Debates of Feb. 1st, 2016

Income Tax Act

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I would like to thank the hon. member for Skeena—Bulkley Valley. He has done an amazing job in the House since 2004 on behalf of his constituents, and I will certainly do my best to follow such an amazing performance.

It is an honour to rise again in the House to speak on behalf of my wonderful constituents in Cowichan—Malahat—Langford and to take part in the debate on Bill C-2, An Act to amend the Income Tax Act. As we all know, this bill would make various changes to the Income Tax Act, but today I will concentrate on two of them: the changes to the income tax brackets and to the contribution limit to the tax-free savings account.

The Liberals were elected on the promise of bringing tax relief to the “middle class”. Indeed, the words from the Liberals' campaign website painted a cozy picture for the average middle-class Canadian. Let me just read some of the words: “We will give middle class Canadians a tax break, by making taxes more fair. When middle class Canadians have more money in their pockets to save, invest, and grow the economy, we all benefit”.

[An hon. member]

Hear, hear!

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Yes, it sounds pretty rosy.

Before I get to the crux of the matter with the tax changes, I want to speak first about the tax-free savings account because this is on something that the NDP can agree on with the Liberal Party.

When the Conservatives were in power, we heard time and again that the TFSA was an excellent tool for helping seniors. I know very well from hearing from seniors across my riding that the TFSA contribution limit would be of little help compared to many of the NDP's proposals. It was a step in the right direction to lower the TFSA contribution limit placed by the Conservatives, because the higher limit yields disproportionate benefits to the richest Canadians. The TFSA contribution limit increase would have cost the treasury billions of dollars in the decades to come. In fact, it is estimated that the combined federal–provincial cost would have been $132 billion by the year 2080. Where is that money going to be recouped?

We know that the Conservatives' responses included the point that it was not a problem for the previous prime minister's grandchildren. We heard Joe Oliver's comments on that mentioned in the last speech. However, we in the NDP believe in creating a sustainable future where no one is left behind. The problem lies in what we have seen through many Liberal governments in the past. They acted on some small measures but really did nothing to deal with the issues that middle- and working-class Canadians face. Presently, we are dealing with a very difficult economy. There are lay-offs and the power of our dollar has been shrinking by the week. This is making our already-precarious seniors' living and food insecurity even more insecure.

Now I will speak to the matter that I am looking forward to addressing, the so-called middle-class tax cut.

The Liberals have decided not to use their first piece of legislation, Bill C-2, to deal with our ruined economy but to propose lowering taxes in a way that would not benefit 60% of Canadians. In my riding, if someone earns the average income of $37,000 a year, he or she would receive precisely zero dollars in benefits. We know that the price of vegetables has gone up by 10% in the last year and we have seen a report from the University of Guelph that predicts that food prices will again rise faster than inflation. This price of food disproportionately affects the most vulnerable Canadians and is something that hurts the real middle class in this country. The seniors and indigenous people in my riding are some of the most adversely affected by this drastic price increase. If we get to the people who are lucky enough to get into the middle-class tax bracket, the maximum benefit that many of them would see, as alluded to earlier, is precisely $50. That figure is negated when we take into account the cost of inflation. In fact, that $50 would basically be eaten up by five stalks of cauliflower over the year at the supermarket with the way food prices are going.

It is important for us to point out the contrasts here today. I want to show members some of the figures that we have from Statistics Canada: for the average office worker earning $39,000 a year, the benefit would be zero dollars; for hairstylists earning an average of $27,000, zero dollars; and even the fish plant worker earning $26,000 a year, it would be zero dollars. However, I do want every Liberal member of Parliament to understand they are giving themselves a tax break of $679. Moreover, every parliamentary secretary on the government side is giving themselves a tax break of $679. They are doing it for lawyers, well-paid bankers, and so on. However, for the average middle-class Canadians, they will get precisely zero dollars under the bill.

We have a constituency week coming up next week when we will all get to travel back to our ridings and meet with our communities, which I am very much looking forward to. However, I would love to see how Liberal members of Parliament will explain to the so-called common folk in their riding, the middle-class Canadians, what the real deal is with their tax break, and how they are giving themselves $679 in tax breaks, but for the rest of the people in the riding, precisely zero or $50.

This middle-class tax cut is nothing more than smoke and mirrors. The Liberals have never been able to define precisely what the middle class is, and they have never answered the question. The median income, defined as the halfway point between the higher half of a data sample and the lower half, and probably a good place to define the middle class, is $31,000. However, this group will receive precisely zero dollars.

On the proposal for middle-class tax cuts, the legislation before us would work for families that make between $166,000 to $200,000. They fall among the richest 90% to 95% of Canadians. I believe this action seems to suggest that either the Liberals are not here to help the real middle class or they believe the middle class is people earning the 90th percentile of income.

