Debates of June 10th, 2014

Opposition Motion—Income Splitting

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

Mr. Speaker, I am very happy to rise on behalf of my constituents in Parkdale--High Park in Toronto to speak to this important motion submitted to the House by my colleague from Skeena—Bulkley Valley. I will read the motion:

That, in the opinion of the House, the drastic increase in income inequality under recent Liberal and Conservative governments harms Canadian society; and that the House express its opposition to the Conservative income splitting proposal which will make this problem worse and provide no benefit to 86% of Canadians.

This is of great interest to my constituents in Parkdale--High Park, because we have a very diverse community in the city of Toronto. We have very low-income people in the community. We have tenants. We have homeowners. There are people with varying incomes, single families. and non-traditional families. There are people who work in a wide diversity of occupations.

I would ask Canadians, through the House, especially members of my community of Parkdale--High Park, this. If they were to ask their government to invest $3 billion every single year on their behalf, how would they want it invested? They might ask for better housing. They might ask that every Canadian have a decent place to live. So many families would say to invest in a quality national child care system, like in most modern democracies around the world. Let us invest in our children first. Would that not be a wonderful thing for the majority of Canadian families to take advantage of?

We have a baby explosion in my riding. Urban legend says that my riding has one of the highest rates of newborns. I do not know if that is true, but there are a lot of young families. I hear from so many parents that if they can even find child care, it costs them practically a second mortgage to pay for that service, because it is so expensive for parents across the country, except in the province of Quebec. While it is not perfect, Quebec certainly has a far better, far more affordable, accessible child care system.

Many of our community members might ask why we do not fulfill the dream of that great social democrat, Tommy Douglas. Tommy Douglas brought us medicare, and Canadians who have to stay in a hospital in this country thank their lucky stars that they have our medicare system and that they do not have to mortgage their houses or go into deep debt to have a hospital stay.

Tommy Douglas had a bigger vision. He wanted not only acute care covered through our medicare system but also a pharmacare system. He wanted us to be able to afford the medications we need when we need them and not have to go into debt or choose between paying the rent and paying for the drugs we need. He also envisioned a home care system so that people with disabilities and seniors could stay in their own homes and have the care they need. He envisioned long-term care so that if people had to go into long-term care, they would not have a situation, as we do in the province of Ontario, where time and time again there are scandals about some of the most vulnerable people in our society, our seniors, people with serious disabilities, being exploited and not getting the care they need in private home settings.

We might want to fulfill his dream of a dental care program so that every person in this country, every child, every senior, had access to good quality dental care.

These would be some of the wonderful ideas Canadians could suggest for investing $3 billion a year.

Instead, the government would take $3 billion a year of Canadians' hard-earned tax dollars, taxes that everyone pays, and spend it on the wealthiest 14% of Canadians. Even in that wealthiest 14% of Canadians, two-thirds of the wealthiest would get maybe $500 a year, if they were lucky. They would get a little bit, but many of the people in the other third would get $5,000 or more back from our tax dollars. This is taking from everybody, especially the middle class, and giving to the very richest. It is opposite of Robin Hood, and it is simply bad economic policy.

It is not just New Democrats who are saying it is bad economic policy. At the C.D. Howe Institute, the most credible economists in Canada today are speaking out against this measure. Even my hon. former colleague, former minister of finance Jim Flaherty, expressed his concern that this was not a good way to spend our tax dollars. I notice that even our colleagues in the Liberal Party have belatedly come on board and said they also do not think it is good policy. We are glad to see that change of heart on their behalf, because this plan leaves out nine out of 10 Canadian families. It is simply bad economic policy.

Let us take a look at who is completely left out. Anybody who makes less than $44,000 a year is left out. If a couple make above that but are both in the same tax bracket, they are left out. Single people, couples with no kids, couples with kids who are over the age of 18, and people who are divorced are all left out.

I want to say too that this proposal, this Conservative plan, especially when combined with the completely and indefensibly inadequate child care system in this country, would also encourage many women to just stay home. I think that is why many of my Conservative colleagues are so in favour of it. They have heard from REAL Women, the social conservative women's organization, which has said that it likes this kind of tax policy because it encourages the traditional family.

