Debates of May 25th, 2015

Finance—Main Estimates 2015-16

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

Mr. Chair, our Conservative government has fulfilled its commitment to end the wasteful and inefficient long gun registry once and for all. It is a $2 million Liberal plan that ballooned to a $2 billion boondoggle. It is still possible to access outdated copies of the long gun registry through access to information legislation. The will of Parliament was made clear and all copies of the registry were to be destroyed. This technical amendment would address this issue.

[Murray Rankin, NDP, Victoria, BC]

Mr. Chair, with respect to income splitting in the current budget plan, why did the government decide to proceed with its handouts to wealthy Canadians rather than putting those funds toward the working income tax benefit to help low-income, hard-working Canadians?

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

Mr. Chair, as I have said, the family benefit program overwhelmingly would benefit low and middle-income Canadians. Two-thirds of the benefits would go to them, and 25% would go to families earning less than $30,000 a year. It is expected that families will save on average $1,140 per year from this package. Thanks to measures introduced by our government, the average Canadian family currently will receive up to $6,600 this year.

[Andrew Saxton, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Chair, our government's long-term commitment to keeping taxes low is making life more affordable for all Canadians. By reducing taxes year after year and enhancing direct benefits to Canadians, the government has given families and individuals greater flexibility to make the choices that are right for them.

Canadian families and individuals will receive $37 billion in tax relief and increased benefits in 2015-16 as a result of actions taken by our government since 2006, including measures announced by the Prime Minister on October 30, 2014. These new measures will provide more than $4.6 billion in annual tax relief and increased benefits to all families with children under age 18.

These measures include an enhanced universal child care benefit that will provide $160 per month for children under the age of 6 and a new benefit of $60 per month for children aged 6 through 17, and that is effective January 1, 2015; a $1,000 increase in each of the maximum dollar amounts that can be claimed under the child care expense deduction, effective for the 2015 taxation year; and the family tax cut, a federal non-refundable tax credit of up to $2,000 for couples with children under the age of 18, effective for the 2014 taxation year.

Among the multitude of tax relief measures this government has introduced, perhaps the most popular is the tax-free savings account, or TFSA. The TFSA is the most important new savings vehicle introduced in Canada since the RRSP was introduced over 50 years ago. As a matter of fact, as of the end of 2013, nearly 11 million individuals had opened a TFSA and the total value of assets held in TFSAs was nearly $120 billion. The TFSA gives Canadians the flexibility to save for their priorities. Whether they want to purchase a new home or car, start a new business or save for retirement, Canadians have many reasons to save at every stage of their lives. That is why the government introduced the TFSA in the first place.

Available since 2009, the TFSA is a flexible, registered, general purpose savings vehicle that allows Canadians aged 18 or older to earn tax-free investment income. I should point out that it is a voluntary program. The contributions are not tax deductible, but investment income earned in a TFSA and withdrawals from it are tax free. Unused TFSA contribution room can be carried forward, and the amount of withdrawals from a TFSA can be re-contributed in future years.

The TFSA provides greater savings incentives for low- and modest-income individuals because, in addition to the tax savings, neither the income earned in a TFSA nor withdrawals from it affect a person's important benefits and credits. Like the Canada child tax benefit, or old age security and guaranteed income supplements that supplement benefits, it is no wonder that Canadians have embraced the TFSA for their savings needs. Best of all, Canadians of all income levels can benefit from TFSAs.

The opposition claims that TFSAs benefit only the rich. This is categorically false. In fact, at the end of 2013, individuals with annual incomes of less than $80,000 accounted for more than 80% of all TFSA holders, and about half of TFSA holders had annual incomes of less than $42,000. About 1.9 million individuals have contributed the maximum amount to their TFSAs. About 46% of these individuals were seniors and over 70% were aged 55 and older. About 60% of the individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000.

In order to provide Canadians with greater opportunity to save on a tax-free basis, this budget proposes to increase the TFSA annual contribution limit to $10,000, effective for 2015 and subsequent years. This new measure will help Canadians save from coast to coast to coast.