The cost of helping such a small portion of the richest Canadians will exert an incredible amount of pressure on the government's books. In fact, it is estimated that this tax cut overall will cost our revenue stream $8.9 billion over the next six years. This plan was a piece of election hyperbole that was meant to seem progressive, but is actually detrimental to our middle and working classes.

Liberal governments of the past have been able to flash left and then turn right while they were in power. We in the NDP do not intend to let the Liberals get by without a struggle on that front.

This change is not the way we take care of our most vulnerable population like seniors, let alone the actual middle class. This is not the change that our most vulnerable citizens were looking for.

The NDP is here not just to point out the inconsistencies in the Liberal plan, but to propose alternatives. We will be doing so here and in committee. A progressive opposition will stand for the values of fairness for all instead of an economy rigged for the highest earners. We believe in helping the real middle class, and not just the high-income earners that the Liberals have labelled as the middle class.

We have developed proposals that will fix the Liberal plan, which would make it correspond with their campaign promise to Canadians. We believe that if we lowered the first income tax bracket by 1%, then 83% of taxpayers would benefit from this proposal. This solution would benefit many more Canadians, and the cost difference would be minimal.

We could further minimize the cost to the treasury if Liberals would just agree with the NDP to increase corporate tax rates by just a smidgen more, and ask corporations to pay a little more of their fair share instead of downloading costs onto Canadians.

I will end my speech by quoting a few validators who have studied the bill.

According to the research chair in Taxation and Public Finance at the University of Sherbrooke, couples with a combined income of $250,000 a year would gain about $1,100 in tax cuts, while couples with a combined income of $75,000 a year would get an average of zero to $4.

Finally, Gordon Pape, certainly no friend of the NDP, wrote the following in The Globe and Mail:

Finally, let's consider low-income earners. There are a lot more of them than those who fall into the middle-income category.... The Liberals didn't offer them any relief so the only break they get is from the indexing of the tax brackets.

Pape continues that they “are the ones that really could have used a tax cut but somehow they got lost in the election hyperbole. Too bad.”

[Matt DeCourcey, Liberal, Fredericton, NB]

Madam Speaker, I thank my colleague for his excellent speech this Monday afternoon.

I was disappointed to hear that the member does not agree with the idea of delivering upwards of hundreds of dollars, on average, to nine million Canadians, but I was pleased to hear that he agreed with our rolling back of the TFSA.

I wonder if the member agrees with our plan to deliver real change to Canadians by lifting hundreds of thousands of children out of poverty through the Canada child benefit; if he agrees with the idea of investing at an historic rate in social, green, and public transit infrastructure, which we know lifts the health of people in communities and increases the quality of life and well-being; if he agrees with our leadership in health care, in helping to lower drug costs for Canadians; if he agrees with our leadership on home care delivery; and if he agrees with our resetting the relationship with indigenous Canadians.

Does the member see those as valuable plans that the government and this Parliament can move forward on?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, of course we in the progressive opposition will always stand and and agree with conclusive measures to help those who are most vulnerable, whether it is children, the elderly, or poverty overall.

However, we are debating Bill C-2 today. That is why I am not talking about future plans in the budget. With all of the problems that Canada is facing, Bill C-2 could have been an opportunity to introduce some very worthwhile legislation to tackle problems.

Why did we not have the introduction of legislation to tackle the Employment Insurance Act? Why did we have legislation to reverse some of the harmful legislation of the previous Conservative government?

We could have done something to lift seniors out of poverty. Instead, a tax bill has been introduced that will help wealthy Canadians, not middle-class Canadians.

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

Madam Speaker, it was great to hear that the member is quite concerned about families and seniors. This is something that I have heard much about at the door.

I have met with seniors groups and have spent time in seniors care facilities. I got to hear a lot about what they had to say. One of the big things they talk about a lot is the availability of doctors. Especially in northern Alberta where I am from, it is difficult to get a family doctor.

The Liberal government has proposed a new tax bracket for the 1% and many of our doctors end up in this 1%. We are concerned about brain drain. Does the member not share my concern that this new tax bracket might cost us these resourceful professionals? Is the member concerned about brain drain, as I am?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I do know a little about doctors, being the son of one. I know, from speaking to my father and many of his colleagues, that they do earn quite a bit of money and have an important skill set, but every single of one of them I spoke to would be happy to pay a little more in taxes if they knew that we had a progressive taxation system that would help the most vulnerable. That is what I would say in answer to the member's question.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Madam Speaker, in my riding we have a lot of issues with families struggling with daycare costs and a lack of spaces.

With this tax break, will there be any support for those families?

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, the member and I heard that on the doorstep from families looking for child care spots.

This tax break does nothing for them. For a family earning in the neighbourhood of $75,000 a year, that is a combined income. That means there are two individuals earning $35,000 to $38,000. They are not getting anything back.

To touch on the child care issue, we will of course welcome any kind of a benefit for the nation's children. I am a father of three and a half year old twins myself. I understand what it is like to raise kids in this environment.

