Mr. Speaker, it is a pleasure and an honour to participate in the debate on the government's Bill C-2, also known as the Liberal giveth and the Liberal taketh away bill, because that is exactly what the bill would do.
Bill C-2 would give some modest tax relief to some Canadians, but it would also take away from all Canadians the ability to contribute $5,000 more to their tax-free savings accounts. That is real money we are talking about here. For a young person perhaps just starting out, aged 25, that could be 45 years or more that he could be contributing an additional $5,000 to his tax-free savings account, but which would now be denied to him because of Bill C-2.
I will explain in greater detail what Bill C-2 would do.
For a Canadian earning between $45,000 and $100,000 a year, he or she would receive some modest tax relief. If a Canadian is earning less than $45,000, there is no tax relief. If a Canadian is earning more than $200,000, he or she will be paying more taxes rather than less. However, every single Canadian eligible to open up a TFSA, that is to say every Canadian of the age of 18 or over who has a valid social insurance number, has the opportunity to open a tax-free savings account.
A tax-free savings account is a relatively new savings vehicle introduced by our previous Conservative government several years ago. It has proved to be incredibly popular. To date, over 11 million Canadians have TFSAs, and that number is growing steadily and quickly day after day.
When we first introduced the TFSA, we set a contribution limit of $5,000. Again, that is to say that all Canadians who opened a TFSA could contribute $5,000 as a maximum each and every year. The money in that account, as it grew over the years, could be withdrawn at any time tax-free. It was so popular, in fact, that most Canadians felt it was a far better savings vehicle than the RRSPs themselves, because, as everyone knows, with RRSPs one gets a tax break when putting money in, but has to pay taxes when taking the money out. TFSAs are just the opposite. One can put after-tax money into an account, and in that account, whether one had stocks, bonds, mutual funds or any other investment, that money could grow tax-free during the life span it was in the TFSA, and when a Canadian took that money out, it could be taken out tax free.
What a wonderful vehicle for Canadians who wanted to save for the future. When someone is approaching retirement age, they are quite rightly concerned about their retirement years, their so-called golden years. Will they have enough money to sustain themselves comfortably in their retirement? The TFSA went a long way to ensuring that all Canadians could do exactly that. However, Bill C-2 would deny Canadians the ability to put an additional $5,000 into their account.
As I mentioned earlier, when we first opened the TFSAs, the contribution limit was $5,000. We increased that a few years later to $5,500, and then a few years after that we put the limit up to $10,500 a year. Out of the 11 million current TFSA holders, over two-thirds of those contribute the maximum, and of those maximum contributors, about 60% have modest to low incomes. Therefore, this was a great tax savings vehicle for all Canadians, particularly those of modest and middle incomes.
The argument presented by the government as to why it reduced the level from $10,500 to $5,500 is that this was a vehicle simply for the rich. However, the statistics prove that simply is not the case. I suspect that the real reason the Liberals have chosen to reduce the ability of Canadians to put an additional $5,000 into a tax-free savings account is simply that the current Liberal government needs more tax revenue.
Why does the government need more tax revenue? It is because the Liberals are going to be spending like drunken sailors, and we have already seen evidence of that. We know now that the first year's budget, which we will be seeing on March 22, is anticipated to come in at about a $30 billion deficit. Most bank economists and people who have been analyzing the promises made by this Liberal government are anticipating that this figure of a $30 billion deficit will grow over the years.
I know that the government's Keynesian theories about putting money into the economy to stimulate it and create jobs simply do not work. Keynesian theory has never worked and will not work today, but the reality is that because of the government's wild intent to go into deficit, all Canadians ultimately will have to pay the price. Why? It is because deficits in real terms are borrowed money. Borrowed money means that someone has to pay that money back. If it is not me, it will be my children and my grandchildren.
This is not new. This is something that the Liberals have done throughout the history of their years in government. This is in their political DNA. In fact, the majority of Canada's debt as we know it today was incurred by the current Prime Minister's father, Pierre Elliott Trudeau. Figures will show that in the last year of the former Trudeau's government, the Government of Canada was spending $1.03 for every $1 that it took in in revenue. It does not take an economist or a rocket scientist to figure out that a few years of that means that the tax load and tax burden on Canadians will have to increase, because there is no way any government can sustain that type of spending.
It seems that the apple has not fallen far from the tree, because this Prime Minister seems to be taking the same approach as his father, going into massive deficits when the government does not have to do so.
Keynesian theory is for when we are in a recession, and then, perhaps short-term stimulus spending or short-term deficits could create jobs and help the economy recover. That is only a theory, and as I mentioned earlier, I believe it has not been well thought out. It certainly has not been proven to be accurate in all of those jurisdictions worldwide that have attempted this type of economics, but one thing is certain, in a jurisdiction that is not in recession, the government should not put money into the economy as stimulus because it has no need to do so.
There is one way the government could get additional tax revenue without raising taxes, and that is to look for private sector investment, private sector projects that might be able to create jobs and create tax revenue for the government. There is such a project in front of the government today. It is called the energy east pipeline, a shovel-ready project that would create literally thousands of jobs and bring in billions of dollars of tax revenue to the government, and yet, what has the government done? Has it embraced the energy east pipeline project? No, it has not.
In fact, there are several members of the Liberal government, mainly sitting on the backbench, who have won seats in ridings from provinces that would most benefit from the energy east pipeline, including Alberta, Saskatchewan, and New Brunswick, yet not one member has stood up in this place and defended the the pipeline. Not one of those members has stood in this place and said, “I endorse energy east”. Quite frankly, that is shameful, because their home provinces know the benefits that the pipeline could bring to Alberta, Saskatchewan, and New Brunswick.
Quite frankly, that does not matter to the government. The government is anti-oil and anti-pipeline, as we have seen time and time again. Instead, it has penalized average working Canadians. It has penalized Canadians by not allowing them to put more money into a tax-free vehicle, and when I ask, when did it become a bad thing to allow Canadians to save more of their money tax free, I have an answer. It occurred on October 19 of last year, when the government decided to penalize hard-working Canadians and prevent them from saving their money tax free.
Bill C-2 is a bad bill, and I will vehemently oppose it, as everyone on this side of the House will as well.
