House of Commons Hansard #27 of the 42nd Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was income.

Topics

The House resumed from February 1 consideration of the motion that Bill C-2, an act to amend the Income Tax Act, be read the second time and referred to a committee, and of the amendment.

Income Tax ActGovernment Orders

11:05 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

Mr. Speaker, our government was proud to run on an ambitious economic agenda, an agenda that highlighted the importance of investment, investing in our economy and infrastructure. However, we did not pledge only to invest in the economy; we pledged to invest in the resourceful and talented people of our great country.

Specifically, our campaign was predicated on the belief that investing in the middle class and those working hard to join it was of utmost importance. As all members of the House can agree, when the middle class succeeds, we all succeed.

We are committed to a strong and growing middle class. The middle class is the true driver of economic growth and job creation in our country, and it needs our help.

Having run on, and been elected on, this plan, I am proud to support this legislation, which delivers on our promise to cut taxes for the middle class that has gone far too long without a raise. This is the fair thing to do; this is the right thing to do.

In the economic update of a few days ago, the Minister of Finance made clear that we were facing difficult economic times. We know that times of economic difficulty exacerbate inequality.

Bill C-2 would cut the tax rate on income earned between $45,282 and $90,563 in 2016 to 20.5% from 22%, and it would introduce a new tax rate of 33% on income in excess of $200,000.

As of January 1, the government is putting $3.4 billion in the pockets of about nine million Canadians each year.

Single individuals who benefit would see an average tax reduction of $330 every year, and couples who benefit would see an average tax reduction of $540 every year.

To help pay for this middle-class tax cut, the government is asking the wealthiest Canadians to contribute a little more. We are therefore creating a new top personal income tax rate of 33% for individual taxable incomes in excess of $200,000.

Earlier, I mentioned the importance of helping the middle class, and those working hard to join it. It is critical that as a government we remember those most vulnerable in our society. In budget 2016, we will see a major step forward in helping our most vulnerable, through the introduction of the Canada child benefit.

I would like to discuss what this measure will mean for Canadian families.

This new tax-free income-tested benefit will lift hundreds of thousands of children out of poverty. Nine out of ten Canadian families will be better off.

The proposed Canada child benefit will simplify and consolidate existing child benefits. It will replace the universal child care benefit, which is not income tested. As we have committed, the new Canada child benefit will be better targeted to those who need it most.

We aim to have payments under the CCB begin this summer. It will give a new generation of Canadians just a bit more space to be children and to grow into a Canada that has prepared itself for them through long-term investments. That includes things like skills and labour strategies to unlock the potential of greater productivity, without making people work longer and harder for less.

Our most vulnerable will also benefit from our historical commitments to infrastructure. They will benefit from our commitment to social infrastructure in things like affordable housing, but also targeted investments in public infrastructure that will grow the economy and get Canadians moving, and green infrastructure that will open up new sectors while addressing climate change.

Canadians elected us to do these things, and they are supportive on the work we are doing.

Recently the Minister of Finance and the parliamentary secretary fanned out across the country, asking Canadians directly what our government could do to better support the middle class. They met with indigenous leaders, business leaders, cultural leaders, all with the intent of listening to Canadians and engaging in discussions to find practical solutions to the difficulties they were facing.

These pre-budget consultations continued online until very recently. The response rate and comments received were tremendous. With over 200,000 interactions with Canadians and more than 500,000 online submissions, this has been the largest pre-budget consultation on record.

Throughout the course of these consultations, Canadians confirmed that they wanted a government that delivered on strengthening the middle class and helping those working hard to join it, and we will deliver.

Our plan to grow the economy is now more important than ever. As the minister reiterated at the finance committee and in the House, the other parties' balanced budget proposals would have led to massive cuts at a time when the economy needed more investment. Cuts at this time would have led to more layoffs and less flexibility.

After 10 years of weak growth, we have a plan to grow the economy. As Bill C-2 clearly demonstrates, we have already started. It is a plan that we are proud to put forward and proud to be implementing. I know some in the House disagree, and members on our side will be happy to hear their perspective and happy to debate them. However, ultimately, we will not be deterred from implementing a plan that will help Canada by investing in it and in its talented, resourceful, and well-educated people.

The tax relief proposed in the legislation will help millions of Canadians. It will give middle-class Canadians more money in their pockets to spend, invest, and grow the economy. I encourage all members of the House to vote for this important legislation.

