Debates of Sept. 19th, 2016

Income Tax Act

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, when we looked at how we could deliver the most effective tax change that would assist Canada's middle class, it was determined that Bill C-2 would be the easiest and most effective way of putting money back into the pockets of Canada's middle class.

If we contrast that to the tax incentive that the Conservatives were talking about in terms of increasing it, there are two distinct approaches. I would argue that our approach is far more direct and that millions of Canadians will benefit by it, which is far greater than what was proposed by the previous government.

[Yvonne Jones, Liberal, Parliamentary Secretary to the Minister of Indigenous and Northern Affairs]

Mr. Speaker, it is a pleasure for me to speak to Bill C-2. I thank my colleague from Winnipeg North for sharing his time with me today.

Bill C-2 would amend the Income Tax Act. It falls in line with what the Liberal Party said during the election campaign and what the Prime Minister said in subsequent days. Bill C-2 would reduce the personal income tax of many Canadians and allow them to have more money in their pockets. It also introduces new marginal tax increases to people at higher taxable income levels. Why anyone in the House of Commons would not want to support that is beyond me. Bill C-2 would allow more money to be held by families who need it, families in the middle-class tax bracket.

Bill C-2 is a good piece of legislation. It is good because it will help many middle-class families, and many income earners who fall into this bracket, to move forward and do things in their lives that they have not been able to because they were in higher tax brackets, losing more of their money and not being able to catch up.

With Bill C-2, our government is allowing middle-class families and income earners to catch up. We are giving them the break they deserve, and this is what Canadians want. It was a large part of the platform of the Liberal Party of Canada in the election. Canadians had an opportunity to have their voices heard at the ballot box, and they chose to have reforms made to the income tax legislation that would allow the middle class in this country to move forward. That is exactly what we are doing.

We are making changes around direct income tax adjustments and allowing more income tax earners to be in a lesser tax bracket. Higher income earners will pay a little more, which we asked them to do in a friendly way and they agreed. We also introduced the child tax benefit in July of this year. This Liberal government initiative allows more families to gain more money in child care benefits that are tax free. They no longer have to incorporate these benefits as part of their income, which was required by the former government and gave them less money in their pocket.

Our government is making that child care benefit tax free. We are bringing more balance to the child care benefit to ensure that families who need that benefit to care for their children will actually get the benefit. This means that people in the higher income bracket will be eliminated from the child care benefit. They can take comfort in knowing that those with lower incomes who need the money to support their children in their initiatives, schooling, careers, and in their lives, will have a little extra money to do that. This is about bringing more fairness and balance to Canadians right across the country.

The other thing we have done to complement the changes we are proposing in the Income Tax Act, besides the child care benefit, is the increase in the guaranteed income supplement for single seniors. This was a huge issue in the election campaign from aging individuals in our country who felt they needed an increase in their supplement to allow them to support themselves, especially widows and widowers. We introduced that benefit, which is going to help them substantially.

We also made improvements to the employment insurance program. We expanded it to include regions that were the hardest hit in the country at the time, including Newfoundland and Labrador, the province in which I live, and also Alberta. These two provinces have been going through huge transitions.

In addition to the income tax breaks, the child care benefits, and the increase in the guaranteed income supplement, we provided a reprieve for workers who have found themselves unemployed. We were able to make changes to the employment insurance program to help them in a difficult time.

However, we also need to look at how we are investing in capital infrastructure, which complements the strategy of where the government is going in lifting up people in our country and ensuring there is a greater balance.

When we look around the country today, we see in the first year of our mandate that we have already been investing money in transit, transportation, housing, and infrastructure, which the country has needed for a very long time. This is not just an investment for today but ensuring economic prosperity for the regions in which we are investing this money. That in itself is creating new opportunity and new jobs for people in many regions of the country, and they are seeing the benefits very quickly. They are seeing it in their homes, their pockets, and in their communities. I think that is very important.

The changes we are making to the income tax legislation, as I said, will ensure that those people who were at a personal income tax rate of over $45,000 a year will drop from 22% taxation to 20.5%. We will also introduce a new personal marginal tax rate of 33%, which will be for those with taxable income in excess of $200,000 a year.

The opposition members are critical because they know that what we are doing is right. It is the right direction to take. They also know that what we are doing is benefiting families. They had the opportunity to do this but chose not to. They chose to distribute the investments of the country in a different way. They provided more income relief for wealthy income earners than they did for low and middle-class income earners. We have chosen a different route. Our route is creating a better balance for Canadians right across the country.

I represent a riding that falls in the middle income level. I define that middle income level as people who make $40,000 to $45,000 a year to $100,000 a year. They are the people who work in our factories, mines, hydro power projects, schools, hospitals, firefighting and policing services. These are the middle-class earners of Canada.

We are saying to them that we recognize that over the last 10 years they have been falling behind and that we are now going to allow them an opportunity to start catching up, be a stronger part of the middle class, and ensure that their families have that opportunity. We are doing it through our income tax reductions, child care benefit, guaranteed income supplement to seniors, and our investment infrastructure programs, which are helping communities, businesses, and Canadians right across the country.

