Debates of March 7th, 2016

Income Tax Act

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, it is a pleasure for me to speak today on what I think should be more appropriately titled the Liberal government's legislation on misplaced priorities, because that is exactly what Bill C-2 is.

The government of the day claims that this is a tax cut for middle-class Canadians and will help stimulate the economy. In fact, all it is is a bit of a shell game.

Liberals are attempting on the one hand to suggest to Canadians that this is a good thing, that it is reducing taxes, which is certainly something that our government believes in, since when we were in government for nine years, we reduced taxes over 140 times. The reason it is a shell game is that while there may be some modest gains in tax relief for some Canadians, on the other hand the Liberals have started to reduce the amount of contributions allowed in TFSAs.

The tax-free savings account was an initiative that our government brought in several years ago, the most important savings vehicle that Canadians have seen since the advent of the RRSP. It has been incredibly popular, and it was well received by Canadians from all income brackets.

My colleagues previously have talked about the fact that 60% of Canadians who maxed out their TFSAs have modest incomes. I always say that any time we give Canadians an opportunity to save money in a tax-free vehicle, that has to be a good thing, so when did it become wrong for Canadians to have the ability to save more of their hard-earned money tax free? When did it become wrong to do that? However, that is exactly what the government apparently is saying, because it is planning to reduce the TFSA contribution limit from $10,500 to $5,500. Liberals are denying Canadians the opportunity to put $5,000 more per year into a tax-free savings account.

I recognize that perhaps not all Canadians would be able to contribute the full amount each and every year, but the TFSAs have been structured so that there is a carry-over element. If people cannot max out their contributions in one year, they do not lose it the next year. No, that unused amount can be carried over, and carried over almost into perpetuity, so that several years down the road if a retired couple wants to sell their house in which they have built up a great deal of equity to travel in their golden years, they could take the money from the sale of their house and put it into a TFSA to the maximum amount.

However, the Liberals feel that this is not the right route to take. Rather than allowing Canadians more opportunities to save more money, they want to reduce that amount. Their argument is that only the wealthy can afford to contribute $10,500 a year, but that is not what they really are saying. They may say that publicly, but what they mean and what they intend is that if a majority of Canadians maxed out their contributions at $10,500, it would cost the government money in lost tax revenue. That is really the crux behind this move, because the government is in trouble.

Although the Liberals promised what they considered to be modest $10-billion-a-year deficits in the first three years of their term, now are going to be incurring at least $30-billion deficits for the first several years of their mandate. They said they would be able to balance the books by 2019, by the time of the next election. It is now admitted by the government's own officials that doing so will be an impossible task.

The government needs more revenue. Allowing Canadians to save more in a tax-free environment would deny the government the much-needed revenue it so desires. What do the Liberals do? Their approach is to spend more money. They say that spending more money will ultimately create a healthier and larger economy. This Keynesian approach has never worked in the past and it will not work this time, but that is the approach that the government has.

I suspect that some of that comes from a long history of Liberal mismanagement in the economy. If one only takes a look at the current Prime Minister's father and his regime, when former Prime Minister Pierre Elliott Trudeau left office, his Liberal government was spending $1.03 for every $1 that it took in in revenue.

No wonder we have such a huge debt in this country, a debt that we are still trying to pay off, thanks to a previous Liberal government. Apparently the apple did not fall far from the tree, because the current Prime Minister seems to be taking the same approach as his father, an approach that has left this country in massive debt.

This is unacceptable, but obviously there are options. Any government has choices. How can it increase its revenue? How can it take in the amount of money it needs to produce programs and balance the budget, as it apparently desires to do?

The obvious choice is to raise taxes, but that is never a popular choice for any government. The other option is to find projects that might increase employment and consequently increase tax revenue, both personal and corporate. The government would argue that this is exactly what it is doing with its stimulus spending: by putting money into the economy, it would create those jobs, create those projects, and in return receive additional revenue.

Unfortuntely, most economists worth their salt would tell us that stimulus really only works if a government or a country is in a recession, which Canada is not. Our economy is growing. Perhaps it is growing more slowly than we would like, but we are most certainly not in a recession, so there is no need for stimulus spending. What is needed is for the private sector to initiate projects that would bring in that much-needed tax revenue, projects that would create employment.

What have we got out there? Is there anything on the horizon that we could point to that might actually fit the bill? There is something, and it is called the energy east pipeline. Here is a project that is shovel ready, would not cost the Liberal government or taxpayers a dime, and would create literally thousands of jobs and billions of dollars in tax revenue between personal and corporate income tax, yet the government sees fit to put so many impositions and prohibitions on the start of this project that the chances of energy east ever seeing the light of day are slim. Hopefully, chances are not zero, but that is what is probably going to happen.

This is why I say that this piece of legislation is misguided in its priorities. There are alternatives. There are options the government could employ to increase its revenue base without costing the Canadian taxpayer a dime, but the Liberal government does not want to do that. Instead, it is going to punish and penalize average hard-working Canadians by reducing the amount of money that those same Canadians can contribute to their tax-free savings accounts.

The Liberal government is making the wrong choices. It has misguided priorities. At the end of the day, we will find that Bill C-2, the first piece of legislation the government has introduced, will end up costing Canadians far more than they will save.