Take, for example, Giselle , a small business owner who saves in her TFSA. She now has the flexibility to contribute $10,000 per year to her TFSA. By earning tax-free investment income on $10,000 of annual savings for 10 years, Giselle can accumulate about $3,700 more dollars in after-tax savings than if she had saved the same amount for 10 years under the existing TFSA annual contribution limit with the remainder in a taxable savings vehicle. Giselle will be able to better save for future priorities, which will be good for her, good for her business, and good for the Canadian economy.

The TFSA is also a great savings tool for seniors. The fact is that Canadians are living longer than ever, which is great news. Since 2006, seniors have been benefiting from important money-saving measures such as pension income splitting, and taking advantage of their tax-free savings accounts. In fact, as of the end of 2013, close to 2.7 million Canadian seniors had TFSAs. In a low-interest rate environment, the TFSA can help to boost after-tax returns, as these returns are not subject to taxation. The TFSA provides seniors with a savings vehicle to meet their ongoing savings needs, something to which they previously only had limited access to once they were over the age of 71.

Here is another example. Barry is a retired 72-year-old who does part-time consulting work, and is required to withdraw a minimum amount of $18,000 from his registered retirement income fund, or RRIF. Taking into account his other pension income, his income from part-time consulting work, and his income taxes, Barry's RRIF withdrawal exceeds his current needs by $7,000. With a $10,000 TFSA annual contribution limit, Barry can now save the entire $7,000 remaining from his RRIF withdrawal in his TFSA.

This government understands that Canadian society thrives in a low-tax environment. It is why we introduced the tax-free savings account. It is why we have cut taxes over and over again, in fact over 180 times since we became government in 2006. It is a shame that opposition members have opposed our changes to the tax-free savings account. They do not realize the benefits that it would bring to Canadians across the country. Unlike our Conservative government, the opposition believes in a high-tax, high-spend agenda.

Our government has lowered taxes every year since coming into office and, as I mentioned, we have introduced over 180 tax-relief measures. This equates to over $37 billion in savings for all Canadians, and $6,600 in average savings per year for the average Canadian family. As a result, the overall federal tax burden is now at its lowest level in over 50 years. In fact, John George Diefenbaker was the prime minister the last time that taxes were this low. Going forward, we will remain committed to keeping taxes low and allowing Canadians to save more of their hard-earned money.

I would like to ask the Minister of Finance a question. In what other ways is the government helping Canadians to save and prepare for their retirement?

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

Mr. Chair, we have spent a lot of time talking about tax-free savings accounts, and it seems that we have not been able to penetrate the opposition members, who are focused on a misunderstanding of the central fact that TFSAs overwhelmingly benefit low and middle-income Canadians. Two-thirds of the benefits go to them, and 25% to families earning less than $30,000 a year.

The TFSA is a marvellous tool to save for a first home, for the kids' education, or for retirement. Of the 11 million Canadians who participate, three-quarters of them earn less than $75,000 a year, half of them earn less than $42,000 a year, and 60% of those who have maxed out earn less than $60,000 a year. This is a very important measure for low and middle-income Canadians and, of course, for seniors. This is part of our government's plan to create jobs, growth, and long-term prosperity.

Since we have spent so much time discussing the TFSAs, perhaps I could move on to the broader discussion of Canada's economy.

Through Canada's economic action plan, our country's economy has seen one of the best economic performances among all G7 countries, as we have said many times. However, Canada is not immune to global economic challenges beyond our borders. That is why economic action plan 2015 continues to focus on supporting job creation and economic growth, while returning Canada to balance.

When one reflects on some of the questions, it is really rich for the NDP and the Liberals to be criticizing our government's savings record and our record on the economy and job creation. They voted against every job creation measure our government has put forward, including introducing the small business job credit, introducing the largest and longest investment in job-creating infrastructure in Canada's history, including the new Building Canada fund; and introducing tax cuts for manufacturers to purchase new equipment and expand their operations.