I would suggest that there is no member of Parliament that has any reason or rationale not to support the changes we are proposing to allow middle-class families to have more money in their pockets.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, I would like to thank the member for Labrador for her speech, but I think she neglected to tell Canadians one very important thing.

When the Liberals were on the campaign trail and first talked about this middle-class tax cut, they guaranteed that it would be revenue neutral, so that the money the rich paid would wash out in the wash. What the member has not told Canadians is that this will add to the deficit. It has been estimated by the parliamentary budget officer that it would be $8.9 billion over six years.

When the member was on the campaign trail, did she commit to her community that this would be a revenue neutral tax cut, because clearly it is not?

[Yvonne Jones, Liberal, Labrador, NL]

Mr. Speaker, what we indicated to people on the campaign trail, and are still indicating to people today, is that the changes we are making in the income tax legislation will allow them to have more money in their pockets.

The former government catered to the wealthiest of the wealthy in our society. It did not reach out to lift up those in the middle class.

We recognize that, and it is exactly what we are doing. We have made changes in a number of pieces of legislation to accommodate this. We are making good on our commitment in the election campaign, and we are ensuring that middle-class Canadians are going to benefit.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Speaker, I would like to pick up on the comment from the member for Kamloops—Thompson—Cariboo. This tax cut will cost Canadian taxpayers as a whole $8.9 billion over the course of the next four or five years.

How can the Liberal government condone such an expense when it does not even help those who really need the help most? This may not be a tax cut for the super wealthy, but it is a tax cut for the upper middle class, if not the upper class itself. Those who make $45,000 a year, and there are many, almost 60% of Canadians, will be left out of this tax cut. They will be the ones who will end up paying that $8.9 billion.

I wonder how the government can condone such a tax cut in light of the current situation in our country.

[Yvonne Jones, Liberal, Labrador, NL]

Mr. Speaker, first of all I think we need to realize that the tax cut the government is proposing today is not going to have a negative impact on anyone in society, other than those who may earn over $200,000 a year in income. That needs to be noted.

Maybe the New Democratic Party could tell us if it agrees with the approach in the legislation toward TFSAs. We will be reducing the contribution limit from $10,000 back to $5,500, simply because Canadians in the middle class and lower class were not able to take advantage of the TFSA. We see this as an opportunity for the government to save, not just today but in future generations of governance and taxation.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, it is a pleasure to rise in the House today to speak to this important bill and to welcome all members back to the House on the first day of the resumption of Parliament. I hope all of my colleagues had a good summer and are ready to get back to work on behalf of Canadians in all of our ridings.

Bill C-2 received first reading in the House on December 9, 2015, following the adoption of a ways and means motion. At that time the New Democratic Party voted in favour of Bill C-2 at second reading in order to be able to propose our amendments to make the bill progressive and actually conform to the rhetoric that accompanied it both during the election and in the House at that time.

Despite the support of various stakeholders, our amendments at committee were rejected. Therefore, we cannot support the bill at third reading as it currently stands and will be opposing the bill.

Bill C-2 amends certain provisions of the Income Tax Act, such as the tax credit for gifts, taxation on income splitting, the tax payable by a non-testamentary trust, the refundable tax on investment income, private corporations, the tax on assessable dividends, the limit on TFSAs or tax-free savings accounts, and most important, the tax rates Canadians pay on their income in this country.

The New Democrats stated our position on the two significant elements of Bill C-2: the amendment on the income tax rates and the amended TFSA limit. Our approach was careful and principled then, and it is careful and thoughtful now. Although we support the government's proposal to limit the TFSA contributions to $5,500, we cannot accept the amendments of the Liberal government to the tax rates, which will primarily benefit the wealthiest.

Let me put this in some context. After almost a decade of poor economic growth and misguided management by the previous Conservative government, working-class and middle-class Canadians and their families are working harder than ever, yet falling further behind. What Canada needs now is a government that will fight against this pattern and this direction, against growing inequalities. However, we find, when we analyze the provisions of the bill and the way the government is using tax rates, that the Liberals will do just the opposite.

The Liberals have continually said they have a plan to help Canadians, middle class and otherwise. They promised change: rapid, urgent, and positive change. However, since they came to power, the Liberals have largely ignored Canada's real middle class, and certainly, as I will show hon. members with numbers, they have absolutely ignored Canada's working class and low-income earners with the bill.

Bill C-2 should have been the Liberals' opportunity to move from rhetoric to action. Unfortunately, that is not what happened. The Liberals' tax plan gives nothing to 60% of Canadians. I listened carefully to my friend from Winnipeg on the other side, who invited us to take the bill to Canada's next election. When two-thirds of Canadians do not receive a red penny from these tax changes, and when they see that people earning more than $89,000 in this country receive the lion's share of these tax cuts while over 17 million Canadians do not receive a cent, I would be happy to take this into the election and debate my hon. friend on who the bill really benefits.

The government is proving every day to be one of celebrity, one of rhetoric, one of spin. Let us look at something surprising. Let us look at facts. Let us look at the numbers. The government is proposing to reduce the second personal income tax rate in this country from 22% to 20.5% and to increase the tax rate to those earning more than $200,000 from 29% to 33%.