[Lloyd Longfield, Liberal, Guelph, ON]

Mr. Speaker, the member across the aisle made a good presentation. It covered a lot of the previous government's strategy around investment, which resulted in creating $150 billion more in debt, which is part of a more recent history than the 1970s.

I found a couple of the member's comments interesting. He said that investing in Canada should only be done during a recession and that jobs can only be created during a recession. Did the previous government put us in two recessions to create jobs?

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, once again, as is common with most Liberals and with most newly elected Liberals, they have this sense of revisionist history. Let us talk about what actually happened.

Back in 2008 when the global recession hit, every G20 country agreed that the best way to get out of the recession was to stimulate the economy by investing money in infrastructure. I was part of that debate in this place. What happened during that debate? The Liberals, who were then in third place, and the NDP, which was the official opposition, criticized our government for not putting enough money into stimulus. In other words, had the Liberals or the NDP had their way, we would have had a larger debt than we do today. Our deficit would have been larger if they had had their way. For anyone on the Liberal benches to say that we created a deficit that they would not have created is absolutely factually incorrect, and the records show that.

Second, we entered into a deficit situation because of the global recession, but we got out of it. In our last years in office, we balanced the budget. That is something the Liberal government will probably never do in its short mandate, which I expect to be only four years.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I would like to thank my neighbour MP from Moose Jaw—Lake Centre—Lanigan for not running in Regina—Lewvan. I would also like to thank him for his able chairmanship of the government operations committee, on which I also serve. Finally, I would like to thank the member for his speech.

I would like to pick up on the point he raised about TFSA contribution limits being cumulative from one year to the next. It seems to me one of the problems with the contribution limit of $10,000 is that over the years and decades it would enable wealthy Canadians to accumulate pools of hundreds of thousands of dollars of investments that would be completely untaxed, and this could contribute significantly to growing inequality and would erode public finances. I wonder what the member thinks about that prospect, looking into the future.

[Tom Lukiwski, Conservative, Moose Jaw—Lake Centre—Lanigan, SK]

Mr. Speaker, I want to thank my colleague from Regina for thanking me for not running in his riding.

If we took a poll of all Canadians, regardless of income level, and asked them this simple question: “Do you agree that you should be allowed to contribute more money to a tax-free savings account, rather than less?”, the answer would come back with a clear “Yes, we want to have the ability to invest more money in a tax-free environment if we can.”

This does not allow only the wealthy to put money into an account. I have many people in my riding, most of whom are not wealthy or affluent, as the government would suggest. When I talk to them about the TFSA, many of them say that if they were to sell their house or come into an inheritance or somehow come into additional dollars, they would like to have the ability to put the money into an account where it would be tax free. They do not want to be denied that ability. Whether or not they max out or contribute to it in totality over the years is incidental, but at least knowing it is there is something they agree with.

I fall back on words I said in my initial presentation. When in Canada did it become a bad thing to allow Canadians to contribute more money tax free? Apparently it was when the Liberal government got elected.

[Peter Kent, Conservative, Thornhill, ON]

Mr. Speaker, it is a pleasure to rise in the final hours of debate on Bill C-2.

We all recognize that this piece of legislation, rushed into the House in December, a forerunner of the budget scheduled for March 22, was intended to fulfill a number of misguided campaign promises in time for a new taxation year. I must say that over the hours of debate since the speech by the Minister of Finance, his answers in debate and in question period, his pronouncements in various fora across Canada, Canadians are getting a very clear and concerning picture of where the government intends to go in terms of taxation, the collection of Canadians' hard-earned tax dollars, and of spending, namely, that it intends to go on a mega disbursement spree of those same hard-earned tax dollars.

The economic situation in Canada today, which a number of speakers have remarked upon, is truly a crisis in parts of the country walloped by the crash of resource prices, but it is not at all like the 2008-09 global recession. The fact is that Canada is not in recession today. Focused stimulation, tax cuts, incentives, and decisive and courageous support of projects such as pipelines and power projects are, indeed, appropriate for provinces hit hard by the resource downturn. However, massive, expansionary government spending, growth of the debt, increased debt servicing, and the mortgaging of our children's futures is simply not justified.

The minister's much touted middle-class tax cut will, he proclaimed, put more money into the pockets of Canadians who need it. The tax cut does, modestly, do that, but the finance minister himself estimates that that it will amount to barely $10 a week for the middle class and then, as our NDP colleagues have pointed out, only a portion of the middle class. At the same time, the Liberals promised that the total cost of the tax cuts would be offset by a new tax on Canada's most affluent taxpayers. Again, a reality check from Finance Canada reveals that, in fact, there will be at least a billion dollar shortfall in the Liberals' estimate, or, more appropriately, guesstimate, which is hardly reassuring as we anticipate the coming budget.

I will move on to the minister's ill-advised trimming of the tax-free savings accounts. The TFSA, as we know, was created by our previous Conservative government, along with more than 180 tax cuts made between 2006 and 2015. These tax cuts combined to give Canadians across all income groups significantly greater take-home income and reduced the federal tax burden to the lowest level in half a century. About half of adult Canadians today have tax-free savings accounts, which is a very high level of participation, indeed, for a program that only began in 2009.

