Debates of March 7th, 2016

Income Tax Act

[John Barlow, Conservative, Foothills, AB]

Mr. Speaker, during the debate today we have heard many times from the members opposite that the tax-free savings account is something that only benefits the wealthy, the affluent even. Some of the NDP members today have asked why they should be supporting a tax break for the affluent.

I would like my colleague to talk about the real facts of who benefits from a tax-free savings account. I do not believe these are wealthy Canadians at all times, but Canadians who are making difficult choices for their families and difficult choices for what they feel is best for their saving priorities.

Could my colleague talk about who can benefit from the tax-free savings account?

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Mr. Speaker, I thank my colleague for his question and excellent work.

He has given me an opportunity to recall that tax-free savings accounts are benefiting people who earn $60,000 or less, those who are not targeted by this measure. Sixty per cent of those people are putting money aside for retirement. This tool is provided for those who have less capacity to save money, so they can better enjoy their senior years.

In a nutshell, Bill C-2 would prevent them from saving money. It is not the way to move forward to ensure that working people today can save money and not pay more taxes.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, I want to thank my seasoned colleague from Bellechasse—Les Etchemins—Lévis for sharing his time with me.

What we have before us today is the debate on Bill C-2, which, to some extent, implements the financial commitments made by the Liberal Party, which now forms the Canadian government.

To put it mildly, the reality presented by the Liberal Party during the election campaign is a far cry from the reality facing Canadians today. In fact, the two could not be more opposite. We are talking about black and white, night and day.

I would remind the House that during the election campaign, the current Prime Minister boasted that the Liberals were going to make changes to the tax system that would benefit the middle class, that the wealthy would finally pay their fair share, and that it would all be revenue neutral. That was a serious mistake. First of all, let us be honest: these Robin Hood stories never work. Should we be surprised to see such a political approach from this Prime Minister? Is this not the same person who said on February 11, 2014, that “the budget will balance itself”?

When someone who believes that the budget will magically balance itself finds himself in government, reality hits hard. The Liberals' promise that the tax changes would be revenue neutral were nothing but a pipe dream.

The parliamentary budget officer recently announced that the Liberals' promise would result in a $1.7-billion deficit. That is far from a balanced budget, far from revenue neutral, and far from the Prime Minister's pipe dream that the budget would balance itself.

The tax changes for the so-called middle class come at a cost. The bill is being sent to our grandchildren and great-grandchildren who are not yet born, but who will be paying for this government's lack of political judgment, as seen in Bill C-2.

Speaking of the middle class, my colleagues, the New Democrat member for Saint-Hyacinthe—Bagot and the member for Bellechasse—Les Etchemins—Lévis, told us how the interpretation of middle class is rather broad, to say the least, especially when someone who earns more than $180,000 is supposed to be part of the middle class. The scope is quite large.

This brings us to the structural deficits run by the Liberal Party. Let us remember that, during the election campaign, the Prime Minister said over and over again that there would be very small deficits for the first two years. In the third year, the deficit would be even smaller, and then, bam! In the fourth year, the budget would be balanced again. That was what the Liberals were saying during the election campaign. Unfortunately, reality has now caught up to the Liberal Party. What did the Minister of Finance say just two weeks ago? He had to confess that Canada was headed for an $18-billion deficit.

Prestigious banking institutions all across Canada have concluded that, in the next four years, we are headed for deficits of $100 billion, $130 billion, and $150 billion. That is a far cry from the very small actuarial deficits that were going to be eliminated during the third year. Is this not the same Prime Minister, who during the election campaign, said that the budget would be balanced by the fourth year? Today, he can no longer say that. In an editorial board meeting with La Presse, he indicated that he could not confirm that the budget would be balanced.

Let us not forget the government's election platform. Unfortunately, the Standing Orders do not permit me to show it, but I have it here with me. The party leader was not present when the platform was released. I have been actively involved in politics for seven years. I was a journalist for 20 years and, honestly, this is the first time I have seen a serious national political party present its economic platform without the party leader being present. Some might say that perhaps it was better that way, because he believes that budgets and deficits balance themselves. However, the minister from Quebec City, my neighbour, was there and I commend him for that.