This is how Canada's tax rates will look as a result of the bill. If people make $45,282 or less of taxable income, the current rate is 15% and the new rate would be 15%. They receive zero tax breaks from the bill. If people make between $45,282 and $90,563, the next bracket of taxable income, they get a tax cut of 1.5%. From $90,563 to $140,388, the tax rate is the same. From $140,388 to $200,000, the tax rate is the same. For more than $200,000, as I say, the tax rate would go from 29% to 33%.

An analysis of this Liberal tax plan reveals that it is in fact the wealthiest Canadians who will benefit the most from the tax reduction program. The Prime Minister's tax plan excludes Canadians who are not in the second income tax bracket, the large majority of Canadians who earn less than $45,000.

No one has to listen to me and we certainly should not listen to the spin doctors on the government side of the House, so let us see what the parliamentary budget officer says. The PBO's office said it is estimated that 17.9 million Canadians who will file income tax returns in 2016 fall within the first tax bracket. They have taxable income and will report taxable income of less than $45,282, and will, therefore, fall below the threshold set by the Liberals to benefit from any tax adjustment. Therefore, the Liberal tax proposal excludes the lowest 60% of wage earners, anybody making under $45,282.

According to the latest statistics available from Statistics Canada, the average Canadian income is $40,000, while the median income is $31,000. That means 50% of Canadians make $31,000 or less. Canadians in this country most in need, those whose incomes are equal to or less than the median or average incomes, will not benefit in any way from this Liberal plan. In fact, only people in the first, second, or third income deciles will see a drop in their taxes.

My hon. colleague on the other side of the House from Winnipeg North also mentioned that the best thing we can do for small businesses is to provide them with consumers. Every economist in the world will say that the people who spend the most of their disposable incomes are the working poor. They cannot afford to save. Every dollar given to a working poor Canadian is a dollar that will be circulated in the economy and spent at every business in our communities, yet the government has not given a penny to two-thirds of Canadians to spend in their communities or in small businesses. Why the government thinks that this proposal is going to stimulate small business, when two-thirds of Canadians will not have a penny in their pockets to spend in their communities or in small businesses, is beyond me.

Let us look at it the other way. Canadians whose income ranks in the highest 30% will be the main beneficiaries, while the wealthiest 10% of Canadians will pocket most of the money from these tax reductions. Even with the income tax increase for those earning more than $200,000, the Liberal plan still offers benefits that are three times higher for people earning $210,000 or more a year than for people earning $50,000.

An income tax reduction for the middle class should benefit a larger proportion of Canadians, in New Democrats' view. That is not the case with the bill. Full-time workers earning less than $23 an hour, which in my riding of Vancouver Kingsway is most people, will get no tax reduction, while those earning $100 an hour will get the maximum tax reduction. That is a funny middle-class tax plan from the Liberals.

Using numbers from the Government of Canada's job bank, let us turn again to another objective source that has illustrated who would benefit from these changes.

An office worker who has a median hourly rate of pay of $19 an hour would get zero from this tax plan. A hairdresser who has a median income of $13.25 an hour would get zero from this tax plan. A fish plant worker who averages $12.50 an hour in median income would get zero from this tax plan. A bank teller who averages $17.20 an hour in median income would get zero from this tax plan. A school bus driver who averages $20 an hour would get zero from the Liberals. A child care worker who makes $17.35 an hour in median income would get zero from the Liberals. The Prime Minister's nanny, who makes $18.20 an hour, would get zero from the Liberals. Even the Prime Minister's assistant chef, who makes $20 to $21.68 an hour, would get nothing from the Liberals.

Let us see who does get money from the Liberal tax plan. A lawyer who averages a median hourly income of $53.91 would get $679.22 courtesy of the Liberals.

A member of Parliament, who is hardly middle class when we make $170,000 a year base income, will receive $679.22. Let us stop and contrast that. A member of Parliament gets money back from the government, almost $700, and officer workers, child care workers, and school bus drivers get nothing.

That is the proposal from the Liberal government to make Canada's tax system fairer. I do not believe that any Canadian who hears those contrasts will agree that it makes our tax system any fairer.

Contrary to what the Liberals claimed during the election campaign, the revenues generated by the tax increase for the very wealthy will not be enough to finance their plan.

I notice that the Liberals consistently refuse to answer questions put by the Conservative opposition and the New Democrats to actually hold them accountable for the promise they made to Canadians during the election.

On this side of the House, at least, we believe that candidates ought to tell the truth to Canadians during elections. What the Liberals said to Canadians was that if they were elected, the tax cuts for the middle class would be revenue neutral and would be paid for by a tax increase for the wealthiest Canadians. They told Canadians that directly.

After the election, it turned out that the Liberals were out by billions of dollars. It has been estimated that some $7 billion of excess money will have to be borrowed to pay for the tax cut, because in fact, the Liberal math was wrong.

In terms of Vancouver Kingsway, I have done my homework. According to Statistics Canada figures from 2010, in my riding roughly 70% of individual income earners will see absolutely no benefit from this cut, because they do not report income over $45,282. In my riding, we have 25,635 people who reported income of over $45,000 and 58,480 who reported income of under $45,282. The median income in my riding of Vancouver Kingsway is $22,614, and the average income is $30,639.

