House of Commons Hansard #31 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was income.
Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, if Questions Nos. 40 to 43 could be made orders for return, these returns would be tabled immediately.
Charlie Angus NDP Timmins—James Bay, ON
With regard to FedNor, for each fiscal year from 2009-10 to 2015-16: (a) what was FedNor's total approved budget; (b) how much of the budget in (a) was actually spent; (c) how much lapsed funding is eligible to be carried over to future years; (d) how much was allocated to the Northern Ontario Development Program; (e) how much was actually spent on the Northern Ontario Development Program; (f) how much was allocated to the Community Futures Program; (g) how much was actually spent on the Community Futures Program; and (e) what were the full-time equivalent staffing levels of FedNor?
(Return tabled)
Question No. 41Questions Passed as Orders for ReturnsRoutine Proceedings
NDP
Charlie Angus NDP Timmins—James Bay, ON
With respect to government funding: what is the total amount of funding, during the 2014-15 fiscal year, that was allocated within the constituency of Timmins — James Bay, specifying each department or agency, initiative, and amount?
(Return tabled)
Charlie Angus NDP Timmins—James Bay, ON
With respect to water and wastewater systems in Indigenous communities across Canada: (a) what is the breakdown of water systems, broken down by (i) high overall risk, (ii) medium overall risk, (iii) low overall risk; (b) how many Indigenous communities had drinking water tanks and cisterns fail safety tests; (c) how many Indigenous communities had drinking water tanks and cisterns which received a one hundred percent pass rate on safety tests; (d) how many homes are reported to have no water service; (e) how many communities are currently under boil-water advisories; (f) of the communities in (e), what kind of advisory is in place and what are the names of the specific communities; (g) what is the breakdown of wastewater systems broken down by (i) high overall risk, (ii) medium overall risk, (iii) low overall risk; (h) how many Indigenous communities had wastewater systems fail safety tests; (i) how many Indigenous communities had wastewater systems get a one hundred percent pass rate on safety tests; (j) how many homes are reported to have no wastewater service; (k) how much money has the government spent on sending bottled water into Indigenous communities that are under boil-water advisories; (l) how many bottles of water has the government sent to Indigenous communities; (m) how much funding is required to end every boil-water advisory currently in place over the next five years; (n) how much funding is required to have all water and wastewater systems receive passing grades; (o) how much money is dedicated within the current budget and the current fiscal framework to improve water and wastewater systems on reserves; (p) with respect to the National Assessment of First Nations Water and Wastewater Systems National Roll-up Report, (i) how much of the estimated 783 million dollars was spent and is projected to be spent on water systems, (ii) how much of the estimated 300 million dollars was spent and is projected to be spent on wastewater systems, (iii) how much of the 4.7 billion dollars was spent and is projected to be spent over the next ten years; and (q) for each subsection in (p), what are the updated costs and needs for funding on water and wastewater systems?
(Return tabled)
Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC
With regard to the Department of Finance’s 2016 pre-budget consultation sessions that took place between January 6, 2016, and January 20, 2016: (a) how many sessions were organized by the government; (b) where did these consultation sessions take place, broken down by (i) city, (ii) constituency; (c) what groups and individuals were invited to the consultation sessions; (d) what groups and individuals participated in the consultation sessions; (e) which members of Parliament attended the consultation sessions; and (f) how many online consultation sessions took place?
(Return tabled)
Kevin Lamoureux Liberal Winnipeg North, MB
Mr. Speaker, I ask that all remaining questions be allowed to stand.
The House resumed consideration of the motion that Bill C-2, An Act to amend the Income Tax Act, be read the second time and referred to a committee.
Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons
Mr. Speaker, I would not turn down the opportunity to ask a friend a friendly question of sorts.
This legislation would do something positive for Canada's middle class. If the bill were passed, it will give substantial tax relief to Canada's middle class. If members vote in favour of it, they will be voting in favour of a tax cut for the middle class.
Would my friend not acknowledge that many Conservatives in the past would have voted in favour of tax cuts? This is one that Canadians could truly get behind. Over nine million Canadians will benefit if this legislation is allowed to pass. Is my friend seriously looking at supporting the legislation?
