Mr. Speaker, it is a pleasure to speak to Bill C-2 today. I will begin by saying that, while the NDP members have issues with some elements of the bill, we are pleased to acknowledge that there are parts of the bill that we believe would be beneficial to Canadians. We have decided to support the bill going forward to committee, where some of these can be more meaningfully considered. There are some clarifications and some rationalizations that I am going to take advantage of during my time here today.
Let us talk about some of the more positive aspects of Bill C-2
Bill C-2 would include tangible measures to collect a fair tax from the rich. Specifically, it would increase, by 4%, the top income tax rate on incomes over $200,000.
As the hon. member for Regina—Lewvan pointed out when the bill was first debated, this increase is entirely consistent with what the NDP has achieved at the provincial level.
In Nova Scotia, the NDP government increased, by 4%, the top rate on incomes over $150,000.
In a minority legislature in Ontario, the NDP amended a budget to add two points of income tax on incomes over $500,000.
The NDP government in Alberta has, quite correctly, gone from a flat tax to a progressive income tax system.
As part of our election platform in Saskatchewan, the NDP is proposing an additional percentage point of tax on incomes over $175,000.
The other positive aspect of this legislation is to restore the TFSA contribution limit to $5,500 per year. I think it is important to note that the previous Conservative government's proposal to increase that limit to $10,000 would only affect people who have extra money left over after 18% of their income has been contributed to RRSPs and after the $5,500 that can still be contributed to the TFSAs.
In 2013, fewer than 7% of eligible Canadians made the maximum TFSA contribution. It stands to reason that probably only up to 7% of Canadians would stand to gain anything from a higher limit on TFSA contributions. Therefore, restoring that limit to $5,500 is clearly a progressive move.
Let us face it. Given the unemployment rate, the skyrocketing cost of food and rent or housing, and the rising precariat, there are far too many people who will not see benefit from the bill. Consider a family of four living off minimum wage with a total monthly income, including benefits and credits, of $2,882. By the way, I get this information from the local Windsor anti-poverty organization, Pathway to Potential. Of this fixed monthly income, 62% goes to rent and food, leaving only $1,082.70 for remaining expenses, such as utilities, phone, transportation, medical costs, and dental costs. People face precarious situations when their rent exceeds 30% of their monthly income. When income is low and rent is high, there is not enough money left for food. This helps explain why so many are forced to use food banks. In 2015, 80,865 individuals were served by Windsor and Essex County food banks, and 41,942 of this number were children.
I think it is safe to say that, when we have a situation this urgent, this dire, we should be drafting legislation to help these people. Yet, these are precisely the ones who are left out of the bill. When families must choose between paying rent and feeding their children, they are not going to have a spare $10,000 to hide away in a tax-free savings account.
Let us consider students. In the Windsor area, we have St. Clair College and the University of Windsor. The reality is that most people who go to school are just getting by or taking out loans to get by, let alone putting money in a tax-free savings account. Perhaps some of them are doing so with the help of family members, but the ordinary Canadians I represent do not have that luxury.
As I alluded to earlier, in the service sector, many people are moving to part-time or precarious work and basically just getting by.
Unfortunately, with this bill, we know from third-party experts and economists that 60% of this plan for a reduction in taxes for Canadians would not be enjoyed by the middle class or those with low incomes. Therefore, it is a sizeable section of Canadians who would be left out. Because of the way the scheme works, the wealthiest would benefit the most. That is a real problem, which New Democrats want to address at committee. It is an issue we have raised before.
Who would benefit from this bill? It would not be the office workers who are making an annual salary of less than $40,000 a year, or the hair stylists who basically earn around $28,000 annually in Canada. They would get zero. It is the same with social workers who make an annual salary totalling around $44,000, and with our friends in the retail sector who earn $21,424 on average.
Cashiers would get nothing back. That is a classic example. All of the people working in department stores, retail shops, drive-throughs, fast-food chains, and all of these types of businesses would receive zero from the plan. They are the people we should be rewarding with a tax reduction. These are the people who do not have the equity to easily afford some of the tax deductions that wealthier Canadians get. They do not earn income at the level to take advantage of some of the policies that have been put in place in the past couple of decades.
Waiters and waitresses earn less than $22,000 on average. They would get zero. That is another group of individuals who, I would argue, would not benefit from this reduction. They would get nothing at all. Nannies are another example. Chefs and assistant chefs would get nothing.
Who would get a benefit from this legislation? Bank managers who earn around $82,000 a year would receive $555 in their tax season from this. They would also be in an income stream where they might be able to take advantage of tax-free savings account. It would be beneficial for them and their family. Lawyers earning around $108,000 a year on average in Canada would get $679. Members of Parliament with the same wage amount would get the cap of around $680 as well.
It gets worse. Bill C-2 also includes a so-called middle-class tax cut that would not actually help the middle class. I think the Liberals might be a bit confused between cutting the middle-class tax bracket and changing taxes in such a way as to help people with middle incomes. What the bill proposes is a tax cut that applies to incomes above $45,000 a year, which is more than the median Canadian income. To receive the maximum benefit, someone would need to have an income of more than $90,000 per year. To put that into perspective, someone working as a nanny for the Prime Minister would receive nothing from the middle-class tax cut. However, the Prime Minister himself, and indeed all members in this House, would get the maximum benefit of about $700. However, we do not need the money.
What are the alternatives? We in the NDP have proposed to reduce the first tax bracket, which applies to everyone. We also propose a boost to the working income tax benefit, which is better targeted to lower incomes. It would be extremely easy to design and implement a middle-class tax cut that would actually go to the middle class. However, in all of the discussion we have heard with respect to this bill, I have not heard a coherent explanation from the Liberals as to why they are pushing ahead with a tax cut that would only go to incomes above $45,000, rather than enacting a tax cut that would include all taxpayers.
Moreover, it has been revealed that the bill would not pay for itself. It would cost more than $1 billion a year in lost federal revenue. In effect, what the government is proposing is to borrow money to fund a tax break for people who do not really need it.
In conclusion, there are a enough positive elements in Bill C-2 that the NDP is prepared to support it on second reading. However, there is a huge amount of room for improvement in targeting the so-called middle-class tax cut to those who really need it, and in collecting the revenue that would ultimately be needed if the government is ever going to balance the budget—