I think my riding is typical of most members' ridings across this country. Let us forget the spin about the middle class and the spin by the Liberal government that everyone is going to do better. The numbers tell the truth, and that is that most Canadians will actually not see a dime from this tax proposal, but wealthy Canadians will.

I want to just turn to something that has not been mentioned, which is the gender impact. It is well known in this country that women, still in 2016, earn significantly less money than men do. It is well known in this country that women who work full time earn less than their male counterparts.

The numbers I found for Vancouver Kingsway bear that out. The median income for men in my riding is $25,532. It is $20,303 for women. It is a full $5,000 less. What that means is that this bill, which exacerbates the inequity between wealthy Canadians and poorer, working, and middle-class Canadians, is going to have a disproportionately bad impact on women.

I was at a conference a couple of days ago when the Prime Minister stood up and said, “Poverty is sexist.” That is true, but then his government, in this House, puts a bill in that will change the tax rates in this country that will disproportionately give advantages to men and disproportionately harm women because of the skewed nature of the tax changes.

I want to mention the changes to the TFSA contribution limit. On this, the NDP does agree with the government. The Conservatives wanted to raise the annual TFSA limit from $5,500 to $10,000. The Liberals, to their credit, campaigned against that during the election, and the New Democrats agreed with that. There are a number of reasons for that. The bottom line is basically that the TFSA, by increasing the amount of money individual Canadians can shelter from taxes, is a cost to the treasury. A cost to the treasury means that it takes revenue from the government needed to pay for much-needed programs that the New Democrats will fight for in this Parliament, like pharmacare, child care, and health care.

Moreover, it has been shown that because investors in our country can take already established investments and shift them to TFSAs, most people, by and large, putting money into TFSAs are not making new investments. They are simply shifting investments.

Finally, I do not know too many Canadians who have an extra $10,000 this year they can put into TFSAs.

I want to comment a bit about the New Democrats' plan and what we would do.

If we really want to make a difference in the country, we have to make an adjustment to the first tax rate. What the New Democrats proposed during the election, and what we suggest to this government, was that we would reduce the income tax rate for the first $45,282 of income from 15% to 14%. That way, 83% of taxpayers would see a change in the amount of tax payable. According to the parliamentary budget officer, nine million Canadians would benefit from this proposal who do not benefit from the proposal of the current government. This solution would not only benefit more taxpayers but the cost difference would be minimal. The difference, we would argue, could be easily recovered through a very slight half-percentage point increase in taxes for large corporations.

I would point out that the Liberals are indistinguishable from the Conservatives on this score. Canada already has an extremely low corporate tax rate of 15% for large, profitable corporations, and neither of those two parties proposes altering that at all. If we were to increase that by half a point, from 15% to 15.5%, for companies like the Royal Bank and Imperial Oil, large profitable companies that are making a lot of money in the country, we could actually put more money in the hands of working-class Canadians, who would then circulate that money in the economy and help stimulate small business, which, the New Democrats believe, deserve a corporate tax cut. That is not what the Liberals and Conservatives believe, though.

David Macdonald at the Canadian Centre for Policy Alternatives, Nicolas Zorn of l'Institut du Nouveau Monde, Stephen Gordon, an economics professor at Laval University, and Luc Godbout, professor and holder of the research chair on taxation and public finance at the University of Sherbrooke, are all absolutely ad idem on this issue. They have all crunched the numbers, and they all say the same thing: this amendment to Canada's tax laws would benefit the wealthy, would do nothing for the poorest Canadians, and is bad economic policy.

The New Democrats will stand in the House and continue to fight against this bad policy and fight for the millions of Canadians who deserve some tax relief and support from the government, as opposed to spin and rhetoric from a government that is more interested in celebrity and style than in actually helping the millions of Canadians from coast to coast to coast who are suffering in this economy.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I believe the member is not doing himself or his party a favour in the way he portrays the legislation or the Government of Canada's agenda. The budget came forward and Bill C-2 came forward. Bill C-2 specifically deals with a tax cut, between the brackets of $45,000 and $90,000, from 22% to 20.5%. It would also implement a tax increase, for those who make over $200,000, from 29% to 33%. What we are going to be voting on is that aspect.

The member wanted to focus on the fact that the Government of Canada has left out others. We see in the budget the Canada child benefit, which helps most of the individuals he says the Liberal government has fallen short on. His facts are just not correct, when we look at the budget combined with the legislation. The issue is whether the member supports the middle class getting a tax decrease and those making more than $200,000 an increase. That is the essence.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, it is funny. My hon. colleague seems to think that every person in Canada has a child and a family. They do not, do they? Pointing out this incredible inequity in the change of tax rates by saying “We have given Canadians a child tax credit” does nothing for low-income Canadians who do not have children. I take it that my friend would probably agree with that.

I guess what he is saying is that low-income Canadians with no children get nothing, but wealthy Canadians will benefit from this Liberal government. That is skewed logic.

I want to quote the parliamentary budget officer, who said directly that benefits of this tax cut will skew to higher-income, higher-wealth households.

David Macdonald from the Canadian Centre for Policy Alternatives, using data from Statistics Canada, demonstrated that middle-class families earning between $48,000 and $62,000 would gain only $51 a year, while families earning between $166,000 and $211,000 would receive $813.