What did the Liberal government's economic plan say? On page 3, it says, “We will be honest about the government of Canada’s fiscal position”.

Really? In fact, that is not untrue. Last week, they acknowledged that we are headed to an $18.7-billion hole. In terms of being honest, that is a start.

Further on it says, “We will run modest deficits for three years.” That did not happen.

On page 4, it says, “A new Liberal government will release a fall Economic and Fiscal Update.” That is true. We got that update.

In the April to November 2015 Fiscal Monitor published by the Department of Finance, we see that there was a $1-billion budgetary surplus. It is true that in this regard, they kept their promise. They released a report, a positive one when it comes to what they inherited from the Conservative government.

Nonetheless, the sad thing in all of this is to read in black and white on page 7, “With the Liberal plan, the federal government will have a modest short-term deficit of less than $10 billion in each of the next two fiscal years...After the next two fiscal years, the deficit will decline and our investment plan will return Canada to a balanced budget in 2019/20.”

It is a pipe dream. These promises are not worth the paper they are printed on. That is the reality of the current Liberal government.

What really gets us is that the government is in the process of literally killing the rich legacy left by the government led by the right hon. member for Calgary Heritage. We left the house in order.

I want to remind members of the facts. We took power in 2006 and remained in power until 2014. In 2008, the entire world was hit by the global economic crisis, the worst crisis since the great recession of the 1930s. No one denies that. What did our government do? It took the bull by the horns. It made bold, brave decisions, with the result that in 2014, our record was very good. We had the best debt-to-GDP ratio. That is important, because if debt is under control, it does not cause problems, especially when the ratio is good and our GDP is higher than our debt. That is the legacy of the Conservative government. The best debt-to-GDP ratio in the G7: that is our legacy. The best job creation record in the G7 during the crisis: that is our legacy. The fastest economic recovery in the G7: that is our legacy.

We believe in infrastructure programs. As all sides of the House have noted, we are glad to see the hon. member for Lac-Saint-Jean back in fine form today. I applaud my colleagues for welcoming him back in a civil and honourable fashion. On his watch, our government introduced the boldest infrastructure plan ever. Our top priority was always to reduce taxes and let people keep more money in their pockets. Our government passed over 140 measures in 10 years. Let me remind everyone that the grandest and most effective of them was reducing the GST from 7% to 6% and from 6% to 5%. We promised, and we delivered. They promised revenue-neutral tax cuts, but they are not delivering. That is why we strongly condemn this government and will not vote in favour of Bill C-2.

Saving money is another issue that is close to our hearts. That is why our government created the TFSA, which this government is trying to water down, unfortunately. That is the wrong approach, and we hope the government will see the light on this.

This government's policies are unrealistic and irresponsible. The government is putting Canada on the road to disaster. It is scuttling the Conservative government's legacy. The Liberal Party has at times left an onerous legacy and at other times left a rich legacy. It is a political party that has vigorously tackled deficits. As the MP for the riding of Louis-Saint-Laurent, I would like to point out that the Right Honourable Louis Saint-Laurent was the prime minister who eliminated the debt after the war. The Right Honourable Paul Martin also steadfastly addressed deficits not so long ago. He made very contentious decisions including the decision to drastically reduce health transfers to the provinces. However he at least wanted to leave a strong economy and, above all, healthy public finances. That is not what the current government is doing.

It is never too late to do the right thing. Bill C-2 could be amended to give Canadians a better economy and, above all, to ensure that their government is realistic and responsible.

[Ginette Petitpas Taylor, Liberal, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, I first want to thank my colleague for his speech.

Clearly, all members of the House want greater benefits for the middle class. Can my colleague explain why he opposes lower tax rates for middle-class Canadians?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, once again, the member's question refers to a rather broadly defined middle class. Someone who earns $185,000 a year is part of the upper, upper middle class. The other reality, however, is that this is not going to be revenue neutral, as the Liberal Party had promised. This is going to create a deficit of $1.7 billion.