Tom Lukiwski Conservative Moose Jaw—Lake Centre—Lanigan, SK
Mr. Speaker, it is a pleasure to respond to a question from a colleague and a good friend as well.
I do not have to remind my colleague of our previous government's record on reducing taxes. Over 140 taxes were reduced in our 9 years in government. We brought the tax regime for every Canadian down to the lowest level in 50 years.
However, the problem with Bill C-2, as I explained in my address, is that it does not just cut taxes for some Canadians. It would penalize every Canadian by not allowing them to max out their TFSAs to the levels that our government introduced. Everyone's contribution limits for TFSAs would be cut by $5,000. That is unacceptable and I certainly will not be supporting Bill C-2.
Erin Weir NDP Regina—Lewvan, SK
Mr. Speaker, perhaps members have seen the movie Groundhog Day. I started out my week by asking the member for Moose Jaw—Lake Centre—Lanigan a question about Bill C-2. I asked him whether he was concerned that a $10,000 contribution limit over time might allow the affluent to accumulate huge pools of tax-free investments. His response was that it was good to allow people to make contributions tax-free. However, there can be too much of a good thing.
In that spirit of Groundhog Day, I would like to ask the same question. At some point does the member for Moose Jaw—Lake Centre—Lanigan believe investment profits should be subject to tax?
Tom Lukiwski Conservative Moose Jaw—Lake Centre—Lanigan, SK
Mr. Speaker, if anyone wondered whether my colleague for Regina—Lewvan had socialist leanings, it has been cleared up right now.
When did it become a bad thing to allow Canadians to reduce their tax burden? When did it become a bad thing to allow Canadians to invest in a vehicle that lets them keep more of their hard-earned money? When did it become a bad thing to allow Canadians to keep their money in a tax-free vehicle? They should not be penalized. Socialists would like to do that, but we do not.
Joël Lightbound Liberal Louis-Hébert, QC
Mr. Speaker, I am very pleased to rise today in the House to talk about something that is particularly dear to my heart, and that is reducing inequalities. When it comes right down to it, that is what Bill C-2, an act to amend the Income Tax Act, is all about.
Obviously, I do not consider Bill C-2 to be the final destination. There will always be work to do when it comes to reducing inequalities, but this bill is a step in the right direction, a step that the government took at the earliest opportunity. This bill is a step in the right direction because it makes our income tax system more progressive by creating a new 33% tax bracket for incomes over $200,000, while lowering taxes for over nine million Canadians who earn less than $90,000.
As a forward-thinking individual, I cannot help but be pleased to see our tax system becoming more progressive through the creation of a new tax bracket under this bill. However, I am also pleased because this bill repeals what can only be described as a regressive measure implemented by the previous Conservative government that increased the maximum TFSA contribution from $5,500 to $10,000.
I do not expect members to take my word for it that this tax measure was regressive. You could listen to economist Rhys Kesselman, from Simon Fraser University, who helped lay the foundation for the introduction of the TFSA in 2009. This is what he had to say about the previous government's proposal to increase the TFSA limit to $2,000.
Before dropping the second shoe, the government should reconsider its pledge to initiate a tax change that would impose a fiscal straightjacket on future administrations that undercuts tax progressivity and increases income inequality.
There are two interesting concepts in this short quote from Mr. Kesselman, who, I remind members, is credited with helping to bring in the TFSA. An increase in contributions would have have imposed a fiscal straitjacket on future administrations, while undercutting tax progressivity and increasing inequality.
I will come back to the concept of a fiscal straitjacket, but first I want to look at how increasing the TFSA undermined our tax progressivity and drastically increased income inequality.
I have heard my Conservative colleagues on the other side say over and over, quite rightly, that 60% of TFSAs are held by individuals with incomes below $60,000. However, this statistic overlooks the fact that, often, the people who invest in a TFSA have a spouse with a substantially higher income. My Conservative colleagues should know that TFSA rules allow a spouse to contribute to both their own and their lower-income spouse's TFSA, up to a total of $11,000 under the former regime, before the Conservatives' increase.
In Kesselman's view, if you want to have a clearer picture, it is important to look at households, not at individuals. If you look at households, including single-person households, that contribute to TFSAs and have an income of less than $60,000, they represent 52% of TFSA holders, but they hold only 31% of all the money invested in TFSAs. In contrast, 4.4% of households that contribute to TFSAs and earn $200,000 or more hold 15% of all TFSA balances.