I am a big fan of the TV show Modern Family, because when I go out in my community of Parkdale—High Park, it is more like Modern Family. However, this policy is more like Leave it to Beaver. That might have been a swell period after the war, and I am sure some of my colleagues across the aisle have fond memories of it, but some equate it to the Mad Men era, and Don Draper would love this policy. Don Draper would be able to claim the full amount under this proposal. He would love this.

It is not proposing something that makes good use of our tax dollars or something that makes sense to the vast majority of Canadians and fits with the modern reality.

This motion also points to increased inequality in Canada. We saw it skyrocket in the 1990s under our colleagues, the Liberals, when they made the biggest social spending cuts in the history of our country and cut the national housing program, the national minimum wage, and, sadly, many other programs.

What New Democrats want is a fairer, shared prosperity for all Canadians. We want to improve services. We would put $3 billion to work for the benefit of all Canadians. Whether living in my community or by the Humber River or in Parkdale or High Park or Roncesvalles, all families would benefit from those improved social services. They would not have to be Don Draper or the Cleaver family from the 1950s. We would enact modern policy to benefit all Canadians.

[Kelly Block, Conservative, Parliamentary Secretary to the Minister of Natural Resources]

Mr. Speaker, what that member forgets, and what I am sure she would like the House to forget and Canadians to forget, is that her party has voted against each and every one of our tax cuts. We have lowered taxes, as we have heard today, nearly 180 times since taking office, saving the average Canadian family nearly $3,400 this year alone. Every time we propose new ways to save Canadians money, the opposition objects.

I want to ask the member this: why are you against saving Canadian families money?

[The Deputy Speaker, NDP, Joe Comartin]

I would remind the member to direct her questions and comments to the Chair, not to other members in the House.

The hon. member for Parkdale—High Park.

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

Mr. Speaker, through you, I would ask my colleague opposite why her party is opposed to logical social and economic policy. Why is it so proud of making cuts that economists across the country believe are bad economic policy?

There are some very good proposals for tax credits and tax cuts that would benefit Canadians. The eco-energy tax credit, which was first proposed by our former leader, Jack Layton, was a job creator, was good for the environment, and helped people improve their homes. The Conservatives, in a minority, did adopt that proposal from the NDP.

However, what has the current government done? It cut that proposal. That was a tax credit that actually made some sense, and the government wanted nothing to do with it.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Mr. Speaker, I welcome this motion on income inequality, a topic that our finance critic and Liberal members have been raising for several years now. It is very important for Canadians. It is very important for the quality of life of people at all income levels, so I thank the member for Parkdale—High Park.

I do note, though, that her party has chosen to add in a comment about recent Liberal governments. Presumably eight and a half years is considered recent. The NDP was not able to stop itself from taking a shot at the Liberal government that introduced so many things to reduce inequality.

I would like to point out the $40-billion health accord, the Kelowna accord to bring the level of accomplishment of first nations up to non-first nation communities, and the national child care program that she herself referred to in her speech. Does she believe that these programs were not directed toward reducing income inequality? Why would the member not at least have made her input to a clear motion that did not include a partisan shot?

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

Mr. Speaker, I do not doubt my colleague's sincerity on this issue. I know she has spoken out on inequality, as have other colleagues in the Liberal Party, and I do want to acknowledge that.

However, out of power, the Liberals tend to hope that Canadians have amnesia. Liberals do have to be accountable for past actions. I will remind the hon. member and all colleagues here that 94% of the increase in inequality over the last couple of decades has occurred during Liberal governments. They enacted many measures that were extremely harmful to Canadians, measures in health care and social spending that were downloaded to the provinces and that we have not recovered from to this day.

I am glad she raised child care, because in more than a decade of Liberal governments, with majority government after majority government and surplus budget after surplus budget, not one child care space was created in this country. I think that was a shameful waste of opportunity.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, I am pleased to have this opportunity to respond today on the motion from the member for Skeena—Bulkley Valley. I will be sharing my time with the Parliamentary Secretary to the Minister of Labour and for Western Economic Diversification.

The most effective approach to raising the incomes of Canadians and their families is by creating jobs and economic growth. The facts support it and the results show it. John Chambers, the CEO of technology giant Cisco Systems, just said last year, “The easiest place in the world to do business is Canada. Their prime minister gets it. They make it easy for me to invest and do acquisitions there; they have a great education program and they have a great immigration policy”.

