Debates of Feb. 1st, 2016

Income Tax Act

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, there has been a lot of talk today in the House on this bill with regard to helping the middle class. I want to talk about the middle class and the overall economy in my riding, and specifically in Alberta.

It is grim right now. I want everyone in the House to understand what it is like in Alberta right now. One cannot walk down a street or go anywhere without talking to someone who has been directly impacted by what is a significant economic issue in this country. I want everyone in the House to realize what is going on right now. It is really serious.

I get so many calls in my office from people who just do not know what to do. These are not just oil sector workers. This is the service industry. This is everything.

Members have to realize that people's severance pay is running out in the next few months. This is a major issue. While we are here talking academically about the middle class and what is happening, this is where the rubber hits the road. I implore all members, when we are thinking about this type of economic policy, to understand what it means to someone who does not have a job and does not have any sort of prospect for a job.

I have heard in this place that what is happening in Alberta is simply explained away as low commodity prices or a lack of trust in this or a lack of trust in that. The bottom line is that Canada's energy sector, whether members subscribe to it in their political philosophy or not, provides jobs to hundreds of thousands of people in this country. My riding is in the heart of this.

There was an article in The Globe and Mail this week that specifically talked about how this downturn affects blue-collar and lower-income workers in Alberta more than anything. What blows my mind is that we are standing here talking about these policies that materially impact hundreds of thousands of people in this country, and we are not talking about exactly what it means. Opposition and government members are probably not going to agree on a lot of things, but I really hope that in their cabinet and caucus meetings, Liberals talk about the impact of what some of these things mean to people who are without jobs in Calgary.

The finance minister talked about raising taxes on stock options. There was a January 10 Globe and Mail article that stated:

Small oil and gas firms also say they want the government to reconsider its pledge to cap the amount that employees can claim through stock-option income deductions. They say the change, if implemented, will be another blow to an industry already downtrodden by depressed crude-oil and natural-gas prices.

My colleague from Kelowna—Lake Country said that people do not take advantage of the tax-free savings account. Sixty per cent of Canadians who maxed out their TFSAs in 2013 had less than $60,000 in income, and we are taking that increase away from them at a time when we should be promoting their investment in this.

During the campaign, Liberals said they wanted to increase CPP contributions. There are people who do not have jobs and do not have prospects for jobs or are small-business owners during a time when the economy is a significant issue, and the signal from the federal government is that it is going to increase premiums. What do members think happens? Fewer people get hired. That is more money off people's paycheques. The same thing goes for EI premiums.

I hear the rhetoric over and over again about income splitting and that it only affects the wealthy. I ask the Liberals what their definition is of wealthy. I ask them that. How do they define wealthy? I would ask them to look at their ridings and tell me that the people who benefit from income splitting are wealthy. I think they would have a hard time doing that.

The same thing goes for the UCCB. When the Liberals cancel what the Conservative government put in place, it will cost $1,920 per child under six and $720 for older ages.

Parents have been paying for students in certain situations. The textbook tax credit is a huge amount to someone who is depending on it, such as a low-income student, on an annual basis. The Liberals are signalling again that perhaps students should be thinking about the fact that their taxes are going to go up because they are going to school.

If this was a manufacturing plant in Ontario, there would be a national outcry about this. There would be all sorts of investment programs. There would be “rah, rah, let us help this sector”. However, this just goes without notice. In fact, there will be even more punitive things. The Liberals are talking about eliminating the mineral exploration tax credit, which would further depress the industry in Alberta.

The other thing that blows my mind is that at a time when we need to be telling workers in the energy sector that we want to promote growth in the sector, we are telling them that we are going to make the regulatory environment more uncertain. We will hear the rhetoric on the other side that there is a lack of trust. Well, the Liberals have never quantified that.

Our government put in place a responsible resource development package. It invested in things like the Pipeline Safety Act, which included another $1 billion to respond to incidents, and we enshrined the polluter pay principle. The main thing that bill did was add certainty to how long a process was going to take. It was not about getting to a yes; it was about getting to a yes or a no in a certain period of time, because that is actually a determinant in investment in the natural resource sector.

My background is in intellectual property management and research administration. To talk about economic diversification and dismiss the problems in Canada's energy sector as simply having to do with commodity prices, or to say that somehow the government can diversify the economy itself, is shortsighted. When we have a thriving industry, we use the receptor capacity created in that industry to see technologies adopted and tested, have venture capital pools created, and have intellectual capital stay in the country.