Income Tax ActGovernment Orders

11:10 a.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Mr. Speaker, the member for Nepean mentioned that the pre-budget consultation his government did was one of the largest in history. Would the hon. member not agree that bigger is not always better?

Income Tax ActGovernment Orders

11:10 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

Mr. Speaker, bigger is always better when we engage Canadians. From coast to coast to coast, we listened to indigenous, community, and cultural leaders. We heard their issues and the problems they faced so we could propose good plans for implementation.

Income Tax ActGovernment Orders

11:10 a.m.

NDP

Brigitte Sansoucy NDP Saint-Hyacinthe—Bagot, QC

Mr. Speaker, six out of 10 Canadians will get nothing under the Liberal plan. Seniors who are waiting for an increased pension are being told to hang on. Families are still waiting to find out how much they will get under the Canada child benefit. However, my colleague talked about this child benefit using the conditional tense and said that it should begin this summer. We are asking questions, but we are not getting any answers.

My colleague talked about the most vulnerable members of our society. Why are Canadians who are living in poverty, the vulnerable people he is talking about, still not getting anything under this bill?

Income Tax ActGovernment Orders

11:10 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

Mr. Speaker, as I mentioned, we will include a Canada child care benefit that will help nine out of ten families that need this assistance most. We also said we would increase the old age pension plan to help seniors. We have other plans for seniors as well.

Income Tax ActGovernment Orders

11:10 a.m.

Conservative

John Barlow Conservative Foothills, AB

Mr. Speaker, I want to follow up on the question my colleague asked regarding the consultation.

When I went around my riding and most of Alberta, the feedback I received from Albertans was that the increase in the tax-free savings account was extremely welcomed to Albertans. Talking to my colleagues, I heard that it was extremely positive across Canada.

The member talked about consultations with Canadians. Have the Liberals ignored the feedback from Canadians who appreciate the increase in the tax-free savings account? Bill C-2 would eliminate that increase. I would be interested to hear why the Liberals would eliminate something that Canadians really want.

Income Tax ActGovernment Orders

11:10 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

Mr. Speaker, we hosted a very good pre-budget consultation meeting in my riding of Nepean. It was a jam-packed room. We heard very clearly that Canadians were happy with the tax cuts we proposed for the middle class and were interested in our infrastructure plans that would allow the economy to continue to grow.

Income Tax ActGovernment Orders

11:15 a.m.

Liberal

Wayne Long Liberal Saint John—Rothesay, NB

Mr. Speaker, I have one comment with respect to tax-free savings accounts. It was a very good program initially, but I think the facts show that a very small percentage of Canadians actually maxed out their tax-free savings accounts and a smaller percentage took advantage of doubling the tax-free savings account. This absolutely was done by the party opposite to pander to its base and allow those who could afford it to do so.

The Liberals came forward with a tax break for the middle class, to put more money back into the pockets of the middle class. What does my hon. colleague believe the benefit of putting more money back into the pockets of hard-working middle-class Canadians will mean to the economy?

Income Tax ActGovernment Orders

11:15 a.m.

Liberal

Chandra Arya Liberal Nepean, ON

Mr. Speaker, in relation to the problems he has mentioned with the tax-free savings account, it is a harsh fact of life that many Canadians cannot even invest in RRSPs. I believe the amount not being invested is in the range of $700 billion. The tax-free savings account is above and beyond what people can invest in their RRSPs.

Taking about our proposed tax cuts, we know this is a time when Canadians need to spend. We need the economy to grow and that can come through both spending by individuals and investments in infrastructure.

Income Tax ActGovernment Orders

11:15 a.m.

NDP

Daniel Blaikie NDP Elmwood—Transcona, MB

Mr. Speaker, I am pleased to rise in debate on this bill today.

What has been most interesting about the debate on this bill to date has been the opportunity to drill down into an issue of contemporary Canadian political semantics. There was a time when we started to talk about the middle class that a lot of people felt this was sort of updating the language of standing up for working-class people and that when we talked about the middle class, we were talking about people who were going to work every day and working hard every day to bring home what they needed to be able to feed their family, pay for their home, and engage in some meaningful recreation after working hours as well.

That is where a lot of people felt the language of the campaign put forward by many parties, especially the governing party, was going when we were talking about the middle class. People felt the middle class meant people who were working hard every day to try to provide for their families.