Through economic action plan 2014, our government has set out a plan for safeguarding Canada's economy by helping Canadians get the information, skills, and experience they need for the jobs of today and tomorrow. The number of Canadians living below the low-income cut-off is now at its lowest level ever. As a result of our government's actions, today the Canadian economy is remarkably strong, setting the conditions for Canadians and their families to succeed and enjoy a high quality of life.

According to the Bloomberg News, Canada is the best country in the G20 for business. Canada also leads the G7 for tax competitiveness. The winner: Canadians from all walks of life. The average Canadian family pays $3,200 less in tax each year under our government. According to a recent PBO report, it is the low-middle-income Canadians who are benefiting the most from our tax cuts.

There is more good news. Canada now leads the G7 in job creation, with over a million net new jobs created since July 2009. There are over 1.4 million fewer Canadians living in poverty under our government than under previous governments. We have one of the strongest fiscal positions in the industrialized world. We are getting our fiscal house in order and we are going to balance the federal budget by 2015. With the help of Canadians, we will continue to build on our successes and focus on the drivers of growth and job creation—innovation, investment, education, skills, and communities—underpinned by our commitment to lower taxes and return to a balanced budget in 2015.

However, while we as Canadians have many reasons to be proud of our country, we must also recognize that there is much more work to be done. Our government recognizes that there are often challenges for under-represented groups in obtaining the support they require for jobs and growth. Those groups include persons with disabilities, aboriginal peoples, and youth. Encouraging their participation in the job market continues to be an important priority for us. As a parliamentarian, I have advocated strongly for reforms and improvements to help more Canadians with disabilities find employment.

This is important not only to promote their social inclusion and improve their quality of life; it is also important because we know that people with disabilities actually form one of the largest untapped talent pools in all of Canada. There are approximately 800,000 working-age Canadians with disabilities who are readily employable and have yet to find a job. Almost half of them have a post-secondary education, so it is clear that their education, skills, and talents are not being maximized, nor are these individuals getting a fair chance to find fulfilling careers. Eliminating the stigmas and removing barriers is key to seeing Canadians with disabilities succeed.

As a matter of fact, no government has done more than this government to support Canadians with disabilities. That is in large part due to the late minister of finance, the Hon. Jim Flaherty.

Former Minister Flaherty was a major supporter of my recent motion calling for reforms to help people with disabilities find work, and he personally spearheaded real, concrete action in this policy area. Last year, for example, we announced a $2 million investment to support the creation of a Canadian employers' disability forum. Established by Canadian business leaders under the name “Canadian Business SenseAbility”, the forum will facilitate education, training, and the sharing of resources and best practices among Canadian businesses. We also made permanent the enabling accessibility fund and announced $40 million in ongoing funding for the opportunities fund in 2013.

These measures create more job opportunities and encourage accessibility for persons with disabilities.

Last year, we extended the labour market agreements for persons with disabilities. We are introducing a new generation of agreements with the provinces and territories this year. Our goal is to better meet the employment needs of businesses and the employment prospects of persons with disabilities. To further ensure the inclusion of persons with disabilities in the labour force, our 2014 budget proposed to connect Canadians with disabilities with jobs by providing $15 million over three years to the Canadian Association for Community Living's ready, willing and able initiative.

Our government is also providing $11.4 million over four years for the expansion of vocational training for programs for persons with autism spectrum disorder.

There is indeed more work to be done. Aboriginal persons—

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

Mr. Speaker, on a point of order, with all due respect, could we discuss the motion that was put forward by the NDP today? It seems to me that what my hon. colleague is talking about has absolutely nothing to do with it.

[Gary Goodyear, Conservative, Cambridge, ON]

Mr. Speaker, entirely the opposite is true. What the member is talking about is the totality of the government's effort to improve the quality of life of Canadians, which happens to be a multitude of taxation decreases.

Not surprisingly, the Liberals do not understand the complete economic effect of government policy.