The issue is the lack of child care spaces, and affordable ones at that.

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

Madam Speaker, I will start by focusing on exactly what the bill is about. I have listened to opposition members talk about what is not in the bill. Quite often, what is not in the bill is because that is not what the bill is about. We can talk about daycare, pipelines, the need for doctors in remote communities, and we will get to those issues in time, but this bill deals with some specific issues for a couple of reasons.

First, this is an amendment to the Income Tax Act. In order to have it apply to the year in which we want the tax cut to occur, it required us to come back before the new year to get those measures in place ahead of the calendar year. It is a technicality. One of the reasons why it was such a critical priority and why there was speed involved in getting this to the floor of Parliament and off to committee was so it could take place in the calendar year where the relief was expected.

What is the proposal? The proposal focuses on two critical issues. One is a tax cut for a very specific set of incomes, between $45,000 approximately and $91,000 approximately, to reduce taxes for income earners situated in that category. The other thing is to roll back a boutique tax cut that was presented to us last year by the previous government, a tax that does not deliver significant relief to a broad band of Canadians but rather privileges a very specific few in a very specific situation. In order to give us some resources to try to balance the budget and deliver more a general and a more targeted tax relief to very specific groups that we think need it, that very specific measure is needed.

The tax cut is very simple. It is relief for middle-income earners who are quite clearly, in volatile economic times, experiencing extraordinary stress on the incomes they earn. Does it provide income support for all Canadians and, in particular, the lowest income Canadians? No. Other measures are on their way to deliver that sort of tax relief, but we committed to this one in the campaign. In order to get it in place in this calendar year in preparation for this year's budget, it needed to be introduced in a timely way.

It is an important measure, though. It starts to make the tax system fair. One of the complaints we have heard about the previous layer upon layer of tax relief presented to us by the previous government, which it skewed toward more affluent and, quite frankly, Canadians who did well, is that it needs to be changed in order to give people the confidence that the taxes they pay are fair. We started to change the tone of the conversation about tax relief and targeted areas and groups of people who did not feel the previous government's tax relief measures were fair.

The TFSA dynamic is the most obvious one. Yes, a lot of people participate in the program. We are not eliminating the program; we are simply not expanding it. The bulk of the people who participate, in particular, lower income Canadians, do not max out those tax-free savings accounts. The folks who are maxing out the tax-free savings accounts, after all of the year's bills have been paid and all of the taxes and expenses have been addressed, are the ones who have $10,000 lying around to invest into one of these tax-free savings accounts, the folks who tend to be doing very well.

We are simply saying that rather than benefit those who are doing well, let us drive the support to those who are struggling to deliver services to their families and support their communities, and aim those tax breaks at middle income earners.

Quite clearly, this is not the last thing we will do. If the proposal were to do this and nothing else for the next three and a half years other than simply manage the government's finances and programs as they are currently configured, much of the criticisms I have heard in this debate so far and read in the newspapers would be justified.

However, we have also committed to sustaining some of the other components of our campaign platform. For example, the minister has already committed to a review of EI eligibility and processing times. Members have also heard us talk about the need to re-evaluate that program to ensure that the people who pay into the system get the support they need, especially in times when economic volatility creates surges of unemployment, as we see in the province of Alberta right now with the resource sector.

Members have also heard us talk about the need to ensure that CPP is reformed, in particular, for seniors who suddenly find themselves in a situation, as life rolls through and the demographic changes happen to their families, where suddenly two pensioners in a single house with rent is now one pensioner with the same rent.

We believe it is an appropriate reform to start targeting support for single seniors who face particular problems as a way of alleviating poverty in a very defined group of people. These people will not benefit from this tax cut, but will benefit from other measures that we will see defined in the budget that will be presented.

Most important, for the family that was previously described in a speech, a family with children that earns $75,000 collectively within its household, this tax measure does not specifically target relief for that circumstance. However, we have promised to double the child tax benefit, not get rid of it. Instead of taxing it as the previous government had done, we will make it tax free. We made this commitment in the campaign. This specific initiative benefits that group of individuals in a very targeted way and provides the kind of support for lower income Canadians, especially those with children, in a way that will alleviate poverty in particular for children, perhaps the most vulnerable group in that population. That is one of the ways in which the targeted approach by this government, which will be unveiled in the budget, will be rolled out.

We are also talking about a whole series of other measures which do not necessarily put more dollars directly into the pocket of families, but will start to alleviate some of the significant pressures that low-income Canadians are under, such as housing and transportation costs when taken as a bundle. Where I come from, for low-income Canadians and the income group that has been described in the previous speech, this constitutes about 71% of household costs for a typical working family. When we add housing to transportation, close to 71% of the disposable income for a family is sucked into those two categories. If we do not move the yardsticks on those two issues, if we do not deliver better transit and better housing supports right across the full spectrum of housing needs, we will not address the issue that is motivating the call for income support.

