Mr. Speaker, I will be very brief on this. I want to raise a follow-up point to my question of privilege that I raised last week on the premature disclosure of Bill C-14, an act to amend the Criminal Code and to make related amendments to other acts. When I did so, the chief government whip rose in his place and offered his sincere apologies on behalf of the government, and of course, I do want to thank him for that. However, I do not believe it is sufficient to leave it at that.

I trust, Mr. Speaker, that you will allow the House to decide this matter, and hopefully the House in its infinite wisdom will send the matter to the Standing Committee on Procedure and House Affairs for further study.

In my question of privilege, I referred to the case in 2001 when the government House leader at the time, the Hon. Don Boudria, also apologized for the premature disclosure of the contents of a government bill. The Speaker in that case allowed a motion to be proposed referring that question of privilege to committee.

Members from all sides of the House then, and it would appear that members from all sides of the House today, believe that this is a grave matter deserving of further consideration. We do not know what the circumstances are. The chief government whip himself admitted he does not know what the circumstances are. He stated on Thursday:

I am not aware of the details surrounding the media report referred to by the member, but I want to assure the House that our government takes any breach of the privilege of members and of the House very seriously.

I can tell the House that at no point was anyone authorized to publicly discuss the specific details of the bill prior to introduction.

If no one was authorized to discuss the bill publicly, then we need to find out how this happened. The chief government whip went on to say that the “government will work to ensure that this does not happen again”, which I think members will appreciate. However, this is not a matter solely for the government. This is a matter involving the privileges of this House.

This matter should be reviewed by a parliamentary committee. If the government gets to the bottom of this internally or has new policies to offer relating to the confidentiality of bills, I expect it to explain all that to a standing committee of this House.

In short, an apology, while appreciated, is indicative of the seriousness in which the government views this matter. Of course, the opposition does as well. The apology does not take away the contempt that exists and, specifically, since we do not know who did it, I do not suppose the government whip was taking on any of the blame himself. It clearly seems to be someone else, and that apology cannot be made on behalf of an unknown person. We need to see if it is possible to find out who did it and what the circumstances were, and have the committee report back to the House.

When you are finished deliberating and have heard all the arguments, Mr. Speaker, if you find in our favour, I will be prepared to move the appropriate motion to send this to committee.

Alleged Premature Disclosure of Contents of Bill C-14PrivilegeOral Questions

3:05 p.m.

Liberal

The Speaker Liberal Geoff Regan

I thank the hon. member for Regina—Qu'Appelle for his further intervention on this question of privilege, and I look forward to getting back to the House very soon with my ruling on this matter.

Government Response to PetitionsRoutine Proceedings

3:05 p.m.

Whitby Ontario

Liberal

Celina Caesar-Chavannes LiberalParliamentary Secretary to the Prime Minister

Mr. Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to one petition.

Interparliamentary DelegationsRoutine Proceedings

3:05 p.m.

Liberal

Joël Lightbound Liberal Louis-Hébert, QC

Mr. Speaker, pursuant to Standing Order 34(1), I have the honour to present to the House, in both official languages, three reports of the Canadian parliamentary delegation of the Canadian branch of the Assemblée parlementaire de la Francophonie.

The first concerns the 31st Regional Assembly of the America Region of the APF, held in Lafayette and Lake Charles, United States of America, from July 27 to 31, 2015. The second concerns the Bureau Meeting of the APF, held in Siem Reap, Cambodia, from January 28 to 30, 2016. Lastly, the third concerns the Meeting of the Executive Committee and the Meeting of the Network of Women Parliamentarians of the APF, held in Tangier, Morocco, from February 24 to 26, 2016.

Interparliamentary DelegationsRoutine Proceedings

3:10 p.m.

Liberal

Nathaniel Erskine-Smith Liberal Beaches—East York, ON

Mr. Speaker, pursuant to Standing Order 34(1), I have the honour to present to the House, in both official languages, two reports of the Canadian Group of the Inter-parliamentary Union, respecting its participation at the annual parliamentary hearing at the United Nations, held in New York, February 8 and 9, and a steering committee of the 12+ Group held in Brussels, Belgium, on February 2.

Veterans AffairsCommittees of the HouseRoutine Proceedings

3:10 p.m.

Liberal

Neil Ellis Liberal Bay of Quinte, ON

Mr. Speaker, I have the honour to present, in both officials languages, the second report of the Standing Committee on Veterans Affairs, entitled “Main Estimates, 2016-17: Votes 1 and 5 under Veterans Affairs, and Vote 1 under Veterans Review and Appeal Board”.

