Debates of May 25th, 2015

Finance—Main Estimates 2015-16

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

Mr. Chair, I have said repeatedly, and a number of times this very evening, that our family tax program will overwhelmingly benefit low- and middle-income Canadians. Twenty-five per cent of the benefits will go to families earning less than $30,000 a year. We estimate that almost $10 billion in 2015-16, or one-half of 1% of GDP, will be returned to families and invested in the economy over the coming months.

This, again, not only is our philosophical difference, because the opposition believes that money earned by hard-working Canadians is, by right, the government's, but it does not seem to understand the benefit of having money retained in the private sector for economic growth.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, the current government saw no problem with adding almost $5,000 for every man, woman, and child in this country to the national debt, which we will be paying for for generations to come.

I will ask a question about income splitting, and I am being very specific for the minister. Can the minister tells us which income decile will benefit the most from his income-splitting scheme?

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

Mr. Chair, I think it is important to note that the NDP's plan would only help a few families that are fortunate enough to receive a spot in its bureaucratic program, which, from experience, is usually higher-income families.

Instead, our plan will benefit every single family across Canada, four million families. In providing choice for families, we believe that mom and dad know better how to support their children than bureaucrats in Ottawa.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, we can understand why the finance minister wants to talk about the NDP's $15-a-day affordable child care plan. It is because his income-splitting scheme does nothing for 85% of Canadian families.

The answer to the question, which he refused to answer, is that the top 80th decile does the best under his income-splitting scheme. Second in line is the top 90th decile for Canadians.

Can the minister tell us how many women will be pushed out of the workforce, according to the PBO study, by his income-splitting scheme?

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

Mr. Chair, first, it is important to understand that under the family benefit program, families will save, on average, $1,140 from the package. Thanks to measures introduced by our government, the average Canadian family of four will receive up to $6,600 this year.

Income splitting is already helping seniors across the country, which is why the government is now proposing similar relief for families. The opposition would shut down that benefit for Canadians from all walks of life.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, was the finance minister warned about the cost of the TFSA program and its expected costs, which will swell in just five years and by 2080 to as much as $132 billion per year?

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

Mr. Chair, 11 million Canadians are participating in the TFSA program. It is permitting them to save for their retirement, save for their kids' education, and save for a down payment on their first home.

It is overwhelmingly a benefit to low- and middle-income Canadians. Three-quarters of the people earn less than $75,000, and 60% of those who maxed out on their program earn less than $60,000 a year.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, is the finance minister still comfortable leaving this massive burden for our grandchildren to solve, as he said to the CBC?

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

Mr. Chair, I understand that humour is not really the strong suit of the NDP. Let me make it clear that the advantage of having more money retained by the private sector is not only fair to Canadians, who will, therefore, have a more affordable life, but means more consumption, more investment, and higher economic growth.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, of the billions spent to double the TFSA, how much will go to the wealthiest 20% of Canadians?

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

Mr. Chair, as I said, this program is overwhelmingly used by lower- and middle-income Canadians. Some 60% of those who maxed out their TFSA contributions earned less than $60,000 a year.

I do not know why the NDP wants to cancel this program. It is an assault on the Canadian middle class.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, economists have shown that within a generation, the TFSA will lead to no taxes being collected on nearly all taxable income. Is this an objective of the Conservative government?

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

Mr. Chair, I have quite a few people who might resonate with the hon. member.

NDP Premier Greg Selinger said, “[TFSA] accounts should be especially helpful in encouraging lower income Manitobans to save”.

The Metcalf Foundation said, “This is a very, very significant new measure for low-income people and has enormous potential”.

Jack Mintz, of the University of Calgary School of Public Policy, said, “It’s a positive step towards encouraging people to save”.

The quotes go on. The fact is, and we have heard from people right across the country, that this is an important savings measure that benefits seniors and low- and middle-income Canadians.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, let us read out another quote for the minister. The top 20% of Canadian earners will get $9 billion from the doubling of the TFSA. That is twice as much as all the rest of Canadians combined. Does the government think that is fair?