If we can get housing and transit costs down, we do support low-income Canadians in a comprehensive, across-the-board way that is direct and meaningful. However, we also put people back to work to earn the incomes they need to pay those bills. It is not enough to simply cut taxes for people if we do not also provide jobs for them to earn the income to pay the taxes. Therefore, we have to look at these things in a holistic manner, and we have in our program.

However, we cannot start building housing in the first week of the new government. There are agreements to be struck and negotiated with the provinces and housing providers. Programs need to be rekindled. Unfortunately the previous government put all of the eggs in one basket. This time I am not talking about the petroleum industry but rather the housing industry.

The focus on chez soi or on housing first, which simply prioritizes rent supplements over a housing construction program, means we are not starting with a robust housing market that allows us to house lower income Canadians effectively. We have to rekindle that program and get it moving forward again. That takes a bit more time than simply introducing a tax measure. Therefore, those provisions will come out and will be seen as part of our infrastructure program.

However, members should make no mistake about it. Our commitment to infrastructure is not just about building stronger communities, better cities, and helping provinces get people back to work. It is also about reconstructing the fabric of our country to provide support for low-income Canadians who need housing and transit support in order to access education, work and services, and move forward with a higher quality of life. Income support is part of it, as is direct support through a rethinking of some of the current programs that support low-income Canadians, in particular CPP and EI. Employment programs that deliver the infrastructure to create much stronger urban and infrastructure fabric is part of it. It also delivers the work we need to see Canadians get back to supporting themselves, and moving the whole agenda forward as a complete comprehensive package.

That is the campaign platform, but it is also the agenda of our government. We will not see all of it in the first 10 weeks of a new government. It takes time to bring partnerships together to make those things a reality, in particular in housing and transit. It is not a question of just simply cutting a cheque and seeing a transit program get built overnight. Programs take time. Unfortunately, in many of these instances we are starting from a standstill. Nowhere is that more obvious than in the resettlement of refugees from Syria.

I heard a question last week from a member across the way with respect to why there was no housing available for all refugees. The reason there is no housing available is because the previous government had virtually no housing program.

As a result of that, 25,000 people cannot be housed overnight. It takes time to fund the housing, approve the housing, and then ensure the houses are built in the right places where people will be able to use them. We are moving forward on those programs in a comprehensive, steady way, but it is not the thing that is done first. It is one of the things that is done as part of a comprehensive package that will be contained in the budget.

While members of the House may be frustrated that Liberals are saying many of the answers to the questions lie in the budget, which will be presented in weeks, not months, to the House, as part of a comprehensive strategy toward those issues which are not addressed directly by the current bill in front of us, that is the reality. We have only been governing for about 10 or 11 weeks. That is just short of the length of the campaign. Think about it. The entire election campaign was 78 days and we have only been in power for close to 100 days. A bit of patience, as we move toward our first budget, is in the order.

However, as I said, this bill requires being introduced ahead of the calendar year to ensure it is in place to accommodate the changes to the tax code that are required, and the changes are very specific. The changes in the bill are designed to support middle-income earners who earn between $45,000 and $91,000, approximately, to reduce their tax rate by about 7% and, in doing so, to give some relief to a very critical part of the population struggling right now with inflation, increased housing costs, and other dynamics that are putting pressure on household budgets.

To criticize the bill for what is not in it misses the point. Many of the questions, debates, and speeches need to be more finely attuned to the budget debate than to this one. That needs to be said. As I sit here and listen to all the criticism being thrown at the bill, it is not actually about the substance of the bill. It is hard to answer and say that this bill should do x, y, and z when it is quite clearly designed to one very specific thing.

I have heard criticism that the amount of money being provided. Some members favour much deeper tax cuts. I have heard others in the opposition say that the support is not deep enough. Finding a balance in troubled and volatile economic times is something that we will all have to work very hard to articulate and achieve. We cannot solve the complexity of the problems that have been presented to us with one-size-fits-all, magic bullet solutions.

The complete list of programs which I have just described is forthcoming. They can be seen in the Liberal campaign platform and ministers have talked about them in the House as they have answered questions of the opposition. That is the totality of our approach. That is the holistic in which way we hope to not only grow the middle class but create a stronger economic platform for our country to thrive, and with the investments that we are talking about, not just build back the capacity of the middle class to thrive and move forward, but to ensure our partners in municipal and provincial governments have the capacity to also make investments and do the other things required to strengthen the Canadian economy and diversify it so it does not enter these periods of volatility quite as vulnerably as it has in the past year.

Things like investments in housing, the environment, social infrastructure, and transportation and transit are, again, part of the larger agenda: to strengthen the middle class with job creation, sustain the capacity of the middle class with tax cuts and reforms to programs which sustain their ability to participate in a strong and valued way, but, at the same time, also ensure we keep an eye on poverty.