Natural ResourcesCommittees of the HouseRoutine Proceedings

3:10 p.m.

Liberal

James Maloney Liberal Etobicoke—Lakeshore, ON

Mr. Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Natural Resources, entitled “Main Estimates, 2016-17:”

Procedure and House AffairsCommittees of the HouseRoutine Proceedings

3:10 p.m.

Liberal

Larry Bagnell Liberal Yukon, YT

Mr. Speaker, pursuant to Standing Orders 104 and 114, I have the honour to present, in both official languages, the seventh report of the Standing Committee on Procedure and House Affairs regarding membership of the committees of the House.

If the House gives its consent, I intend to move concurrence in the seventh report later this day.

Mr. Speaker, if the House gives its consent, I move that the seventh report of the Standing Committee on Procedure and House Affairs presented to the House earlier this day be concurred in.

Procedure and House AffairsCommittees of the HouseRoutine Proceedings

3:10 p.m.

Liberal

The Speaker Liberal Geoff Regan

Does the hon. member have the unanimous consent of the House to move the motion?

Procedure and House AffairsCommittees of the HouseRoutine Proceedings

3:10 p.m.

Some hon. members

Agreed.

Procedure and House AffairsCommittees of the HouseRoutine Proceedings

3:10 p.m.

Liberal

The Speaker Liberal Geoff Regan

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

Procedure and House AffairsCommittees of the HouseRoutine Proceedings

3:10 p.m.

Some hon. members

Agreed.

Procedure and House AffairsCommittees of the HouseRoutine Proceedings

3:10 p.m.

Liberal

The Speaker Liberal Geoff Regan

(Motion agreed to)

Instruction to Committee on Bill C-2Routine Proceedings

3:10 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

moved:

That it be an instruction to the Standing Committee on Finance that, during its consideration of Bill C-2, An Act to amend the Income Tax Act, the Committee be granted the power to divide the Bill in order that all the provisions related to the contribution limit increase of the Tax-Free Savings Account be in a separate piece of legislation.

Mr. Speaker, as everyone knows, we are currently examining Bill C-2 at the Standing Committee on Finance. It was the first bill introduced by this government and it amends the Income Tax Act. When you look at the contents of the bill a little closer, it is clear that it contains two separate measures. The first measure has to do with changing the tax rates. The change this government is proposing targets the second tax bracket, whose tax rate would drop from 22.5% to 20%. The second measure has to do with the contribution limit for tax-free savings accounts, which the Conservatives had increased to $10,000 a year. This bill drops that limit back to $5,500.

I would like the House to instruct the Standing Committee on Finance to separate the bill so that the two issues can be addressed separately, because they are two fundamentally different issues.

Let us look at the TFSA, the tax-free savings account. Many people think or are under the impression, due to the way it was presented to the Canadian population, that it is basically a savings account for retirement, that people put money aside in that account after paying taxes on it, and that it can actually grow with interest and returns, and they will eventually be able to take that money out tax free because they already paid tax on it.

If we look deeper into the TFSA, we see it is a bit more complicated than that. It is more complicated because it is not only money that can be put in this account. People can put all kinds of things in this account. They can put stocks, bonds, derivatives, and all kinds of financial tools.

The concern with raising the ceiling to $10,000 was the fact that it became something other than a retirement savings mechanism. It became, basically, a way to shelter returns on financial investments. If I invest in the stock market and make a significant return on my investment, I will not pay the same income taxes as most of the population. With this money, I will be taxed only for half of what I would be earning, and I will only pay taxes on a portion of that half, while people earning incomes through work will actually be taxed on the entirety of their gains. We are in a situation right now where capital gains have a different tax status from income tax gains, basically.

When the ceiling was raised, there was a possibility that it could be no longer used as a savings mechanism but as a slush fund, in which people would deposit money, play the market with it through a variety of financial tools, and eventually escape the capital gains tax altogether. This possibility, I would submit, is not available to the large majority of Canadians. Those who have the means to play the stock market or the derivative market is actually a very limited number of people.

Many analysts who are studying the TFSA and the impact of the increased limit have been concerned about this. The Parliamentary Budget Officer, among others, estimated that the limit increase would have some serious adverse effects. In his update of the analysis of the TFSA limit increase, he estimated that by 2080, the long-term fiscal impact of the TFSA would reach 0.65% of the GDP. That is almost 0.7%. We are constantly being told in the House that it is impossible for Canada to meet its international aid commitments of 0.7%, because there is not enough money. However, this TFSA limit increase would have nearly hit this objective, but just a small part of the population would have benefited. The Parliamentary Budget Officer noted this as well. He looked at the distribution of TFSA benefits by wealth.