These numbers have been cited before, but I am proud to remind the government again that of those TFSA investors who took advantage of last year's $10,000 limit, fully 60% earned $60,000 or less, which refutes the Prime Minister and the finance minister's characterization of the TFSA as a tool for the rich only. The tax-free savings account is also a particularly important retirement savings tool for seniors who can no longer take advantage of RRSPs, registered retirement savings plans.

A majority of Canadians supported and still support the $10,000 limit. Public opinion polls reflected this and still reflect this. That support is consistent across all age groups, income levels, and regions of our country. That support was reflected in one of the first e-petitions to the government, an e-petition that I was proud to sponsor. Folks at home can find and consider that petition at petitions.parl.gc.ca, listed under e-3, with the key words “taxation”, and “tax free savings account”. This petition has accumulated almost 5,000 signatures, even though the government plowed ahead in reducing this year's TFSA contribution level by half. The petition is still open for another month, and frustrated Canadians can still register their unhappiness with the government's decision until April.

The government tried to justify the gutting of the annual savings limits with the excuse that the TFSA cost the government too much. The federal government spends much more every year to support the very generous indexed pensions of government employees. Those public service pensions are paid for with the hard-earned tax dollars of the 80% of Canadians who do not work for the government, who have much less generous employer pension plans, or who must provide entirely for their own retirement.

In my constituency, the wonderfully diverse middle-class community of Thornhill, TFSAs have become an important part of taxpayers' retirement savings portfolios, an important part, again, of our senior citizens' retirement savings portfolios. That is evident across all income levels, as national polls show.

Making the retirement savings process even more challenging and burdensome, the new federal government has agreed to collect for the spendthrift Government of Ontario the job-killing payroll taxes from employees and employers for the so-called Ontario retirement pension plan. The ORPP is sold as a top-up to the Canada pension plan, but it will take fully 40 years to reach its modest annual payback level. Why now? What is the rush?

Well, Premier Wynne's government, in an amazing blaze of unintended transparency, in its 2014 budget, revealed that the ORPP is not really designed for retirees. The budget document revealed that ORPP is really a tax grab. It will help bail out the debt and deficit created by the provincial Liberal government's misspending. The 2014 budget said precisely that by “encouraging more Ontarians to save through a proposed new Ontario Retirement Pension Plan, new pools of capital would be available for Ontario-based projects such as building roads, bridges and new transit.”

The federal government is now complicit by recently agreeing to collect for Ontario the job-killing employment taxes, not for the workers of today who will see little, if any, eventual benefit, but effectively to create a new slush fund for its provincial Liberal cousins who have created the largest sub-national debt in the world.

A variation of an old joke, not that far from reality is, ask an Ontario Liberal how to create a small business and they will say, take a medium-sized business and tax it down to size.

I see my remaining time is short, so I will briefly return to the Minister of Finance's remarks, when he introduced to Bill C-2, in which he talked about growth and investment in the budget that will tabled March 22.

We on this side of the House are very concerned about the dark reality for Canadian taxpayers and the Canadian economy that will, we believe, define those words. The growth that the minister and Prime Minister are trying, unwisely, to create will be in annual deficits: $30 billion, $40 billion, or more, in expansionary spending that simply cannot be justified. The investment will be the billions of dollars of deeper debt that our children and grandchildren will eventually have to confront.

If the Liberals are really serious about growing the economy, the minister must come forward with a jobs plan that will actually help get Canadians back to work. He should abandon the rush to recklessly push Canadians' billions of hard-earned tax dollars into spontaneously confected, inadequately planned infrastructure projects or to impose new regulations and taxes based on half-baked theories.

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

Mr. Speaker, we inherited an economy that was not moving forward and not in good shape due to the low-growth policies of the party opposite.

When the party opposite talks about the shell game the Liberals are playing, let us talk about the party that invented the shell game. After seven straight deficits, the party opposite said it was going to come up with a plan, that it would come up with a surplus or a balanced budget in the year before the election.

Let us talk about the shell game. There was $900 million put back into the budget from its own public servants' sick leave; the $2 billion rainy fund was put into the shell game; the GM shares were sold and also put into the shell game; and lapsed funding for veterans affairs was put into the shell game; and EI training was thrown in too.

Canadians have woken up to a low-growth, no-growth economic style from the party opposite. Good government and good government policies are for the many, not the few. With only 6.3% of Canadians using tax-free savings accounts, doubling that number pandered to the few.

Would the member opposite not concede that good government policy, good governance, is for the many, not the few, and not like the doubling of the tax-free savings accounts?

[Peter Kent, Conservative, Thornhill, ON]

Mr. Speaker, I thank my colleague for his question and for refraining from making the implausible claim that the Liberals found Canada in a deficit when they took power. Last year, the Canadian economy grew by 1.2%, and as the parliamentary budget officer has said many times, although this was ignored by the finance minister, we left the government in a surplus and in growth.

In response to the member's question with respect the tax-free savings account, I do not know how many times members on our side will say this today but fully 60% of the people who maxed out at the $10,000 level, many of whom are seniors who have no other place to put their money because they are forced to cash in their RRSPs at the age of 72, earn $60,000 or significantly less.