We see an acknowledgement by the government sometimes that that is not quite what they mean by “middle class”. It has talked about the middle class and those working hard to join it. However, in fact, the way the government is defining the middle class through the tax cuts is to say, first of all, that they would only benefit people making over $45,000 a year, which already does not include 60% of Canadians going to work every day and trying to provide for their families.

Then the greatest benefit, of course, does not come at the bottom of that bracket, but at the top, so when we start talking about the people who are going to see the major benefit of this tax cut, it is plain to see that it is far more than 60% of Canadians who will not be seeing any real, substantial benefit from this tax break.

We have been talking about how we define the middle class. If we are trying to define in any sort of absolute way what that means vis-à-vis the majority of working Canadians, then I would say the government proposal really does fail to do anything for the middle class, understood as the large majority of Canadians who are going out and earning the median market wage for a lot of the work being done in Canada. The median salary of a Canadian worker is somewhere in the neighbourhood of $35,000 a year. That is not even close to qualifying for any benefit under the new Liberal tax plan.

We can define it aspirationally, as the Prime Minister sometimes does when he says it is the middle class and those working hard to join it. Maybe the implication is somehow that is more the focus or that we really need to capture all those people under the umbrella of “middle class”, even though they are living a life quite different life from those making $90,000, $100,000, $110,000, $120,000, who are the people in the middle of the bracket that the government has chosen to target.

If we are defining it aspirationally, then it is a mistake to say it is the class of people who need the most help. It is not. It is often implied by the government itself that the intention of the program is to provide help to those who need it the most, but if the middle class is going to be defined only aspirationally, then it would be a mistake to say that it is the class of people who need it most.

If it is defined absolutely, we are looking at the majority of working Canadians, and I would say that those are the people who do need help. If anyone needs extra help or extra resources in order to leverage more out of their work and create an acceptable living standard for their family, it is the people on the lower end of that scale, not the people on the higher end.

I find it a strange focus. I wish the government would be clear about the way in which it is going to go about defining the middle class and clarify whether it wants to speak directly to the majority of working Canadians or whether it is talking about some aspirational category. If that is the case, then the help is misplaced. We really want to be helping those who are trying to get into that category, and this tax package really has nothing to do with that.

I find that odd. We want to talk about how we provide real help to those who need it, those working families. If the Liberals are going to get away with defining “middle class” as being that upper end, a six-figure category, then we do need to rehabilitate the language related to “working class” in Canada, because the category of people we thought we were talking about when we were talking about the middle class clearly is not the category we are talking about if we listen to the government.

There is a whole group of people out there, 60% of the population, working for under $45,000. Those are the people on whom the efforts of government are best spent, both because there is a moral obligation to make sure that people who are putting in that work are getting a fair return for that work and are able to provide for their families and also because there is an economic argument.

It is the kind of economic argument that has been appropriated by the government in favour of those making around six figures. That argument really belongs with that 60% who are making $45,000 or less a year. The resources provided to them and the extra bit of spending money that could be provided to them, whether it is through tax relief or through a child care program program that would do a better job, would relieve the actual dollars that are coming out of the pocket just the same as taxes are.

Child care is not optional for most working families in Canada, so the money that they spend on child care is no more an option than the money that is taken off their cheque every week for taxes. Providing relief on the cost of child care is meaningful and would put money back into the pockets of families. The benefit of this strategy is that it also means we could do a better job of making sure those services are available where they are needed.

We know that the market has not always been doing that in the most efficient way and that there is room for intervention there. There are many ways to put money back into the pockets of those families who need it the most—not the ones in which one or two earners are making $100,000 a year, but the ones who are making a median salary. We could do that with a child care program.

We could do it by providing relief on EI, because even families who might have benefited from these tax cuts because they were making $80,000 to $120,000 somewhere in the country in the trades are now unable to find work. Because of the change in commodity prices, their jobs no longer exist, and those families need relief right now.

It is why I was quite pleased with our opposition day motion to get the government to move as quickly on EI as it saw fit to move on this tax break, the main benefit of which is going to go to people already making six figures. It will not help the people who need it now. If the government asked what its priorities are and how it can move quickly to help those who need it most and how it is going to put money in the pockets of people who will spend it right away because they have to and need to, this would not fit the bill.

I am shocked that this is what we are debating and that it took an NDP opposition day motion to get urgent debate on EI reform in the House. We will be voting on that later today, and I would be pleased to see colleagues across the way stand in favour of that motion. It is much needed, and I would be remiss if I did not mention it, because the vote is today.