If we divide the population into groups, each representing a 20% wealth bracket, we see that the 20% representing the wealthiest households would receive a greater tax benefit than the remaining 80% of families who are not high-wealth households.

Therefore, we see that the Conservatives' proposal was extremely detrimental to the country's fiscal situation. In fact, it opened the door to the use of this mechanism not only as a retirement savings tool, but more so as a tax shelter for capital gains. The capital gains tax is already much lower than taxes on people's income, for example on working income. The concern that is being raised by many is that instead of being a savings mechanism, it almost becomes a rather significant tool for tax avoidance, and it will not be used for the purpose it was intended when it was introduced and passed in the House.

That is one measure that the government finally wants to reverse. Instead of keeping the 2015-16 ceiling of $10,000, the government wants to bring it back down to $5,500. That is one measure we agree with. We floated the idea during the election campaign. We believed that the amount of $5,500 was sufficient for reaching retirement savings goals.

In fact, depositing $5,500 for ten years, for example, will yield $55,000 plus interest, which is tax free. That is in addition to the other existing tools, such as RRSPs and the benefits people will have access to at 65, such as old age security and savings under the Canada pension plan or the Quebec pension plan.

The TFSA is an additional mechanism that can be used, a tool among many others. We believe that the $5,500 ceiling is adequate.

Now, there is a second measure in Bill C-2 which is extremely different from the ceilings of the TFSA. That is the modification of the tax brackets. The bill proposed to change a second bracket.

For those who might be listening at home, right now we have four tax brackets in Canada. The first one applies to income of $11,000 to about $45,000, which is at 15% right now. Then any income between $45,000 and about $90,000 is taxed currently at 22%. Then income of $90,000 to about $135,000 is taxed at 26%. Over that amount, income is taxed at 29%.

The bill makes two changes. It decreases the second bracket, so for all revenue, all income from $45,000 to $90,000 the rate is decreased from 22% to 20.5%, and it adds another bracket for those earning over $200,000 that will be taxed at 33%.

During that debate and during the campaign, I was actually a bit surprised at the low level of understanding of how our tax system works. That reduction on the amounts between $45,000 and $90,000 will not only affect those earning a total of between $45,000 and $90,000, but it will actually be applied on all income over $45,000.

Right now, somebody earning $150,000, an ordinary member of Parliament, for example, who earns about $135,000, will actually have a 1.5% reduction of his or her taxes on all the income between $45,000 and $90,000. Before $45,000, that income will be taxed 1.5% less.

Many people are under the impression that people earning over $90,000 will not be affected. On the contrary, they get the full tax reduction at that level.

We are going through the analysis. Much analysis has been done, including by the parliamentary budget officer. What we are seeing is that while the Liberals, during the campaign promised to have a middle-class tax cut, it is clear that those earning less than $45,000 will not see a single cent of that tax reduction. It is clear. It only affects people earning over $45,000.

I have been told in no uncertain terms that those who earn $35,000 to $45,000 might legitimately claim to be members of the middle class, which is a very difficult term to define. One way to define it is to look at all the income divisions in Canada, to exclude the 20% who earn the most, the 20% who earn the least, and that would give us a middle class that is anywhere between $20,000 to $60,000. That would be, roughly, what the middle class is in terms of income per year. There is a large chunk of that group who would not get a cent of that tax reduction. Therefore, to call this a middle-class tax cut is, in my mind, misleading.

There is a second part of it, which was supposed to pay for the lost revenues. That is the new tax bracket of 33% for income over $200,000. We know, and the government was forced to admit it, that it will not pay for the tax reductions. We all agree on that. Not only will it not pay for those tax reductions, but even people making an income over $200,000 would still have an overall tax reduction, even though this was supposed to impose more on them, because they still get the full tax reduction of that second bracket. That means someone earning $210,000 would still have an overall tax reduction. Someone earning $215,000 would still have an overall tax reduction. Is that what we mean by a middle-class tax cut?

For those of us on this side of the House, there is a problem. We agree with one large measure that would, if it is not addressed right now, have significant fiscal impact on the Canadian government. On the other side, we disagree with the measure that we find is misleading and which is not achieving the aims that were presented to the Canadian population especially during the election.