It should also be noted that the returns generated by families with the highest incomes are higher than those of other taxpayers, and on that particular issue, I would again like to quote Mr. Kesselman, who, I would remind the House, is the intellectual father of TFSAs in Canada:
Upper-income families enjoy TFSA tax savings to an even more unbalanced degree than those statistics might suggest: they typically generate higher investment returns on their TFSA assets than lower earners, and they avoid the higher personal tax rates that would otherwise apply on the income from assets shifted into their tax-free accounts.
Lastly, it is interesting to also note that, proportionally, not all Canadians contribute to their TFSAs equally. While only 29.2% of Canadians who earn under $50,000 contribute to their TFSA, 99% of Canadians who earn over $150,000 contribute.
It was not surprising, therefore, that the former parliamentary budget officer, Kevin Page, had something to say about the Conservatives' plan to increase the TFSA contribution limit. He wondered if it would really generate any savings for the middle class and low-income households. He pointed out that one would have to be pretty comfortable to be able to set aside $11,000 in a TFSA at the end of the year and that the priority should be investing in infrastructure, since the larger issue was growing the economy.
I could not agree more with Mr. Page, and clearly, Canadians agreed with him too. They chose growth and a more just and accountable society.
It should come as no surprise that when our American neighbours added TFSAs to their tax regime, they limited contributions to $5,500 and made TFSAs off limits to single individuals whose income exceeds $116,000 and households whose income exceeds $183,000.
Getting back to the concept of the fiscal straitjacket that Mr. Kesselman described, according the the parliamentary budget officer in a study published in February 2015, raising the TFSA limit would cost the federal government $14.7 billion a year in lost revenue by 2060. The provinces would lose $7.6 billion a year.
Interest rates are low, we need to stimulate the economy, and there is a pressing need to invest in our communities and our infrastructure, yet surreally, the Conservatives bemoan our government building up a deficit that will put future generations in debt while simultaneously tearing their hair out arguing in favour of maintaining an irresponsibly high TFSA contribution limit that will benefit only the wealthiest 10%, which would be an abdication of fiscal responsibility on the part of the government. It is utterly surreal.
I can understand why they are so attached to this policy. It was a hat trick for them. It was the triple crown. Not only did this irresponsible policy allow them to deprive the government of significant revenues, which then allowed them to justify its disengagement, but it also gave an undue and outrageous advantage to the wealthy, whose interests the Conservatives have always cared deeply about, as we know. That may be understandable, but it is not defensible.
Bill C-2 makes our tax system more progressive by a adding a tax bracket and giving back to nine million Canadians. It also undoes one of the previous government's most regressive and irresponsible policies. Overall, Bill C-2 is a step toward reducing inequality in Canada. At the beginning of my speech, I said that this issue is especially important to me. It may even be the reason I entered politics. It is important to me because I am seeing a worrisome trend in Canada. Since World War II, there has been a steady increase in worker productivity, but compensation has not kept pace. The gap between productivity and compensation keeps getting wider.
Since the 1980s, the disposable income of the top 1% of income earners has increased by 77%, while that of the 0.01% at the top of the pyramid has grown by 160%. During that same period, the other 90% have seen their incomes increase by only 19%.
In Canada, roughly 70% of all net worth belongs to 20% of the top income earners. Historically, economic growth is more robust when the trend leans toward income equality. From the 1950s until the 1970s, in developed countries, lower income inequality went hand in hand with high economic growth. The IMF was able to quantify the gains to be made by narrowing income gaps. I would like to share a quote:
If the income share of the top 20 percent increases by 1 percentage point, GDP growth is actually 0.08 percentage point lower in the following five years, suggesting that the benefits do not trickle down. Instead, a similar increase in the income share of the bottom 20 percent (the poor) is associated with 0.38 percentage point higher growth.
For all these reasons, I will enthusiastically support Bill C-2, because I believe that prosperity in Canada must be inclusive and that sustainable growth is inevitably dependent on equitable growth.
Marjolaine Boutin-Sweet NDP Hochelaga, QC
Mr. Speaker, the member for Louis-Hébert talked a lot about reducing inequalities. That is quite commendable.