However, when we increase taxes on small businesses and raise taxes on stock options, the sorts of incentives that help people invest and innovate, it says to people, “Why would they bother investing here?”

It is a very shortsighted philosophy to think that increasing taxes over and over again and increasing the deficit of our country is going to miraculously result in an economic turnaround.

I want people at home, and anyone who is listening in Alberta today, to understand that if they hear the Liberals over and over again say that it is just low commodity prices or it is just this or it is just that, it shows a complete lack of understanding of how the sector works. Everyone in Alberta knows that we need to have regulatory certainty to move forward on major projects.

We also need to ensure that we retain skilled labour so that when the prices do rebound, all the skilled labour has not left. We have not heard once from the government how it is going to keep the remarkable talent we have built in Canada's energy infrastructure or how it is going help them through this. All we hear is that we are going to increase their taxes, because they are wealthy.

The thing that bothers me most about this is that there is a lack of a plan. We heard in the campaign that the Liberals were going to have a $10-billion deficit. There are different schools of thought as to whether that is a good or bad thing. However, what I think is very negative is the fact that the government does not even know what that end number is going to be. Will it be $50 billion, $100 billion? Who knows? We do not know what that is going to do for the Canadian economy.

Anyone in my riding listening to this and anyone across the country who has a concern about where Canada's economy is going should write to their Liberal MPs and ask them why they are raising their taxes.

I implore my colleagues opposite to really have a think about this. When they are in their caucus meetings, they should ask how these tax increases will affect their constituents. They should ask what that huge increase in the deficit means, not just for their constituents but for their children and their children's children. Hopefully we can see something good come out of this.

[Steven MacKinnon, Liberal, Gatineau, QC]

Mr. Speaker, I thank my colleague for his speech.

An unemployed Canadian is one unemployed Canadian too many. What the energy sector is going through today is the same situation we have experienced in the forestry in Quebec, the mining industry in New Brunswick, and indeed, the manufacturing sector in Ontario and Quebec during the past 10 years.

Any job that is lost is one job too many. The member opposite watched as oil prices went from $110 to $90 to $70 to $50 under the previous government, yet we did not hear the kind of speech she gave in the chamber today.

The member opposite was the minister of western economic diversification. What measures did she put in place in the last 10 years that would gird Alberta and our energy sector, which is living through a crisis, during the kind of situation they are going through now?

[The Assistant Deputy Speaker, Anthony Rota]

Before we go to the hon. member, I want to remind members in the House, and the member who is about to speak, that they should be speaking through the Chair and not to the other side.

The hon. member for Calgary Nose Hill.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, during my tenure as minister of state for western economic diversification, I completely remodelled the department in five key themed areas. They included skilled labour training and ensuring that there was a better pathway for the commercialization of the research and development that was happening in western Canada. That included a $100-million fund to see process developments and prototypes commercialized and put into markets. I worked with first nations communities to ensure that first nations and aboriginal communities in western Canada had equal access to the economic opportunities created in western Canada. I worked to ensure that trading investment opportunities with new markets were opened up to western Canadian trade groups and producers. I also worked with the western Canadian aerospace sector to ensure that small and medium-sized enterprises had access to our supply chain.

However, I also stood up for my constituents day in and day out and said that the argument around Canada's energy sector was not a good versus evil debate; it is a sector we should embrace throughout the country, because it creates jobs. We also saw the lowest federal tax burden in over 50 years, which increased investment.

I think that is a pretty good record and is one I am more than happy to stand on.

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

Mr. Speaker, I would like to thank the member for Calgary Nose Hill for her speech. She is obviously a passionate person standing up for her riding.

I would like to let all members of the House know that we all are feeling the pain Alberta is going through. On a personal note, I have a brother who resides in the city of Calgary. He lost his job. I am a resident of British Columbia, and many people who live in my riding depended on the oil boom of Alberta for long-term, prosperous work. We all feel the pain Alberta is going through. It affects not just locals in Alberta but many people from across the country who got jobs there.

