Debates of Jan. 29th, 2016

Immigration

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I want to table a petition that many of my constituents have signed. It is in regard to visitor visas, recognizing how important it is that we make progress on getting visas approved, in particular with a special concentration on families so people can attend events such as graduations, weddings, funerals, and things of this nature. The petition emphasizes how important it is that we improve the visitor visa approval process.

Questions on the Order Paper

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I ask that all questions be allowed to stand.

[The Deputy Speaker, Conservative, Bruce Stanton]

Is that agreed?

[Some hon. members]

Agreed.

The House resumed consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the second time and referred to a committee.

Income Tax Act

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

Mr. Speaker, I am very pleased to rise in the House as the NDP's finance critic to debate Bill C-2, which was introduced in December and which is now being debated in the House.

I had the opportunity to ask the Minister of Finance a question earlier today after his opening remarks. Unfortunately, I did not get an adequate answer. I did not get an answer to the fundamental question raised by this bill: how does the Liberal Party define the middle class?

This is a fundamental question, because since the election, the Liberal Party, which now forms the government, has boasted about making tax cuts for that much talked-about middle class. However, as the Parliamentary Budget Officer's report very clearly and succinctly states, the middle class will get nothing from the tax cuts the Liberal government is promising.

With Bill C-2, there is the good and there is the bad. I will start with the bad, and then talk about the good.

Any definition of the middle class must be based on a common definition. One way to define it would be to use the median income, which is $31,000 a year per person in Canada. That means that half of Canadians earn less than $31,000 a year and the other half earns more than $31,000 a year.

Will someone earning the median income benefit from this tax cut? No. In fact, those earning $45,000 or less a year will not benefit at all from the tax cut promised by the Liberals. Even those earning between $45,000 and $90,000 a year will only receive part of what was promised. The devil is in the details. In reality, someone earing $50,000 will probably only receive twenty or thirty dollars.

Taxpayers earning more than $90,000 a year will benefit the most from this tax cut. Even someone who earns $200,000 a year will receive the maximum from this tax cut. An individual would have to earn $210,000 a year before receiving less, due to the new tax bracket, but they would still still receive a large part of this reduction.

If we take this definition of the middle class, whose members earn around $31,000 a year, and exclude all those whose income is among the top 20% and those whose income is among the bottom 20%, then we have a middle class that makes up 60% of the population. The range of income of that middle class would be between $20,000 and $60,000 a year. A very small portion of those people would benefit only slightly from the tax cut.

If we take the median income, people will receive nothing. If we take the income that everyone associates with the middle class, in other words, $45,000, people will receive nothing. Those who will receive the biggest slice of the tax-cut pie are the top 20% income earners. That is not the middle class.

When the ways and means motion was tabled, we made a counter-proposal because if we really want change, and considering that on October 19, Canadians voted for a tax cut for the middle class, then this tax cut has to be given to the middle class.

That is why we proposed a change to the Liberal proposal. Instead of targeting the second tax bracket, as the Liberal government wants to do, we should change the first tax bracket so that a larger portion of the population can benefit from such a tax cut. Our proposal seeks to reduce the first tax bracket from 15% to 14% to ensure that all taxpayers, those who pay income tax, can benefit from this change.

Our proposal seeks to give people earning the median income a tax cut as high as $250 annually, as those people are currently receiving nothing.

Someone who earns $200,000 per year and who will get a tax cut worth about $600 would be forced to pay a portion because of the higher tax rate and the new bracket that we would leave in place.

It is clear that the Liberals' proposal is merely a smokescreen. In his response to my question about the Liberal Party's definition of the middle class, the minister did not answer the question. He simply said that this is just the first step and that the next step is the child benefit. We have not seen that yet. Maybe it will actually be a good thing for families with children, or maybe not—we will see. However, that does not answer my question.

This measure will not really help the middle class at all. A child benefit might help families with children, but it will not do a thing for single people, couples without children or seniors. Any of those people who earn less than $45,000, and especially if they earn less than $90,000, will not benefit at all from the Liberal promises for the middle class, even if their income is lower.

It is important to look at everything the Liberals are proposing. We believe that our proposal would help the middle class much more effectively than the Liberal measure, which, as I said, will benefit only the top 20% of income earners and do very little for everyone else.

I began by talking about the bad, and there is a lot of it, but now I would like to talk about the good, and one key measure that we support in this budget. I am talking about dropping the contribution limit for tax-free savings accounts, or TFSAs, from $10,000 to $5,500. We regard TFSAs as a useful tool for saving, and they should be used for that purpose. However, what the previous Conservative government proposed, raising the contribution limit to $10,000, is very harmful to Canada's public finances and does very little to help taxpayers and investors who want to use that tool.

This is because anyone can open a TFSA, and among those who can afford to do so, only 7% are contributing the maximum at this time. This measure is extremely costly. The numbers speak for themselves. In 2020, if the limit stays at $10,000—and it could even be indexed later on—it is estimated that it will cost the Canadian treasury $2.3 billion, all for a single investment tool that benefits only a small minority of Canadians. In 2030, 10 years later, the lost revenue or tax expenditures are estimated to be $9 billion. In fact, the parliamentary budget officer, whose job it is to study the impact this would have on the Canadian treasury, went as far as to say that in the medium term—I am talking about 2040-50, since the horizon might well extend that far ahead—tax expenditures, which is income lost by the Canadian government, will account for nearly 0.7% of GDP.