[The Deputy Speaker, NDP, Joe Comartin]

As all members in the House are aware, the latitude that we grant is quite wide on the issue of relevance. I have to say that, overall, I understand the point the member for Brant is making in terms of the comparison he is making. I think it is quite within the realm of relevancy, so he may continue.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, aboriginal people, to give another example, remain under-represented in the labour market and often face multiple barriers to employment. They are Canada's youngest and fastest-growing population group, but we are concerned that their rate of participation in the workforce is lower than the national average. Improving economic opportunities for aboriginal people remains a priority for our government. At the federal level, we are taking action to help aboriginal people gain skills and work experience. We are doing that through investments and partnerships with the private sector. This includes three key activities.

First, nearly $250 million is being invested over five years to improve the on-reserve income assistance program to help ensure aboriginal youth can access the skills and training they need to secure employment.

Second, our government is investing $1.6 billion over five years in the aboriginal skills and employment training strategy. This is an integrated approach to aboriginal labour market programming that links training to labour market demand.

Third, the skills and partnership fund helps respond to the changing needs and priorities of the labour market, while providing opportunities for aboriginal people to fully participate in Canada's economy.

In addition, economic action plan 2014 will help aboriginal people build a better future for themselves and their families. This includes $1.25 billion in support of the first nations control of first nations education act, $323.4 million over two years to continue to implement the first nations water and waste water action plan, and $303 million annually in support of first nations housing needs on reserves.

To paraphrase the Minister of Employment and Social Development, the paradox of our time is too many people without jobs and too many jobs without people. One person said recently at our human resources committee that the key will be matching talent to task. Many unemployed Canadians do not have the right skills for the jobs available. It is particularly challenging for young people who do not have the skills or the work experience. That is why we need to do a better job of making a compelling case to more young Canadians to consider a future in the skilled trades.

For too long, we have settled for this beige, one-size-fits-all approach to youth employment, which has essentially been to tell kids to stay in school for as long as they can while in many ways frowning on vocational schools and apprenticeship training.

The Government of Canada is helping Canadian youth get the skills employers are looking for with the Canada job grant, the apprenticeship incentive grant, the apprenticeship completion grant, the Canada apprentice loan, and through help from certain tax credits, such as tuition, education, and textbook tax credits.

As Canada is facing labour shortages, the government is investing in youth employment, skills and apprenticeship programs—

[The Deputy Speaker, NDP, Joe Comartin]

I am afraid the member has exceeded his time by over a minute now, so perhaps additional issues can be raised in the question and comment period.

Questions and comments, the hon. member for LaSalle—Émard.

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

Mr. Speaker, I want to thank my colleague, who served with me on the Standing Committee on Industry, Science and Technology. He mentioned a lot of the topics that came up in committee. However, I still was not clear about his position on income splitting, which his government seems to want to implement.

How will income splitting make the gap between the rich and the poor and between men and women even wider? Could the member talk more about how income splitting will affect the well-being of Canadians, which he mentioned?

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, I have thought through the consequences for a wide group of people, including the ones I talked about, persons with disabilities in family situations.

Often for people who are in business, as I was in my previous life before I came to the House of Commons, income splitting was a common thing that went hand in hand with owning one's own business. A husband and wife were able to contribute to the business and split their incomes. In situations with persons, let us say, who are unable to work, this is of even greater benefit. These people are typically at the low and middle-income levels. I totally support our government moving forward on income splitting. I see a benefit for those families in situations where one of the potential earners cannot find work. The income can be split from one to the other and greatly benefit those in the low- to middle-income levels.

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

Mr. Speaker, I would like to follow up with my hon. colleague on the previous question. He mentioned that some people will benefit from it and it is acknowledged that, in fact, about 14% of Canadians will benefit from it, including those he described. However, 86% of Canadians will not.

I would like to know what the member feels about the fact that this measure, which will cost $2.5 billion a year, is going to benefit 14% but not 86% of Canadians. If the government wants to continue reducing taxes, which is not a bad thing in itself, could it not have chosen something that would have benefited more fairly all Canadians?

[Phil McColeman, Conservative, Brant, ON]

First, Mr. Speaker, let me say more broadly that the numbers presented are very skewed toward the situations that have been characterized by the opposition as somehow being a tax break for the rich. I come from an orientation that is totally different than that.