Need I remind the member that under our government, when we reduced the tax burden through 140 measures, we did not create a massive deficit, as this government is doing? If they wanted to cut taxes for the middle class, why not introduce measures that will actually lower them? As long as we are in the hole for $1.7 billion, why stop there? Everything is fine. That is not the right attitude to take. It is important to be realistic and responsible. If you cannot afford it, do not do it.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I thank the hon. member for Louis-Saint-Laurent for his speech, and I wish to inform him that the riding I represent is called Saint-Hyacinthe—Bagot.

I have had the opportunity to sit with my colleague on a committee where he went on and on about the importance of non-partisan work in committee. In that vein, we have chosen to support the bill so that we can try to improve it in committee, determine at third reading whether it meets the needs of the people we represent, and then decide whether we will support it or not.

Will my colleague also adopt this attitude and support this bill to try to improve it for the people we represent?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, first, I want to give my regards to my colleague from Saint-Hyacinthe—Bagot. I apologize for forgetting the name of her riding. Bagot is the land of the late Hon. Daniel Johnson, Premier of Quebec from 1966 to 1968.

The second part of what she said had to do with the non-partisan work of the end-of-life care committee. That was absolutely the attitude that was called for, the one that we took, and the one that we will take toward the bill that will be introduced on this issue in the House.

In committee, of course we will collaborate and move forward, but everything in this bill needs to be changed. We have to rescind the proposed tax cuts, as they are not revenue-neutral, as was announced. That is why we are going to do the work and propose amendments. However, will they be accepted by the people who were elected on a campaign that they are unable to follow through on today? We shall see. I am not holding my breath.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Speaker, I thank my colleague for his speech today.

He is a welcome addition to our team, and as the member for Louis Saint-Laurent, he would make Louis Saint-Laurent and a generation of leaders from Quebec quite proud with the passion and the knowledge he brings to this House.

He touched on this in his speech. This is a very selective bill that cuts taxes for a few but claims to cut for many and actually leaves out the most needy, the lower-income to lower-middle-income Canadians, yet at the same time the government is now in the $30 billion-plus deficit range.

Could the member comment that reckless deficit spending means future taxes? While the Liberals may give a modest tax break to a few Canadians now, their work in building up liabilities and deficits and debt means that taxes will go up, carbon taxes will be imposed, and GST will be increased in the future, if they possibly ever keep a commitment to balance the budget in four years.

Could the member talk about how high deficit and high spending mean future taxes on the people for whom the government claims to be cutting now?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Mr. Speaker, let me pay all my respects to my hon. colleague who, not long ago was the minister of veterans affairs and did a tremendous job. I know what I am talking about because in my riding I have plenty of veterans. He did a heck of a good job, and I appreciate this member.

Talking about the future, yes, it is very sad to see a deficit in this situation. We are not in a crisis as we were in 2008. It is all wrong for the economy, because we are putting it into the hands of our grandchildren who are not born today.

Let me remind the House that I pay my respects to two former honourable Liberal prime ministers, but I also have to remind the House that it was under another Liberal prime minister during the 1970s that the deficits were back to the worst in the Canadian economy.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, it is an honour to rise in the House to join the debate on Bill C-2. I would like to spend some of my time speaking on why definitions of the middle class are so important.

In the last election the Liberals campaigned on a promise to reduce taxes for the middle class and support those working hard to enter the middle class. Canadians took them at their word. Like most Canadians, I agree with my NDP caucus that additional benefits should be targeted at the middle class and those who need them the most.

The problem with this legislation is that the Liberal definition of “middle class” seems to have been created by the Donald Trumps of the world. Surely only the very rich would devise a bill that would give most of the tax benefits to those making around $200,000 a year while offering Canadians who make $40,000 a year nothing at all and still call it a tax cut for the middle class. Definitions matter for the middle class.

The bill in its current form would not help Canadians who are working harder than ever, yet falling further behind. The Liberals promised to join the campaign to fight against growing inequalities, which was a big part of why they were elected, but in this legislation they are doing the exact opposite. Canadians do not like to be misled, and the Liberals will have to answer for that. Canadians also do not like empty rhetoric and grandstanding.

Let us see what needs to be done to fix this bill. We were all sent here to work together to deliver positive results for all Canadians, and I believe it is not too late.