I appreciate the comments, concerns, and issues that have been raised around poverty, poverty within the aboriginal, first nations, Métis, and Inuit communities, both on and off reserve, in particular, in urban settings, which concerns the riding I represent. I appreciate the focus on seniors who are struggling as private pensions sometimes become fragile and public pensions do not keep pace with some of the cost pressures that are arising. As we move toward demographic changes, we will have many more seniors in vulnerable situations moving forward. I understand there is a need to act there.

In particular, child poverty was something which the House committed to eliminate, but has not. If members look at the riding that I represent, there are more poor children within an hour of the downtown core of Toronto than there are in all of Atlantic Canada combined. These are serious issues that we have to solve. Will this bill, in and of itself, solve those specific issues immediately? Of course not. One would be crazy to think so. We have to get to those issues as part of the larger budget process and throughout the mandate of this government. However, this is the first step we are taking to provide very specific and targeted tax relief to a very defined group of people in our country.

Rest assured that there is more to come as we start the project of building back the size, capacity, and health of the middle class in our country.

I want to end by talking about how housing fits into this, because it is critical. The debate cannot just begin and end with a simple tax cut. We need to start delivering across the full spectrum of housing needs in the country. This is an issue that will actually define whether or not we succeed in rebuilding the middle class and giving it the strength it needs.

It is not just about affordable housing. It is about housing affordability. There are housing markets in our country where a sudden housing correction, a sudden spike in mortgage payments, or a drop in equity in people's households would create poverty the likes of which our country has not seen for decades. We need to manage the full spectrum of housing needs in the country. We need to ensure a way to get from the street into a shelter, from the shelter into affordable housing, from affordable housing into home ownership, and from there, on a path to the middle class.

The housing strategies that we will hear in the House are, to me, fundamentally the most important conversation we are going to have about alleviating poverty and strengthening the middle class. If we do not get to that conversation, if we get hung up on simply measuring the percentages of tax cuts, the size of the deficit, and the size of the debt as it moves forward, if all we do is focus on the numbers and not focus on the actual living conditions of Canadians right across the housing spectrum in the country, we will never solve these issues. Therefore, in the weeks and months ahead, what we need to focus on, as we build capacity of the middle class, is creating the housing required to accommodate aspirations to middle class in the country. We have to do that. If we fail to do that, this Parliament and this debate will have been for nothing. We can cut taxes all we want, but if the quality of life does not change and the capacity to move forward as an individual or a community does not get shifted, nothing will have been achieved.

Housing lies at the heart of it. Housing is no longer just a wealth transfer, and it cannot be. It is also about protecting middle-class investments. It has to be about making sure low-income Canadians have a place to thrive, and vulnerable Canadians are sheltered and protected properly.

However, we also have to look at it as a tool that solves most of the other challenges we face in the country. It is the tool we need to solve some of our energy crisis and climate change dynamics. It is the tool we need to use to deal with child poverty. It is an important tool in making sure aboriginal—first nations, Inuit, and Metis—Canadians have access to stable and thriving life opportunities.

Housing is the solution, and that is where we are going to have the most complex debate. That is where many of the issues that are defined are going to have the most impact, because if we can get that piece right—the tax cuts we talked about, the changes to unemployment insurance, the changes to CPP, and the changes to the way we support vulnerable Canadians—if we have the platform for their lives solidified and protected and moved forward as a federal agenda, we are going to achieve great things in this Parliament.

It starts with this tax cut for technical reasons, and perhaps symbolic reasons, but the entire program is what is about to be presented in the next budget. The entire program is what we will be debating over the next three to four years. Many of the questions that have been raised, which are important questions, will be directly addressed in those days to come. However, in the meantime, this is the first step. I look forward to members' support, and I look forward to members' questions.

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

Madam Speaker, the hon. member has said we should focus on the bill. I am going to do just that. I want to focus specifically on what the bill would do. It is going to give him, as a member of Parliament, a so-called middle-class tax break in the range of $600 to $800, which he would receive.

This would add to the debt of our country, because the Liberals' math is wrong. They said that the rich paying more—those earning over $200,000—would result in a revenue-neutral middle-class tax cut. However, that is wrong. It is wrong by $1.2 billion to $1.4 billion. He is going to accept another $600 to $800 in his pocket at the expense of future generations and his grandchildren.

As someone who regularly stands up in the House and speaks about affordable housing and poverty, how can he stand up and vote for this particular bill?

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Madam Speaker, the bill also proposes a significant increase to people earning over $200,000 a year, and that is part of the way it is paid for.

All tax cuts benefit some people to the disadvantage of others. That is the way taxes are built. We are trying to shift the tax system back into a fairer structure. People whose income passes through the bracket of $45,000 to $91,000 benefit. All of us who are in that situation benefit.