My friend can keep saying the words “middle class, middle class, middle class”, but what the numbers tell us is that middle-class Canadians, whether they make $48,000, $62,000, or less than $45,000, will see hardly any money from this, but people who make $150,000 plus will. That is not the New Democrats' definition of “middle class”.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, I would like to go back to something that both the member and I have alluded to. On the campaign trail a year ago, we remember hearing the commitment from the Liberals on the tax cut they were going to provide. They very clearly said that it was going to be revenue neutral. We now know that there is a big “oops” in that calculation.

I wonder if he could talk a bit about the math behind it and who, ultimately, is going to actually have to cover this tax reduction.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, that is an excellent question from my hon. colleague. She is absolutely right. I may be old-fashioned, but I come from the school of thought that says that candidates, during an election, should tell the truth to the people they want to get votes from. I also think it is very important to create integrity in the system so that when people vote for a certain party, they can actually expect that the politicians will be true to their word.

The Liberals directly told Canadians during the election that their middle-class tax cut, as much as we can still call it “middle class”, which I think is not really accurate, would be paid for by a tax increase for the wealthiest Canadians. They were out by only a billion dollars, I think, and over the years many more billions of dollars. The problem with that is that when we are deficit financing, the government is effectively borrowing money to give to wealthy Canadians that Canadians of all income levels will have to pay for.

This was not just a one-off mistake. The Prime Minister also said during the election that we would have three modest $10-billion deficits, and he would balance the budget in the fourth year. With the very first budget tabled by the government, we have a $30-billion deficit, six more years of deficits, and no plan to balance the budget whatsoever.

They did not bring in 25,000 refugees by the end of the year. They did not bring in 25,000 government-assisted refugees. They are not restoring mail delivery to homes in Canada. I could go on and on with the broken promises of the government, but we have a whole session to do that.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Mr. Speaker, I read an interesting opinion piece in the paper a couple of days ago by Robin Sears. He said that one of the great facts of Canadian political life is that Liberals “always break progressive hearts”.

I did not come to this House to give myself a tax break, yet this bill is going to give me and everyone in this chamber $679. That is not the middle class I was sent here to represent. It is not the middle class I came to fight for.

Our friend across the way from Winnipeg North likes to keep talking about the child benefit. Yes, it pays out a maximum of $6,400. What he neglects to tell this House is that child care costs in British Columbia are double that, and there is a lack of affordable spaces.

I know my friend from Vancouver Kingsway is a great member of Parliament for his region, and I know that he has received feedback on this and many other Liberal bills. I would love to hear some of the feedback he has received from his constituents on the wrong direction the Liberal government is taking.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, I would like to thank my hon. colleague, who is doing an outstanding job for his constituents on Vancouver Island, for that question, because it allows me to raise the very critical issue of child care.

The Liberals, in previous governments, promised Canadians a national child care plan. In fact, I have often, in this House, heard Liberals blame the New Democrats for the Liberals not bringing in a national child care plan. How that is the case when they had 13 years of majority governments to do so is beyond me, but I have heard that.

Here we are. The Liberal government is a majority government. I challenge the Liberal government to actually bring in a national child care plan that makes sure that every single parent in this country can drop off his or her children at a quality, accessible, affordable child care. Let us see if the government can produce that instead of bragging about throwing money at families that is not sufficient for them to actually take care of their children.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, it is a pleasure to be back in the House. I hope everyone took the time this summer to reconnect with their constituents to find out what was happening in their ridings. I also hope they took a bit of time to enjoy our very short summers in Canada.

It is interesting that we are back here today debating Bill C-2. I noted an article yesterday in which it said that the Liberal government had the most unproductive Parliament in two decades in what it had managed to move forward with. Perhaps Bill C-2 is an example.

Bill C-2 was introduced in December of last year and we are now at third reading. That really illustrates the Liberals' inability to move what they say are important pieces of legislation through the House. However, I would rather have no legislation than bad legislation, which Bill C-2 is.

Because it has been so long, as a quick refresher, Bill C-2 contains a number of measures such as the change in the marginal tax rate, the TFSA reduction in limit, and of course some other things. There are general clean-up measures dealing with such things as charitable donation tax credits and income earned by trust, among others. Clearly what we will hear from the debate is that those clean-up measures are relatively uncontroversial. Really the issues around the marginal tax rate and the TFSAs are the most problematic.

Again today the debate has predominantly focused so far on the Liberals proudly proclaiming that their middle-class tax cut was a significant move forward. However, the Liberals really forgot to tell Canadians two very important things. One is that they never have clearly defined the middle class. I think most Canadians, as they listen to this, might be thinking that as the middle class, members of Parliament will see $700 where people who earn $23 an hour will see nothing.

I will be sharing my time, Mr. Speaker, with the member for Renfrew—Nipissing—Pembroke.