My question for the member is whether, in this time of economic uncertainty and the hurt Alberta is going through, she thinks the government would have been better to introduce in its first bill some honest measures to help the people who are going through a tough time by reforming our Employment Insurance Act.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, I am happy to again speak to the comments on employment insurance as a whole. My concern is with the government signalling to employers, especially small businesses, that it is going to increase EI premiums at a time when, clearly, we need to be looking at ways to promote economic growth. That is going to have a huge impact not only on small business growth but specifically on employees. For someone who may have taken a pay cut or was laid off, this means additional money right off their paycheque. It is not something I support. I strongly feel that it is going to be detrimental to the economy and that the Liberals will have to answer for that if they should pass it.

[François-Philippe Champagne, Liberal, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I am pleased to speak today. I want to begin by acknowledging my hon. colleague across the way, who said:

“Does the government have a plan?” I can assure the House that the government has a plan. We first reduced taxes. I cannot believe that the hon. member would be against that. Nine million people will benefit. Although she is leaving the room, I am sure she will understand that.

[The Assistant Deputy Speaker, Anthony Rota]

Order, please.

I just want to remind all members that we do not refer to the presence of other members, whether they are leaving or whether they are here.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, I am sure my colleagues on the other side will appreciate that we have a plan. We started by reducing taxes in December. We are going to put the Canada child benefit program in place in the next budget, and we are going to make historical investments in our infrastructure. That is the plan we have.

I criss-crossed the country. I am sure hon. members know that. We went from Moncton to Yellowknife to listen to people. I can assure them that what Canadians expect from us is to invest in our economy.

This is a turbulent time for the global economy, a time when the Bank of Japan is resorting to negative interest rates, China is facing a slowdown, the collapse of commodity prices is more than just a blip, and mediocre growth is the new norm. That is how Christine Lagarde, the head of the International Monetary Fund, recently spoke about the mediocre growth around the world.

This is a time when Canada needs decisive measures and a firm hand. It requires leadership in order to make smart investments and tax measures to put our economy on track for growth. That is what Canadians expect from us.

Our government is ready to rise to the challenge. After 10 years of slow economic growth, our government was elected to bring in an ambitious economic program to boost our economy. We are taking meaningful action to manage our economy. We are building a more sound economic foundation by providing tax relief to middle-class Canadians and investing in key economic sectors.

That is what people were asking us to do when I was criss-crossing the country during our prebudget consultations. People want us to invest in innovation, productivity, and in our infrastructure. They want us to diversify our economy and promote our exports.

Our government understands that infrastructure can and will go a long way toward solving our problems in the short term and ensuring prosperity in the long term. We know that investing in public infrastructure is the smart thing to do.

In the fall, we finished a very long election campaign during which Canadians voted for real change in Ottawa. They voted for a clear promise to help the middle class and invest in our country to create economic growth and good jobs.

Canadians made their voices heard. They said that it was time to come up with a new plan and a new economic approach. It is time to invest in our communities and in the things that are part of people's everyday lives, such as public transit, roads, clean energy, housing, and child care.

We need to grow our economy's infrastructure to move forward and prosper. As many members know, infrastructure is much more than just structures. It is more than concrete, water pipes, roads, bridges, buses, and railroads. As my colleague, the member for Edmonton—Mill Woods—Beaumont, pointed out, infrastructure is really about people. It is about what enables Canadians to connect in their communities and to play an active role in society and the economy.

When we were doing our cross-country pre-budget consultations, people talked to us about infrastructure, but they also talked about digital infrastructure. They talked about Internet and cell phone connectivity. My colleagues across the way talk about Alberta, but I am from a region that has seen major job losses, like in Shawinigan. Today, people are asking us to make smart investments in infrastructure so that they can participate fully in the economy.

Everyone in the House of Commons is well aware of the significant economic benefits that come from investing in public infrastructure in both the short term and the long term. However, we are also well aware of the power that infrastructure has when it comes to building communities and creating places where we want to live, work, and prosper. During the election campaign, we presented an ambitious platform, and that is the platform that Canadians voted for.

We have committed to doubling federal investments in infrastructure over the next decade. We are betting on and investing in Canadians, and specifically the middle class, in order to stimulate and diversify Canada's economy.

We have committed to investing new funds in three sectors, and they are public transit, green infrastructure, and social infrastructure. We are all familiar with the economic challenges we are currently facing, but strategic investment in infrastructure can stimulate the economy and help build strong, sustainable, and inclusive communities.