I look at families of different natures in my riding, some of whom I have met through volunteer work in my life, and this will be a huge boon for them. This will give people the ability to have more disposable income than they ever thought they would have. Income splitting at all levels is a good thing. It would give people, especially at the lower and middle tiers, tax breaks that prior to this never existed. If we were to ask seniors right now what they think of income splitting, they will say over and over again it is one of the best things that ever happened. Now we are extending it to the rest of Canada and it is going to affect a much broader range than the numbers the member suggested.

[Cathy McLeod, Conservative, Parliamentary Secretary to the Minister of Labour and for Western Economic Diversification]

Mr. Speaker, I am very delighted to join the debate here this afternoon. I have to start by looking at the motion that was put before us. I think there is a flaw in that very first sentence. The first sentence says, “That, in the opinion of the House, the drastic increase in income inequality...” and it went on to talk about recent governments.

I was on the finance committee. We did a pretty extensive study and we had a lot of complicated testimony. The motion starts off with a very flawed premise. I need to look at some of the statistics. I will be speaking to some of the statistics from StatsCan.

I heard the speech from the member for Toronto Centre, but I think she left that issue off in the mid-1990s and was not reflecting what has been happening more recently. Again, we have some data that is very important that we need to consider.

First, the share of the population in Canada below the low-income tax cut-off phase in 1995 was over 15% and more recently, around 2008, we are under 9%. Significant numbers of people were taken off the tax rolls. Indeed one million people, including over 300,000 seniors, have now been removed from the tax rolls.

Another statistic is on median family income, including government transfers. It was steadily worse before 1998 and it has become steadily better ever since then.

We can go into hourly average wages by gender. I know we still have some work to do in this area, but again, if we look at the graph starting in 1985 where there was a huge and significant difference, we see those graphs coming together where there is a lot less inequity in terms of wages by gender.

An important thing is the share of market income by quintile. Again there was a noticeable increase in the share going to the top 20% before 1998, but there has been very little change since then. That is an important measure.

On share of income after tax transfers, again, there are relative income gains by quintile. We had another person who talked to us about mobility, the ability for Canadians born in low-income families to move into other income opportunities. Canada has very strong measures in terms. If one is born in poverty, one does not necessarily stay there for one's whole life.

These are all measured by StatsCan. Income share of the top 1% again reflects some pretty important numbers. It was at an all-time high in the 1930s and is significantly down. There was a bit of a burst, but now we are stabilizing.

I think we have to start by looking at the premise of the question. Income inequality is an important issue, absolutely, but it is wrong to suggest that this is a situation that we all have to be fearful about. The numbers show that since the 1990s we have had some pretty good measures.

I would hasten to add that we should look at who has been in government for the last number of years. It has a large part to do with some of the policies implemented by the Conservative government. Again, one million people off the tax rolls is a hugely important number. There have been 180 tax reductions.

What the opposition members have not talked about is the report by the Parliamentary Budget Officer who said in total the cumulative changes have reduced federal taxes by $30 billion, or 12%. The low- and middle-income earners have benefited more in relative terms than the higher income earners. That is really important information.

We can look at what the NDP policies would be. The members went to the United States on an anti-trade mission to talk down our ability for the Keystone pipeline. We hear them argue against every trade agreement that comes before the House. They are anti-trade and anti-jobs. I could go on and on about the carbon tax they want to implement and the higher corporate rate for taxes. We would not have a problem with inequality if they were ever to make government, what we would have a problem with is everyone being in the low-income area because there would be no opportunities in Canada, so there would be no opportunity for inequality.

The other thing I found a bit disturbing is some of the talk I have heard today about women. I am really surprised that it is coming from the NDP.

We have choices in Canada. When my children were young, I took on a part-time job by choice. It was not that I was being suppressed; it was the fact that I truly wanted that time and opportunity to be with my children, so I took a wage reduction and went into part-time work. At that time, my husband worked a little harder to see us through. We were not rich by any means. Certainly, I did not see that it impacted my ability to be fulfilled or my career opportunities. I made a choice in terms of my children at that time.

Men make these choices also. There are times when it is women physicians, surgeons, dentists, businessmen, and women in the trades. Increasingly, this is a choice that parents will make, and it could just as well be the husband who is staying home; and increasingly it is the husband. Therefore, it is absolute nonsense for the NDP opposition to suggest that this is something that is taking us back to the Leave it to Beaver times and that it denigrates women. Whether it is the male or the female, this provides the family unit the opportunity to decide how it will work and combine careers, because as we all know, it is tough when two parents are working. It is very busy, and if there is any opportunity to help the parents in terms of what they are doing and how they are doing it, we are a government that is proud to do that.