The government needs to present its definition of who is included in its understanding of the middle class. There are different ways to define the middle class, but regardless of the definition, those definitions should always at least cover one, if not both, of the following characteristics. First, we could look at the income of all Canadians and see where most people land. This is also considered to be the median income in a country. Second, the population could be divided into groups of equivalent size, such as five blocks each comprising 20% of the population, and targeting the groups in the middle as the middle class.

Let us see if the current definition of “middle class” in the bill meets these requirements.

First, the median income in Canada is $31,000. Under the Liberal plan, any Canadian making the median income, or near it, would receive zero benefit. Second, if we divide the population into equal blocks of 20%, the bill would not benefit the lowest 20%, nor would it benefit the second tier of Canadians. For those in the third or middle block, the bill would still provide no benefit at all. Furthermore, the benefits would only kick in halfway through the fourth block, and they would begin very small. The vast majority of the benefit would go to the highest-income earners in Canada alone.

I will look at my riding of Courtenay—Alberni. In the fifties and the sixties, Alberni Valley was a booming community. It had the highest median income in the country and was sending lots of money to Ottawa. Most recently, it was rejected for a Building Canada grant for scheduled air service at its airport. It was rejected because it did not have scheduled air service.

The people in Alberni Valley feel as though they are being betrayed by Ottawa. The median income is $25,000 a year, and one in three children is living in poverty. Alberni Valley wants to move forward, but it needs help. The Liberal government promised that it was going to help the middle class.

I will talk about another demographic in my riding, the Nuu-chah-nulth people. The median income of the Nuu-chah-nulth people is $17,000 a year. The Liberal government made a lot of promises about a new relationship with aboriginal people, but this legislation does not include aboriginal people across Canada. They feel forgotten.

Seniors feel forgotten. Inequality is at an all-time high, and this legislation does not address it.

The Nuu-chah-nulth people use a word in their language, uu-a-thluk, which means “taking care of”. They use this word in reference to their fishery. They have been in a court case for over 10 years defending their right to catch and sell fish. They feel again that Ottawa has betrayed them with respect to recognizing their aboriginal rights and title. They want to take care of the resource. They want to work with Canadians so we can take care of each other. This legislation forgets to take care of the people in my riding.

Folks in my riding will do anything to support maintaining the tax-free savings account system, but they want a return to the annual cap of $5,500. This would allow my constituents the ability to put more savings away, but it would not open the door that would, in effect, give the richest Canadians a tax break. We know this because 93% of Canadians with tax-free savings accounts were not able to contribute the full amount, so the expanded limit would allow only the wealthiest Canadians—and we have seen this before—to utilize the full amount of the savings account.

To return to the income tax changes, people in my riding in the Alberni Valley, the Comox valley, and Oceanside, and aboriginal people across this country, are feeling left out. Who will see the biggest benefits from the definition of “middle class”? As I said, clearly it is not the majority of people in my riding, but those who make as much as members of Parliament here. Those who make over $160,000 a year would see their taxes lowered by almost $700, while nearly 60% of Canadians would get nothing at all. This is not fair, and the NDP opposes those measures.

How do we fix this? Instead of targeting the second bracket, as the Liberals have done, the NDP has proposed lowering the first tax bracket.

How would this help? The tax brackets are in layers, and Canadians who earn enough to enter the second and third tax brackets are still taxed on the first layer. Therefore, to focus the benefit on the middle class, one must get a tax break on the first layer rather than the second, which skews the benefits disproportionately to the top earners. The NDP plan would reduce the first tax bracket from 15% to 14%. This would give the largest benefit to those making $45,000, rather than those making $200,000, who would benefit under the Liberal plan. Because the NDP plan actually focuses on the middle class, 83% of taxpayers would benefit from our proposed idea.

It may seem strange to some folks watching at home, but the way we can fix this bill is to implement this reasonable amendment from the NDP to get the bill to committee. New Democrats want to fix this bill so that the substance matches the title. This way, a bill that is supposedly intended to help middle-class families would actually deliver on that promise, instead of giving MPs a $680 tax break that they do not need.