When I was knocking on doors in Thornhill last year, I met young people, university students and graduates, some of whom were paying both for university and making contributions to the TFSA. It is not for the affluent. Of the middle-income earners of all ages who made significant contributions, many chose not to buy an SUV but rather to drive a used vehicle and put some of that money aside. For those who are self-employed, the TFSA represents a real opportunity for long-term maximum benefit, and an even greater benefit than the RRSP.

I again think that the Liberal government was misguided into playing class warfare in trimming the TFSA.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the member for Thornhill just said that 60% of the people who maxed out at the $10,000 level were earning $60,000 or less. How can the member possibly have any data on who maxed out at $10,000?

[Peter Kent, Conservative, Thornhill, ON]

Mr. Speaker, I would point the member to the various firms in Canada that carry out surveys of working Canadians, including the Working Canadians organization and the financial institutions that handle the establishment of tax-free savings accounts. Those numbers are solid.

In quoting low participation rates, the Liberals looked back to the 2013 investment year. However, if we speak to any of the major financial institutions in this country, we will find that participation rates rose sharply last year, and even more sharply when it became clear that the Liberals were hell bent on fulfilling their campaign promises to slash the $10,000 annual investment limit.

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, the late Saskatchewan premier Allan Blakeney defined social democracy as a “fair share for all in a free society”, and the NDP certainly believes in a free society.

In the last Parliament, we were the only party to stand up and vote against Bill C-51, the Conservative surveillance law. In the current Parliament, we were the only party to stand up and oppose the Conservative motion calling on the state to condemn controversial speech about Israel.

However, as important as civil liberties are, and as good as the NDP's record is in this area, civil liberties are not what define us fundamentally as social democrats. “Liberal” is also a derivative of “liberty”. Even in the Conservative Party, there is a libertarian strain, even if it was pretty difficult to detect under the last Conservative government. What really defines us as social democrats is our concern for what former premier Blakeney described as a fair share: a more equitable distribution of income and wealth.

We believe in equality, not just for its own sake, but also because all the evidence indicates that a more equitable distribution of income and wealth leads to more happiness, better health, and less crime. Therefore, the trend toward worsening inequality is quite troubling.

In recent years and decades, a vastly disproportionate share of income gains have been concentrated in too few hands at the very top of the scale. The tax system is one of the most powerful tools available to government to address those inequalities. Therefore, I believe the House should evaluate Bill C-2 in terms of its effect on income inequality.

At this point, I will shift from quoting Allan Blakeney to invoking Clint Eastwood, because Bill C-2 has the consistency of a spaghetti western. Allow me to review the good, the bad, and yes, the ugly aspects of the legislation before us.

The good thing about Bill C-2 is that it includes tangible measures to collect a fairer share of tax from the rich. Specifically, it would increase by 4% the top income tax rate on incomes over $200,000.

This 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 half a million dollars. The most excellent 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 the 18% of income that can be contributed to RRSPs and after the $5,500 that can still be contributed to TFSAs.

In 2013, fewer than 7% of eligible Canadians made the maximum TFSA contribution. It stands to reason that probably only up to that 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. That is the good.

Now I am moving on to the bad.

Bill C-2 would include 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 tax bracket and changing taxes in such a way as to help people with middle incomes, because what the bill proposes is a tax cut that only applies to incomes above $45,000, and that 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 of this House, would get the maximum benefit of about $700—but we do not need the money.

What are the alternatives?

We in the NDP had proposed to reduce the first tax bracket, which applies to everyone. We also proposed to boost the working income tax benefit, which is more targeted toward lower incomes.

In our election platform in Saskatchewan, the provincial NDP is proposing to boost the basic personal exemption, which again applies to everyone.

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 the discussion we have heard about the 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 Canadian taxpayers.

I notice that many people on this side of the House are speaking today because the Liberals have given up their speaking slots in this debate. I would suggest that is because they do not actually have a very good answer to this question.

That is the bad.

Now, I am moving on to the ugly.

The bill would not even add up. I would argue that the Liberal tax proposal during the election was palatable to many progressive Canadians because it was promised to pay for itself. Even though the Liberal proposal was not very well targeted, it at least seemed that a redistribution from the very rich to the upper middle class might be a move in the direction of equality.

It has since been revealed that the bill would not pay for itself, that 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.

How could we make up the lost revenue?

Since 2000, Liberal and Conservative governments have slashed the federal corporate tax rate in half. We have not seen the promised boost in investment. On the contrary, we see private non-financial corporations sitting on a record hoard of cash.

The parliamentary budget officer estimates that each point of corporate income tax that we might restore would collect $2 billion of revenue.

One might argue that, with low commodity prices and depressed corporate profits, the corporate tax would not actually bring in that much. However, that is the beauty of corporate taxes: they function as an automatic stabilizer. When the economy is depressed and profits are low, they do not take very much money out of it, but as the economy starts to recover and we want to move toward a balanced budget, corporate taxes will automatically collect more revenue.

I would urge the government to very seriously consider at least partially reversing corporate tax cuts as a way of starting to collect the additional revenue that will be wanted as our economy begins to recover.

In conclusion, there are 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 will ultimately be needed if the government is ever going to balance the budget.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Speaker, I want to congratulate the hon. member for Regina—Lewvan on a very entertaining speech. It is rare that we hear Clint Eastwood quoted in this chamber. I do not think he is quoted enough, so let me quote him from Heartbreak Ridge. Clint Eastwood said to improvise, adapt, and overcome.