We have a very poorly defined middle class, and I do not think many of us would really call members of Parliament middle class who are deserving of the biggest tax cut. As Conservatives, we certainly support tax cuts in whatever form, but the bigger problem is that tax cut and what it would actually do. The government had a big oops in its math. The Liberals went to Canadians and said they were going to give this tax cut and that it was going to be revenue neutral because they were going to increase taxes for higher income earners. That was the commitment and the promise the Liberals made to Canadians. Lo and behold, they are in government and it is “wow, we've made a really big math error in that particular calculation”. That is an $8.9 billion error that will be over six years. The mistake the Liberals have made is over $1 billion a year.

We also had a commitment that they would have a $10 billion deficit. It has gone to $30 billion now. This is just one of the measures that has added to the deficit that will create problems into the future.

This is not a promise kept. This is a promise that has been broken to Canadians because it is not revenue neutral. It has been said in the past that debt is deferred taxes. For the $600 or $700 to someone who earns $160,000 a year, their children and grandchildren will have to pay. To be quite frank, the government is irresponsible to put that kind of debt and deficit on our children and grandchildren when it is not necessary. It is quite shameful.

The other piece I want to focus some comments on is the tax-free savings account. There really is no justification for the way the Liberals have structured their marginal tax reduction. They have reduced the ability to contribute to a tax-free savings account from $10,000 down to $5,000 plus a bit of change.

Let me talk about what the tax-free savings account is all about. This is from a Department of Finance document that looks at tax expenditures and evaluations.

It states:

Ensuring that the tax system provides meaningful incentives to save supports a more efficient allocation between current and future consumption. In particular, the accumulation of personal savings allows Canadians to improve their living standards and better align income and consumption when planning for important life events such as retirement [or purchasing a house]....[It is] increasing the funds available for capital investment, which leads to a higher capacity to produce goods and services.

The evidence from the program shows that Canadians have taken advantage of these tax-saving opportunities. It is a popular means of saving for Canadians of all ages. I would commend to anyone who is interested in the TFSA and its impact. This is an excellent document, and it certainly talks about the benefits.

What is the Liberals' argument with respect to why they had to reduce the tax-free savings account? They said that it was only benefiting the rich, that not everyone could put money into it and therefore it was not a good thing to do.

There are 440,000 GIS recipients who have put $4.3 billion into their tax-free savings accounts. That gives us a really good example. I think anyone could imagine that living on old age security and the guaranteed income supplement is a challenge for any senior. However, let us say that there are seniors who have a house but really no major means of support. They then sell their houses and have tiny nest eggs that they can put into their tax-free savings accounts and have the interest that they make to support them during their retirement and very difficult times. Having that allocation is a very important mechanism for seniors putting a little from the sale of a house into a GIS, or young people in Vancouver or Toronto. Right now we know how difficult it is for young people to get into the housing market. Therefore, it is a real step backward and a real shame to see the measures the government has taken in that area.

The Liberals do not like allowing us the personal freedom to make choices about our own money. They want to enforce an increase in the Canada pension plan, which will not only enforce increased contributions from individuals but also employers. They like a plan that the government controls. For some reason they are adversely opposed to plans that Canadians control. Perhaps if people do not want to put extra money into the CPP, they see the TFSA as an opportunity to put money into their savings. Therefore, there is not a one size fits all.

I am very concerned that the government is showing a massive predisposition toward spending taxpayer money that it does not have, deficits, debt, and creating a one-size-fits-all government-run program that is not good for meeting the needs of Canadians in all of their diversities.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, there is a natural question that should be asked when a Conservative member speaks to a tax-reducing legislation. We need to make it very clear that Bill C-2 does give tax relief to millions of Canadians. Traditionally, I would have thought the Conservatives would have supported a tax cut. The core of Bill C-2 is just that: a tax cut to Canada's hard-working middle class and those aspiring to be a part of the middle class.

Therefore, as a member of the Conservative Party, does she not believe she should be supporting tax cuts? I would have thought that would be a given. How does she justify to her constituents that she does not support them getting a tax break?

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, that is a good point. We do support tax cuts in many forms, but we also put a high priority on a balanced budget. Again, debt is deferred taxes. Liberals are taking a tax cut now and moving it to future generations. Our government worked very hard to see Canada through the global recession and get back to balanced budgets. The Liberal government spent $8 billion over the summer on gazebos and assorted items. It has miscalculated the money the tax cut would cost. Liberals have a huge spending problem and we need to be very concerned.

[François Choquette, NDP, Drummond, QC]

Mr. Speaker, I am happy to be taking part in this debate because I am worried about the working class. People work so hard, but, unfortunately, they still have trouble making ends meet.

The Liberal government is not really doing more for the middle class. Canadians earning $31,000 per year, the median income, will not benefit from this tax cut, which is really for those earning between $89,000 and $200,000 per year. The people who are having the toughest time making ends meet are not the ones who are going to benefit the most from this tax cut.

It is sad to see this kind of measure from the Liberal government after it promised to work for the middle class and those who need it most. That is not what it is doing. We were also told the plan would be revenue neutral, but, unfortunately, revenue will drop.

Who will once again end up paying for this poor fiscal management?