In the spirit of being constructive, we also put forward a different tax proposal. Investing in a national child care strategy is a better way to go and would accomplish a lot of what the Liberal government said it wants to accomplish through tax relief. We said, “Fine; the Liberals ran on a platform of tax cuts that are supposed to help the middle class, so let us play ball. Why do we not give a proposal that is in spirit the same thing, but would actually do a better job of realizing the objectives the Liberals set out in the campaign for tax relief?”

We proposed a reduction on the first bracket that would actually cover that 60% of Canadians earning below $45,000 a year. It is why we are looking to move the bill on to the committee stage to have it examined. I hope members opposite will see that as an opportunity to improve a plan that has misfired because it not helping those who need the help and is not helping those that the government in the election campaign implied it was going to be helping with tax relief.

We are looking to be constructive in the House. We think we have found a way to help the new government help itself. It is a busy time. There is a rush to get certain things through, and we hope that our reflections may assist the government in doing a better job of what it said it would do. We are voting in favour of the bill at second reading to get it to committee and have that full debate.

Income Tax ActGovernment Orders

11:25 a.m.

Liberal

Mark Gerretsen Liberal Kingston and the Islands, ON

Mr. Speaker, I will start with a comment about what we are discussing today and then go on to the less fortunate individuals in our society, as the member mentioned and pointed out so rightly.

I will start by saying that this measure would put money into the pockets of nine million Canadians. We cannot dispute the fact that would have the ability to spread throughout the economy and help it grow.

If we were to stop there, then I could possibly agree with the suggestion that this would not be enough. However, we are going further. This goes to the member's point in his eloquent speech and to the passion he showed with respect to the less fortunate in our communities. That is why the Liberal Party is planning to put forward the Canadian child tax benefit, which would put more money into the pockets of families who need it the most, rather than maintaining the universal child care benefit—which, by the way, the NDP supported during the election.

My question to the member opposite is this. When it comes to the particular program that we will be putting forward, a program that would put more money into the pockets of families who are struggling, will he go against what the NDP committed to during the election and support that plan? It would truly benefit those he has singled out who were not being taken care of, which is what we plan to do with the Canadian child tax benefit.

Income Tax ActGovernment Orders

11:25 a.m.

NDP

Daniel Blaikie NDP Elmwood—Transcona, MB

Mr. Speaker, it would be irresponsible to endorse a plan I have not seen. In the House we have been calling to see that plan. We keep being told that it is coming. However, until I see the details, I will not say one way or another whether it is something I would be willing to support.

I would urge the member or another member to stand up in the House today and give us the details of that plan so that we might better evaluate our support.

Income Tax ActGovernment Orders

11:25 a.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Mr. Speaker, I thank the member for his eloquent speech. I agree with him that this bill and this strategy that the Liberal government is putting forward to this place does not help the low-income Canadians who need it the most. I will certainly grant him that point. I wish the priorities of the Liberals were different on that front.

The NDP and the member have said they will be supporting this measure. To bring it to committee means that it will have a good examination, and the NDP may decide not to support it later. What I am concerned about is that this measure will cause a deficit of $1.2 billion or more, because it is not revenue neutral as the Liberals originally proposed it would be.

Does the member not see, though, that if we continue to put forward things that would put us into a deficit position, many of the programs and supports that the member is calling for that would help low-income Canadians would inevitably be put under pressure, to the point where we may revisit the 1990s, when the Liberal government at the time cut transfers to the provinces, particularly around health care, in order to pay the bills?

Income Tax ActGovernment Orders

11:30 a.m.

NDP

Daniel Blaikie NDP Elmwood—Transcona, MB

Mr. Speaker, I would agree with the hon. member that I am concerned that as deficits mount for a Liberal government, it does look to cutting programs eventually as a way to make up for that shortfall. That is why we have proposed that it look at raising the corporate tax rate and closing tax loopholes for CEOs, and we have seen them starting to backpedal somewhat on that commitment, so I do share some of the member's concerns.

I would say that if we are to offer good and sustainable social programs that support families, we do need to ask that revenue question. That is something that the NDP has been willing to do. It is a harder conversation than promising the moon and then getting elected and sorting it out later, usually to the dissatisfaction of most Canadians. That is a conversation we are willing to have. I would urge the government to look at raising the corporate tax rate in order to make up for some of the shortfalls in its plan, and I look forward to further discussion at committee.

Income Tax ActGovernment Orders

11:30 a.m.