I was elected to hold the government to account and to work with it, wherever possible, to bring much-needed relief to those struggling in my riding. As the Nuu-chah-nulth people say, “Let's use uu-a-thluk. Let's take care of each other.”

I hope members will consider that in this bill and in making this amendment.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Mr. Speaker, my colleague opposite and I share some similar values in terms of taking care of each other and trying to find ways to take care of each other. I appreciate that this bill does not reach into some of the areas where he thinks attention needs to be paid, such as raising incomes and the outlook for people of first nations, aboriginal, Métis, and Inuit descent. We share those concerns. It is not in this bill because this bill is focused on income tax and not necessarily on those specific issues.

On the issue of helping low-income children and low-income families in particular, again the tax credit focuses specifically on raising children out of poverty, as with raising seniors out of poverty. They are not part of this bill; they are part of the budget to come.

Would the member opposite not agree that the focus of this bill is to deal with tax measures that had to be in place before the calendar year began, because that is the time in which one fixes the tax code and that is why this bill is so narrowly focused?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, I absolutely think that this is exactly the right time to help those people earning $17,000 a year.

No, they are not included in this tax bill, actually, because anyone earning under $49,000 a year does not get a tax break with this bill that has been introduced. Therefore, including them is what I would like to see. I am asking the government to include everybody in this tax bill earning under $49,000, including people earning $17,000 a year and people earning $25,000 a year. Right now, they are not being recognized in this bill. They are being left behind, and inequality is going to continue to rise. It is those earning over $49,000 who start to see the benefit and those earning more than $100,000 who see the most benefit.

This is the right time to tackle inequality. This is the right time to show that we want a new relationship with people who are struggling to make ends meet, meaning the working class, the medium-income earners of this country.

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

Mr. Speaker, I certainly share some of the member's concerns with respect to how this bill does not help those who actually need the help the most. I am sure he will applaud the Conservative record as a government in lowering the GST and lowering the lowest marginal tax rate that Canadians pay.

However, I am a bit confused about the NDP position on tax-free savings accounts, because the numbers with respect to TFSAs are very clear. They show that over half of those who max out their tax-free savings accounts are actually making less than $60,000 a year. Why does the NDP not join Conservatives in supporting tax-free savings accounts, a vital vehicle that is very useful to medium- and low-income Canadians?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, I appreciate the question from the member because we both agree that tax-free savings accounts are important. They are important to help people save for the future. We want to encourage that, but at what cost? We have to define what it will cost future generations. We know that the finance minister from the last government said that it would be the problem of future generations or a certain prime minister's granddaughter to deal with the increasing costs associated with the tax-free savings account. I do not think that is a responsible way of taking this on.

It is important that we take fiscal action right now, today, and ensure that we manage the economy, the environment, and the social well-being of our nation. We invest in that today, but we also will not leave it to the detriment of future generations to pick up the tab.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, I would like to congratulate my colleague on a great speech. I really liked his commentary on the definition of the middle class, because it should be defined as being above the poverty line and below the highest tax bracket. That would put it somewhere between $23,000 and $138,000 for individuals.

However, the current government, in giving a tax break to the middle class, is giving about $600 a year to people who make more than $50,000 and up to $200,000. Therefore, my question to the member is this: does he think that people who make more than $80,000 a year need a tax break of $50 a month?

[Gord Johns, NDP, Courtenay—Alberni, BC]

Mr. Speaker, the government made a decision and put forward an idea upon which it got elected, a promise of a tax cut to the middle class. I want to ensure that the middle class get that tax cut. If the median income in our country is $31,000 a year, the people who earn $31,000 a year should get a tax break. That is a promise that was made by the current government.

The government cannot fulfill all of its obligations and its promises through promises of child tax benefits or old age security that we have still not seen. Here is the opportunity right now. The government has been asked to provide a tax cut and relief for the middle class, but it is not doing it for those who are earning less than $49,000 a year. It has an opportunity to bring the bill to committee to fix it and to ensure that 83% of Canadians benefit from this tax measure.

Hopefully we can fix this bill and work together collaboratively in this House to move forward in 2016 to take care of each other.