I enjoyed how the hon. member improvised and adapted. During the election campaign, the NDP did not favour a tax increase for those earning over $200,000. During the election campaign, the NDP did not favour a tax decrease for those earning less than $45,000. However, suddenly the hon. member for Regina—Lewvan is adapting, improvising, and trying to overcome by criticizing all the things we are now doing and saying that the NDP believes this and this and this; but the New Democrats said completely the opposite in the election campaign.

I would like to ask this for the hon. member for Regina—Lewvan. How can he possibly improvise, adapt, and overcome in this way when he is now contradicting what his party said in the election campaign?

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I will refrain from quoting Clint Eastwood as to whether the member opposite is feeling lucky, but I will make the point that there are many ways of making the tax system more progressive.

In the election campaign, the NDP proposed a reversal of corporate tax cuts as a way of collecting more revenue and funding important public services and infrastructure. The Liberal Party chose not to make that proposal. The Liberals proposed a modest increase in the top personal tax rate. That is quite consistent with what the NDP has achieved at the provincial level, and we are happy to support it in this House as well.

The real question is whether the Liberal government will actually start reversing corporate tax cuts in order to collect a fairer share of revenue and start to move back toward a balanced budget.

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

Mr. Speaker, my colleague brought the scope of provincial NDP governments into his speech, so let us talk about that.

In Manitoba, there was legislation that required a referendum prior to a PST increase. The NDP government, even though it campaigned against a PST increase, increased the PST. It had to go and try to gut the legislation requiring the referendum, but still increased the PST before that law was changed, even though a survey by Angus Reid at the time said that 74% of Manitobans wanted a referendum and 72% disagreed with raising the PST. Why was that? It was because common-sense Canadians know that raises to general consumption taxes are a bad thing.

I am asking the following for my colleague. Given the absolutely disastrous reign of the Manitoba NDP in my home province of Manitoba—it has been in power since I was 19 years old—including the loss of jobs, the instability in social programming, and the absolute disaster that the government has been, how can my colleague bring provincial politics into his speech and think that the NDP has absolutely any credibility whatsoever to speak to taxation issues?

[Erin Weir, NDP, Regina—Lewvan, SK]

Mr. Speaker, I will just clarify for the member for Calgary Nose Hill that I am from Saskatchewan, not Manitoba, and I will not pretend to be intimately familiar with all the details of Manitoba provincial politics. What I will say philosophically is that I do not believe in legislation that requires governments to go through referenda before making tax changes. I believe in the sovereignty of Parliament, and I think that governments need to make important fiscal decisions all the time.

However, what I am really excited about, in terms of the NDP at the provincial level, is the most excellent government we have in Alberta. It has really moved that province out of the dark ages of having this regressive flat tax and has in fact brought Alberta into the light of having a progressive income tax, where people who have the good fortune to earn higher incomes pay a higher rate of tax on those incomes. I believe that progressive taxation is really a hallmark of civilized society, and it is a great thing that Alberta, under the NDP, has joined the rest of the country in that regard.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, I begin my speech today by referring to page 9 of the Liberal Party of Canada election platform and will quote directly from that document: “The two tax changes will be revenue neutral to the federal government.” It does not say that these tax changes might be revenue neutral to the federal government or that they hope these tax changes will be revenue neutral to the federal government. The Liberals were very clear that these tax changes will be revenue neutral to the federal government.

Of course, on page 6 of the same document, Liberals told us that this was all part of a “fully costed” platform. In fact, throughout the election, we heard how Liberal experts had fully costed the platform. However, we now know that the so-called Liberal experts got it wrong. In fact, they got it very wrong.

The public budget office has shown us the real cost of these Liberal tax changes. These are not revenue neutral at all. The real cost is $8.9 billion by the 2020-21 fiscal year. In other words, every single Liberal member of this House was elected under questionable pretenses.

Where are those Liberal experts today? I have yet to hear the Prime Minister apologize on behalf of these experts, or hold them accountable for misleading Canadians. The Liberals, as we know, say these tax changes will help the middle class. In fact, if we search Hansard, as well as online search engines, we would see hundreds of references by the Prime Minister about the middle class.

Yet, here is an interesting observation. On dozens of occasions in this place and in the media, the Prime Minister and the Minister of Finance have been repeatedly asked how they define the middle class. To my amazement, I have yet to find an answer. They consistently refuse to provide a definition.

Let us look at these tax changes for an idea on who the Liberals think are the middle class. Are they citizens who are earning $45,000 a year? According to the Liberals, these are not middle-class Canadians because there is no income tax cut for them in these changes.

In essence, the Liberal tax changes apply to the tax bracket for incomes just over $45,000, and up to $90,563. However, wait, there is more. For those who earn over $90,000, they will also pay less tax on this portion of their income. For those earning up to $199,000—and I will come back to why I reference $199,000 in a moment—they will benefit from this tax cut. In other words, someone earning $199,000 per year benefits from these Liberals income tax changes, while someone earning $45,000 a year does not.

I challenge any member of this House to ask your constituents who they think is part of the middle class. Is it someone earning $45,0000 a year who does not benefit from these Liberal tax changes, or someone earning $199,000 per year who does? It is no wonder that our Prime Minister and Minister of Finance refuse to define the middle class. Only the Liberals would think that someone earning $199,000 is middle class and someone earning $45,000 is not.