I would like to point out that this House is not budging and that previous governments did not budge on the issue of international aid and reaching the target, which was set at 0.7% of GDP under the agreements. The previous government considered it to be too costly to move forward on that. We were never even close to the 0.7% target. According to the parliamentary budget officer, with the TFSA alone we would reach 0.7% of GDP in foregone revenues, those revenues that would no longer be paid to the Canadian government, by 2040-2050. The TFSA is a savings vehicle that we fully support. However, if we were to head in the direction that the Conservative government proposed, it is a measure that could be extremely debilitating for Canada's fiscal capacity and its ability to provide the quality programs and services that Canadians expect.

As I was saying, the TFSA is a beneficial savings vehicle. The $5,500 contribution limit, indexed to inflation in $500 increments when this amount is reached, is quite adequate. Only 7% of Canadians currently contribute the maximum. If we look at just individuals who have already opened a TFSA, only 17% of them contribute the maximum. Increasing the contribution limit will only help the 17% who already contribute the maximum. Thus, this is a very expensive measure that very few people take advantage of.

If I am dwelling on the tax-free savings account, it is probably because outside of the tax cut in Bill C-2, it is the key issue in terms of finances. The TFSA is a useful tool for promoting savings and a tax shelter appreciated by those who use it properly. However, it could also become a means of tax avoidance, and that is what we must prevent.

I say that, because when we are talking about $10,000, which will one day be indexed, a lot of Canadians see the tax-free savings account as an account where they put after-tax money, which will yield non-taxable interest. They can then withdraw that money as they see fit, which is not a bad thing. However, what these people often do not know is that you can put many things other than cash in these accounts. You can put in stocks or financial instruments, and anyone who can afford it can put up to $10,000 in stocks, for example, into a tax-free savings account and enjoy capital gains that will not be taxed within that account.

Right now, 50% of capital gains are taxed, at a rate of about 40%. The TFSA can be an attractive vehicle for those who want to avoid paying tax on capital gains and are able to contribute up to the limit of $10,000, in which case they do not really need to save.

In that sense, the TFSA can be useful for Canadians, and that is why we support it. However, we want to prevent these accounts from becoming a way for people to avoid paying taxes, and that is why we oppose increasing the contribution limit to $10,000. We think that the $5,500 limit is a perfectly adequate way of helping Canadians who want to ensure their future financial security.

Let us remember that there are also other savings vehicles, such as RRSPs. These private savings are one of the main ways to ensure one's financial security. Others include company pensions, the Canada pension plan, the Quebec pension plan, and old age security, which can be supplemented with the guaranteed income supplement.

If we tally the good and bad points that I talked about earlier, it is clear that the Liberals' decision to reduce taxes for the richest 20% and increase them for the richest 1% is not an appropriate measure if the government really wants to help the middle class.

Eventually, under an NDP government, there will be a way to review this decision and really help the middle class. We are extending an olive branch to the government here, because the other thing that could be done is to make the necessary changes in committee so that we can come back to the House and adopt a measure that will really help the middle class.

We are therefore going to resubmit this proposal in committee for review. It is largely based on the excellent work done by the parliamentary budget officer.

Lowering the TFSA limit is extremely important from a tax perspective in order to ensure that the Canadian government can offer these services, function properly, and ultimately, or so we hope, make significant reinvestments in areas where the Conservatives cut funding to the bone or even deeper.

That is why we will support the bill at second reading. We hope the government and its members will be willing to listen in our committee meetings. This would eventually open the door to amending the provision to lower taxes for the richest 20% of Canadians and instead helping 80% of Canadians, many of whom are getting nothing right now. Of course we will support the second measure, which is to lower the contribution limit for TFSAs.

This is the first bill introduced in this new Parliament. I truly hope the government will take a new approach. I think all parliamentarians have already noticed a change in tone and dynamics, which is very much appreciated. However, after four years of hearing meaningless slogans and catchphrases to try to justify things that are simply not supported by the facts, we might still be in for another four long years.

This morning, when the Minister of Finance introduced Bill C-2 and delivered his speech justifying the tax cut, I was hoping he would at least understand or acknowledge the auditing work done by the parliamentary budget officer, but that was not the case.

I wish he would accept a fact that has been proven over and over. The middle class will not benefit from these measures; only the richest 20% will. The facts prove it. The parliamentary budget officer proved it, and we ourselves proved it before the report was released. He wants to stay the course and perpetuate the myth that the middle class will benefit. This is a snow job.

A lot of Canadians are going to be surprised and disappointed when they fill out their income tax returns. They thought they voted for a party, the Liberal Party of Canada, that would give them a tax cut, but they are going to find out that they are not eligible. A good 80% of people will find out that this does not apply to them. I predict some nasty hangovers for them.

I sincerely hope that the government will pay more attention to the opposition parties, especially when we are trying to help by suggesting improvements that should help the government achieve its goals. I would like it to say so publicly.