In addition, we still wanted to be constructive, since Canadians elected this government in part because of its promise to lower taxes for the middle class. We respected the verdict and we made a proposal to the government. Rather than excluding a large portion of the middle class, rather than simply reducing the second tax bracket, let us reduce the first tax bracket, the first level of income at which people have to start paying taxes. This tax bracket starts at approximately $11,000 because people are given a basic exemption that is not taxed. We proposed to reduce that tax bracket from 15% to 14%, a 1% reduction. What would that do? It would allow people who really belong to the middle class to benefit from this tax reduction. It would allow people who are currently getting a 1.5% reduction on income over $45,000 to have a 1% reduction on a similar income. It would make it possible to ensure that people who are earning $210,000 a year are not being given a tax cut. This is a series of measures that I believe all Canadians would agree with.

For reasons that cannot be explained, the government is opposed to this measure. So be it. However, I do not think that the government can disagree with the fact that the two measures in question are totally separate issues. I think that each one should be examined on its own merit. The Standing Committee on Finance has done some of the work. I also believe that it is in the government's best interest to move in that direction. We are offering the government an advantage on a silver platter. The media had a field day when these measures were presented to the Canadian public. We are offering the government the opportunity to hold two separate debates and two separate votes on the measures that it is presenting, measures it is proud of. It would be really worthwhile for the House to be able to vote on whether the bill should be divided. I know that I presented some extremely technical information, but it is hard not to get technical when we are talking about income tax. Finally, the two measures have completely opposite effects.

It goes to the notion of transparency and the notion of accountability as well that the House could actually pronounce itself separately on those measures.

We will have that chance in the finance committee. Bill C-2 is only 10 clauses long and we will do a clause-by-clause study. We will vote clause by clause in the finance committee, so we will have the opportunity to demonstrate in committee which clauses we are in favour of and which we are not.

Since Bill C-2 is the first bill presented by the Liberal government and it is one of the key measures that it wanted to bring forth to the Canadian population, it is important that the House have the opportunity to do the same and to vote separately on those arguments. It would be beneficial for the trust that the population puts in the Liberal government. It goes to the issue of credibility as well. It would go toward contributing to the answer to the question that many have asked so far.

Since we voted on the ways and means motion on which we could not divide per se, people were under the impression that starting on January 1, they would have a tax reduction if they considered themselves part of the middle class. Starting on January 1, when they saw their pay slips, they might have been surprised not to see any changes. They still do not understand.

I have not really heard the government so far in this debate talk about the technical aspects of it publicly. I hear the answers given either by the minister or parliamentary secretary saying that the government has given the middle class a tax cut, period.

This calls for some clarification. Here in the House, there are 338 MPs who represent all Canadians. The government would do well to clarify this. We are giving the government the opportunity to do that so we can debate these two points on their merits.

That is why we moved this motion to divide the bill into its two main parts. These main parts encompass all of the other elements, such as changes to the law and the tax credit formula for charitable donations. That formula generally uses the highest individual percentage, which will be changed, so it will have to be changed too.

This is not a very complicated issue. Can we divide the bill in two so as to deal with changes to the tax-free savings account and the tax brackets separately? That is what we are suggesting to the government.

I hope the members of the House will support this so we can clarify the work the Standing Committee on Finance is now doing and ensure that we are accountable and transparent to Canadians.

Instruction to Committee on Bill C-2Routine Proceedings

3:30 p.m.

Liberal

David Graham Liberal Laurentides—Labelle, QC

Mr. Speaker, I am just wondering why the member for Rimouski-Neigette—Témiscouata—Les Basques wants to debate a motion regarding a bill that he has already agreed to send to committee. He voted in favour of Bill C-2 at second reading on March 21. Why does he now want to change a bill he recently voted for? The member already had the right to vote for or against the clauses in the bill. There is a whole section of committee appropriately referred to as clause-by-clause consideration for this very task. The bill has already been referred to committee. I do not see why he is now writing new conditions for his support.

Why will the member not let the committee do its work and hold its own debate rather than pushing for unnecessary delays?

Instruction to Committee on Bill C-2Routine Proceedings

3:30 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, I thank my colleague for his question.

I want to clarify something: this is not a concurrence motion, but rather a motion of instruction. The House has the power to instruct the committee on the drafting of its report, to have the report tabled here in Parliament.

I am not actually a member of the Standing Committee on Finance, but I have heard murmurs of what is going on there. Yes, the committee will do a clause by clause, but it is still a committee. It is made up of one NDP member, three Conservative members, five Liberal members, and the chair. There are 338 members in the House. This is about something as fundamental as a substantial change to our tax system. We are talking about billions of dollars. The parliamentary budget officer estimated that over six years, this tax cut will cost $9 billion.