The hope is that, through that, we invest back into the economy by spending, that we generate economic activity, and in doing so we start to lift up the economy, providing jobs and opportunities for others.

As I said, if this was the only measure we took and the only focus we provided in the next four years, the member's criticism would be legitimate. However, this is the first initiative of a basket of initiatives to try to make the tax system fairer and, in making it fairer, to deliver confidence to the Canadian people both that the middle class is being rebuilt and that our other pressing needs, those of lower-income Canadians, are now in a position to be addressed specifically.

Some of us benefit, of course. It is an easy criticism to make. However, at the end of the day, when the totality of all the measures is put in place, what we are going to see is equity returned to the tax system. That is what the bill seeks to do, although as a first step, it does expose itself to that criticism.

[Matthew Dubé, NDP, Beloeil—Chambly, QC]

Madam Speaker, considering how much we heard about these tax cuts over the campaign, it is a pretty bad sell when the government is pitching a budget that has not even been presented yet to justify the tax cuts. That is what the member has been doing for the past 20 minutes.

The fact is that the member has asked to hear criticisms of the substance of the bill. That is what the New Democrats have been doing all morning, since the debate started. We have been asking the government why it will not make a simple modification to the change to the tax code to make sure that people earning less than $45,000 actually get something, and that includes medium-income earners of $31,000. Right now they are getting nothing at all.

Is the member perhaps embarrassed by that? Is that why he spent all his time talking about a budget that has not even been tabled?

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Madam Speaker, the question as presented by that inquiry is quite a simple one. What is the best way to provide support for the lowest of income earners in this country? Is it tax relief or other programs that deliver resources straight to their pocket?

We believe the changes we are bringing to the child tax credit, the changes we are bringing to EI eligibility, and the changes we are talking about around CPP—the changes we are talking about in totality—are our best approach, and I think it is the best approach and the approach supported by the majority of Canadian voters, the approach to deliver relief to poverty in this country.

I do not disagree with the goal that was stated in the question. What we disagree with is the strategy. I do not believe that cutting taxes for low-income earners is the quickest, best, or most sustainable way to prevent poverty and to build opportunities for people in low incomes to move into stable, middle-class earning capacities.

It is a difference in strategy, but it is not a difference in terms of goals.

[Darrell Samson, Liberal, Sackville—Preston—Chezzetcook, NS]

Madam Speaker, I am pleased to ask my colleague a question about his presentation. I was very impressed by all the details he provided about our platform. Over the next four years, our platform will certainly allow Canadians to benefit tremendously from the changes that will be made during this time.

The opposition has indicated a number of times that we should raise taxes on small businesses. As we know, and as my colleague explained so well in his speech, the government wants to invest in Canada and Canadians, not raise taxes, as that would slow down the economy. I would like my colleague to say a few words about that.

I would also like my colleague to talk about the importance of raising taxes on the wealthiest Canadians by 5%. Why does my colleague think that we are the only party calling on the rich to help less fortunate Canadians?

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Madam Speaker, I will deal with the question specifically in English, and I apologize.

The move we have made to double the summer employment program is a very interesting one. We could have, perhaps, chosen to raise minimum wages for a very small percentage of federal workers and try to pretend that we are helping young people get work by paying them better even though it is not as broad-based an approach as possible.

However, in doubling the summer employment program and ensuring small businesses are eligible and by not raising their taxes, we would give businesses the capacity to hire. By assisting in the hiring, doubling the grants, and putting more money into the system so more students can be hired, we see it as a comprehensive way to get at one of the groups that have the most difficulty getting employment, one of the groups suffering from low employment, wages, and opportunities: youth.

There are other ways to approach these programs that are contained within our platform, and they are part and parcel with a holistic approach to alleviating poverty, building a strong middle class, and delivering a different approach than perhaps enunciated by some of our members opposite. It is not that raising minimum wages is a bad idea, and I do not think we criticized the idea. The question is this. When we have limited resources and we are in volatile economic times, what is the way we can have the biggest, most direct impact and work with the partners in the economy to deliver results? We would not raise taxes on small businesses or on large corporations; we would leave those dollars in the economy. However, then we would direct activity toward full employment, in particular for young people in this country, as a way of moving this country forward together. It is a different approach, but it is the right approach, and the electors certainly supported it.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I wish we could reframe this debate. Starting during the election campaign, both the New Democrats and the Liberals were in a stampede to embrace the middle class. I am hoping this is really coded language for addressing inequity. I hope it is really about the inequality by which the wealthiest 0.002% of Canadians have more wealth than the bottom 34% of Canadians. I hope we are really talking about, as the parliamentary secretary suggested, a suite of measures.

However, I do not think we can measure it against how well the middle class works. I do not think any economist has a definition of what middle class means. We do know what inequality means, and it means the poorest fall behind and the billionaires make more. That would take a whole lot more than what we see before us in Bill C-2.