We believe that the most effective approach to raising the incomes of Canadians and their families is to grow the economy through reducing taxes, increasing support for hard-working Canadians, promoting trade and investment, supporting key economic sectors, making education accessible and affordable, reducing barriers to labour market participation, and being strong fiscal managers. The motion that the NDP has put forward is just plain wrong and ill-conceived. As a result of our government's approach, Canadians enjoy one of the highest standards of living in the world. The low income rate in Canada has been declining and now sits at an all-time low. We talked about how that changed. We can look at the graphs. Those are not made-up numbers; they are available from Statistics Canada because they are important numbers. Because of these facts, Canada's economy has demonstrated a remarkable capacity to create jobs, setting the conditions for Canadians and their families to be successful.

We often talk about our labour market performance in the G7, with more than a million net new jobs created since the recession. We still have a way to go. We recognize that we have a fragile economy and we have to watch what is happening, but we believe that families are the building blocks of our society and are critical to Canada and our long-term prosperity.

Since 2006, we have provided significant tax relief for Canadian families, and economic action plan 2014 continues on that track by keeping taxes low. These tax reductions give parents greater flexibility to make the choices that are right for them and help build a solid foundation for future economic growth, more jobs, and a higher standard of living for them and their children. Canadians at all levels of income are benefiting from the tax relief measures introduced.

The New York Times recently wrote that Canadian median incomes are the highest in the world. Middle income Canadians receive proportionately greater relief than the one million low income Canadians who have been removed from the tax rolls.

There are many things that we have done, whether it is the Canada child tax benefit, the national child benefit supplement, the disability benefit, or the child tax credit. Of these investments, two-thirds go to the low income and modest income families with children.

Unfortunately, I do not have enough time to share with the opposition all the measures that create fabrics, such as the working income tax disability. They are a basket of tax measures that are targeted, that help different groups in our society in Canada to be the prosperous families and communities in the prosperous Canada that we so truly enjoy.

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

Mr. Speaker, I thank the Parliamentary Secretary to the Minister of Labour and for Western Economic Diversification for her speech. I had the pleasure of working with her for part of 2013 on the Standing Committee on Finance.

After she left the committee, we studied the economic inequality of Canadian households. The report we produced, which was endorsed by the Conservative government, showed that even though the Conservatives may have slowed the increase in income inequality in Canada as compared to the Liberals, it has still increased. Income inequality has increased at a slower pace, but it has increased nonetheless. The pace has not been reversed, despite the tax measures taken by this government.

Part of the motion addresses the increase in income inequality in Canada. Is the parliamentary secretary distancing herself from the report her government adopted in the Standing Committee on Finance?

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, what I clearly showed is a number of measures. I was on the finance committee, and we listened to many witnesses who indicated many significant measures, including a move from 15% to under 9% for families that are under the low income cut-off level. That is a huge improvement. It represents the ability for mobility in terms of how Canadians can move from low income through to having opportunities with a higher income.

What I showed and demonstrated in the early part of my speech is that income inequality is an important issue that we need to pay attention to, but it is certainly not dramatically increasing, as this motion says. We are very proud of our record on this in terms of the reduction.

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

Mr. Speaker, I would like to come back to the issue of income splitting and the inequality it creates.

I know that the government made a promise in 2011. It was looking way ahead and saying that if it was in a position to balance the budget by 2015, it would bring in this income splitting. It would be very embarrassing for the government to backtrack, having made that solemn promise in the last election.

However, the evidence shows that income splitting in the way it has been proposed here, as it was promised back in 2011, would only benefit 14% of Canadians. The other 86% would not benefit in any way whatsoever.

The government held the previous finance minister in very high esteem, and he himself recognized and said very clearly that he was definitely having second thoughts about income splitting. That was with very good reason, because he understood the consequences of it. Given that, does the government not recognize that moving ahead with income splitting the way it promised in 2011 is not the right thing to do for the majority of Canadians, and that it would, in fact, add to income inequality?