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, it is not very often that we agree with the NDP, but my colleague has some excellent questions. We talked earlier about the math problem the Liberals had with the execution of their middle-class tax cut being $8.9 billion, over a billion dollars a year of math problems. They also have a definition problem. They have never been able to clearly articulate what the middle class is and why they are defining and giving the biggest benefit to those making between $100,000 and $200,000 a year. I am sure most Canadians if asked if that were the middle class would clearly say this is not what they expected in tax cuts and in revenue neutral.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, my colleague clearly articulated how the Liberals are back to using gun registry math, where we had a $2 million gun registry balloon to $1 billion. That is a debate for another day seeing as how they are bringing that one back.

I would like my colleague to tell us how the reduction of the TFSA maximum amount from $10,000 per year to $5,500 a year is working against the middle class.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, the Department of Finance has an excellent report on the uptake of Canadians and how the TFSA has been a very important vehicle for them. Again, whether it is for young people perhaps who want to save for their first home, whether it is people in the middle class who are looking to save toward retirement, the argument that because they cannot put $10,000 a year in is not a good argument. There are some years where people can put in $10,000. To have that limit has been a very important vehicle for all.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, as the member of Parliament for Renfrew—Nipissing—Pembroke, I thank the electors of my constituency for this opportunity to represent their interests in the affairs of this nation.

Today we will talk about paying for bad spending, like this legislation, Bill C-2. It is one of the reasons Canada has gone from having a budgetary surplus to having a huge requirement to raise taxes.

The legislation we have before us today is the result of election campaign promises. These measures could easily have been incorporated into the federal budget, but for whatever reason of political expediency that motivates the government, we are dealing with budget measures, but not from the March budget.

Some election promises are made to be broken. Unfortunately for Canadians, the election promises that were broken were the wrong ones, starting with a decision to triple the deficit from $10 billion to $30 billion in each of the government's first three years, with no plan to get Canada out of deficit. Deficits are nothing more than deferred taxes.

The Prime Minister went across the country during the campaign saying, we'll take the money from rich and we'll give it to the middle class for income tax cuts, and don't worry, it will not come out of the Treasury. It will be a revenue-neutral bill. The Prime Minister repeatedly and directly stated that he would introduce a $3 billion tax cut for the middle class, paid for by a $3 billion increase on high-income earners. The fact of the matter is that, as usual, the Liberals got their numbers completely wrong. There is no such thing as a revenue-neutral Liberal tax cut.

Now Canadians understand why the measures in the legislation before us today were sliced out of where they should have been, in the March 22 federal budget. That is because someone's tax cut on the one hand must be paid by someone else on the other hand, Canadians now realize that the title of the budget document was misnamed. It should really have read, “Paying for Bad Spending”.

By the Minister of Finance's own admission, when he is not in denial of the fact that our Conservative government left the nation's finances in a budgetary surplus, there will be a revenue shortfall of almost $2 billion from the measures contained in this legislation. Where will that money come from to pay for this campaign promise? It has to come from existing revenues, or the government will create an even larger tax increase requirement.

Starting April 1, the federal government is spending $444.4 million to hire a new army of tax collectors to go after average Canadians, with a five-year quota of $2.6 billion. For anyone who cannot afford to hire an expensive accountant or lawyer to defend themselves, or who has so much money that they can afford to use overseas tax shelters, the Liberal government will spend $351.6 million with a five-year collection quota of $7.4 billion to collect so-called tax debt. In round numbers, it will be spending almost $800 million in total to squeeze $10 billion more out of the pockets of Canadians.

The CBC tells us that Montreal-based clothing maker Gildan earned $396 million in profit last year, but paid just over $6 million in taxes, a rate of about 2%. Drug maker Valeant, based in nearby Laval, Quebec, booked $1.1 billion in profit in 2014 but paid only $110 million in tax.

If the plan was to go after companies that use overseas tax shelters to avoid paying their fair share of tax, Canadians would support that. However, rather than paying for the tax changes in Bill C-2 by going after the large corporations that make extensive use of lawyers, accountants, and tax shelters, the Liberal government has targeted campgrounds—not any campgrounds, just the small mom and pop campgrounds that are typically family owned and operated.

The Liberal government even mentioned a number, five employees, on page 220 of the budget, implying that a campground with fewer than five full-time employees is a tax planning scheme. This is the arbitrary Liberal threshold to be considered a small business. Forget that many of these small campgrounds consist of a husband and wife doing all the work, or that the short camping season in Canada is only a season. Someone has to pay for the Liberal campaign promises.

This is what the executive director of a camping organization in Ontario had to say:

Campgrounds are active, labour-intensive recreational businesses that provide an affordable vacationing option for Canadian families and international visitors.

These recent Canada Revenue assessments not only put these small, mostly family-owned businesses at risk, but also sends a terrible signal to the entire industry just days before the 2016 camping season is about to begin....

The Canadian Federation of Independent Business has stated that “Requiring five staff to qualify for the small business tax rate is deeply insulting to the entrepreneurs who are often a part of the daily operations of their businesses. It's called the small business tax rate. Being too small should not be a reason to exclude anyone.” It is called paying for bad spending.

The Minister of Finance in his opening remarks regarding Bill C-2 stated the government consulted widely before introducing the measures in his legislation. He claimed to have asked Canadians directly how the government could support them and grow the economy. The Minister of Finance even claimed to have met people from all walks of life, including small business owners. He obviously skipped meeting with any small business entrepreneurs who operate family campgrounds.