That is why the government is committed to working closely with its local partners. We have confidence in their expertise when it comes to establishing priorities in their own communities.

In order to build the infrastructure that Canada needs most, co-operation will be crucial to our success. That is why we have taken the time to go out and meet with Canadians across the country. We went from coast to coast to coast. I even went to Yellowknife to hear the voice of every Canadian. We visited more than 20 towns and cities right across the country, precisely to make sure that the programs we are bringing in are good for Canadians.

In this spirit of collaboration, the Minister of Finance and I held the most comprehensive pre-budget consultations in recent history. More than 146,000 Canadians participated in this process, and this number will continue to increase as online consultations are ongoing.

On January 11, the minister and I went on a six-day tour in order to speak with as many Canadians as possible. We hosted 26 separate meetings and round tables with stakeholders and Canadians all across the country. In addition to these meetings, the minister spoke to capacity crowds at the Halifax Chamber of Commerce, the Montreal Council on Foreign Relations, and the Surrey Board of Trade, with a total attendance of over 1,500 people. Those Canadians who were not able to meet with the minister or myself in person can continue to share their ideas on the Department of Finance website. We have already received more than 3,000 submissions from Canadians. This evening I will be in the riding of Ottawa Centre to hold pre-budget consultations with my colleague, the Minister of Environment .

As part of our pre-budget consultations, we are talking to Canadians to get their input on how the government can best support the middle class, meet infrastructure needs and help grow the economy, protect the environment, and meet local needs, as well as ensure that the most vulnerable members of our society do not get left behind. It is an ambitious list, to say the least, but one that respects Canadian values of honesty, hard work, fiscal prudence, and generosity.

Canadians will be able to see their contributions when the 2016 budget is tabled. I want to assure Canadians that we are listening and we hope that this renewed interest by Canadians will make a better country for all of us, for our families and for our communities.

No one will be surprised to hear me say that the economy is going through a very difficult period. However, in the face of this real challenge, there is also real opportunity to put in place the conditions to create long-term growth. Canadians asked us to make smart choices, and that is exactly what we are going to do. This growth will create good jobs and help our middle class, the lifeblood of our economy, to prosper. We have a plan to grow the economy, and we have already begun to implement it by focusing on investments that promote economic growth while maintaining a commitment to manage the country's economy responsibly.

We will improve economic prospects for our middle class, which is the backbone of our economy.

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

Mr. Speaker, when my colleague was running for office, I am sure he knocked on many doors and talked at many community forums where he would have indicated some of his party's key platform commitments, one being that there might be a deficit, but it would not be any more than $10 billion, and that the Liberals would have the rich pay more and the middle class would benefit, but it would be revenue-neutral. We now know that the deficit will be higher than $10 billion and we know that this revenue-neutral tax actually will be $1.4 billion.

How will my colleague explain that to residents of his riding? The Liberals will create a structural deficit, so who will pay that debt in the future?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, Canadians understand that when interest rates are low, we invest in the economy to grow the economy. My answer for my constituents is simple. I told them what we would do with the economy, and that is exactly what we are doing. In December we started our plan by reducing taxes for the middle class. We will have the Canada child benefit program, which will be put in place in the next budget. It will lift hundreds of thousands of children out of poverty. It will help 9 out of 10 families, probably 9.9 in my riding. We will invest in a historical fashion in our infrastructure. That is what we said we would do, and that is what we are doing.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, before I start, I want to quickly wish my eldest daughter a happy 16th birthday today.

In the member's speech, I did not hear a lot about Bill C-2. He talked about consultation with Canadians and going around the country. We know that the bill benefits 40% of Canadians, those who earn over $45,000. Those who do not earn $45,000, which is 60% of Canadians, were they consulted about this tax? If they were, I have a hard time believing that they would support this tax break.

The government has talked about setting its priorities and pushing those forward in the first 100 days. When are 60% of the taxpayers going to become a priority of the government?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, I wish the member's daughter a happy birthday. This is a place for serious discussion, but also we have families. I am very pleased that he acknowledged his daughter.

It is very simple. Our tax plan is to reduce taxes for nine million Canadians. We went across the country and spoke with people from all walks of life, small business owners, people from the non-profit sector, and people from universities. We consulted in a way which is unprecedented in our country. People understood that cutting taxes for the middle class, investing in our children, investing in a historical way for infrastructure was the way to kick start the economy and provide long-term prosperity for all Canadians.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Mr. Speaker, the member for Glengarry—Prescott—Russell earlier today spoke of the differences in home prices in different parts of the country. In some of those places it is very expensive and hard to get into the market.