The most disappointing thing about the Minister of Finance's speech is the fact that he is trying to deal with the problem by sending up yet another smokescreen. We have not yet seen the Canada child tax benefit, which is really just going to be a remix of existing programs. That is still nothing but a promise.

The fact is that only couples with children and single-parent families will benefit from this money. Those people will be happy to get some extra money. Couples without children, singles without children, and seniors, even the poorest of them, even those who earn, say, $45,000, $30,000, $20,000, or $10,000, will get nothing. They will not get a tax cut, nor will they benefit from the Liberals' upcoming measure.

I would like the Liberal government to be consistent, to respect the Canadian public, and to tell the truth about the real impact of the measures it is introducing. This was the government's first opportunity to do so. I think it has missed its opportunity, but it will have another chance in committee. I hope that the government will be listening. If the government continues in this direction, I think that the next four years will be very long and full of hype, catch phrases, and empty rhetoric, but very thin in terms of measures that will truly help Canadians, especially middle-class Canadians and those with such low incomes that they struggle to make ends meet.

I look forward to questions from my colleagues in the House, but I want to reiterate that we will support the bill at second reading, because it maintains the TFSA contribution limit at $5,500, which has considerable tax implications, and we will try to make changes to the bill in committee.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I listened to the member's comments, and I do not know to what degree he is being fair when talking about the overall picture being portrayed in the legislation we are debating. There is no doubt that, through this legislation, the government is saying that those individuals making in excess of $200,000 a year will be paying a little more. There is no doubt it indicates that millions of Canadians will receive tax breaks in this fiscal year.

If we take into consideration the Canada child benefit program that the member made reference to, there is no doubt that the bill would help put into place a substantial benefit for Canada's middle class. A major part of our party's platform was that we were going to assist and give strength to Canada's middle class. By doing that we would be giving strength to Canada's economy.

When we look at a holistic approach on this particular bill, do the New Democrats feel that overall this is a bill that is worth supporting? It does ensure that there is less inequity overall. There is always room for some improvement in terms of the holistic policy, but in terms of a step forward the, bill does a lot for Canadians. This is something all members of the House should support.

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

Madam Speaker, in fact, the numbers indicate that the bill does a lot for the 20% of Canadians with the highest incomes. It does nothing for 80% of Canadians, who will get little to nothing out of the tax cuts that were promised.

Compare the Liberals' proposal to ours, which seeks to change the first tax bracket in order to help far more people. The median income is around $31,000. People earning that amount have nothing to gain from the tax cut the Liberals promised, but would receive $200 through our proposal. An individual whose income is between $11,000 and $45,000 has nothing to gain from the Liberals' proposal, while they would receive $170 on average from ours.

The parliamentary secretary said that people earning $200,000 will start to pay more. However, under the Liberals' proposal, a person earning $210,000 a year will get a net total of $279. Under our proposal, they would pay an additional $66 in tax.

That is why I think the government is using smoke and mirrors when it talks about the middle class, since the tax cut they are promising does not help the middle class. It does nothing for 80% of the population. It redistributes supplementary income from the top 1% to 20% of the wealthiest Canadians. We do not think this measure helps the middle class.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Madam Speaker, I appreciate the comments from the hon. member. Out of respect, I will not try to say his riding's name, because I will not be able to do that.

I am a new member of Parliament, and I was disappointed by the lack of interest the government across the way has shown. The only member who actually looked up while the member was talking was the member who asked the question. The Minister of Finance did not answer my question either; the Liberals threw out numbers of 80,000 and 150,000. Yesterday, the hon. member for Surrey—Newton said the government went and consulted with six communities across Canada.

My question is about the geographic data of the interest from Canadians and the consultations the government apparently has had with Canadians. That is what is being said. I have a problem with this because the Liberals are throwing these numbers out there and there is no substantive, quantifiable data that tells us where they are getting this data and information from. It can come from social media, online consultation, or anywhere.

My question for my hon. colleague is this. Do you have concern as well that perhaps some of this information and the consultation might be coming from third parties, foreign interests, or foreign parties from across our borders?

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I want to remind the member for Cariboo—Prince George that, when asking his question, he should address it to the Chair and not to individual members.

The hon. member for Rimouski-Neigette—Témiscouata—Les Basques.

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

Madam Speaker, we do have concerns about how the government is conducting its pre-budget consultations. They are not necessarily the same concerns, but the government is holding its own pre-budget consultations, just like the previous Conservative government did. That is perfectly legitimate, but the consultations are limited because they are organized by the government.

We asked the Minister of Finance to have the Standing Committee on Finance hold formal pre-budget consultations. We recognize that there is limited time because the committee has not yet been struck. However, we proposed an intense schedule for the Standing Committee on Finance, which would meet for two or even three weeks, from morning to night if need be, so that each party, including the government, could hold public consultations that would be open to all Canadians. That would provide input other than that sought by the government.

Naturally, if the government organizes its own pre-budget consultations it controls the entire process, including the selection of witnesses. It is important to recognize the role of the Standing Committee on Finance, which has members from the three recognized parties, and to ensure that Canadians in all situations and from all walks of life and all philosophical backgrounds are heard in the House, even if within a shorter period of time. I believe that the Standing Committee on Finance is prepared to do this work. All we need is for the government to agree.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Madam Speaker, I thank the member from Rimouski-Neigette—Témiscouata—Les Basques for his excellent presentation.