Conservative

Cathay Wagantall Conservative Yorkton—Melville, SK

Mr. Speaker, I am pleased to stand today to speak on behalf of my constituents and Canadians across the country who have great reservations about Bill C-2 and the ballooning deficit agenda of the Liberal government.

My riding of Yorkton—Melville is strongly representative of the highly educated and talented workforces the Minister of Finance confirms exist in Canada, from young successful entrepreneurs and professionals to small- and medium-sized businesses in the real estate, retail, agriculture, manufacturing, and mining sectors, just to name a few.

We are a hardworking bunch who are committed to sustainable growth and prosperity. We value caring for each other and those less fortunate. We value investing in our communities, our hospitals, care homes, and our youth at risk programs. Quite frankly, the people of Yorkton—Melville are second to none when it comes to hard work, compassion, and common sense.

Election promises were made. However, promises made, promises kept, has yet to apply to the government. Instead of helping the middle class, the Liberals' tax cut is most beneficial to the high end of the second highest tax bracket, those who make close to $200,000 a year. In fact, the parliamentary budget officer says that the reduction of the second tax bracket will benefit the top 30% of income earners in the country.

Based on the Finance Department's own estimates, the new Liberal tax plan amounts to an average $6.34 a week for those who qualify. These facts reveal that this tax cut does not in any way uphold the Liberals' campaign promise. They promised that the tax cuts would be part of a plan holding the deficit to $10 billion.

The Prime Minister promised a $3 billion tax cut for the middle class, paid for by a $3 billion tax increase on high-income earners. The middle class tax cut would be revenue neutral. By the Minister of Finance's own admission, there will be a revenue shortfall of over $1 billion on this issue.

The Institute of Research on Public Policy has said that the shortfall will be even greater, creating a revenue debt up to $1.5 billion. The C.D. Howe Institute, which the Minister of Finance once chaired, said the Liberal plan will fall short by nearly $2 billion, that will not be revenue neutral, but a tax cut that will cost the treasury a minimum of $1 billion.

I have to say that ordinary folks in my riding are shaking their heads, wondering how election promises were made, either with poor research and poor advice, or with no clarity other than that hope that “This could work. It sounds good. Let's go for it.”

Another related promise has been made that in the upcoming budget a new Canada child benefit will be introduced, plainly to target those who need it most by replacing the universal child care benefit, which was not tied to income.

The UCCB was given to every family, true, regardless of income. In addition, the Canada child tax benefit was also available for parents who needed and were eligible for more support. Here, I totally agree with the member opposite that my own family, when they were in challenging circumstances, were very thankful for that support that lower income folks need, and especially since, in many cases, the amount of tax they pay is minimal to begin with.

While I was door knocking during the election campaign, one gentleman complained to me that his daughter and son-in-law would have to give it all back when submitting their taxes and that it would not be of any benefit to them. As we talked, he did share that they were both good income earners who had qualified for their mortgage, and whose children were well cared for and that they had a little bit of savings. Since they knew they were likely to have to return the money, I suggested that perhaps they could put it in their tax-free savings account and at least make a little tax-free interest in the meantime.

As well, I suggested that it was probably good to know it was there in case the unexpected happened, an illness or who knows what, such as a downturn in the economy that could mean a temporary or permanent loss of employment, in which case an unexpected change in their family income could suddenly mean that the UCCB would be there for them because it is readily available and not tied to income.

This new Liberal child benefit tied to income would not be adjustable until after one's income tax has been filed and a difficult year is in the past, like the year that many of our oilfield workers in Saskatchewan and Alberta and those from the east coast are experiencing right now.

Then there is the decision of the government to eliminate the increase in the tax-free savings account to $10,000, declaring that this action is consistent with their objective of creating a tax system that is fair and helps those most in need.

As a result of the TFSA being designed to be cumulative, it encourages young Canadians to invest what they can, knowing that it is a savings account to be used for the future when they are economically able to put more away in the knowledge that they had that choice. These accounts were an enormous step forward for the middle class to support a wide range of their financial goals, including saving for school, their children's futures, a home, or a comfortable retirement.

When the money is withdrawn it carries no tax penalties. Unlike the RRSP, money in a TFSA can be used as collateral, while at the same time investments are not counted as income to qualify for government benefits or pension supplements that carry a means test. They are not to penalize the most vulnerable people in society but to add to the free choice of how Canadians can save.