However, I wonder whether he knows that two out of five Canadians spend more than 30% of their income on housing and that more than one out of five Canadians spend more than 50%. One-third of Canadians spend far too much on housing, and we are not talking about people who earn $89,000 a year or more. We are not even talking about people who earn $40,000 or $50,000. There is nothing in this bill for these people.
If it is so important to reduce inequalities, why did the federal government focus on bills that help people who earn more than $89,000 instead of people who are living in poverty? For example, why does the government not immediately introduce bills to lift seniors out of poverty instead of this bill?
Joël Lightbound Liberal Louis-Hébert, QC
Mr. Speaker, I would like to thank the member for Hochelaga for her excellent question. I share her concerns in that regard.
In my riding, I believe that 42% of the population spends more than the recommended 30% of income on housing. That being said, we need to look at the government's overall approach. Yes, Bill C-2 lowers taxes for the middle class, raises them slightly for the wealthiest members of our society, and does away with the previous TFSA limit, which in my opinion is a very good thing. However, the budget will soon be tabled, and we are committed to introducing the new Canada child benefit, which will be more generous and progressive and, according to the Library of Parliament, will lift 315,000 children out of poverty.
We are also committed to investing in social infrastructure, including affordable housing and social housing, to ensure that as many people as possible have quality of life and to reduce inequalities in Canada. That is my answer to my colleague.
Wayne Long Liberal Saint John—Rothesay, NB
Mr. Speaker, there is a clear difference between all three parties in this House. New Democrats ran their campaign and their platform on really two or three main things. It was a $15-a-day day care that was clearly not costed out, and a $15-an-hour minimum wage they proposed that was for less than 1% of Canadian workers.
What the Liberal plan offers is real change in tax relief for middle-class Canadians, with a tax cut. More important, the Canada child benefit would put money back in the pockets and hands of families that need it the most, not like the universal child care benefit that the NDP and the Conservatives both supported, which gave the same cheques to millionaires equal to those who needed it.
There is no question that the Canada child benefit would be better for nine out of ten Canadian families. I ask my hon. colleague if he could talk about the impact that the Canada child benefit would have on his riding.
Joël Lightbound Liberal Louis-Hébert, QC
Mr. Speaker, I would like to thank my colleague for his question.
I think that we need to look at the government's approach as a whole, in a holistic way. Yes, there is the tax cut set out in Bill C-2, but we have also committed to introducing the Canada child benefit, which will lift 315,000 children out of poverty. We did the math for my riding, and this benefit will lift approximately 1,000 children out of poverty.
To come back to the previous question about seniors, members need to think about our government's commitment to increasing the guaranteed income supplement. It would have been impossible for the NDP to keep this type of social commitment because it also made a commitment to balance the budget and achieve a zero deficit no matter what the cost.
I think that we have the best approach, a more progressive approach. Bill C-2 may not be the final destination, but it is certainly a step in the right direction.
Kevin Waugh Conservative Saskatoon—Grasswood, SK
Mr. Speaker, changes to the Income Tax Act as proposed by the new government are a major concern for entrepreneurs and professionals from coast to coast to coast.
These are the people who drive our economy, the small business owners who have taken a chance in their life, and through their hard work are now being rewarded. Now the government has taken the initiative out of the most ambitious people in our country, like the doctors who have studied for years, have made huge sacrifices, and have built up huge debt, knowing there was a reward for them at the end of the day.
Last week, I went to a young optometrist in Saskatoon. She was just starting her career. She is under 30 years of age. The professional spent the better part of her twenties in school. She graduated with a mountain of debt. This was a concern. However, at the same time, this young professional was confident that over time she could make it up.
Now we are not too sure about this young optometrist. With this plan of more taxes for higher income earners, we are discouraging success and are actually punishing those who are high achievers in this country.
Saskatoon will be the home of a much-needed children's hospital. This has been a dream of ours and our province of 1.2 million for decades. Many families in our province were forced to send their sick children to centres like Calgary, Edmonton, Toronto, and even to Minneapolis, Rochester, and New York.