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

Mr. Chair, half of TFSA holders earn less than $42,000 a year. Some 600,000 seniors with incomes below $60,000 are currently maximizing their TFSA room and will benefit from the measure.

The Canadian Association of Retired Persons strongly supports our increase. What is the NDP going to say to CARP when it keeps insisting that it will cancel this important program for seniors?

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, if the Conservatives want to fight for the wealthiest 20% and allow them double the advantage of all the rest of Canadians combined, I will let the finance minister and his party make that argument to Canadians.

Now I have a question about child care. Of the approximately 125,000 child care spaces the current Conservative Prime Minister solemnly promised to create, can the government update us on how many have actually been created?

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

Mr. Chair, our government has provided a significant increase to the provinces and the territories. We have increased the transfers by 62% since we came into office. We have increased social funding for education. We have increased funding significantly for health care and for equalization. We have not achieved a budgetary balance on the backs of the provinces.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, the question was this: How many child care spaces, of the 125,000 the government promised to create, has it created? The answer is actually quite simple. It is not on a piece of paper handed to the minister by an official. It is zero.

Can the finance minister tell us, in his home city of Toronto, what the average cost for a month of child care is?

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

Mr. Chair, as I have said, we have provided significant benefits for every single one of the four million Canadian families, and we have done that with a suite of programs, including, in particular, the universal childcare benefit. They all benefit from this. We have provided choice, and we have put our faith in the wisdom of parents.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, the answer is a little over $1,600 a month. I suppose the minister does not know or does not care.

Can the minister tell us what percentage of income, for an average working mother in his own city of Toronto, would be taken up paying for that child care space?

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

Mr. Chair, the government's commitment is to make life more affordable for Canadian families and to help families make ends meet.

The overall tax burden is at its lowest level in more than 50 years. The measures introduced since 2006 will provide tax relief and increased benefits of up to $6,600 for the typical family of four in 2015.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, the finance minister often talks about investments. Can he tell us how much is returned to the Canadian economy for every dollar invested in child care?

Let me preempt this, because I suspect that the minister is not actually going to either know or care to answer. It is $1.75. For every dollar we put into child-care spaces, we get $1.75 back to the Canadian economy. They would kill for such an investment in any program they have offered to Canadians so far. Why not take up this opportunity to help Canadian families and help our economy at the same time?

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

Mr. Chair, our government has a proud record of helping Canadian families, helping the middle class, and helping Canadians who are less advantaged. We have done that through a very progressive tax system and by providing benefits directly to moms and dads, who have the interests of their children and have the wisdom to provide the choices that make sense for their children.

While the opposition members may be derisive about the wisdom of moms and dads, we believe in the wisdom of the people.

[The Deputy Chair, Conservative, Barry Devolin]

Regrettably, the time for the hon. member for Skeena—Bulkley Valley has expired.

Resuming debate, the hon. member for Winnipeg South Centre.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Mr. Chair, it is an honour to be here tonight talking about small business and the impact that small business has on our economy.

Small businesses are the backbone of the Canadian economy. They account for 99% of all businesses in Canada and employ half the working men and women in the Canadian private sector.

Our government believes that owners of small businesses should spend their time growing their business and creating jobs, not choking on high taxes and wallowing in red tape.

Today I want to give members a quick snapshot of why it is only our government that can be trusted to keep taxes low for all Canadians.

We have cut taxes significantly for small businesses and their owners. We cut the small business tax rate to 11% as of 2008, and by the way, as soon as we pass economic action plan 2015, we will be reducing it to 9%. We increased the amount of annual income eligible for this lower rate from $300,000 to $400,000 in 2007 and to $500,000 in 2009. We cut the general corporate income tax rate to 15% in 2012 from 22.12%. All of these benefits help successful small businesses when their income exceeds $500,000.

We increased the lifetime capital gains exemption on qualified small business shares to $750,000 from $500,000 in 2007. The government further increased this exemption to $800,000 in 2014 and indexed the limit to inflation, bringing it to $813,600 for 2015. The exemption is estimated to be delivering over $1 billion of tax relief annually to small business owners and owners of farms and fishing businesses. By the way, they are creating jobs with those savings.