Since TFSAs are a very effective savings vehicle for people trying to build their savings and get a down payment so they can get into the market, especially in the high-cost areas, areas where it might be difficult for young Canadians to get into the market, does it make sense to restrict one of the most effective savings methods ever introduced? Would it not make sense to allow Canadians to save for the future?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Speaker, the answer is quite simple.

We have chosen to invest in the middle class. In 2013, just 6.7% of eligible Canadians made the maximum contribution. When the Conservatives doubled the maximum yearly contribution, it did nothing for 93.3% of Canadians.

During the election campaign, we said that we would help the vast majority of Canadians, the middle class, and that is what we have done. That is exactly what our tax cut does: it helps nine million Canadian taxpayers.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased to rise today in the House, on behalf of the people of Sherbrooke, who put their trust in me for a second time. Since this is my first official speech in the House in 2016, I want to thank them for their renewed trust in me. It is a privilege to represent them here. I am also pleased to speak to Bill C-2, as national revenue critic for the progressive opposition, the NDP. I will provide a brief explanation of how our opposition to the current government is a progressive and constructive one, unlike the other oppositions in the House.

Bill C-2 amends the Income Tax Act, an extremely important and complex piece of legislation. It deserves all the attention we are giving it today. Earlier, I heard some government members talking about topics that are not in Bill C-2. I will try to stick as much as possible to what is in this bill.

I will start off by saying that my colleagues and I will support Bill C-2 because it has some good things in it. It does have some bad things though, and that is what I will focus on in my speech if the government does not mind. I will spend more time talking about the worrisome aspects of this bill.

The two main points I want to talk about are changes to income tax rates—the tax brackets that will be in effect if the bill passes—and changes to the savings plan known as the TFSA, the tax-free savings account. The bill introduces a change to reduce the limit, making it somewhat lower than what the Conservatives brought in last year.

Let me begin with the new income tax rates. Unfortunately, I had high expectations about these changes, and I was hoping to see some help for the middle class, but that is clearly not what we have here. Wealthy Canadians will benefit from the cuts, but 60% of Canadians will get nothing. That is disappointing. Canadian voters expected a lot from the government, as did I with respect to this first bill. The government promised that the middle-class tax cut would be the first item on the agenda right after the election. It is now clear that our definition of the middle class is very different, which is very unfortunate for Canadians who were so hopeful. They put their faith in the Liberals. They expected a lot from them, but unfortunately, it is clear from this bill that things are well below their expectations—and mine, too.

There is one other thing I just have to mention, something we have been hearing for a while and not just in today's debate. Since coming to power, the government keeps talking about the future. It keeps talking about a plan. It keeps saying that it will do something in the future and that it is going to tackle this problem or that—soon—and that we should not worry, because everything is coming. However, people need action now. I would have preferred to hear the government begin by talking about right now, talking about what it is doing and bringing in right now.

Unfortunately, in many of today's speeches, the Liberals are still talking about the future, about plans, and about what it intends to do in the future, when people have real needs now and they cannot wait until March or later to see these much-anticipated changes take place.

Why is it that we on this side of the House see that the proposed changes to the tax brackets as less than ideal? The Liberals are tossing around huge numbers, just as the Conservatives did. They are saying that nine million Canadians will benefit from this tax cut. That is a nice number. Everyone watching us at home thinks they are part of that nine million. The Liberals are talking about the middle class. They are saying that nine million people will benefit from a tax cut, but if you look at it a little closer, you see that you have to earn more than $45,000 a year. If you earn $45,000, you get only a $50 reduction. It may bring to mind a nice number when they say they are going to put more money in the pockets of nine million people, but some people might be expecting more than $50.

It is better than nothing, and that is partly why we are supporting this bill. However, many people are disappointed today because those who benefit the most from this measure have the highest tax rates. Accordingly, those who earn the most income have the most to gain.