I would like to add the comment that we saw, under the Conservatives, Canadian families struggling under an appalling record debt load. Canadian families were carrying, under the Conservatives, the highest and heaviest debt load in our nation's history. That is because the Conservative economic policy is kind of like an oxymoron. It just did not work for Canadians.

The Liberals have been in office 100 days, but that debt load has actually worsened. What they did to deal with the appalling level of debt for Canada's families, particularly middle-class families, was to put in place a measure, as the member said so eloquently, that actually does not help the folks in the middle class at all, the folks who have that average income. The folks earning $40,000 a year are not being helped at all, even though they are dealing with a crisis in health care, fewer and fewer funds available for them and their children, record levels of student debt, and record levels of family debt.

I would like the member to explain to me and Canadians why it is that the Liberals chose to help people earning over $200,000 a year—a stockbroker on Bay Street benefits from this program—but have not chosen to help so many middle-class families that actually need the help and support.

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

Madam Speaker, I would like to thank the member for Burnaby—New Westminster for his question.

I hope that the Liberals will give us an answer to that question. I think that most Canadians will be very disappointed when they file their income tax return because they will not get any of the money promised to them during the election campaign.

Does the government really think that the average voter who heard about a tax cut for the middle class during the election campaign understood that that tax cut would apply only to families that earn $45,000 a year and would be most beneficial to families that earn $89,000 a year? No. Voters thought that there would be a tax cut for the middle class. Many Canadians who consider themselves to be and are in fact part of the middle class are excluded from the measure proposed by the Liberals.

When the Parliamentary Secretary to the Leader of the Government in the House of Commons asked me his question, I answered that only the richest 20% of Canadians would benefit.

When looking at how this would affect couples, Luc Godbout, an eminent tax expert in Quebec, determined that if a couple had an estimated or combined income of $250,000 a year, they could receive a tax break of up to $1,120. However, a couple with a combined income of $75,000 a year, who are arguably part of the middle class, would receive an average of zero to four dollars.

I do not think that the Liberals defined middle class properly. I hope that they will consider the arguments that we have already made and that we will continue to make, as well as the arguments presented by the parliamentary budget officer, so that they can really address the concerns of the middle class.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I did not have a chance the last time I spoke in the House to thank the constituents of Coast of Bays—Central—Notre Dame for putting me back in office. I would like to do that now. The vast majority of them have been doing so for five elections now. I keep testing the limit every time I run out there. Nevertheless, I want to thank them for their generosity and for giving me the opportunity of a lifetime to represent them in the House of Commons in the nation's capital. Indeed, it is the opportunity of a lifetime for all of us to sit in the House of Commons.

I am honoured also to talk about a bill this morning that we talked about much during our campaign. We talked about it as a way of helping the middle class of this country grow Canada's economic engine. We faced challenges as we started the campaign, and the challenges continue to this point. Right now, we have challenges in certain aspects and geographic areas of this country that are certainly unprecedented. I talk of the price of oil and natural gas. I also talk about the fact that many of the provinces also find themselves in a precarious situation given the fact that a lot of their revenues are based on royalties and taxes they collect from this particular sector. We also have a low dollar, something that for many people may produce some opportunities but in other cases could provide many challenges. It too is at an unprecedented level of less than 70¢ to the American dollar now.

I want to talk today about Bill C-2 and some of the measures we hope to bring forward that would provide some tax relief to Canada's middle class. As I said before, the middle class is the economic engine of this country. When I say the middle class is the economic engine of this country, I am talking about the individual talents of those individuals and their ability to provide a living for their families.

For example, in my area of Newfoundland and Labrador the greatest exports right now in dollar value alone would be seafood exports. We also have mining and forestry and many other sectors with great exports. To be honest, one of the greatest and most exciting exports that we have right now in central Newfoundland, the area that I predominantly represent, is the people and their talents.

We do have skilled people in the oil and gas sector but we also have many skilled people in other sectors such as mining. They have a skill and a trade that they export around the world. Each and every week I travel from my home riding to Ottawa or to other parts of the country, I run into people that I have grown up with or I talk to people that I have met in my tenure as a member of Parliament. These people talk to me about the areas where they have been or where they are going, such as Russia, the North Sea, northern Africa, or Alberta, Saskatchewan, and British Columbia right here in Canada. In the field of hydroelectricity, they have travelled to Quebec and Manitoba. It is phenomenal how they do this. They travel vast distances. They go away for weeks at a time then return home and bring that wealth home with them. This a precarious position for them right now given the situation in the oil and gas sector. Some people would say that the reason they have created that value is the oil and gas itself, but I would disagree. What created that value for them was their own talent and ability to adjust to the world markets. On the one hand, I am worried about the price of oil and gas in this country and around the world, but on the other hand I am not worried because of the versatility these individuals have shown over the past while. The majority of them are certainly in that middle-class income bracket.

I am pleased to participate in this important discussion on the government's middle-class tax cut. My objective today is twofold. First, I want to provide the House with a quick assessment of our economic and fiscal situation and, second, I want to tell members why the middle-class tax cut would help grow our economy.