The other interesting part is that the Liberals, in spite of the shoddy revenue-neutral math, tell us that these tax changes are there to help stimulate the economy. However, part of these tax changes are that the Prime Minister has created his own new top income tax rate. Those earning $200,000 or more will be penalized with a new 33% tax rate. In other words, we have a tax cut intended to help stimulate the economy, yet those who are most financially able to stimulate the economy are being penalized not to do so.

I have no doubt that the same Liberal experts who bungled the math on these tax changes being revenue neutral likely came up with this misguided policy as well. With this Liberal tax hike, combined with provincial income taxes, some provinces will now be paying a combined rate of taxation that exceeds 50%.

I know that the Liberals think, who cares, that these people are wealthy. However, in talking to regions desperately trying to recruit much-needed new doctors, particularly rural areas in my riding, when doctors hear about a total tax rate of over 50%, they say “Thanks, but no thanks”.

What is also interesting is that Bill C-2 proposes to roll back the maximum TFSA contribution implemented by the former government. I went through Hansard and read the Prime Minister's comments to try to determine why he hates the idea of Canadians saving money.

I found an interesting reference from the Prime Minister. He believes that having a tax-free savings account will only benefit the rich and will be paid for by the next generation of Canadians. I find this fascinating. Here we have a Prime Minister who is saddling the next generation of Canadians with billions of dollars in new debt, and he is worried about people having too much money in a savings account. Only in Liberal land does this make sense.

Let us not forget that all tax-free savings account contributions are made with net after-tax dollars. In other words, they are from the net income after tax has been paid. Let us also not forget that although people's investment income may not be taxable within a tax-free savings account, which is the entire point of having one, eventually that money will be withdrawn. In fact, people already withdraw from the TFSA for vehicle purchases, home renovations, and other big-ticket items that are common reasons for withdrawal.

Let us not overlook that when people spend that money here in Canada, not only do they support our local economies, but the money is also taxed, by GST, HST in some places, provincial sales tax. It is bizarre when the Liberals say that they are cutting taxes for some Canadians to help stimulate the economy, yet they discourage the idea of saving money.

Yesterday, I read an interesting column in a report by Vancity Credit Union. It talked about the expectations of millennials to inherit funds from the bank of mom and dad. The problem is that in many cases the expectations exceed what the bank of mom and dad is planning on delivering. That is why I submit that cutting back the tax-free savings account and sending the message that saving after-tax dollars is a bad idea is so misguided.

That is why I am here today opposing Bill C-2. So-called Liberal experts have the map badly wrong and have misled Canadians in the process. These same so-called experts further came up with policies that will only further set Canada behind, while adding billions in increased debt. It is not increased debt because we are in a recession, but rather debt because we are in a period of slow growth. That does not make sense.

The Liberals often like to say that a Canadian is a Canadian is a Canadian. However, if someone is a Canadian making $45,000 a year, there is no tax cut. If a Canadian is making $199,000 a year, they are apparently the middle class and do get a tax cut. If someone is a Canadian making $200,000 a year or more, they are further financially penalized. However, I suppose the fact that all future Canadians, regardless of income, will be left paying billions of dollars in new debt from these Liberal tax changes is the great equalizer.

I oppose these changes, because I believe that as Canadians we deserve better.

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

Mr. Speaker, I find it truly amazing that the member would express concern in regard to deficits. All he needs to do is reflect on the 10 years of Conservative rule where there is over $150 billion. The only governments in the past that have truly had balanced budgets and surpluses have been the Paul Martin and Jean Chrétien governments.

The member makes reference to the tax breaks and the middle class. If I were a Conservative, I too would have a tough time to vote against this legislation. As much as he tries to cherry-pick in terms of who is benefiting, the individuals he does not choose are the hundreds of thousands of individuals who work in factories, teachers, many different professionals, who are going to have more money in their pockets as a direct result of this legislation.

I would suggest that the member reflect in terms of why he believes that the bulk of middle-class Canadians, many of whom are in his constituency, do not deserve a tax break. That is what he is voting on. Does he believe that his constituents should be getting the tax break?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, this is Liberal land at its finest. The fact is, the Liberals' own experts panned that this would be a revenue neutral tax cut. It is clearly not. At $8.9 billion a year by 2020-21, it is not a healthy thing for Canada.

He talked about the deficits that prime ministers Chrétien and Martin dealt with. They dealt with them by cutting transfers to people, to provinces, and particularly downloading to municipalities and provincial health care programs. That is not a Canada that I want to see.

When we added to our deficits, it was because we had the financial crisis of 2007-08, which then precipitated the great recession, the lowest output in North America since the Great Depression. There was a rationale then; there is no rationale now. The member should be a little more clear and coherent about what he is panning.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Mr. Speaker, it is surprising to see so much misinformation coming out of the government. This $150-billion figure that they keep quoting is not accurate. In fact, the numbers are much lower in terms of debt that was added over the last 10 years. Projections are that the government will add more debt in the next four years than happened over the last 10 years, and that was coming through a financial crisis. We do not have a financial crisis right now, at all.