We now have the opportunity in our province to have the sick children stay at home and be well attended to. Construction has started on this project in the Saskatoon area, and optimism is very high. However, there is a legitimate concern about where the doctors will come from to feed this fabulous facility.
This is a specialty area, and it is competitive for these specialists. Not only do we compete with other provinces like Alberta, B.C., and Ontario, but with these proposed changes in the Income Tax Act, we will be losing our professionals to other parts of the world. What good is the bricks and mortar, if we cannot staff this facility with highly qualified professionals? How can we be competitive with this extra burden on those who are in this tax bracket? They will simply pick up and leave Saskatchewan, and leave Canada.
This is called “brain drain”. This Liberal tax plan will certainly lead to an exit of professionals right out of this country. I have talked to many doctors and dentists who employ a lot of people in our city. They do not need to be putting in extra hours, knowing they will be paying more taxes to the government. Many have said they will simply cut back on their hours. Instead of serving the public for six or even seven days a week, they have all said they are going to cut back their hours.
Professional athletes already have apprehension about playing in Canada. Let us take the NHL players in Ottawa, Montreal, or Toronto, along with Calgary, Edmonton, and Vancouver. With higher taxes, they can make the decision, telling their agents when they are free agents, that they simply do not want to play in Canada. When free agency hits, they have the option. They can actually put a no-trade clause into their contract not to be based on a Canadian team.
The reason is simple. Hockey is a business, and players know they only have a small window of opportunity to make their living. Taxes matter in this age group. It is no coincidence that if the playoffs were to open today in the NHL, not one Canadian-based team would make the NHL playoffs today.
Yesterday, the President of the United States made a reference right in front of the Prime Minister, asking where was the Stanley Cup. Well, guess what? The cup is in the President's home town of Chicago. Do we think that is a level playing field? It certainly is not.
How about the members across from me? Could it be another 50 years before Maple Leaf fans can plan a Stanley Cup parade down Yonge Street with this tax plan? The same goes for the entertainment business. Canada's most talented people today come from a zip code instead of a postal code, and this is going to make it worse.
I can tell the House that Canadian charities are very concerned with this Liberal tax plan and this bill. High-wage earners over the years have been very generous with their money in our communities in Canada. If not for this group, many social organizations would not be around today. These are the people who dig deep for charities so they can provide the necessary programs needed in our communities. I have sat on many charities in my city over the years, and if it were not for some of these professionals, organizations would have closed their doors long before now. Charities that do not need federal handouts can continue operations because of this class of people who give back to the community in many ways. We have all been in offices that have local art on the walls. That is because people give back to their communities so that others can enjoy their lifestyles and passion.
When the Liberals originally introduced this new system of tax breaks, they promised it was going to be revenue neutral. Four months later, though, the finance minister conceded in the House that this plan is not revenue neutral at all. A recent report from the parliamentary budget officer estimates that the cost could actually be closer to $1.7 billion. We already know that the government has blown by its $10-billion deficit per year that it promised during the election campaign. We are at least at $18.4 billion, and climbing every day. Conservatives cannot wait for the budget to come down to see the number on March 22.
I ask, who is going to pay for this? It will have to be repaid at some time. Is it our kids or our grandchildren who will pay for this Liberal tax plan? It is a broken promise because it was grossly miscalculated. I might add that it will completely eliminate the $1 billion surplus that the Conservative government handed over to the Liberals last year.
The Conservative government, and rightfully so, believed in the concept that people need to save for the future, a future that requires at one point or another taking money out of the popular TFSAs for an emergency. This was designed to take the burden off the federal government so that it could redirect much-needed money to other programs in this country. Now there is no incentive at all to put money away. The very popular TFSAs have been sliced back. Many families and seniors in my riding of Saskatoon—Grasswood are not happy at all with this new Liberal tax plan.
The report yesterday said it all in The Globe and Mail. It stated, “The more we get to know TFSAs, the more they demand attention as a vehicle for retirement saving.” The previous Conservative government introduced this program. It was a great tool for investing, even for a first home.
Canadian household debt is at an all-time high today. This country lost 2,300 jobs last month, instead of the expected gain of 10,000. Canada's unemployment rate is at 7.3% today. That is the highest level in three years. It is only going to get worse with this new Liberal tax plan. I will not support Bill C-2 today.