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, I have some trouble with what the member said, because he said that 14% of people in this country do not matter.

How many benefited from the working income tax benefit? It was a percentage. How many seniors benefited from the income splitting? It was a percentage of the population.

He is suggesting that families with young children who have working parents with a disparity in their incomes should not also have some of the benefits of tax policies that Canadians put forward. I would like to ask him if the seniors in his riding who benefited from the income splitting that they enjoy support his party's retracting on that one.

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

Mr. Speaker, it is a pleasure to speak here today. I have a prepared speech, but listening to the debate we have had here in the House has made me think about how many people who sit in this House would actually benefit from this income splitting proposal from the Conservatives. I would argue it would be a lot of us.

I think about my own financial situation, and I would benefit from this. However, as a member of the House of Commons, my salary of $160,000 is ample. My wife's salary is a little less than that. It is also on public record. I am against this proposal because I think I am adequately compensated for the work I do.

Everyone here in the House is really within the top 1% or 2% of Canadians in terms of earnings. Therefore, how could I in good conscience vote for something that would put an extra $5,000 in my pocket? I cannot. This is what is really disturbing me about this debate. Parliamentarians, we in the House of Commons, are here to be responsible with public money. We are not here to line our own pockets. That is what this income splitting would essentially do. I would estimate that probably half the members in the House of Commons would directly benefit from this tax proposal. That is really alarming.

Sometimes this is what is wrong with this place. We have really lost touch with what is going on in the general public. We have a high unemployment rate. Our economy is not scheduled to grow at the same rate as other economies around the world. I will talk about it in a minute, but we have this kind of massive inequality starting to grow between the people who are the top earners, like us in the House of Commons, and folks outside the House of Commons. Therefore, I think these types of measures are a mistake. We should be looking at ways to bring Canadians, who are not as fortunate as us to earn this kind of money, the help they need to move into the middle class or stay in the middle class.

Again, I think this is really abhorrent and any Canadians watching this debate would be quite upset. They would be saying, “There they go again giving themselves a big chunk of money”. That is what is most disturbing.

I would like to thank the shadow finance minister, the member for Skeena—Bulkley Valley, for his work on this issue. He is doing yeoman's work for us as a shadow finance minister.

Although we are talking about income splitting, at the core of this issue is income inequality in Canada. The Conference Board of Canada has said that income inequality is really looking at how income is distributed within a country. Inequality means that it is being distributed unevenly. Really, this is a principle of equity we are looking at. If there is a large income inequality within a country, as we see elsewhere around the world and increasingly in Canada, there will be problems. In some extreme cases there could be instability, which of course none of us wants.

A common way of assessing inequality, used by most economists, is the Gini coefficient, which is a way of measuring this dispersal of income. A zero on the Gini index would indicate exact equality. That means everyone makes exactly the same amount. A score of 1 would mean that one person has all the money and everyone else has none. We have this scale between 1 and 0. Without taxation and social transfers like our health care systems, welfare systems, and EI systems, Canada's Gini score would be .44, which is classified as very unequal. However, with tax transfers the score drops to .32, putting us in a situation where we are unequal, but not as bad as some places.

To put this in perspective, in South Africa, the Gini score is .63, which is the worst among most countries. Sweden is the best at .22. Canada is not as bad as South Africa, where we see extreme inequality, but of course we are not nearly as good as the Nordic countries in terms of redistributing wealth.

According to the Conference Board of Canada, again, not an NDP publication but one we like to refer to when it gets it right, Canada gets a C. We rank 12th out of 17 peer countries. In fact, the real problem is that inequality in Canada has increased over the years.

Whatever we are hearing from the other side, it is really an undeniable fact that the richest group of Canadians has increased its share of total national income, while the poorest and middle income groups have lost share. Really, over this period of both Liberal and Conservative governments, our Gini coefficient has grown from .28 to .32. Again, it does not sound like a lot, but when we think about how many thousands of Canadians are affected, we see it is actually a very troubling trend.

One question is, what fanciful tax measures can we put in place? However, the real question is, what problems should we be addressing?

We do see some GDP growth, but it has slowed over the years. We have an economy that is sluggish but growing. However, our real problem is how we reduce this inequality. The Conservative idea of income splitting will do nothing to lessen the gap in inequality. In fact, it would increase inequality, which is a big problem.