I was concerned as well to see very high levels of a combined debt-to-GDP ratio for Canada, if we include provincial and municipal numbers as well. Now is not the time to be increasing our debt-to-GDP ratio, as the government plan would be.

Could the member comment on that and also correct some of the ridiculous misinformation we are getting from the government?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Speaker, we always have to take into account the context of the situation today. With our aging demographic, we are going to see less capacity to pay for things as we go forward. Is there a place for senior levels of government to invest in quality of life and productive infrastructure to make our economy better over the long term? Absolutely. However, we should be asking ourselves at what point it is within our means.

The government blew through the modest deficit promise of $10 billion a year. Now, we are talking about a starting point of $18.4 billion. It has blown past any suggestion that it would anchor itself to the GDP-to-net debt. That promise is blown away. What happens if we hit another financial crisis? What happens if there is another recession and we are behind the eight ball when it comes to dealing with our demographics and our aging society?

There is an argument to be made for investments. However, to be totally throwing out the financial road map that both previous Liberal and Conservative governments held, that balanced budgets make us stronger as a country, I believe is the wrong path.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Speaker, it is my very great pleasure to rise today and speak on behalf of residents of Milton with respect to Bill C-2.

If we recall the last campaign, the new Liberal tax plan was a central part of the government's campaign. It would become a vital plank of the Liberals' platform, one that they would go on to say was a major part of the plan that they credit their election win on. In fact, it was a vital plank of their platform that was signed off on by the now-Minister of Finance.

What was really important to my constituents in that campaign platform was that the plan be revenue neutral, as they had promised. However, soon after coming into power, the Minister of Finance admitted that there was a miscalculation. He is basically admitting that the Liberals had been elected under false pretenses.

We also have it confirmed now by the Parliamentary Budget Officer that this tax plan will end up costing Canadians $8.9 billion over the next four years. This is one of the first concrete initiatives that was brought in by the new Liberal government, and it was grossly miscalculated. This leads us to where we find ourselves today, very much concerned about what is next. What future is our government headed toward in terms of other possible miscalculations?

The Liberals have justified destroying the former Conservative surplus and repealing the budget balance bill on the grounds that their spending is going to stimulate the economy. They are assuring Canadians, “Do not worry; relying on borrowed money is going to be okay. What really matters is the relationship between debt and GDP.”

What the Liberals are not telling Canadians is that these values of debt and GDP are not within the government's control. The government controls only spending, and quite frankly, it should be exercising prudence on this front. Targeted spending that will truly stimulate the economy is a good thing, and it is very different from these feel-good handouts that we are seeing more and more from the Liberal government.

What is this for? What is this deficit for, in terms of this tax plan? In reality, for a single person, Finance Canada tells us that it amounts to $6.34 a week. That is the price of a latte once a week, or maybe a salad once a week. The plan also relies on a feeling of consumer confidence, but when I talk to constituents in my riding, they have suggested that they are starting to feel a pinch.

A few weeks ago the Premier of Ontario announced a 4.5¢ tax on a litre of gas. That is about $900 a year for Canadian families to fill up at the pump. That is the cost associated with moving kids around to hockey, to soccer, to school. Under the federal Liberals' new tax plan, middle-class families are just going to receive $300 per year, and with this provincial tax, money granted under this bill will be completely swallowed up. Now, rather than feeling confident in spending, many plan on saving. After all, putting money in one pocket just to take it out of the other is certainly not what was promised in the election campaign.

The other aspect of this legislation that is truly concerning is that it seeks to make it more difficult for Canadians to save in general. It actually slashes the contribution limits for the tax-free savings account to $5,500 from the $10,000 that a previous Conservative government had set it at.

Many of the constituents in Milton have told me that they rely upon these savings accounts when planning for their future. In fact, there are two ways in which families in Milton are saving for their retirement and their future. One is by investing in their home. When they have their home equity built up, they utilize that in future years. They know they are saving toward a great goal.

The second way, of course, was through these TFSAs. The beautiful part about the TFSA is that individuals did not have to sell their homes in order to access the growth in these accounts. To someone saving for a higher education, a single couple saving to start a family, entrepreneurs saving for their businesses, parents saving for next year's hockey costs, or a low-income senior saving for retirement, the TFSA was a key tool to help them save. The Liberal tax plan will make life less affordable for Canadians and seniors who are ultimately trying to save for vulnerable years.

A recent report from the Parliamentary Budget Officer demonstrates that Canadians are taking on uncontrollable levels of debt. Canada has the highest debt in the G7, 171%, but at the same time we are taking away ways for Canadians to save their own money, and that is going to increase their exposure to becoming delinquent. The government should be encouraging responsibility in saving, regardless of how it chooses to run the nation's finances.

At a cost of $8.9 billion over four years, the new Liberal tax plan will do virtually nothing for Ontarians. The point is that the amount of money granted under the Liberal tax plan is so small that it is not worth the cost. With low oil prices, with thousands of lost jobs across the country, Canadians cannot afford to be plunged into a greater economic uncertainty with more deficit spending, which, by the way, is borrowing. When individuals buy cars, they do not say they are going to deficit finance that car. They say they are going to borrow money for that car.

If net benefits are nebulous, as they are in this Liberal tax plan, then it is problematic. If the government cannot manage its own books, who will? At the end of the day, all Canadians will end up paying in the form of tax increases.