[The Deputy Speaker, Conservative, Bruce Stanton]

Order. It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the member for Regina—Lewvan, Regional Development; and the member for Hochelaga, Social Development.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, there are two provisions to Bill C-2. One is the reduction in the annual limit one can deposit into a tax-free savings account, and the other is a reduction in the second income tax bracket while increasing the top tax bracket. I will begin my discussion with the tax-free savings account.

The TFSA was introduced in the 2008 federal budget, back when the late Jim Flaherty was the minister of finance. Canadian families were able to invest their after-tax dollars and earn income tax-free through their TFSAs. TFSAs can be used to invest in all sorts of eligible financial products, whether they are GICs, mutual funds, or stocks and bonds, to name a few. Canadians were already taxed once on their income. The TFSA allows them to earn income on their savings without having to be taxed again. Unlike RRSPs, the TFSA alleviates the risk that governments will change the tax rates, as withdrawals from the TFSA are not taxed.

It is not surprising, especially with the Liberals set to increase taxes in the upcoming budget, that Canadians at all income levels are choosing to invest in TFSAs. The Liberals would like nothing more than to get their hands on the savings of Canadians. Simply put, the country benefits from Canadians saving their hard-earned money, and the TFSA allows them to do so. We should be encouraging saving and not discouraging it, as Bill C-2 will do.

The previous Conservative government was able to increase the TFSA contribution limit because our last full fiscal year in government was in surplus. The Auditor General confirmed this. Indeed, the Minister of Finance's own department, in the monthly “Fiscal Monitor” publication, showed that in the first nine months of the current fiscal year ending in December, Canada's budgetary surplus was $3 billion. Now the Liberals are choosing to squander this surplus and plunge us into massive deficits, including with Bill C-2.

I will now bring my attention to the second part of Bill C-2, which is the proposed adjustment of the income tax brackets. Since I was elected to the House of Commons in October 2008, the rates for the federal tax brackets have not changed. There is a 15% bracket, a 22% bracket, a 26% bracket, and the top bracket of 29%. With this stability, Canadians can reliably predict how much income tax they would be paying.

The new Liberal introduction of a higher tax bracket would create a situation where top-paid and top-performing professionals in Canada will be discouraged from working further and encouraged to look into ways of legally reducing their taxable income levels. In particular, I would like to point out that when we add together the combined federal and provincial marginal tax rates, Canadians who live in over half of our provinces will be paying a top combined tax rate of over 50%. These provinces include Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, and Prince Edward Island. This means that people in the top tax bracket will be paying the government more than half of their income for each extra dollar they make.

Does anyone in the House believe that these individuals will be seeking to earn more money when they will be paying more than half of their income in the form of income taxes? We should be encouraging Canadians to work hard and earn more money. This income tax change will have the opposite effect for those highly paid professionals who qualify for the top income tax bracket. There will be a point when people will choose to work less because the money they earn will simply be given to the government. Indeed, I foresee the only growth in high-paying jobs resulting from Bill C-2 will be of tax accountants, who will be finding ways to reduce the income tax burden on highly paid professionals. That was maybe the Liberal plan after all.

Speaking of Liberal plans, the other fact that the Liberals promised in their election platform is that the reduction of the second tax bracket will be paid for by the increase in taxes in the top tax bracket. Subsequent projections from the Department of Finance have indicated that Bill C-2 will not be revenue neutral but will put us further into deficit.

Indeed, our previous government's election commitments, including an increase to the TFSA annual contribution rate, were contingent on balancing the budget. Not only have the Liberals squandered the surplus, but they are implementing changes that were clearly from incorrect premises.

In summary, Bill C-2 is wrong for Canadians. I will be voting against it in its current form.

[Adam Vaughan, Liberal, Parliamentary Secretary to the Prime Minister (Intergovernmental Affairs)]

Mr. Speaker, on October 19, the Montreal Canadiens were in first place and Carey Price was the player of the week. We are now watching a play-off series about to start where the Montreal Canadiens are not going to make the play-offs simply because they were leading on October 19, and Carey Price, much like Joe Oliver, is no longer in a position to defend anything.