As for another, completely different issue, which has to do with changing the contribution limit for tax-free savings accounts, this measure could cost the Canadian treasury as much as $132 billion by 2080. Both of these measures will have a considerable impact.

That is why, if members really want to do the right thing, the House should take note of the report to be tabled by the finance committee and, in order to have all the information available, instruct the committee to separate the bill in two.

Instruction to Committee on Bill C-2Routine Proceedings

3:30 p.m.

Conservative

Marilyn Gladu Conservative Sarnia—Lambton, ON

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

I agree with what my colleague has said, that we do not see a lot of openness and transparency from the government. It says it is a middle-class tax cut, but, as the member has pointed out, it does not apply to some of the middle class, and then the rest, the wealthy, are getting an advantage. I do not think that is open and transparent and clear to Canadians.

I also think that the math was bad, because it was supposed to be revenue neutral. When the government added up the number of people who were going to get the tax cut, it should have been able to figure out the amount of money to make it neutral, but the government is $1.7 billion short every year.

With respect to the tax-free savings account, I was interested to hear the member say he agreed that it is a good savings vehicle. I think that is true. I see a lot of seniors in my riding who have to take their savings out of their RRSPs and put it in TFSAs to keep their savings protected.

I wonder, then, if we removed the ability to put stocks and the things the member is concerned about into TFSAs, would he be willing to increase the cap on it?

Instruction to Committee on Bill C-2Routine Proceedings

3:35 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, honestly, I think that is certainly something worth looking into. I cannot really answer that question without weighing the tax implications of such a measure. However, I would at least be willing to consider or study it.

As to the first part, I would like to get back to who wins and who does not win on this measure, even those who are making over $45,000, at which point the tax reduction starts to apply. Those numbers came from David Macdonald and were confirmed by other economists. That is from the Canadian Centre for Policy Alternatives.

He said that those families earning between $48,000 and $62,000 a year would make an average of $51. That is the remainder of the middle class, as defined by the income brackets. Those families earning between $166,000 and $210,000 a year will not get an average reduction of $51; they will get an average reduction of $813.

This is why this measure actually deserves to be voted on on its own merits.

Instruction to Committee on Bill C-2Routine Proceedings

3:35 p.m.

NDP

Gord Johns NDP Courtenay—Alberni, BC

Mr. Speaker, I want to the thank my colleague for his in-depth work and for bringing this forward.

I, also, have gone back to my riding and talked to people. There is huge support for keeping tax-free savings accounts and for bringing it back to a reasonable amount that future generations can afford.

However, when I talk to people—and it does not matter what their income level is—they do not think it is appropriate that a government that ran on a platform of fairness and inclusivity would go ahead and ignore taxpayers earning up to $45,000 and believe that it is fair that they do not get a tax break. I talked to people of all income levels, including people who are earning over $90,000 a year, and they think it is wrong.

The Prime Minister goes out across the country and says he wants to help and the government wants to help lift those who are not in the middle class to join the middle class, and clearly this bill does not do that.

We need fairness. One part of this bill is supported by many Canadians, the tax-free savings account. However, when it comes down to tax fairness, the members across the floor need to go into their ridings and ask their own constituents whether they think this is fair. They will quickly find out, if they are listening and doing what they promised to do, which was to consult their own constituents. I am hearing across this country that it is time for the Liberals to take another look at this measure.

I want to thank the member for bringing this proposition forward and I want to ask him how many Canadians he thinks will not benefit from this bill as it is presented through the tax proposal. Could the member talk about how many Canadians are not going to benefit from this proposal?

Instruction to Committee on Bill C-2Routine Proceedings

3:35 p.m.

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, that is actually a very important question.

Time after time we hear the parliamentary secretary, and at times the Minister of Finance, boasting that nine million Canadians will get a tax cut under this plan. What they are not saying, though, is that 14 million will not get any tax cut under this plan, and most of them are earning under $45,000 a year.

Among that nine million, we have countless individuals who are making over $90,000, who we could argue are part of the upper middle class, and a large number making up to $217,000, at which point they finally start paying more in taxes rather than getting a tax reduction. They are not part of the middle class but they are part of that nine million.

Let us keep that number in mind. I said 14 million, but actually it is more than that: it is 15 million to 16 million, because we have 24 million taxpayers in this country. If we take 24 million less nine million, it is 15 million, so 15 million Canadians will not get a tax cut.