As we embark on an agenda of economic growth and long-term prosperity, there is no doubt that we are facing considerable headwinds as I discussed earlier. Globally we continue to experience what International Monetary Fund Managing Director Christine Lagarde famously called “the new mediocre”. In its latest economic outlook in January, the IMF expects global growth to pick up modestly to 3.4% in 2016 and 3.6% in 2017. This is down point two percentage points for both 2016 and 2017, compared to its October 2015 world economic outlook.

Though the recent performance of the U.S. economy is encouraging, the European and Chinese economies are cause for concern. We have seen this happen in Europe now for the past seven years and most recently with the Chinese economy. Although China's GDP is very large and is still growing, it is not growing as much as it did in the past four to five years. Many if not all of of us here have experienced the benefit of global trade and have had conversations with people in business in our ridings who deal with many Chinese companies. Members, of course, know of what I speak.

As I mentioned earlier, global crude oil prices remain at less than half of what they were in mid-2014 due to persistent global oversupply and softening demand. What is happening beyond our borders has real and tangible consequences for us all.

In Canada, our economic performance in the first half of 2015 was poor, mainly due to the collapse of oil prices in 2014. Consider this. Last April, just to put some numbers on this, the government projected an oil price of $71 a barrel by the end of this year. As I speak, oil is now trading at about $30 a barrel, less than half the projected price. As I mentioned earlier, coming from Newfoundland and Labrador, I know how we are hit directly and indirectly by the resulting large hole in our provincial budget. We are directly hit, of course, because our offshore exploration has diminished and it is our offshore supply that directly benefits us in the way of royalties and taxation for our province, and indirectly through the employment that it creates, including for individuals who travel around the world in this particular sector.

We know that growth will be lower than was expected in the last budget projections. This has important implications for our currency and our fiscal situation. The good news is that real GDP growth resumed in the third quarter of 2015. The IMF, it its latest economic outlook released January 19, expects growth in Canada to pick up over the next two years in relation to 2015. We also maintain an enviable position of having a low debt-to-GDP ratio, abundant natural resources, and one of the most educated, intelligent workforces in the world.

Our policies will strike a balance between fiscal responsibility and controlled investments that promote economic growth. One of the most important components of this is restoring middle-class economic progress, which is, as we all know, the backbone of our economy and has been since our inception for close to 150 years now.

This is why one of the government's first orders of business back in December when we arrived was to table a notice of a ways and means motion to cut taxes for the middle class. This was the right thing to do for our economy. The proposed middle-class tax cut and accompanying proposals will help make the tax system fair so that all Canadians have the opportunity to succeed and prosper.

Specifically, Bill C-2 proposes, first, to reduce the second personal income tax rate to 20.5% from 22%; second, to introduce a 33% personal income tax rate on individual taxable income in excess of $200,000; and third, to return the tax-free savings account annual contribution limit to $5,500 from $10,000 and reinstate indexation of the TFSA annual contribution limit.

I will expand on the three points.

The first one is the reduction of the the middle-income tax bracket, which is taking effect January 1. It is expected that about nine million Canadians will benefit from this measure in 2016. Single individuals will see an average tax reduction of $330 per year, and couples will see an average tax reduction of $540 per year.

Second, the government is introducing a new personal income tax rate of 33% that will apply to individual taxable income in excess of $200,000 per year. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax rates. As with other bracket thresholds, the $200,000 threshold will be indexed to inflation.

Third, the government is returning the tax-free savings account annual contribution limit to $5,500 from $10,000, effective January 1, 2016.

These are some of the issues that we discussed during the campaign, including my colleague for Cape Breton—Canso. He was just here and talked incessantly about how wonderful his riding is and how hard it is for him to get around his large riding. He likes to talk about all these new policies we are bringing in to help the middle class in that beautiful area known as Cape Breton.

I can reassure members that the change to the TFSA is not retroactive. The TFSA annual contribution limit for 2015 will remain at $10,000. However, returning the TFSA annual contribution limit to $5,500 is consistent with the government's objective of making the tax system fairer and helping those who need it the most. When combined with other registered savings plans, which we are all familiar with, the $5,500 TFSA annual contribution limit will permit most individuals to meet their ongoing savings needs in a tax efficient manner.

Indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time. This is referring to the consumer price index and how we will tie the limits to the increase in inflation.

Finally, before I conclude, I would like to highlight some of the other measures that are included in today's legislation, Bill C-2.

The bill proposes to change the current flat top rate of taxation rules applicable to trusts to a new rate of 33%, which is in line with the 33% tax rate as we proposed. The bill proposes to set the tax on split income to the new rate of 33%. It would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate. Finally, it would increase the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the proposed new 33% personal income tax rate.

Also, the government will introduce proposals in the upcoming budget to create a new Canada child benefit, which will take all of the benefits and put them into one tax-free Canada child benefit. This is something that has been talked about in my riding for quite some time. The biggest complaints were about benefits from government that suffered from tax clawbacks, which affected all benefits no matter what they were. We have now put forward this Canada child benefit that puts the tax aside for the sake of and benefit of our families. I look forward to the budget in the spring to talk about this.

