Mr. Speaker, it is a great pleasure for me to participate in today's debate.
As hon. members know, our government came to office with a plan to grow the middle class and to grow the economy. Bill C-63 is the next step toward this goal.
The bill would help to make the tax system fairer and more efficient. This bill also includes measures to give federally regulated workers the right to request more flexible work arrangements from their employer, largely benefiting women, who continue to do the majority of unpaid work at home. Also proposed is the elimination of unpaid internships in federally regulated sectors that are not part of a formal educational program, and providing labour standard protections for unpaid interns who are part of an educational program.
Bill C-63 also provides yet another building block in our overall climate change strategy. Through the bill the government is taking action to ensure that Canadian exploration expense treatment for the oil and gas sector is effectively limited to unsuccessful exploration or early stage exploration where the linkage to success cannot reasonably be determined in the year the activity takes place. We believe these measures will be an important part of Canada's pursuit of a low-carbon economy.
If we look at the measures in Bill C-63, I think we can all agree that this legislation is an important step in our plan to build an economy that works for the middle class and those working hard to join it.
However, before I speak about the next steps in our plan, I would like to talk about how we got where we are today, and the signs that tell us our plan to build a stronger middle class and grow the Canadian economy is working.
First, let us look at what we inherited.
Just two years ago, the world economy was still in recovery. Canadians were feeling as though they were working harder than ever, but they just were not getting ahead. During the last election campaign we debated whether Canada was in or heading into a recession. There were grounds for that concern. The median real wage income of Canadians had barely risen over the previous 30 years.
The global economic environment was, and to a large extent still is, very uncertain. The fact is that when we talk to people across the country, there is a lot of anxiety that the next generation, our kids and grandkids, may not be as well off. Our government wants to ensure we create the conditions for all Canadians to succeed in a changing economy.
To get there, the government is committed to ensuring a healthy, thriving business environment and to protecting the ability of Canadian businesses to invest, grow and create jobs.
Let us look at where we are right now.
I would now like to focus on the state of our economy and the recent measures in the government's fall economic statement, which is a continuation of the government's plan put in place in 2015. Our past two budgets laid the foundation for this plan and we built on it in last month's fall statement.
The government's plan to invest in people and in our country's future is based on the belief that when we have an economy that works for the middle class, we have a country that works for everyone.
I think it is fair to say that there are many clear signs that the government's plan is working.
The Canadian economy is currently the fastest growing in the G7, with an average growth of 3.7% over the last four quarters.
This is due in large part to increased consumer confidence, a direct result of programs like the Canada child benefit, which puts more money in the pockets of moms and dads, so they can pay off debt, buy sports equipment for their children, or buy healthier food. Our government is providing a bit of breathing room for Canadian households that greatly need it.
Everywhere we look, there are signs of progress for the middle class.
Over 600,000 new jobs have been created since 2015, and the unemployment rate is nearly the lowest it has been in a decade. Canadian economic growth has accelerated sharply since the second half of 2016. Over the last four quarters, the Canadian economy has had its fastest rate of growth in more than a decade, and growth is forecast to be 3.1% in 2017, significantly above expectations at the beginning of the year.
These gains, coupled with a better than expected fiscal outcome in 2016-17, have resulted in a real positive improvement to our budget outlook.
In fact, Canada's fiscal outlook has improved by over $6.5 billion annually on average compared to what we expected back in March. The federal debt-to-GDP ratio has been firmly placed on a downward track, with Canada's net debt-to-GDP ratio projected to remain the lowest in the G7. Our government is committed to preserving Canada's low-debt advantage for current and future generations.
The actions the government has taken are having a real, positive impact on our economy and for all Canadians.
I would now like to expand on how our government's fall economic statement will keep us on this positive trajectory.
Canada's strong economy is giving our government the ability to reinvest the benefits of growth back into the people have who contributed most to that success. This is why we are strengthening the Canada child benefit, to ensure it continues to play a vital role in supporting families for years to come.
The Canada child benefit will be bolstered by annual cost of living increases starting in July 2018, which is two years ahead of schedule.