Luc Godbout, from Université de Sherbrooke in my riding, is a renowned tax expert who often speaks about subjects we are called upon to discuss in the House. To illustrate that those who had the most to gain were those with the most money, he pointed out that with the new changes, a couple with a combined income of $250,000 would get up to $1,120 in tax cuts, whereas a couple with a combined income of $75,000 would on average get between $0 and $4 in tax cuts. My colleague mentioned this earlier. The numbers speak for themselves.

I want to be sure to talk about TFSAs because they are another reason we are supporting Bill C-2. I am talking about the change to the contribution ceiling for this somewhat contentious savings vehicle.

Many people use them for the right reasons. However, there have been documented cases of people using TFSAs as a way to avoid paying taxes. That is unfortunate because the primary objective of the TFSA is a noble one. Various studies have shown that some people are putting money that does not necessarily constitute new savings into their TFSAs. People are not always putting new money for their retirement into those accounts. Instead, they are transferring other assets into their TFSAs. They are simply transferring assets that they already have from one place to another to try to avoid paying taxes. It is unfortunate that some people have been using the TFSA that way. As many members have said today and as is quite obvious to everyone, only a very small number of people make the maximum contribution to a TFSA, and it is usually the wealthiest people who do.

When the Conservative government announced that it was going to raise the limit to $10,000, I had a hard time accepting it. I thought it was a bad decision. I am pleased to see that the Liberals are reversing that decision, and that at the very least, they are going to minimize the cost for future generations. It is important to mention that future generations would have had to pay exorbitant amounts if the government had kept the limit at $10,000. The parliamentary budget officer estimated that the fiscal cost could have reached approximately $130 billion by 2080. When we talk about future generations, I try to include myself in that. I would like to think that I will still be around in 2080. As a result, this increase in the limit really bothered me because it would have had a direct impact on tax revenue for future generations for years.

We must be careful and look at studies that also ask us to carefully consider what will happen with TFSAs, because this is a recent savings vehicle and it could have rather significant consequences for the tax system. Jonathan Kesselman came up with the idea for the TFSA in the early 2000s and together with a colleague whose name escapes me—I apologize for that—studied the possibility of a tax-free savings vehicle. In the article “Tax-Free Savings Accounts: Expanding, Restricting or Refining?”, which appeared in an issue of the Canadian Tax Journal in 2015, Mr. Kesselman presented some options to help the government realize the impact the TFSA could have and ensure that it will be a sustainable program for future generations.

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

Mr. Speaker, the member indicated that he would be supporting Bill C-2, and I am encouraged to hear that.

One of the things I would look to him to at the very least acknowledge is the fact that, in good part, the legislation addresses the issue of income inequality, which is very real. Many Canadians want us to address that. In doing so we would be affecting the middle class directly. The middle class would, in fact, benefit by the passage of this legislation.

Would the member not agree with that?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased that my colleague mentioned income inequality, which is a very important issue for me and, I am sure, for my colleagues as well.

In my opinion, Bill C-2 does not do enough on that front. When Bill C-1 was introduced, we proposed a technical amendment, which would have been very easy to adopt. It was rejected. We wanted to reduce the tax rate on the first income bracket from 15% to 14%.

Everyone probably has their own definition of middle class, but it seems that the government has a rather broad definition. In my opinion, reducing the tax on the first taxable income bracket would have been better for the real middle class. In the NDP's plan, the people who would have saved the most tax by year-end would have been those who earn $45,000 a year.

Therefore, I am very disappointed that our plan was not accepted, because Bill C-2 will not help the middle class, but rather the upper middle class, if I may call it that.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I tend to agree with the member. My own conception of the middle class probably falls somewhat lower than transferring money from the high six-figure earners to the low six-figure earners, which unfortunately is what Bill C-2 would seem to do.

There are many people now who would have been in the middle class, however one would define that a year ago, but have lost their jobs. We have seen a lot of urgency put on Bill C-2, but not the same urgency put on reforms to the employment insurance program.

Could the member speak to how much that might have helped people who are no longer in the middle class because they do not have employment, but a year or two ago would have found themselves there?

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague from Elmwood—Transcona for his question.

It is true that many people had high expectations of this government. They were hoping to see a significant tax cut rather quickly.

The government is incorporating the tax cut into Bill C-2 for people who may not need it as much as others. People were expecting something better than this.

Many Canadian voters are probably now disillusioned with what the government is presenting to them, since all the government does is speak in future tense. Some people are still being left out, and it is important to mention these people, who may not have enough income to pay taxes, in the House. We do not talk enough about these people in the House.