To put it plainly, the income splitting plan amounts to a tax break for the most wealthy, which will cost the federal government about $3 billion without providing any benefit to 86% of Canadian families. We have to remember that it is not just 14% of random families that would benefit, but 14% of the richest families would benefit from this, which troubles economists.

I had the great privilege teaching at Simon Fraser's School of Public Policy. The professor who had an office beside mine was Rhys Kesselman, a Canada Research Chair in Public Finance. It was a great department. I am a raging lefty with the NDP, but we had a lot more centre-right colleagues to bounce ideas off. This was one of the ideas, along with the HST, carbon taxes or whatever else we would discuss. The great thing about academia is that one can throw ideas around.

Professor Kesselman is largely credited for inventing the Conservatives' tax-free savings account policy. This is a man whose work they are not unfamiliar with on the other side. In fact, he supported greatly the HST within British Columbia, which did not go down so well. He is a very thoughtful man and the author of a C.D. Howe Institute report on income splitting. His report entitled, “Income Splitting for Two-Parent Families: Who Gains, Who Doesn't, and at What Cost?”, finds, similar to other reports, that 85% of households would gain nothing from this and a further 6% would gain less than $500.

We are not just talking about 86% who would not be gaining. We are getting closer to 91% of Canadians who would not benefit from it. Therefore, it would be a very small segment of the population that would benefit. The richest 9% of Canada, like us in the House of Commons, would benefit from income splitting.

Professor Kesselman says that:

The splitting proposal would significantly raise marginal effective tax rates for most lower-earning spouses, thus imposing barriers for working or returning to work; this would make married women more vulnerable by reducing their work experience...And if the objective is to provide support to families in raising children, it would distribute most benefits where they are least likely to be needed.

In economic speak, I would call that a raging failure of a policy.

I will be splitting my time, Mr. Speaker, with the member for Churchill.

People who make under $44,000 would have no benefit. People who make above $44,000 a year but who are in the same tax bracket would have no benefit. Single people, couples with no kids and couples with kids who are grown would not benefit. Parents who are divorced would have no benefit.

Income splitting is not a good idea but, again, if those in the House of Commons want to give themselves a big fat cheque, this would be exactly how to do it, by income splitting.

I am a bit puzzled by those at the end of the chamber. The Liberal leader has called income splitting a decent idea, and it seems the Green Party also supports it.

I find this disturbing. Canada's big challenge is income inequality. It is a growing challenge and one that is not being addressed. It has been heightened by Paul Martin and other Liberal finance ministers and it is getting worse and worse under the Conservative government.

These measures, which are so boldly meant to benefit the richest people in Canada, will not fix things. Until we are honest about this, there are a lot of people in Canada who will suffer.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, I will use my hon. friend's own logic at the outset of his statement when he said that the wealthiest people, including us in the House, would benefit from income splitting, and he cited himself as an example.

Does that mean he has voted against every tax reduction measure because he felt that he should not benefit from it? What does he have to say now to all those lower-income Canadians who would have benefited by the lower tax reductions brought in by our government? What does he have to say to those lower-income Canadians when he voted in his own interest?

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

Mr. Speaker, I guess the member is somebody who is going to benefit from this tax measure and is arguing to support it.

The NDP is here to defend all Canadians, especially those of lower income. It is really our brand. It is what we stand for. It is why I joined the NDP and why I continue to stand here to fight against that rhetoric.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the member might be somewhat misinformed on what the NDP actually does stand for once it gets into government at the provincial level. He might be surprised of the inequities and how profound the NDP is, particularly, in a province like British Columbia. It used to be fourth among Canadian provinces in terms of inequity on income redistribution. Then in 10 years it brought it to the worst in Canada.

In Manitoba the NDP had seven different reductions of corporate taxes and gloated that it wanted to do more. I do not think the NDP owns any holy ground on this issue.

Does the member not believe there is a role for the House of Commons to play? We saw a bit of that role when a motion passed a couple of years ago on the need for us to come up with some tangible ideas on how we could come back

Could the member provide us one tangible policy today that would have a positive impact and which the NDP would support, one that will not contradict something that one of its NDP cousins at the provincial level has done?