The argument that keeping the limit at $10,000 would have helped Canada's wealthiest save more while costing the federal treasury hundreds of millions of dollars over the next five years is truly telling. It says that the government cannot afford people putting away for their own futures, saving for their own retirements, so they can continue into their golden years self-sufficient and continue to contribute to the economy. It says that when the government goes into deficit to the tune of at least $50 billion in the next four years, it will need to claw back the hundreds of millions of dollars Canadians would be saving for themselves and their families' futures over the next five years.

The new government's approach to retirement savings is counter-intuitive. On the one hand, it supports the Government of Ontario's ideology to force all workers into new government-sponsored pension schemes that would cut take-home pay and force employers to cut jobs and/or have less to invest in the very businesses that are the backbone of our economy. On the other hand, the Liberals want to deter Canadians from using a revolutionary savings tool designed to support Canadians in whatever their own unique goals might be.

Eleven million Canadians opened tax-free savings accounts. People earning less than $80,000 a year accounted for 80% of those holding those accounts, and 60% of the individuals contributing the maximum amount had incomes of less than $60,000.

I personally encourage all young Canadians to open tax-free savings accounts now, in the midst of the challenges of getting their post-secondary education, raising their young families, facing increased unemployment and rising housing costs, including higher down payment expectations from the government that will hurt their ability to get into the housing market. I urge them to do it now so that the accrued potential for their future savings gives them hope and the incentive to plan and take hold of their future, and certainly not depend on a government that says on the one hand that it wants to invest in the middle class while on the other hand stifling their saving options and growing a national debt that will ultimately fall on their shoulders to repay.

This legislation does not recognize the fact that the tax break for the middle class is not revenue-neutral and would not make a significant difference in the ability of the middle class to grow or stimulate the economy in a significant way. This legislation would place a higher priority on federal revenues to offset the government's intentions to go significantly further into deficit than on empowering Canadians. When the Minister of Finance introduced the bill he said that “the government's job is to help Canadians succeed”. Sadly, the bill does not meet that objective.

Income Tax ActGovernment Orders

11:40 a.m.

Conservative

Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB

Mr. Speaker, there are a lot of problems with this legislation, the most glaring of which the the member highlighted in her remarks, that those who would benefit the most from the government's tax changes are those making over $90,000 a year, but that most of those who use tax-free savings accounts make less than $60,000 a year. On the one hand, the government is talking about the middle class but on the other hand it is helping those who are doing better than those making less than $60,000 a year.

Could the member talk a bit more about the value of tax-free savings accounts specifically for middle- and low-income Canadians, which really illustrates why the government's rhetoric does not match the reality of the bill?

Income Tax ActGovernment Orders

11:40 a.m.

Conservative

Cathay Wagantall Conservative Yorkton—Melville, SK

Mr. Speaker, there is no question in my mind that the tax-free savings accounts, which our government encouraged be raised to $10,000, were significantly appreciated across the board by lower- income families as well as middle-income families.

This has an impact my own family, which is in the circumstances that I talked about. Right now it is in the midst of the challenges of family members upgrading their education and their families growing. Saving for their future is challenging at this point in time. Knowing that the ability was there for them to add that significant amount to their tax-free savings accounts in the future was significant. It is truly a disappointment to them because it will no longer be the case.

Income Tax ActGovernment Orders

11:40 a.m.

Liberal

Wayne Long Liberal Saint John—Rothesay, NB

Mr. Speaker, for the record, let us talk about the tax-free savings accounts. They were doubled for one reason, and that was to pander to the Conservative base. I wonder if the member opposite could tell me how many middle-income or low-income people would benefit from the Conservative Party's doubling of the tax-free savings account.

Income Tax ActGovernment Orders

11:40 a.m.

Conservative

Cathay Wagantall Conservative Yorkton—Melville, SK

Mr. Speaker, the majority of people with tax-free savings account have incomes of $80,000 or less. Sixty per cent of those individuals contributing the maximum had incomes of less than $60,000. I am not sure what the member opposite is calling the middle class. These are folks who do not have the potential right now to invest in their future.

This younger generation of Canadians understands that that will very much be their responsibility and are excited and hopeful when they hear the government say “We're going to make sure our economy is strong”. That would have been the case if the government were not planning on going into significant debt and there were still growing employment opportunities and these young Canadians were not facing the circumstances they are facing right now.

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11:40 a.m.

Liberal

The Assistant Deputy Speaker Liberal Anthony Rota

Before I continue to questions and comments, I just want to remind members that I am trying to listen from up here and with members' comments starting up on the side it really makes it hard for me. Therefore, if members do not mind thinking about me and my aging ears, I would appreciate it.