The situation is this. The previous Liberal government paid down $90 billion on the national debt, but the previous Conservative government added $150 billion to the national debt. Under former prime minister Pierre Trudeau, the debt was 2.9% of the GDP, but under Brian Mulroney, it was 6.7%, and it goes on and on. The bottom line is that the former prime minister, combined with Mr. Mulroney, have created three-quarters of Canada's debt since Confederation.

If the Conservatives are so concerned about the record of debt that their government left, why have they not all resigned and joined a party that actually fights deficits?

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I thank the member opposite for quoting historical records.

Historically, it was our government that cut taxes and yet was able to balance the budget. The way that the Liberals did the balancing was to cut transfers to provinces for education and health care. We had to keep adding our contribution to the provinces in order to get rid of their deficits. It was our government that was able to balance budgets several times. It was during the recession that we were able to use the deficit to create jobs,1.2 million net new jobs. When the government on the other side was doing that, they lost jobs. This is our proud record.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Mr. Speaker, my question has to do with the two conflicting views that are continually being presented in the House on the financial situation that the current government inherited. I am interested to hear the member clarify, for the sake of the public who must be very confused, what she understands about the balanced budget and the surplus left by the previous Conservative government.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I will state again that the Conservative government was able to increase the TFSA contribution limit because our full fiscal year in government had a surplus. The Auditor General confirmed this. Indeed, the Department of Finance, through its monthly “Fiscal Monitor” publication showed that in the first nine months of the current fiscal year ending December, Canada's budgetary surplus was $3 billion.

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

Mr. Speaker, the member talked about how the new bill would add to the deficit, and the government seems to have no regard for the impact of that deficit on future generations who are going to work to pay off the spending we have today.

I wonder if the member could comment specifically on the impact that the misguided fiscal approach of the current government is going to have on future generations.

[Alice Wong, Conservative, Richmond Centre, BC]

Mr. Speaker, I thank my young hon. member for that question.

Indeed, the Liberal government is heading to create more deficits, and I worry about the younger generation. That is why we wanted our students to be able to save for education, our families to save to start a family, entrepreneurs to save for their businesses, parents to save for their children, and low-income seniors, who are close to my heart, save for retirement.

If Bill C-2 passes without change, these changes will make life less affordable for Canadians who are trying to save for vulnerable years. Therefore, we will vote against Bill C-2 in its current form.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Mr. Speaker, I appreciate the opportunity to speak on this important bill. Tax fairness has been an NDP concern for decades. Unfortunately, I am not at all convinced that Bill C-2,, an act to amend the Income Tax Act, provides the fairness that Canadians have done without for quite some time.

I will begin by quoting from the Liberal Party's election campaign platform. The Liberals told us that they would give middle-class Canadians a tax break by making taxes more fair: “When middle class Canadians have more money in their pockets to save, invest, and grow the economy, we all benefit.”

However, there is a problem here. The Liberal definition of middle class seems to be a moving target. Worse, that vagary seems to be intentional. It wins votes, but at the same time it absolves them of accountability. It leaves us with many questions.

Which Canadian workers fall into the category of middle class? Let us look at the numbers. MoneySense estimates for 2013, based on Statistics Canada data, are that an individual Canadian earning an income between $23,000 and $37,000 annually makes more than the poorest 40% of Canadians and less than the richest 40%. It is reasonable, then, to assume that if one sits in a wage range where the number of Canadians making more and less is equal, one falls in the middle, a middle which at the top end, using this definition, is just under $37,000. In fact, the Liberal tax proposal excludes anyone making less than $45,000. In other words, this tax reform excludes the lowest 60% of wage earners. However, as I pointed out, the Liberal definition of middle class is a little vague.

Let us give the Liberals the benefit of the doubt and look at Canadians with an annual income falling between $48,000 and $62,000 per year. The tax benefit now kicks in at a whopping $50.

As an aside, and because the bill also proposes a rollback in the TFSA limit, it may be sad and somewhat surprising to learn that the claims of the previous minister of employment, the member for Carleton, turned out to be inaccurate when he said that 60% of individuals contributing the maximum amount to their TFSAs had incomes of less than $60,000 in 2013. Were they middle class? Also, for those income earners, the additional $50 tax benefit, or 96¢ a week, does not amount to much. With that increase to one's take-home pay, they would have to wait two weeks just to buy themselves a double-double.