The NDP continues to push for risky economic policies, including a $20 billion carbon tax that would be a tax on everything and everybody and would hurt Canada's economy.

Meanwhile, the Liberals have introduced a plan full of holes that would return Canada to deficits and jeopardize our strong economic position. In fact, the Liberal leader's plan simply does not add up. He already admits to a $2 billion shortage. We have discovered an additional $1 billion in his rudimentary miscalculation of the cancellation of the UCC benefit, and of course he has wildly overestimated the amount of tax he would collect through his tax hike. In addition to that, there are more high-cost spending programs to come. The question is, where will he get the money? Will it come from piling on more debt? Will it come from increasing taxes? Will it come from cancelling important programs, such as income splitting for seniors or increased funding to the brave men and women in uniform? We do not know, and we suspect the Liberal leader does not know either.

We can contrast all that with our low-tax plan. On the other side, the Liberal leader thinks that Canadians should be convinced to accept a tax hike, believes that budgets balance themselves, and does not think we should provide benefits to all Canadian families.

From July 2009 to April 2015, our government created 1.2 million jobs. More than 80% of these jobs are full-time, more than 80% are in the private sector and nearly 60% are in high-wage sectors. Since our government came to power, we have created almost 20% more jobs than our closest competitor. Canada posted the strongest business investment record in the G7 during the recovery.

Both the International Monetary Fund and the Organisation for Economic Cooperation and Development expect Canada to show solid economic growth in the coming years. For the seventh consecutive year, the World Economic Forum rated Canada's banking system as the soundest in the world. Canada leapt from sixth to second place in Bloomberg's ranking of the most attractive destinations for business.

[The Deputy Chair, Conservative, Barry Devolin]

That concludes the time for the hon. parliamentary secretary.

There are three minutes remaining for the hon. member for Davenport.

[Andrew Cash, NDP, Davenport, ON]

Mr. Chair, does the minister know how many workers in Toronto cannot gain traditional, secure full-time employment with benefits?

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

Mr. Chair, both prior to this economic action plan 2015 and through our current budget, we have provided a suite of proposals and initiatives that would enhance job creation right across the country for small businesses and for large businesses. For small businesses, we are reducing the tax rate from 11% to 9% and we have introduced an accelerated capital cost allowance.

[Andrew Cash, NDP, Davenport, ON]

Mr. Chair, the answer has been all over the media. The finance minister is from Toronto, so he would know that the answer to that question is that over 50% of all workers cannot access full-time, stable jobs.

Does the minister know how many of Toronto's unemployed are receiving EI benefits after paying into the program for years?

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

Mr. Chair, I will get that information for the member.

[Andrew Cash, NDP, Davenport, ON]

It is 17%, Mr. Chair.

Is the minister satisfied with that number, now that he knows what the number is?

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

Mr. Chair, as I have said, we have taken many measures to improve employment. We have job-matching services. We have a variety of programs for youth internships. We have the student loan programs. We have programs to help people get the training they need for Red Seal accreditation and Blue Seal accreditation. We will continue to provide benefits to job-creating companies right across this country.

[The Deputy Chair, Conservative, Barry Devolin]

Last question, the hon. member for Davenport.

[Andrew Cash, NDP, Davenport, ON]

Mr. Chair, could the minister explain why the current government is featuring Camaro production in its recent ad, given that the Camaro is no longer going to be manufactured in Canada?

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

Mr. Chair, we have been communicating with Canadians on a variety of important measures that we have introduced to benefit Canadians across the country. It is very important that they have these measures in mind because, just to take one example, the UCCB is very beneficial for Canadian families, but there are over 200,000 families that do not have the information they would need in order to register, and they have to be alerted to the potential benefits for them.

[The Deputy Chair, Conservative, Barry Devolin]

It being 11:28 p.m., pursuant to Standing Order 81(4), all votes are deemed reported.

[The Acting Speaker, Conservative, Barry Devolin]

This House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 11:30 p.m.)