Mr. Speaker, I rise in the House today to discuss Bill C-2, an act to amend the Income Tax or, as I like to call it, the Liberals' tax cut in name only.
There are many things to be said about this bill. For starters, the tax cut, while sounding good in a press release, is nothing more than a PR ploy. I want to first note the fact that this tax break is another in a string of broken promises by the Liberals. I recall the warm summer months, and I do recall the warmth fondly being here, and the beginning of a long and growing election. One of the promises made by the government was that the new tax plan, a plan that would cut taxes for the middle class, would be made revenue-neutral through a tax hike on the wealthy. The wealthy were defined as those who make $200,000 or more. However, surprise, the tax plan is not revenue-neutral, and in fact will cost Canadian taxpayers well over $1 billion per year, year after year.
The finance minister himself conceded that the plan will leave a staggering $1-billion annual hole behind, and this is from the head of the government's finance department. Further, a report from the parliamentary budget officer estimates the cost to be close to $1.7 billion per year, adding almost $9 billion in debt over the next six years. This broken promise proves that the government's plan was grossly miscalculated. It is clear that for the Liberals, numbers are a challenging thing to deal with.
This tax plan would completely eliminate the $1 billion surplus that the previous Conservative government left behind, as confirmed by the “Fiscal Monitor” in Finance Canada. I would normally favour tax cuts, but what Canadians are getting is a future tax hike. It is a tax cut being paid for by deficit spending. By borrowing more money to pay for this tax cut, the government is slightly reducing what individual taxpayers are paying now, in exchange for a future hike in taxes. This hike in taxes will surpass the small decrease they are receiving now. It is akin to taking out a bank loan and thinking that the money is an increase in income. It is not. Interest payments on the money borrowed to finance a $9-billion deficit over the next six years will add millions upon millions of extra dollars to what the government owes, which in turn means more money that the taxpayer will be forced to pay.
This tax cut simply does not make sense. Why pay a little less now for a larger tax hike later? In the world of the Liberals, we do so because it makes the government look good. It makes it look like it is saving Canadians money, when in reality it is sticking it to future taxpayers. This so-called middle-class tax cut amounts to savings of mere pennies a day at the lower end of the income scale, rising up to a whole $3 a day of savings at the top end.
What would it offer those making below $45,000 a year? It will offer nothing. There are 17-million Canadian taxpayers who make less than $45,000 a year and will receive absolutely nothing from this tax cut. Sixty-six per cent of all Canadian tax filers will get nothing from this tax cut. There are 338 members of Parliament in the House who will benefit from this tax cut, but not those below $45,000 a year. It is not often that I agree with my NDP colleagues, but, like them, I question how the Liberal government could overlook 66% of Canadians who make less than $45,000 a year and will receive nothing but higher debt from this tax cut. This is not a middle-class tax cut paid for by the 1%. It is simply cynical Liberal rhetoric used solely for election purposes.
It is not just the fact that this tax cut is nothing but a phony one; it includes much more than that. This bill would effectively slash the savings vehicle that gives those with low to medium-income levels a chance to get ahead. The bill would slash the tax-free savings account from $10,000 to $5,500. We Conservatives understand the importance of saving and investing. Frankly, our tax system is often a disincentive to the lower middle-class income earners when it comes to saving. The tax code would treat interest and income from savings as yet another lucrative pool of money that the government could get its hands on.
The TFSA limit at $5,500 a year and then at $10,000 a year was fair. It allowed for both lower and middle-class income earners to save without worrying that the gains made from interest or rising stock values would be washed away by taxes. Doubling the TFSA was a chance for those at the bottom of the economic rungs to climb up. However, never let a good program that benefits Canadians get in the way of the Liberals' chance to play politics for their own gain.
Let me quote from the Liberal website, which is still up, about TFSA. It states that TFSAs are “tax breaks for the wealthy — like the doubling of the TFSA limit, which does nothing for the middle class.” Yet, 73% of those who maxed out their TFSAs in 2013-14 were making less than $80,000 per year. Sixty per cent of those who maxed out their TFSAs made less than $60,000 per year.
What about those horrid one-percenters who the Liberals claim were the biggest benefactors of the TFSAs? Just 5% who maxed out their TFSAs were from this despicable 1%.
The government is trying to change the ability of Canadians to save for their future. Through Bill C-2, Liberals are now saying that those in the middle class should in fact pay more taxes on the money that they save. Rather than giving low- and middle-class income earners the freedom to save up to $10,000 a year, Liberals are saying that $5,500 is a proper amount. If one is able to save more, then clearly one is rich enough to pay more taxes, yet 60% of Canadians who maxed out their TFSAs make less than $60,000 a year. Still they are told it is a tax break for the wealthy, so they are not allowed to save more, tax-free.
This has affected many Canadians who have come to rely on these savings accounts in planning for their future: students saving for higher education; families saving to start a family or for a down payment on a house; entrepreneurs saving for a business; parents saving for their children; and, more importantly, seniors saving to stretch their savings into retirement. These changes will make life less affordable for these Canadians who are trying to save for their vulnerable years. This will be the Liberal legacy: taking away opportunity for wealth generation for Canadians.
The bill embodies the Liberal ideology of higher taxes, higher debt, and higher deficits. It highlights the financial illiteracy of the current government. To Liberals, debt and deficit are great things. Taxing people more is a great thing. This is in stark contrast to what our previous Conservative government did.
Under our leadership, Canada was prosperous, with the wealthiest middle class in the world. Canada was an island of stability in a turbulent world. We had a proud legacy of tax fairness and cutting taxes. When in office, our Conservative government reduced taxes more than 140 times, bringing the federal tax burden to the lowest level it has been in 50 years. To put it in perspective, the Maple Leafs were still winning Stanley Cups the last time the tax burden was this low. We did this through measures that were targeted and responsible. We did it while ensuring that when taxes were cut, they were cut for good. It is not like what the current Liberal government is doing, which is cutting today with more to pay in the future.
All in all, the bill is simply irresponsible. It would put an even bigger hole in our budget, pile on more debt for future generations, and cost Canadians more in the long run. It would also take away the economic freedom of Canadians to be able to save and invest in their already taxed hard-earned money, tax-free.
It is for these reasons I will not be voting in favour of the bill.