I hope that the government will at least address these issues in the future. I know that I was asking the government not to speak in future tense. However, I urge the government to at least think of those who have lost their jobs, who might be receiving employment insurance, who are not as fortunate as others, or who simply cannot pay taxes because they do not have enough income.

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

Mr. Speaker, it is with pleasure that I rise to address what I think is a very important piece of legislation that we have been debating for the last while. It is important in the sense that we are witnessing the implementation of what I believe is a very significant aspect of an election platform that the Prime Minister of Canada campaigned on, not only for a relatively short period of our summer and leading to October 19, but something about which the Liberal Party had talked for many months while in opposition.

We acknowledge and recognize the importance of Canada's middle class. In fact, members will find that when the Prime Minister was first elected leader of the Liberal Party the term “middle class” started to be talked about and mentioned a whole lot more inside the House of Commons, because that is an issue that he brought to the House and, time and again, has reinforced with great success since his capture of the leadership of the Liberal Party. Through that, we have heard members of all political parties talking more about Canada's middle class.

Let us get back to the election platform. The election platform was very clear that we would change tax rates and that those who make in excess of $200,000 a year would be expected to pay a little more. If we talk to those individuals, I am sure we would find that a good-sized majority of those people understand the need to pay a little more. After all, it is all about fairness.

Then we have those people in a tax bracket on which we have focused a great deal of attention here in the House for well over a year now. It was incorporated into an election platform that there would be a tax break to the middle class. That is what this bill would do. It would deliver on an election promise that was made and will be kept. That is why we see a sense of pride when members of the Liberal caucus stand to speak to address this particular piece of legislation. It is because we are keeping a commitment.

It would even go a little further than that tax break. Again, the last budget doubled the contribution limit to the TFSA. It was roundly criticized when the then Conservative majority government proposed to double the contribution limit. I argued at that point that doubling the limit was not the appropriate tax break to give to Canadians. In terms of percentages, very few Canadians actually take advantage by contributing the maximum amount to the TFSA, which at that time was just over $5,000.

I represent a riding that is working class in a very real way, and my constituents do not have $10,000 sitting around to invest in a tax-free savings plan. They are trying to cope with the economic demands facing them today. We made the commitment back then that we would not be supporting the increase that the previous Conservative government was making. There was wide support for our not supporting it. The previous government of Canada did not have support from the different stakeholders when it implemented that particular tax break. There was no real support. It all came from the Prime Minister's Office back then. The Liberal Party is correcting a wrong. The contribution limit should never have been increased. This is something that is also incorporated into the legislation we have before us.

I know a lot of people talk about what sort of tax breaks we want to provide to Canadians. Let us recall the debate on income splitting. That was another Conservative idea that did not have the support of Jim Flaherty, members will recall. Do they remember the income split? It was a couple of billion dollars annually to Canada's wealthiest individuals. Who was going to foot the bill? Canada's middle class was going to foot that particular bill. Even Jim Flaherty, the former Conservative minister, recognized the flaw of that Conservative policy. We recognized back then that this was not the type of Canada we wanted to see and that there was a need to reinforce the positive.

This is something I believe is a step in the right direction.

I hear a lot of the Conservatives talking about deficits. This is really something to hear, now, being on the government side. When I was in opposition, we raised the issue of deficits. I raised the issue on numerous occasions. In fact, when they brought in the budget, saying that they had a balanced budget, I made it very clear that it was a bogus balanced budget, that they were fudging the numbers. Members can check Hansard. They will see it right there, in black and white.

However, I was not alone. They do not have to believe me. Even the Governor of the Bank of Canada indicated that this was going to be a deficit budget, and that was done in the month of July.

There was no surplus budget handed over to the Liberal government on October 19. That is a deception. We inherited a deficit, much as Jean Chrétien inherited a deficit, and he turned that deficit into a multibillion-dollar surplus.

Then what happened? Then the Conservatives got their hands on the purse again and they turned that multibillion-dollar surplus into a multibillion-dollar deficit within two years. That was even prior to Canada getting into the recession.

Ever since they achieved that deficit, every year since then, they have had a deficit, including the 2015 and 2016 budget.