We also reduced small business EI premiums by introducing the small business job credit. This credit is expected to save small businesses more than $550 million over 2015 and 2016. These measures will benefit hard-working small business owners all across the country.

Unlike the opposition, our government believes that the best way to create jobs is to lower taxes for job creators. That is exactly what we are doing.

Economic action plan 2015 cuts taxes even further for small businesses. To encourage small business growth, economic action plan 2015 proposes to reduce the small business tax rate to 9% by 2019. This would be the largest cut in the tax rate for small businesses in more than 25 years. It is estimated that the cut to 9% for small businesses would reduce taxes for small businesses and their owners by $2.7 billion over 2015 to 2019.

For example, a small business with a taxable income of half a million dollars would pay 46% less tax in 2019 compared to when we came into office in 2006. This means that their annual tax reduction can be reinvested in the business to fuel its growth and create jobs for even more Canadians. By the way, we have already created 1.2 million net new jobs since the depths of the recession, and that is only the beginning.

Alongside lower taxes, businesses also need access to capital. They have to have capital if they expect to develop. That is why our government is introducing changes to the Canada small business financing program. This program facilitates the extension of loans by private sector financial institutions to small businesses for the acquisition of real property and equipment and for leasehold improvements.

The program helps new businesses get started, helps established firms to make improvements and expand, and improves access to loans that would not otherwise be available to small businesses. That stimulates economic growth. That creates jobs for Canadians.

Since 2006, when our government took office, this program has provided over 50,000 loans to small businesses, with loans totalling approximately $1 billion per year.

Economic action plan 2015 proposes to amend the Canada Small Business Financing Act to make two changes: first, it will increase the maximum loan amount for real property from $500,000 to $1 million; second, it will raise the small business eligibility criterion from firms with gross annual revenues of $5 million or less to firms with gross annual revenues of $10 million and under.

In addition to reducing taxes and improving access to capital, action is also being taken to reduce the amount of red tape that is hindering the growth and success of small businesses across the country.

Any entrepreneur will say that running a small business means long hours and selfless sacrifice. Our government believes that entrepreneurs' time is best served growing their businesses, rather than being bogged down in red tape and having to pay exorbitant taxes. That is why cutting red tape is an absolute priority for us.

Since its implementation in 2012, the red tape reduction action plan has proved to be a very successful control on the growth of red tape, while maintaining high standards for safety and protection.

The one-for-one rule and other reforms have brought a new level of discipline on how the government regulates businesses. The one-for-one rule requires that when a new regulation is added, one must be removed. This measure alone has saved businesses an estimated $22 million last year alone, along with 290,000 fewer hours dealing with red tape.

Economic action plan 2015 will build on these successes to reduce the tax compliance burden faced by our businesses. That includes a new quarterly remitter category for the smallest new employers, which will reduce the frequency of remittance payments by two-thirds. Beginning in 2016, new employers will be eligible to make quarterly rather than monthly payments to the CRA if their monthly withholdings are less than $1,000 and they have maintained a perfect compliance record.

That is valuable time employers can reclaim and reinvest in both their operations and their families. Going forward, our government remains committed to continuing to provide tax relief to all Canadians, including small business owners and families.

Speaking of small business owners and their families, I think one of the most important pieces in our economic action plan 2015 is the introduction of an increase to the tax-free savings account. This is being lauded by not only business people, who recognize that this is a pool of capital that will be created for use and investment, but also by our children, who are perhaps saving for their first home purchase. It is being lauded by our seniors, our parents, who are putting a little bit by because they do not want to be terrorized by the fact that they are living longer. They want to be able to have savings for their wonderful long lives.

It is very important that we recognize that the tax-free savings account is helping all Canadians. As the minister said earlier, 60% of people who hold a tax-free savings account earn less than $60,000, and half of tax-free savings accounts are held by people who earn less than $42,000. That is a program that is helping the middle class.

I am thankful for the opportunity to speak on economic action plan 2015 and the previous elements we have completed. I have just reiterated what we are doing for small businesses because it matters so much; would the Minister of Finance speak to what our government has done to help families? I have said what we have done to help businesses. I would love to hear from him how we are helping families.