The Conservative government had a legacy of tax fairness and a legacy of cutting taxes. When in office, the Conservative government cut taxes over 140 times. It left government with a surplus on the books, according to Finance Canada. That surplus became a deficit pretty soon after the Liberals took power. The Liberal path of deficit spending is disconcerting. The lack of oversight demonstrated in Bill C-2 speaks to this, and for Canadians, this should be a red flag.

Three promises were made in the Liberal campaign platform. The first was that the budget would be balanced by the end of the Liberal mandate, the second was that any deficit would be moderate, and the third was that any tax plan would be revenue neutral.

Canadians took the Liberals at their word, but over 120 days, every single one of these fundamental promises has been broken and fundamentally breached. Those promises, I would submit, were absolutely made in consideration for the vote of the Canadian taxpayer. As a result, we sit in a situation now where we do not know how much the deficit will be, but we expect it will be significant.

The Liberals are not going to balance the budget at the end of their mandate. We know with great certainty that this is not a revenue-neutral tax plan, because it has been shown not to be upon admission and by Finance Canada.

As I said, for Canadians these are not only broken promises but very costly broken promises. Canadians cannot afford these changes, and when they come at the cost of growing structural long-term deficits, they should be opposed.

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

Mr. Speaker, according to the Conservatives, it is a dream to have Canadians save. They want everybody to be able to save. However, try telling that to people in low-income areas in priority neighbourhoods. Try telling that to families that are living day to day. Try telling that to people on the street. Our homeless rates are rising. Our poverty levels are rising. Try telling that to them.

The Conservatives also talk about the Liberal shell game. A previous speech by a member of the party opposite talked about Premier Wynne and how she was using a government slush fund to pay down debt. That came from a party that took $20 billion in EI reforms in 2010 and another $3 billion in EI reforms from 2010 to 2015 to pay down debt, so let us not talk half-truths.

Would the member opposite not agree that only 6.7% of Canadians maximized or registered for a tax-free savings account, which does not mean it was used? Would the member not agree that doubling something like that was actually for the few and not for the many? Would the member not agree that good governments make policy for the many, policy such as the Canada child benefit or a tax break for the middle class?

That is what good government should be.

[Lisa Raitt, Conservative, Milton, ON]

Mr. Speaker, the hon. member and I both come from the same region of Canada. I, of course, am from Cape Breton. We cannot all be blessed: he is from Saint John, New Brunswick. However, during his earlier speech something caught my attention, some words that I do believe separate us in this House, one on this side and one on that side.

When he was talking about TFSAs, he said that having them in place would affect government revenues. I take a very different point of view. These are taxpayer dollars that people have worked for. This is what they have achieved and aspired to do. Notionally, to think of utilizing what is in people's TFSAs on a year-by-year basis is the wrong way of looking at it.

I did not make a lot of money when growing up on Cape Breton Island. I remember doing my grandmother's taxes. She made $18,000 in 1989 and she brought us both up on that. The reality is I had dreams. I wanted to do better, and the TFSA goes with me through life. When I get to a higher salary, it allows me to shelter the money that I have worked extremely hard for so that I not only have a house I can rely upon if things go bad but I also have this tax-free savings account that is there for me to allow me to choose what to do, when I want to do it, and how I want to do it.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Speaker, I want to add to the comments made by my colleague with respect to the Liberal plan not being revenue neutral and in particular to the proposed carbon taxes the government wants to bring in.

I will quote Greg Sorbara, a former Ontario Liberal minister of finance and someone who would know a bit about this. In talking about what was done in Ontario, he stated, “Although the minister said there are no tax increases, the fact is that there's a $1.9-billion increase, which I call a flow-through tax, that will ultimately affect consumers. Cap and trade is a system where the government sells to industry an imaginary product called carbon credits, and those industries pass the costs—$1.9 billion, in this case—through the system, and it gives rise to higher prices at the gas pump, for gas that heats homes, and ultimately for every single product that we buy. The issue that I have with it.... I mean, it's an interesting way to raise money and say at the same time that you're not raising taxes. The issue that I have, and I'm not sure, because there's no evidence anywhere in the world that the cap and trade system actually does work to significantly reduce carbon emissions....”

My question to my colleague is this. The Liberals are addicted to all of these new taxes, and we have talked about the pension tax increases. However, what would this cap and trade plan do to the competitiveness of Canada when we are competing aggressively for new investment, especially in places like Oshawa, where I come from? What would these new taxes that are not revenue neutral do to our competitiveness internationally?

[Lisa Raitt, Conservative, Milton, ON]

Mr. Speaker, that is an excellent question. I thank the hon. member for his research on the matter.

The issue that arises with adding on all these taxes is that those who cannot afford them the most are the ones who feel them the most. It is the mother who on a Saturday morning is looking at how expensive gas is to fill up the minivan because she knows she has to get her kids to different areas in her town and she knows how much gas it will take for her to do that. It is happening in Nova Scotia, where people and senior citizens are wondering if they can fill their heating oil tank for the winter. I know they worry about global warming, but the truth is that an easier winter is something that will be easier on their pocketbooks. That is the reality. People make difficult choices with the small amount of money they have. Extra taxes on top of that seriously affect their quality of life.