As much as I know that the government likes to say it consults Canadians, here are a few comments from average Canadians on how they feel about the federal government going after small family-owned campgrounds to pay for its wild spending.

If a company with fewer than five employees is not a small company, then what is, besides campgrounds that are still reeling from having to charge property tax on seasonal trailers? Surely the CRA must have bigger fish to fry.

There is this comment: “I am not running a passive small business. I am running a business. One that I work seven days a week. My campground is host to campers from Germany, Holland, France, Switzerland and darn near every state and province in North America. Passive I am not. I am however the owner of a small business and I resent that you suggest otherwise in order to rob me or any campground of more tax dollars. I do not believe that small family-run businesses should pay more tax than billion-dollar corporate businesses. I, along with my family, have camped most of my life and I'd like to continue doing so.”

As tax collection targets of the Liberal government, imagine the shock of family campground owners when they receive collection letters telling them they no longer are considered small businesses and owe tens of thousands of dollars in reassessed taxes. A campground owner in southwestern Ontario recently received a collection letter stating that he owed $250,000 in reassessed taxes. Another campground owner received a notice of assessment for 2013-14 showing that $36,000 more in taxes was due, plus $250 per month in interest charges alone. Campgrounds will be closing. This move to go after small businesses like family campgrounds is not unexpected.

The second campaign promise to be broken by the Liberal government after breaking the first by blowing the deficit sky-high was to renege on its promise to lower the small business tax rate. The Prime Minister demonstrated his contempt for small business by claiming that small businesses were nothing more than tax scams. He believes they are set up as a way to avoid paying taxes. That comment is an insult to the husband and wife team who work 60- to 70-hour weeks to manage a family campground during the short summer camping season. Camping is family time, getting kids off video games and out into nature and the great outdoors. The last affordable family vacation will now be taken away from Canadians.

Since I brought this change in taxation policy to the attention of the people who would be the most adversely affected by it, I am pleased to recognize the many individual campground owners, as well as the many municipalities, who have expressed their support for any action taken to rescind this unfair taxation.

We are supposed to be more active. What better way to be healthy than spending the day outdoors? Campgrounds are an escape for people who live in urban areas. Not everyone can afford a cottage. These businesses need to be recognized for what they are: small family run businesses. Small business is the backbone of our nation. Canada was built on appreciation for the great outdoors. The government should stop over-taxing and allow our kids to enjoy themselves in nature.

It is truly unfortunate that the first budget of the new regime should be so wrong for Canada. I urge the Liberal Party to really think about the harm it is doing to Canada with its policy of high deficits and raising taxes.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, my question continues from my previous one, which the member responded to by talking about deficits. The member seems to be convinced that the Liberal government intends to have nothing but deficits when in fact the reality is that when the Conservatives took office, they inherited a healthy multi-billion surplus, and then ran deficits in every year since 2009. Until today the Harper government had a deficit, so it deferred.

Why does the member now believe that a deficit is bad when the Harper government itself created a $160 billion plus deficit? It does not make sense.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, again, the Liberals are in denial. Our government left this country with a surplus at election time.

Because the Liberals like to consult so much, on climate change for example, and load up the meetings with their Liberal riding association members, is that another way to funnel money now? It used to be foundations during the Chrétien and Martin years, but now it is these organizations run by their electoral district associations. However, because they like to consult, I am going to provide more consultation from our campground owners.

One them says, “I have grown up with my parents running a family campground, run by my parents alone, with the occasional help of my sister and I. There is no 'one size fits all' but in our area, campgrounds are not investment opportunities, but instead a way for many families to make a living by offering those outside of the area a small piece of heaven.”

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

Mr. Speaker, earlier today we heard from the member for Winnipeg North. He accused the Conservatives of being completely out of touch with the middle class. The member expressed the opinion that the Conservatives did not do enough to tackle inequality during their term in government.

When we look at the tax break that is being proposed, we know that those who earn $45,000 or less will get nothing, and those who earn between $100,000 and $200,000 will get the most. We know that even those who are earning between $100,000 and $200,000 need a break. Housing prices are going through the roof. However, Canadians are fair, and I do not think we will find a Canadian who earns between $100,000 and $200,000 who thinks it is fair that they will get a tax break and someone who earns less than $45,000 will get nothing.

Does the member think that the middle-class tax break being proposed by the Liberals is fair? Would she support the New Democrats' call to include the bottom tax bracket in the Liberal middle-class tax break, or scrap it altogether and do something more productive like create a national child care plan?

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Mr. Speaker, clearly the Conservative Party represents the taxpayers. We have to fight for tax cuts and against tax increases. One of those increases is the small business tax credit. The Liberals, instead of lowering the amount that we had in mind and pledged to do during the election, did not. That really amounts to a tax increase.

I want to share another comment from another campground:

...I support small family run campgrounds. Regardless of how many people they employ, the surrounding municipalities benefit greatly from all the campers they draw in from other areas to contribute to our local businesses and attractions. Many of the people hired to work at the campgrounds are returning college and university students who rely on these summer jobs to pay for their education.

They, as my colleague said, are in the lower-income bracket and need the work.