Of course, nowadays there is an added pressure regarding things such as child care and child spending. Therefore, this is one of the proposals I look forward to in the upcoming budget that we talked about in the campaign, which Canadians overwhelmingly accepted as a way of financially helping themselves during their child-rearing years.

All these initiatives demonstrate that our sights are clearly set on the future. This legislation will help strengthen the middle class by putting more money in the pockets of Canadians to save, invest, and grow the economy. More broadly, it will help grow our economy in the context of a difficult global economic climate so that all Canadians benefit.

I heard some of the debate earlier, and I appreciate some of the concerns the opposition put forward. Of course, we have taken a strategic approach to provide a benefit to middle-class Canadians, especially those facing tough times.

To address these tough times in the future, I look forward to the budget, as I mentioned earlier, with things such as the Canada child benefit, which I think will enhance a way of life for those bringing up children now. For those who are suddenly unemployed, the situation is very difficult. As we deal with the situation in the next few months and certainly within the next few years, my colleagues, no matter what party they belong to, would certainly agree with me that we have challenging times ahead.

Again, for those provinces dependent on revenues from the oil and gas sector, and I speak of Alberta, Saskatchewan, and my own province of Newfoundland and Labrador, there are difficulties ahead, certainly when it comes to social programs. There will certainly be added pressure, but we believe that measures taken, such as those contained in BillC-2 and in the upcoming budget, will help to alleviate some of those concerns.

For the budget coming up, consultations are going ahead. I would advise all members to conduct consultations in their ridings, as I will. It is a perfect opportunity to get back to our ridings as members of Parliament. I am travelling to 15 communities in an area the size of Germany. I wish all members the best, because I know that travel can be very taxing on our families, but it is certainly worth it.

In my situation, I know what I will hear. I will hear a lot about the resource sector. I am going to hear a lot about the challenges that lie ahead but also about things like skilled trades and infrastructure spending to help spark the economy and to help communities deal with transit and their future investments.

I will leave it at that for now. I look forward to the questions and comments from my hon. colleagues.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Madam Speaker, part of the frustrating part of this, as a middle-class Canadian myself, is to hear the arguments of the Minister of Finance and to hear the arguments of the hon. member, as though somehow they are giving a gift to the middle class.

David Macdonald, who is a senior economist with the Canadian Centre for Policy and Alternatives, broke it down. The reality is that for those Canadians making $48,000 to $52,0000 a year, the average saving will be about $51 a year, or as my hon. colleague for Brantford—Brant said, about $6 a week, roughly, or less than that, in fact. From $62,000 to $78,000, it will be $117 a year. He classifies what comes as the next level as the upper middle class. Those making $124,000 to $166,000 will gain $521 a year, and then from $166,000 to $211,000, it will be $813.

In the meantime, Canadians earning over $211,000, granted, will see a tax increase of $2,912, but in fact, it is a shell game. It is a shell game the Liberals are putting over on Canadians, because the Parliamentary Budget Officer himself said that there would be an $8.9 billion revenue deficit within six years.

We are providing tax breaks to Canadians now. Will the member tell us how Canadians will pay for this going forward, with the debt and deficits that will be created as a result?

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I am assuming that my hon. colleague is new to the House. I have yet to hear a Conservative talk about the drawbacks of a particular tax break. That is a new one to me. Nevertheless, I will address the issue at hand.

During the campaign, we talked about how the tax savings measures we are talking about are a benefit, as most economists would say, to the middle class. I would like to remind him that the Canada child benefit is going to provide a great benefit to all Canadians with young families, as we talked about earlier.

The Conservatives continue to brag about the 2% off the GST. I was wondering if perhaps my hon. colleague would like to stand now and talk about the benefit that provided.

We are talking about thousands of people being lifted out of poverty, despite the numbers he puts out there.

In this particular situation, this is a great way for us to begin to invest in the middle class by providing the tax relief contained in Bill C-2 and by providing the benefits we will announce in the budget. I guess the overall answer for that is to stay tuned.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, this will interest my hon. colleague, who I have known for many years. He is a very likable fellow and a decent guy. I feel bad for him that he is having to do this job, which is the Liberal attempt to treat Canadians like they are rubes at a country fair.

When the Prime Minister talks about the middle class, who is he talking about? He is not talking about the 18 million people who pay taxes.

My hon. colleague says the Liberals are worried about people who are facing tougher times, and I am looking at who will benefit from this and who will not. If people are in the top 30%, they will make out like bandits. If people are in the top 10%, they are going to love these guys.

However, if people are getting by as office workers, there will be zero dollars for them. A hairstylist earning $27,000 a year will get nothing. A social worker earning $43,000 a year will get nothing. A fish plant worker in Newfoundland will get zero dollars. A cashier will get zero dollars. Are these people not working hard?

However, if someone is a parliamentary secretary, thumbs up. If someone is a member of Parliament, thumbs up. If someone is a bank manager, thumbs up.

The question for the Liberals is to be honest. When they are using this shield of the middle class, they should at least have the decency to say that it is for the people who are doing quite well, thanks very much, and the rest of the hard-working Canadians who pay their taxes and do their jobs are the ones being left behind by the government.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I find it hard to believe. I have known the member for quite some time. I do not recall him actually being so down on all of the incentives that were brought in before.