The hon. member for Elmwood—Transcona.

Income Tax ActGovernment Orders

11:40 a.m.

NDP

Daniel Blaikie NDP Elmwood—Transcona, MB

Mr. Speaker, Canadians made it very clear in the last election that there is an appetite for government to invest in infrastructure, whether physical or social infrastructure. However, I wonder about the wisdom of cutting government revenue to make those investments. Canadians are getting some money back in their pockets, but it is money the government is spending anyway and Canadian taxpayers then have to pay interest on it.

We saw that a little with the previous government too, where big deficits were already being run and taxes were being reduced. Taxpayers end up paying for the money they are getting back with interest. I just wonder about the wisdom of that.

Income Tax ActGovernment Orders

11:40 a.m.

Conservative

Cathay Wagantall Conservative Yorkton—Melville, SK

Mr. Speaker, I am proud to stand today as a Conservative who was part of a government that saw our country through one of the worst depressions the world has ever seen. It required going into some debt to survive that. However, our country is not facing that kind of a dynamic right now and it is very important that we make sure our economy is very robust by investing in Canadians, Canadian businesses, entrepreneurs, and innovators who can make the difference for Canadians.

Yes, we need the infrastructure. We were prepared to invest in that infrastructure in a way that would be doable.

Income Tax ActGovernment Orders

11:45 a.m.

NDP

Brian Masse NDP Windsor West, ON

Mr. Speaker, it is a pleasure to speak on Bill C-2 today. It is an initiative that New Democrats support going to committee. The reason we are doing so is because there are so many issues related to the incomes of Canadians.

The debate itself is healthy, because we have seen in society, during the years that I have been here, a movement away from the middle class, in two directions. One direction has been that some have become more affluent and are able to take advantage of certain government changes in laws, like the tax-free savings account and other types of measures put in place over the last decade. In the opposite direction, there are people with challenging circumstances, such as their wages being frozen, having their working hours reduced, a reduction in benefits taking place as collective agreements have been stretched to the limit, or benefits staying the same and cutting the workforce. That has very much been a priority of unions across this country, because they want to keep the same benefits and wages. However, there has been a stagnation with that.

We have also witnessed, on the other end against personal income taxes, massive corporate tax reductions that were supported by the Liberals originally, and then later by the Conservatives. That has left our economy without a lot of the tools that we normally would have had. There are a number of different industries, like the banks and so forth, that have benefited from a lot of tax reductions. Their response to those tax reductions has been historic layoffs and closures of facilities that actually cost Canadians more. There has also been a reward for them related to the products and services that they provide to customers on the other end. Therefore, there are those who are less affluent and cannot take advantage of their different circumstances.

Before I get into the connection to Bill C-2, I will take, for example, my bank, which I will not mention the name of; I also deal with a credit union. My bank allows its customers free banking services if they maintain a minimum of $1,000 in their accounts. It continues for the duration of a month. If customers go below that amount, then they pay a series of charges. In the riding I represent, Windsor West, there are a lot of people who do not have $1,000 in their accounts, especially if they are students or working-class families. They pay those additional fees, whereas people with the money do not have to. We have lost the income stream from the government's tax reductions and a whole bunch of dead money in our economy, and then, on top of that, service charges continue to grow.

The tax-free savings account, in Bill C-2, is something that New Democrats are happy to see the eventual reduction of. The parliamentary budget officer and others have raised the caution flag with regard to the way that this expanded. I know from representing my area and travelling to other parts of Canada over the years, whether it be for my seniors charter of rights bill or other initiatives on auto fairness, that there are a series of things I have run into. The common thing is that a lot of people do not even have enough money to save for their current school year, let alone the next one.

There is a fine college, St. Clair College, in my riding, as well as the University of Windsor, that have done their part in expanding services and competitiveness, and attracting international students and other Canadians to go there. In many respects, it revitalized some of our innovation. However, the reality is that most people who go to school there are just getting by or taking out loans to get by, let alone putting money in a tax-free savings account. Perhaps some of their family members are doing so with their help, but the ordinary Canadians I represent do not have that luxury.

The squeeze is on the middle class and those who are unemployed. As I mentioned, in the job service sector many people are moving to part-time or precarious work and basically just getting by. Unfortunately with this bill, we know from third-party experts and economists that 60% of this plan for a reduction in taxes for Canadians will not be enjoyed by the middle class or people with less earnings. Therefore, there is a series of Canadians who will be left out. Because of the way this scheme works, the wealthiest will have the benefit. That is a real problem that New Democrats want to address at committee. It is an issue that we have raised before.