[Adam Vaughan, Liberal, Spadina—Fort York, ON]

Madam Speaker, I share the analysis, quite frankly. Our language may differ but, again as I said in the speech, our goals are the same.

It is about inequality. It is why there is a proposal for a tax increase on the top 1% of wage earners contained in this bill. It is why it would shift the TFSA. Instead of maximizing the capacity in terms of people's contributions to it, it would sustain it at its current level because we see it as an effective tool, but we do not see it as a one-size-fits-all cure-all for some of the challenges.

Alleviating poverty, getting people in low-income situations on a path to middle-class existence, growing the capacity and the size of the middle class, and creating fairness in our society are the goals of our government. This particular bill addresses one particular strategy: income tax for a very specific group of people who have income. However, in dealing with lower-income Canadians or those on social assistance, a whole different approach is required. Cutting taxes for a single senior on CPP would not deliver opportunities or support. Boosting CPP would, and we will see measures addressed specifically to that group as part of a larger equity agenda as our budget unfolds in the weeks and days ahead.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, I would like to advise you that I will be sharing my time with the member for Barrie—Springwater—Oro-Medonte, and I would like to take this opportunity to congratulate him on his election to the House.

This is the first time I have had the opportunity to rise to speak in the 42nd Parliament. Therefore, first, I would like to thank the constituents of my beautiful riding of Haldimand—Norfolk for electing me for my fifth term and for trusting me once again to represent them here in Ottawa.

I would like to acknowledge the team of volunteers in my community who worked so very hard each and every day over that 11-week period. Without them, I know that I would not be here today.

I would also like to congratulate my colleagues on all sides of the House for their election, and I look forward to working with them over the coming years.

I am incredibly proud to call the riding Haldimand—Norfolk my home, and I will continue to work hard to be the strong Conservative voice my constituents have asked for in Ottawa. I will fight to make our riding an even more wonderful place in which to live, work, and raise a family.

Haldimand—Norfolk is full of hard-working individuals who know the value of a dollar. Our Conservative government always believed that Canadians' money belonged to them and that they know what is best for themselves and their families.

Canadians in all income groups have seen their take-home incomes rise since 2006. The federal tax burden is at its lowest in over 50 years, thanks to our then Conservative government and the more than 180 tax cuts we made. These tax reductions gave Canadians the flexibility to make choices that were right for them to help build a solid foundation for their future economic growth and a higher standard of living for themselves and their children.

Canadians at all levels are benefiting from that tax relief, with low and middle-class Canadian families receiving proportionately greater benefits. More than one million low-income Canadians were removed from the federal tax rolls altogether due to our Conservative government's tax policies. We significantly improved the lives of Canadians, while at the same time, we kept our promise to balance the budget and stay fiscally responsible.

As we all know, the current Liberal government made it clear in its platform that it would be taking the surplus the previous government left it and would be entering into multi-year deficits. One of the problems with that is that there was once a promise to keep the deficit to $10 billion, which has now ballooned to $20 billion or possibly even $30 billion.

Every week we hear more holes in the Liberal costing of their platform. More recently, the Parliamentary Budget Officer contradicted the Liberals' claim of a cost-neutral tax increase to Canadians.

It is clear to Canadians that there is one party that will always look out for hard-working taxpayers, and that, of course, is the Conservative Party.

Among the multitude of tax-relief measures our government introduced, perhaps the most popular was the tax-free savings account, or TFSA. The TFSA is the most important new savings vehicle introduced in Canada since the RRSP was introduced more than 50 years ago.

Available since its introduction by our Conservative government in 2009, the TFSA is a flexible, registered general purpose savings vehicle that allows Canadians age 18 or older to earn tax-free investment income. I should point out that this is a voluntary procedure.

Millions of Canadians have taken advantage of the very popular TFSA. They are an excellent way for Canadians to save tax free and to have the money available for their own personal needs.

As a matter of fact, according to Revenue Canada, as of the end of 2013, nearly 11 million individuals, that is roughly one in three Canadians, had opened TFSAs, and the value of the total assets held in those TFSAs was nearly $120 billion.

The TFSA gives Canadians the flexibility to save for purchases like a new home or car, to start a business, or to save for retirement. Many Canadians have maxed out the old $5,500 limit, and many would contribute more if allowed. Our Conservative government made that possible when we raised the maximum contribution limit to $10,000, effective 2015 and for subsequent years.

The opposition claims that TFSAs only benefit the rich. That is blatantly 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. Roughly 60% of the individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000.

Many seniors in my beautiful riding of Haldimand--Norfolk have shared their concerns with me about the changes proposed by the new Liberal government. Some retirees on fixed incomes struggle to save for their future, and the TFSA, with its limit increase, was one way to make that easier.

The fact is that Canadians are living longer than ever, which is great news for all of us. Since 2006, seniors have been benefiting from important money-saving measures such as pension income splitting and tax-free savings accounts. As of the end of 2013, close to 2.7 million seniors had TFSAs.