In this particular situation, what he is talking about is a situation we have discussed before. He has supported many of the measures in the past. My understanding is that he is now supporting this particular measure going to second reading. If the rubes are making out in the market, I am not quite sure why New Democrats would want to support these particular rubes going forward. Nevertheless, they are.

He talked about the middle class in the election. I heard him do it during the campaign. I cannot imagine the reason his protestations are so loud about this particular bill that he has now decided to support at second reading. I would suggest that the hon. member come forward on this more constructively. I have always known him to be a constructive person.

Nevertheless, I would point to the facts about how many people will benefit.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Madam Speaker, the members opposite are geographically well positioned, because prior to the last election, all of them together seemed to prefer a program that sent cheques to millionaires through their universal benefits and a program that, surveys showed, three out of 10 Canadian families did not need.

What we have here is an example of the difference between equality, which is a good value, and equity, which means that one focuses one's resources on the people who actually need it.

I am wondering if my hon. colleague can enhance this notion of equity.

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, it is a valid point by my hon. colleague from British Columbia.

We talked earlier, throughout the campaign and until now, about how the investment in benefits and tax incentives are targeted toward those who will benefit the most. That is why, when we discussed the TFSA issue and reducing the limit from $10,000 to $5,500, the whole point was that more people would maximize it. We can use those savings to give benefits to others who will also leverage that. That is the whole point of what we have been doing.

We talked about the child care benefit. The Canada child benefit contains two things targeted towards those who need it most. Second, it is tax free. That is what we talked about during the campaign.

We received the mandate to put that forward for those very reasons. People said to us, yes, we believe it is the right investment to make and not iin cases where we would be providing a benefit for those who need it the least.

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Mr. Speaker, it is interesting listening to the member opposite talk about their strategic approach. I think I stand for all of the opposition parties when we ask the government to show Canadians what its plan is. We have yet to see it. We have yet to hear any actual questions answered.

Earlier this morning, the Minister of Finance stood and said that indeed, the Conservative government left this country in a state of flux.

The document I am looking at right now, the “Fiscal Monitor”, which is a publication of the Department of Finance, states that as of November 2015, there was a budgetary surplus of $1 billion.

My question for the member opposite is this: Did the Minister of Finance just misread his cue cards?

[Scott Simms, Liberal, Coast of Bays—Central—Notre Dame, NL]

Madam Speaker, I first came here in 2004. In 2006, when the Conservatives took over, we handed them a multibillion dollar surplus, which just ran through the cracks and madly off in all directions over the following six years. Trust me, I was here during the deficit years.

I would like to remind the member that whatever he talks about now is some fictional type of surplus. Trust me, it was fiddled away in the last 10 years of their existence.

[Karen Vecchio, Conservative, Elgin—Middlesex—London, ON]

Mr. Speaker, today I will be sharing my time with the hon. member for Dauphin—Swan River—Neepawa.

I am honoured to rise today to speak on Bill C-2. This is my maiden speech, and I wish to start by thanking the people of Elgin—Middlesex—London for giving me the opportunity to represent them in the House of Commons for the next four years.

I would not be here if not for the amazing volunteers and friends, but most of all my incredible family. To start, I know that as I speak today my mom and dad are watching these proceedings. I would like to thank my parents, Patricia and Harold Martyn, for all of the opportunities and support they have always given me. As the daughter of people who farm turkeys and pigs, I understand hard work and commitment, and I thank them for instilling these values in me. Whoever thought the girl from Sparta would be sitting in the House of Commons.

To my siblings who have always held me accountable, and doing so with love, a huge thanks for believing in me: Linda, Ann, Paul, and my in-laws, Greg, Scott, Trish, Lisa, Pete, and David. I thank them all. To Sandra and Bill, a.k.a. Nana and Pops, who have always been there for me, I love them both.

Making this decision to get into federal politics was not an easy decision, but I truly had a head start. My mentor and former boss, Joe Preston sat across this aisle from 2004 to 2015. “Trust me” was a common phrase used daily in our discussions. Today I would like to thank Joe for encouraging me. Without his support, this would not have been possible.

Now for the hard part, naming the people I miss every day as I serve this amazing country: Dakota, Garrett, Marissa, Hannah, and Christian. I hope from this new chapter of my life they will realize that anything is possible, will believe in themselves, and surround themselves with good people. I cannot wait to see what the future holds for them.

Finally, to Michael, my better half, the guy from band camp whom I married, I miss our evening walks, but I am definitely thankful for Facetime, or this journey would never have been possible. Although we are 640 kilometres apart, he is always with me. I believe in him, just as much as he believes in me, and I look forward to kicking off our bucket list in the next 20 years.

Elgin—Middlesex—London is an incredible riding. It is filled with beautiful lake harbours, rich agricultural land, small and large vibrant businesses, but most of all, great people. The volunteers not only on my campaign but throughout this riding helped mold me and educate me.

I would like to personally thank all the people who got me here, including Brian, Fran, Francine, Marci, Whitney, Jeff, Jen, Betty, Ena, Blake, Bob, Mae, Terry, Reinhardt, Dan, Shirley, Dean, Bridget, Melissa, and all the residents on Crescent Ave. I thought if I went fast, no one would know if I missed them. I send a special thanks to Ninja Turtle Noah, Maddie, Lauren, and Sarah.

