retirement savings plans. We have introduced a public transit tax credit to encourage public transit use.

At the same time, we have increased and enhanced benefits for Canadian families by introducing the universal child care benefit, introducing and enhancing the working income tax benefit, increasing the amount of income families can earn before the national child benefit supplement is fully phased out and before the Canada child tax benefit base benefit begins to be phased out.

What do all of these measures have in common? The opposition voted against every single one of them.

As I have said, Canadians at all income levels are benefiting from tax relief introduced by our government with low and middle-income Canadians receiving proportionately greater relief. More than one million low-income Canadians have been fully removed from the tax rolls as a result of tax relief provided by our government.

Our recent budgets have built upon our record of supporting families and communities while establishing a path for returning to balanced budgets. Successive economic action plans have supported Canadian families by keeping taxes low, better recognizing the costs of adopting a child, helping to lower the prices of consumer goods, and better protecting financial consumers. The economic action plan continues on this track.

From Detroit to Greece, the dire consequences of ongoing and growing deficits are clear. This is one of the reasons why our government has reduced taxes, to keep more money in the pockets of Canadians. We are committed to reducing the tax burden on Canadians in our forthcoming budget.

Let me conclude by saying that I am optimistic about our prospects as a nation. The Canadian economy continues to expand, enjoying one of the strongest job creation records in the G7 over the period of the recovery. Over a million more Canadians are working now than during the depths of the recession, with the overwhelming majority of jobs being full time, high wage, and in the private sector.

While our jobs and growth performance is encouraging, we still have work to do. I am confident that economic action plan 2014 is the way to go. If we hold to the course we have chosen, our future looks bright.

[Wayne Marston, NDP, Hamilton East—Stoney Creek, ON]

Mr. Speaker, listening to the speech by the member for York Centre is much like listening to most of the Conservatives' response to this debate. Rather than talking about income splitting, they talk about what has gone on over the last number of years in this place. We could have that as a separate debate, but that is not the motion before us today. We do not hear them talking about 14% of the wealthiest Canadians benefiting from this.

My friend asks me about my wife from time to time. We have gone through cancer in our home and the only thing that we had to pay for was parking at the hospital. That is a benefit of the system that we have in this country.

We go to fundraisers from time to time for children with leukemia and other diseases whose families do not have the resources to pay for medications that are not covered by our health system. Would it not be better to pay for that medication using some of that $3 billion that we are about to give to the wealthiest Canadians?

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, our government has taken action in successive budgets to reduce the tax burden on average Canadians so that they have more money in their pockets to spend on what they need the most.

The hon. member is a good friend of mine. Let me remind him about the NDP record in Ontario. Ontario had the highest income taxes in North America, the highest deficit in Ontario's history up until that point, and the most job losses since the Great Depression. Tuition fees were doubled. This turned Ontario into the welfare capital of Canada.

Rather than coming up with something new, the NDP members, rather than changing their proposals, want to double-down and bring what they did to Ontario to the whole of Canada.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, since my hon. colleague on the government side specifically brought up Jim Flaherty and referred to him as the world's greatest finance minister, I would like to ask him what he makes of the fact that a few months ago Mr. Flaherty expressed some serious reservations about the income splitting plan that had been promised by the Conservatives in 2011. It was clear to him in his pronouncements that he was questioning it seriously because he considered it to be very unfair.

I would like to hear what my colleague has to say about that.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, unlike other party caucuses, our caucus has a variety of opinions. We have strong and robust debate on policy matters, which is encouraged within our own party. This is unlike the Liberals. I remind the people of Canada who are watching this debate right now that in 1974 they campaigned on not imposing wage and price controls yet the first thing they did when they got into power was to impose wage and price controls. In 1993, Jean Chrétien promised to axe the tax, to get rid of the GST. Instead of doing that, he kept it. He also promised to get rid of the NAFTA. He ended up keeping that too.

Today, we hear the Liberals criticizing the temporary foreign worker program in public but behind the curtains they speak to the Minister of Employment and Social Development to get more temporary foreign workers into their ridings. That party's hypocrisy is evident.

We cannot really step on the pedal and on the brake at the same time.

[Dan Albas, Conservative, Parliamentary Secretary to the President of the Treasury Board]

Mr. Speaker, it seems that the opposition has voted against every single tax measure, whether it be consumption taxes, corporate taxes, or income taxes. It does not matter what we do. Those members seem to be ideologically opposed to it regardless of the benefit. We saw a public budget officer report that said the majority of the $30 billion went to low- and middle-income families.

I would like the member's thoughts on the reasoning behind those members' opposition to every tax measure that has been brought to the House.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, NDP members seem to be stuck in the past. Their buggy tires are mired in mud and spinning.

The NDP members are mired in the past and stuck in the old economic policies of the past. Rather than bring them into a more modern version of at least their own form of democratic socialism, rather than revise their policies, they want to double-down on the old policies and bring what happened to Bob Rae's government to Canada. We know he cannot run away fast enough from the NDP.

[Bob Dechert, Conservative, Parliamentary Secretary to the Minister of Justice]

Mr. Speaker, members will probably know that prior to being elected to this place, my hon. colleague was the president of the Economic Club of Toronto. This is a man who really knows what he is talking about. I think it showed from the speech he just made and his answers to the questions.

I represent the city of Mississauga in the greater Toronto area. The cost of living is high there. The cost of housing is high and the cost of transportation is high. Tax relief for families is important to our community and it benefits everyone in our community.

Because of our policies, the average family of four saves almost $3,400 a year in taxes. That is contributing to increases in the net worth of families in places like Mississauga and their incomes, and it is a good thing for all of Canada.

[The Speaker, Conservative, Andrew Scheer]

It being 6:30 p.m. and this being the final supply day for the period ending June 23, 2014, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the opposition motion.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Speaker, Conservative, Andrew Scheer]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Speaker, Conservative, Andrew Scheer]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Speaker, Conservative, Andrew Scheer]

In my opinion the yeas have it.

And five or more members having risen:

Pursuant to Standing Order 81(18), the division stands deferred until later this day.