It seems to me that except for the fact that the Conservative Party leader seems to have had a change of heart and is now aligning herself with the 99%, the old Liberal-Tories same old story adage holds true here again today. Under the current Prime Minister's plan, the highest 30% of Canadian income earners are the main beneficiaries of this legislation while the wealthiest 10% pocket most of the money. One would think that an income tax deduction designed for the middle class should actually benefit a larger proportion of Canadians.

A federal tax system is put into place in order to create and maintain an equal and just society, to provide essential services for Canadians, and to ensure that not one of us is left behind. It is the vehicle of a strong social democracy. I would like to suggest that the plan should be sustainable. New Democrats know that is possible. How can the Liberals justify this change when it will result in a total revenue loss of $8.9 billion between now and 2021?

We have an opportunity to effect real change for the people who need it most, and, in doing that, everyone benefits. Unfortunately, the tax change proposed by the Liberals does not even come close.

Why not aim higher? Why not make changes that would ensure that no Canadian lives in poverty?

New Democrats know that we do not have to get bogged down in the definition of who is middle class to see that Canadians are being left behind as a result of Conservative and Liberal government inaction. The gutting of our manufacturing sector and the loss of well-paying jobs and stable work has affected the economy and the lives of people in London, Ontario and all of Canada for decades. New Democrats understand this reality and know that we can do better. The fact that we have Canadians living in poverty is shameful. The income gap is growing and it becomes increasingly difficult for families to find accessible, affordable housing, and child care, health care, and education.

In their effective opposition, the New Democrats have proposed a number of realistic measures to help families struggling to make ends meet: a national child benefit supplement; guaranteed income supplement; $15-a-day child care for all Canadian families; and reinstatement of the labour-sponsored tax fund credit, to name just a few. The NDP understands the reality of the middle- and lower-income earners of this country.

If the country were to reduce the tax rate for Canadians earning less than $45,000 a year by just 1%, from 15% to 14%, 83% of those people, some nine million Canadians, would benefit. The cost difference would be minimal and could be easily recovered with a very slight increase of one half percentage point to the corporate tax rate. The New Democrats' proposal makes sense in and cents terms. Our proposal would also enable the government to increase the working income tax benefit, which has proven to be very effective for low-income workers, and put more money back into local economies.

As tomorrow is International Women's Day, let us talk a bit about equity.

We know that creating equity for workers with the lowest incomes benefits women. Federal tax policy is structured such that the ratio of profit between women and men is 60-40, more or less. It favours those with higher incomes, and since men by and large earn higher incomes than women, they are advantaged and women are disadvantaged under the current taxation regimes. This disadvantage follows them from the time they enter the workforce to retirement, as women on average fall more often into the category of low-wage earners and since those benefits are often calculated based upon annual income, which is more likely to be part time, precarious, or interrupted in order for women to raise children.

As members can see, tax cuts to the lowest tier of Canadian income earners, such as those proposed by the NDP, would not only benefit those workers and the communities but would also represent a small and vital step toward gender equality.

The NDP has always worked for seniors. I am very proud to say that we are the only party that has a national strategy on aging, and I am thankful to my staffer, Tara Hogeterp, who worked diligently in the last Parliament, with the aid of our NDP research staff team, to bring that strategy to the public.

We do not believe that an increased TFSA limit is the solution for lifting nearly 200,000 seniors out of poverty, so we support the government's proposal to amend it. We fought against the Conservatives' reckless decision to raise the retirement age from 65 to 67. We proposed to increase funding for the guaranteed income supplement by more than $400 million.

It seems to me that the government is missing an important opportunity here to create fair and equal taxation systems that would benefit all Canadians, missing an opportunity to fulfill one of its election promises. It makes me wonder whether it ever had any intention of doing so in the first place.

Instead of making smoke-and-mirror changes to tax policy that would not benefit anyone but copywriters, why not create a system that would actually serve the Canadian population and work toward real sustainable fairness and equity?

In doing so, the government would be able to say that election promises do matter. That would be a remarkable and refreshing change.