To the ladies in the office, Cathy, Kaylie, Jena, and Kim, knowing that they are a part of the team makes me confident that Elgin—Middlesex—London is in good hands.

It is with all of these wonderful Canadians in mind that I stand in the House to oppose the proposed alterations to the Income Tax Act. Canadians have utilized the tax-free savings account since its introduction in 2009. This program has provided Canadians with incentives to develop attitudes of economic responsibility.

TFSAs are helpful tools for Canadians who are seeking to save or are preparing for unforeseen economic vulnerability, a tool used by many of my constituents in Elgin—Middlesex—London, both young and old.

The current Liberal government has proposed a reduction in the maximum amount of funds that Canadians can invest in these accounts per year. Unfortunately, the government does this on the false pretence that doubling of the TFSAs only benefits the highest earning Canadians rather than just the middle class.

On the contrary, statistics demonstrate that this investment tool is utilized by many middle-class Canadians. Half of those holding TFSAs earn less than $42,000 a year. In fact, 60% of Canadians who take advantage of the TFSA's limit earn $60,000 or less a year. What is more, in 2015, 600,000 Canadian seniors invested in TFSAs, maximizing their yearly deposits while earning less than $60,000 a year.

CARP, Canada's association for the fifty-plus, was in favour of increasing the limit the TFSAs to help seniors form fiscally responsible plans for the future. When the Conservatives raised the limit on TFSAs, the majority of Canadians supported that decision. Lowering the limit on TFSAs will do absolutely nothing for the low-income families, including financially burdened Canadians, to which the government must remain accountable.

The proposed changes in Bill C-2 will negatively affect Canadians by noticeably reducing their incentive to save for the future, creating a heavier reliance on government support during financial crises. Further, it will limit the choice of Canadians.

Why put up roadblocks for people who want to engage in responsible saving practices? Why remove the sensible avenue for saving, which costs the government very little?

Bill C-2 would do more than limit the choices available to the middle class. It would also reduce the amount of attention given to the vulnerable people in Canadian society. Instead of worrying about nitpicking a program that already works for Canadians, the Liberal government should be seeking out programs and initiatives that would actually aid in giving a hand up to this country's most vulnerable people.

The current government needs to continue to support programs such as the housing first initiative, which was undertaken by the previous Conservative government. This initiative was directly aimed at ending homelessness by identifying those most desperate in Canadian society and ensuring they were given a real opportunity for self-advancement. By seeking out these programs, the current government would have the ability to ensure that its efforts to end social issues do not go a mile wide and an inch deep. Spending well, rather than just spending, is the key to improving social issues today. Unfortunately, spending responsibly does not seem to be the current government's strongest attribute.

These tax cuts are aimed at making the public feel better about Canada's current position during this time of economic uncertainty. However, these cuts are not enough to provide true relief for Canadians being affected by the dipping dollar. It will take much more than just tax cuts to regrow the Canadian economy. This remedy is a mere surface solution to a much more serious problem.

Even more indicative of the Liberals' spending habits are the alterations to revenue that Bill C-2 would cause. Originally, the Liberals claimed that their new tax programs, including the lowering of the ceiling of the TFSA, would be revenue neutral. However, the tax bracket changes contained in this bill would actually cost the government $8.9 billion in the next six years. Since the government failed to accurately project and report these financial results, why should we trust the Liberals' promises that they will aid Canadians in the long run?

My constituents in Elgin—Middlesex—London have addressed this issue to me personally and are concerned about these changes. All age groups from all tax brackets have been using this method of saving their money for the future. Young adults have been putting their money away through TFSAs to invest in new homes, families have been using it to invest in their children's education, and many have been using it as retirement tool.

As the official critic for families, children, and social development, I can assure members that I have spoken to many constituents and Canadians who want to see the ceiling of the TFSA contributions remain at $10,000 per year.

I look forward to continuing to hear from my constituents in the great riding of Elgin—Middlesex—London and to working with all Canadians in my new role. I would like to thank this House and my hon. colleagues for indulging me and for the opportunity to speak to this very important piece of legislation that would affect all Canadians.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Madam Speaker, I welcome my colleague across the floor to the House of Commons and note that, unlike me, she was not present in the last session of Parliament. She talked about false projections. I am just going to read back, from the 2015 budget, the projections that the other side of the House made as they relate to the economic circumstances in which we now find ourselves.

The Conservatives projected a 3.1% growth in GDP. That was the foundation of their budget. They projected growth this year of 2.2%, and from that they said they would therefore have a surplus. We now know that growth is at 1.2%. That is the misguided financial capacity of the previous government, with which we are now dealing.

However, the other reference that was made here, beyond the false projections of the previous government and the false projections of a surplus, is this. Your government has been withdrawing the funding agreements for social housing in this country over the last three years consistently, and in doing so, as you reduced it from $2.1 billion to $1.9 billion to $1.7 billion, you have been directly putting people in subsidized housing out on the street. How can you stand here and say that your government had a humanitarian approach—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Order, please. I would like to remind the member that he is to address his questions to the Chair and not to individual members.

The hon. member for Elgin—Middlesex—London.