The previous government understood that Canadian society thrives in a low-tax environment. It is a shame that the Liberal government is opposed to the enhancements made to the tax-free savings account. They do not realize the benefits it would bring to Canadians across the country. Unlike the prudent fiscal approach the Conservatives took, the Liberals fundamentally believe in irresponsibly high taxes, recklessly high spending, and what seems to be an aspiration toward structural deficits.

Through Bill C-2, the government would significantly cut back on the amount individuals can contribute to their TFSAs, in spite of the fact that all data shows that those in the middle- and low-income classes are far more likely to use their TFSAs. Meanwhile, the new tax changes the government is trying to bring in would provide absolutely no tax relief to those earning less than $45,000 a year. Instead, many low-income people who are using TFSAs would now be worse off under this new Liberal government's proposed plan.

Our government fulfilled its commitment of doubling the TFSA contribution limit to $10,000, something that was helpful to all Canadians, young and old. The Liberal government should be encouraging responsibility in saving, regardless of how irresponsibly it chooses to run the nation's finances.

The Liberals promised Canadians that their plan was revenue-neutral. Since then, the revenue minister has conceded that the plan is not revenue-neutral; it would leave a $1-billion hole. The Parliamentary Budget Officer released a report estimating that the cost will be closer to $1.7 billion. This is a broken promise that proves that the Liberal plan has been grossly miscalculated.

Canadians know that the Liberal tax plan will end up costing them, so they deserve to know where the money will come from. It is my hope that the Liberal government will see the impact these changes will have on Canadians and will change direction so that all Canadians may benefit from TFSAs to the max.

[Sheri Benson, NDP, Saskatoon West, SK]

Madam Speaker, I agree with my colleague's comments about the Liberal tax plan providing the maximum benefit to wealthy Canadians while nearly 60% of the population will receive nothing. In my riding of Saskatoon West, the largest occupational group is people who work in the retail and service sector. That group will receive little to no tax benefit from this plan.

Would the hon. member join with me and the NDP to propose an amendment to the bill to see the tax benefit actually benefit more lower-income Canadians, because during the Conservative government, many in my riding did not benefit at all.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, we believe that it is important that there be equity, that everyone be allowed to continue to benefit from TFSAs. As I mentioned in my remarks, 60% of those with TFSAs earn less than $60,000. The Liberal government has said that TFSAs disproportionately benefit the wealthy. However, $60,000 a year is not a wealthy income. For 60% of people who have TFSAs, that is what their income is, or less.

We believe that the Liberals should pull back this legislation so that everyone continues to benefit, regardless of their income, because that is good for Canadians and for their families.

[Wayne Long, Liberal, Saint John—Rothesay, NB]

Madam Speaker, I thank the member opposite on her passionate speech about TFSAs.

Let me quote:

Doubling the annual maximum does nothing for the 93.3 per cent of Canadians who cannot max-out their TFSA contributions at the existing limit of $5500/year....

Following a detailed review of this program last winter, the Parliamentary Budget Officer (PBO) said: “TFSA benefits, currently balanced across wealth groups, will become increasingly skewed toward high-wealth households over time.”

After the recent budget, would the member not agree that the TFSA, and especially the increase in TFSAs, was to pander to the Conservative base?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, in fact, TFSAs were introduced to benefit all Canadians. Right now, 11 million Canadians have opened TFSA accounts. If we think about our population of around 33 million to 35 million people, that is one-third of all Canadians, and they must be 18 years of age or older.

This is a very popular program right across the financial spectrum. The wealthy are included in it, but one-third of the population is not in that bracket.

This is a program that appeals to all Canadians. Over 60% of those who have opened them have incomes of less than $60,000 a year. We believe that they should continue to benefit from this program. If they do not contribute to it to the max, then it should not affect the finances. However, they should be given the opportunity.

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

Madam Speaker, I note that the member talks about the TFSAs. I think there are different circumstances in people's lives. It is not about the rich. There could be a 30-some-year-old who has been barely making ends meet who has not started to save for his or her retirement but who has a bit of a windfall gain in terms of an inheritance. There could be seniors who are converting their income retirement plans.

Could my colleague talk a bit further about the enormous opportunities TFSAs had for Canadians and how they really were not just a tool? I know it seems like a lot of money every year, but that balance carried forward for years when people had extraordinary circumstances.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Speaker, my colleague raises a very good point. At different points in our lives, different circumstances exist. Often someone receives an inheritance or a windfall or perhaps makes a bit of money on the lottery, or any other number of circumstances. Perhaps there is a separation, which is an unfortunate circumstance, but if they find a job quickly thereafter, they would have extra funding that they would need to invest and invest wisely.

I think it behooves the Canadian government to support those individuals and help them protect their earnings going forward so that they can save for a stronger future, which makes a stronger future for us all.