Mr. Speaker, let me draw a picture. A single mother is earning $80,000 and has two kids; one of the kids is in day care, and one of the kids is starting grade 2. She has to afford her mortgage, her grocery bill, her day care bill, and all of these different things in her daily life. This is exactly the type of measure that is designed to help her and nine million other Canadians. This is why I am so proud to rise today to support Bill C-2 in its second reading.
On January 1 of this year, nine million Canadians received a tax break. Our government was elected on a plan to grow the economy, and these changes are an important first step in that plan.
This week, our government reiterated its conviction that when you have an economy that works for the middle class, you have a country that works for everyone. Our government is charting a new course. At the heart of this approach is a commitment to strengthen the middle class and create conditions for economic growth that benefit all Canadians.
The new government will take action to ensure that economic growth is shared equally with the middle class and those working so hard to join it. In challenging economic times, the government has an important role to play. Now, more than ever, is the time to make investments to build a stronger middle class and foster sustainable, clean growth.
The legislative measures set out in Bill C-2 are the first step in the government's plan to create the long-term conditions necessary for economic growth. This will certainly not be the last step since we have a very ambitious agenda that we will fulfill one step at a time, one bill at a time, and one debate at a time.
I want to focus on the bill we are debating today, Bill C-2. This bill makes a meaningful change for the middle class by putting more money in the pockets of Canadian workers. In 2016, this bill will lower the personal tax rate for taxable income by 7% for people earning between $45,282 and $90,563.
On January 1, 2016, the government also reduced the annual contribution limit for the tax-free savings account, or TFSA, from $10,000 to $5,500. I assure the House that this change is not retroactive. The 2015 contribution limit will remain $10,000. We know that just 6.7% of Canadians who are eligible to contribute to a TFSA contributed the maximum amount in 2013. Doubling the contribution limit did nothing for the 93.3% of Canadians who did not contribute the existing maximum. Indexation of the annual contribution limit will be reinstated so that the annual limit maintains its real value over time.
Let me just say that I very strongly support the TFSA. I think it is a very important investment vehicle.
However, given the fact that so few Canadians used the maximum amount—only 6.7% in 2013—the amount of money we are losing in treasury for doubling the amount of TFSA can well be used on better things, such as for example, the Canadian child tax benefit that we intend to introduce.
With this tax cut for the middle class and the associated changes, we are delivering a fairer tax system. It is expected that about nine million Canadians will benefit from this measure in 2016, and this measure represents a real change for many Canadian workers. Not only is this measure fair, but it is also the smart thing to do for our economy. Furthermore, the tax changes proposed in Bill C-2 took effect on January 1, 2016. This means that the Canadians affected by these tax changes are already seeing the impact on their paycheques.
This is a turbulent time for the global economy, a time when the Bank of Japan has adopted a negative interest rate policy, China is facing a slowdown, the collapse of commodity prices is more than just a blip, and mediocre growth is the new norm.
This is a time when Canada needs decisive measures and a firm hand. It requires bold leadership in order to make smart investments and adopt tax measures to put our economy on track for growth.
Our government is ready to rise to the challenge. Our government was elected to implement an ambitious economic agenda that will kick-start our economy. We are taking concrete action to manage the Canadian economy. We are building a more sound economic foundation by providing tax relief to middle-class Canadians and investing in key sectors.
Thanks to our plan to strengthen the middle class and grow the economy, people who work hard can expect a good standard of living, a secure retirement, and better opportunities for their children.
During the election campaign, many of us had the chance to travel around our own ridings; and my riding of Mount Royal is no different from many other ridings. All of us know many people who would benefit from the middle-class tax cut.
It is true that not every Canadian would benefit. Some Canadians who earn more than $200,000 would be taxed a little more. Some Canadians who earn less than $45,000 would not benefit from the middle-class tax cut itself. However, they would benefit from all of the corollary efforts the government would make: to add to the guaranteed income supplement for single seniors, the Canada child tax benefit that would allow those who earn less to have much more to take their children out of poverty, and all of the corollary plans of our agenda, which was the plan Canadians chose in this election. They are ones that we believe are well worthwhile to put through.
I fully understand that some members opposite may disagree. We are all free, in a democracy, to disagree. However, I do think nobody can doubt that this was a proposal we made in the election campaign—a proposal we were elected on—and as such, it is a proposal the government needs to adopt in this Parliament.