There will be a vote later tonight on employment insurance, where there are many people paying into a system that does not provide them with any benefit whatsoever. In the example that I used in speaking about this issue earlier in the House, there are persons with disabilities. They only have a certain number of hours to do their jobs because of health restrictions. They pay into the system, and to my knowledge would never benefit from it because they would not qualify at the end of the day.

We have to be careful. People are still getting their heads around it. To this day, I run into people who say they do not want to go on employment insurance because they do not want to feel they are taking taxpayers' money. They like to get by on their own. However, what people forget is that employment insurance is their money that comes off their pay cheques, and the companies' money. That has nothing to do with the government, aside from the government deciding how that is disbursed, how it is actually given back to workers.

We set rules that disadvantage those who are in more precarious and part-time positions, and that includes women. We have a systemic issue within our culture and our society, even on the government programming side. We make lots of noise about being equality driven, but we still have rules in place that do not allow that to happen.

Who would not benefit from this bill? It is important for Canadians to realize some of the comparisons and who would not benefit whatsoever from this plan in terms of tax reductions. They are office workers who make an annual salary of less than $40,000 per year; they would receive nothing under this scheme. They are hairstylists, who in Canada basically earn around $28,000 annually. They will get zero. They are social workers, which I used to be in my previous working life. I worked for two organizations, on behalf of persons with disabilities and on behalf of youth at risk. Their annual salary today is around $44,000. They would get nothing. Some people in the process of trying to buy a home, who are trying to raise families and trying to get forward, would not be able to benefit from this plan.

We have cashiers. When we go to stores and see the people working there, they work hard doing what they need to do. In our economy in some places, we have had challenges with the retail sector and so forth. They earn $21,424 on average. Cashiers would get nothing back. That is a classic example. All of the people working in department stores, in retail shops, in drive-throughs, in fast-food chains, and all of these different businesses, would receive zero from the plan. To me, they are the people we should be rewarding with a tax reduction. These are the people who do not have the equity to easily afford some of the tax deductions that wealthier Canadians get. They do not earn income at the level to take advantage of some of the policies that have been put in place over the last couple of decades.

Waiters and waitresses earn less than $22,000 as an average wage. They would get zero. That is another group of individuals I would argue would not benefit from this tax reduction. They would get nothing at all. Nannies are another good example, and chefs and assistant chefs as well. They would not get anything.

Who would get income from this legislation? Our bank managers, who earn around $82,000 a year, would receive $555 in their tax season from this. They would receive that and also be eligible for the tax-free savings account. They would be in an income stream where they might be able to take advantage of it. It would be beneficial for them and their families. A lawyer, earning around $108,000 a year on average in Canada, would get $679. Members of Parliament in that same wage amount would get the cap, at around $680, as well.

I know my time is running out, but I want to hopefully create an opportunity at committee so we can work on some of the measures to ensure that all Canadians are included in this proposed tax reduction. We know it is going to come from the cost of borrowing, as the Liberals do not have the money coming in that they thought they had for this bill. Interest and payments on that money in the future is paid for by all Canadians, so all Canadians should be part of a tax reduction.

Income Tax ActGovernment Orders

11:55 a.m.

Winnipeg North Manitoba

Liberal

Kevin Lamoureux LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, what the member does not realize, or he did not state, is that there are millions of Canadians who will benefit. I also did not hear him make reference to the tens of thousands of manufacturing jobs, and those workers who would benefit by the bill. This is why the NDP have chosen to support the bill.

The member did not talk about the tens of thousands of teachers from coast to coast to coast who would benefit in tax relief from the bill before us. There are nine million Canadians who would benefit from the bill.

The NDP asks about those on very low income. Never before have we seen such a progressive national child care program, which we are going to be hearing a lot more about in a week or so, that would lift hundreds of thousands of children out of poverty.

These are the types of progressive initiatives that the Liberal Party talked about prior to the last federal election. What we are seeing today, through Bill C-2, is a piece of legislation that would help to implement the Liberal platform. It would lift children out of poverty and support Canada's middle class.

I appreciate that the NDP will be supporting the bill, but will the member not at the very least acknowledge the benefits that tens of thousands, if not millions, of Canadians, would receive by seeing this legislation pass?