The government had previously committed to indexing the Canada child benefit to inflation as of July 2020. However, our economic growth and our improved fiscal record have allowed our government to achieve this commitment two years ahead of schedule, which is excellent news for Canadian families.
We are also putting money in the pockets of low-income Canadians by increasing the working income tax benefit by $500 million more per year as of 2019. This benefit will ultimately be 65% higher than it was when we came to power.
I remind members that the working income tax benefit is a refundable tax credit that supplements the earnings of low-income workers, the people who are working hard to get into the middle class, such as young, single workers who are struggling to carve out a place on the job market.
The working income tax benefit provides important income support and helps to ensure that work is rewarded. This $500 million enhancement announced in the fall economic statement is in addition to the increase of about $250 million annually that will come into effect in that year as part of the enhancement of the Canada pension plan. These two actions will boost the total amount the government spends on the working income tax benefit by about 65% in 2019, increasing benefits to current recipients and expanding the number of Canadians receiving that much-needed support.
This will give a needed boost to well over 1.5 million low-income workers as they work long hours, sometimes in more than one job, to advance their careers and support themselves and their families. Whether this extra money is used for things such as helping to cover the family grocery bill or helping to pay for work-related expenses, the improved benefit will help low-income working Canadians make ends meet.
We are also helping small businesses invest, grow, and create jobs by lowering the small business tax rate to 9% by 2019. We are making sure that Canada's low corporate tax rates serve to support businesses, not to provide unfair tax advantages to the wealthiest 1% of Canadians.
The investments we have made in our country's people, communities, and economy are producing results. They are putting more money in the pockets of those who need it the most, creating good, well-paying jobs, and giving Canadians more confidence in their future.
That is why we are doubling down on a plan that has been proven to work and reinvesting in the middle class, which, need I remind the House, was neglected by the previous government for a decade.
I would like to take a moment to discuss another measure in Bill C-63.
It is important for Canadians to have the confidence that our tax system is fair, simple, and efficient and that we have a growing and healthy economy. Initial action to implement changes from the comprehensive tax expenditure review conducted by the government were introduced in budget 2017. The review had a broad scope, which included corporate income tax expenditures, personal income tax expenditures, as well as goods and services tax expenditures. As part of the tax expenditure review, the government considered billed-basis accounting.
Billed-basis accounting is a method that allows certain designated professionals to declare expenses for tax purposes before the income related to those expenses is included in their revenue. It was eliminated in the 1980s for all professionals, except those in certain designated professions. Back then, those professionals could not access the small business deduction except under very limited circumstances, which put them at a disadvantage. That is no longer the case today.
With Bill C-63, the government is proposing to eliminate the option of using billed-basis accounting for income tax purposes for a limited group of professionals in order to avoid giving these professionals a tax benefit that other taxpayers do not have access to.
We intend to implement this measure in a fair and reasonable manner and give professionals the time they need to adjust and adapt. We are acting on the feedback we have received, and we are planning to extend the phase-in period to five years.
I would also like to reassure the House that this measure should not affect the legal services provided through legal aid or on a pro bono basis. It will not have any impact on the agreements regarding contingency fees, under which a lawyer is paid only if the client receives money. The Canada Revenue Agency has indicated that work in progress could be considered to have no value until a payment is made.
In summary, the government is committed to ensuring that the tax system puts everyone on an equal footing, and we are convinced that this measure will contribute to greater equity among professionals.
The government's plan will help strengthen the middle class and ensure Canadians have the support, resources, and confidence they need to succeed, create jobs, and grow our economy.
Economic growth is strong and because of that, we are in a position to do even more to help the middle class and those working hard to join it. We will ensure Canadians have the skills, training, and learning opportunities they need to compete and thrive in the rapidly changing global economy.
We are continuing to invest in public transit, our commercial networks, and cleaner water to keep our cities moving and to keep Canadians safe.
We will continue to build a better future for the middle class and all Canadians, no matter their circumstances. We want to ensure that they have a real chance to reach their full potential.