The opposition will have to excuse me, as I suspect most Canadians realize that the Conservatives do not know how to balance the books. The only party that has balanced the books here in Ottawa has been the Liberal Party, and it has demonstrated that time and again.

I would suggest that we listen to what the Prime Minister has very eloquently said to Canadians, that at the end of the day, today, this is doing a lot for the middle class.

Well, there is a lot more that is coming down the pike.

We can talk about the Canada child benefit program that would be lifting, literally, tens of thousands of children out of poverty. That is a very strong positive.

Imagine a government, now, that is going to take a proactive approach at dealing with some of those important social issues that, again, are going to help Canada's middle class and those aspiring to become a part of the middle class—programs such as housing and the impact that housing would make across all regions of our country, coast to coast to coast, not to mention the hundreds of millions of dollars that would be spent on our infrastructure.

This expenditure on infrastructure would create jobs, real jobs.

The infrastructure program that the Conservatives had was nothing more than an empty shell. They would say they were going to spend this kind of money on infrastructure, but it was years down the line, not when the economy needed it, not when the municipalities were calling for it. They had their own political agenda, in terms of the expenditure of public dollars dealing with infrastructure, when the needs are today. That is what they should have been doing, but they did not recognize that.

This government does recognize that. We are seeing more money invested in infrastructure at a time when Canada most needs that money to be spent in the history of our country, or at least in the most modern history, in the last 40 or 50 years. It is because we believe in building Canada's infrastructure. By building our infrastructure, we are helping the local economies throughout the country in many different ways, not only from a social perspective, but also from an economic perspective.

There is a lot of discussion about oil prices. It is interesting watching the Conservatives yap across the aisle on that particular issue. We should remind them what the price of oil was when they were in office. It was $110. When they left, before October 19, it was at maybe $30. I might be a little bit off.

Where were all those Alberta members of Parliament? They were nowhere to be seen. I can tell members that the Alberta members of the Liberal caucus are very vocal, as they understand, as all the Liberal caucus understands, the importance of what is taking place in Alberta.

We are going to do for Alberta what we do for other provinces. We are not only going to demonstrate that we care, but we are going to invest. By strengthening Canada's middle class, we will be strengthening the economy, and all of us will benefit by it despite what the Conservative opposition might have to say.

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

Mr. Speaker, the hon. member has never let facts get in the way of his speeches in the House, facts from the parliamentary budget officer and the finance officials' own report as of November, and facts from the Auditor General in terms of the rollout of the stimulus plan.

The member did start off his speech earlier talking about a promise he made to his constituents, talking about the commitment the Liberals are going to keep. Did he also promise them that it was only going to be a $10-billion deficit? That was also a promise. Is he going to break that promise?

Even though the Liberals have not been able to define middle class yet, did the member tell his constituents that the so-called tax swap of raising the taxes on the rich and giving the middle class a break was going to cost $1.4 billion and add to the structural deficit of his government?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I did tell my constituents the truth, the truth being that the Conservative government had a significant deficit for 2015-2016. I also let them know that it was not just me saying that. The Governor of the Bank of Canada, who is an apolitical individual, made it clear back in July that there was a deficit situation, and we are not talking about thousands of dollars but rather about hundreds of millions of dollars.

There is a lot to be learned. I would suggest to the Conservative Party that it reflect on its past behaviour in regard to balancing the books. You never really achieved a balanced book, unless of course we take into consideration the very first budget when you first took office immediately following Paul Martin's defeat. He handed you a multi-billion-dollar surplus. That is the only time you actually had a surplus. Outside of that, it was deficit after deficit. We do not have to take any advice from the Conservatives with regard to financial management.

Under this Liberal government we will achieve a balanced budget at some point.

[The Assistant Deputy Speaker, Anthony Rota]

I want to remind the hon. member and all members to speak through the Speaker and not directly across the floor.

The hon. member for Elmwood—Transcona.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Mr. Speaker, the hon. member mentioned that many people in his riding do not have $10,000 a year to contribute to a TFSA, and I am sure he is right about that. He is right about that in part because so many people in his riding do not make the $45,000 a year that they would need in order to qualify for the Liberal tax cut in Bill C-2.

I am wondering if he could get up and explain to the House why it is that he will not support the NDP proposal to give tax breaks to people who make under $45,000 a year. Will he admit that he would be doing more for more people in his constituency if he supported our plan over what is presented in Bill C-2?