Mr. Speaker, I rise on behalf of my people of the riding of Renfrew—Nipissing—Pembroke in this unfortunate debate regarding the latest tax target of the federal government, the 13.5 million Canadians who have private health care plans.
Increasing the tax burden on ordinary working Canadians represents a fundamental shift from the tax policy of our previous Conservative government. Under a Conservative government, the policy was to decrease the tax burden on ordinary working Canadians, particularly Canadians in the low to mid-income range.
While giving lip service to the middle class, Liberal policy favours wealthy Canadians, the type who can afford to pay the high admission cost to the pay-to-play fundraisers used by lobbyists to gain special access for preferential tax treatment.
The tax changes in the last Liberal budget resulted in the maximum tax break going to individuals with income between $89,000 and $200,000, with some people with an income over $200,000 seeing their taxes reduced also. So much for believing anything this government says when it comes to tax fairness. The Prime Minister's vapid talking points on the middle class is another fake promise from a party that wrote the book on fake news.
One of the first acts of our government was to create the parliamentary budget officer. The PBO is a non-partisan agency with a mandate to provide financial information to parliamentarians and all Canadians in a factual manner. The PBO has documented for all Canadians the fact that low and middle-income earners benefited the most from Conservative tax policy. Conservatives returned billions of tax dollars back to Canadians, and we did so with a balanced federal budget.
Those tax changes included reducing the GST for all Canadians, a tax reduction that has been wiped out by the federal carbon tax and the decision by the Liberal Party to increase the tax burden on families by eliminating Conservative family-friendly tax credits. Our tax changes, as noted by the non-partisan PBO, were progressive, benefiting low and middle-income earners the most.
The PBO identified low and middle-income earners as households where the annual income was between $12,200 and $23,300 a year. Those incomes are much less than the $90,000 the government thinks is middle class. The irony is that the wealthy friends of the Liberal Party, who attend the Liberal pay-to-play fundraisers, are some of the high-income earners who fled the country with their capital when the Liberals took office, in the largest flight of capital since records began to be kept.
Low to middle-income earners enjoyed a real increase in their after-tax income at a rate higher than the richest 10% of Canadians, with Conservatives in government. Conservatives are the best friends of millions of everyday Canadians with just an average size paycheque.
Canadians, for the first time, are net creditors of the United States and have much to lose by the amateur way the government is conducting relations with our largest trading partner.
The Liberal tax targeted at health plans is the latest example, like the elimination of the family-friendly tax credits, and demonstrates, once again, the Liberal Party appetite for new taxes is insatiable. It will not stop until every last dollar in the pockets of taxpayers has been gobbled up.
The latest tax target, the subject of today's supply motion, is employer-sponsored health plans. The Liberals are looking to treat health plans as income, and tax them as income.
Health plans cover important preventive care measures like vision care, mental health services, prescription drugs, and physiotherapy. Taxing health plans could very well end up costing taxpayers money in addition to health care costs. As health care is a provincial responsibility, it is a sneaky way of implementing a tax grab and then downloading the social cost of this tax policy onto the provinces. It is sort of like the carbon tax two-step the feds just negotiated with the provinces, so the provinces would get blamed for their new tax on everything carbon taxed.
When the Province of Quebec began to tax these health plans, companies cut back and the number of people with additional health coverage dropped. With an aging population, the last thing we need is for Canadians to have less health coverage.
Just as with the Netflix tax, the Liberals are trying to spin this new tax by saying it is about fairness. For Liberals, the fair solution to any problem is for everybody to pay higher taxes.
Once again, the reckless spending of the Liberals is putting Canadians' health at risk. We need to tell the Prime Minister that health plans should not become the latest Liberal tax target. Liberal plans to tax employer-sponsored health plans will be especially painful for retired Canadians on fixed incomes.
Some companies still offer health benefits to retired employees. While more companies require pensioners to pay for portions of their health benefits, they still provide large tax-free benefits. According to a Conference Board of Canada report, the average cost to a company to provide a plan is about $8,330. Depending on how much pensioners contribute to their health plans, they could have an additional tax burden of $800 to $1,600 per year.
For pensioners on fixed incomes in my riding of Renfrew—Nipissing—Pembroke, already facing the January 1, 2017, federally mandated Kathleen Wynne carbon tax, this new health tax could wipe them out financially. If they opt out of the health plans to avoid being hit with this tax, they put their health at greater risk.
Seniors' health is already being put at risk by energy poverty. They do not have the luxury of avoiding the cold by spending a lavish holiday on a private island paid for by a wealthy friend in the Bahamas, as the Prime Minister did. The Liberal Premier of Ontario wants seniors in my riding to spend their winters in a cold, dark house, because the high cost of electricity means they are afraid to turn on the lights or the heat.
Retired Canadians paid tax all of their working lives, and much of it went to pay for Pierre Trudeau's reckless spending. Having worked hard their whole lives, now they will be punished for the son's reckless spending.
If this new health tax could hurt any of the Canadians who are listening to this debate, I ask them to share this information with anyone else they know who could suffer from this tax as well. We can stop the Liberals from sneaking this new tax into this budget, but only if more Canadians know about it and speak out.
The Liberal scheme to tax employer-sponsored health plans would disproportionately harm employers. The Liberals have never been fans of small businesses. They attacked them during the election. The Prime Minister cancelled planned cuts to the small business tax rate, and is now telling some businesses, such as family-owned campgrounds, that they are too small to qualify for a business tax rate for small business. If that is not enough, taxing health plans might hammer the final nail into the coffins of many employees of many small businesses.
When Quebec started taxing employer-sponsored health plans, it saw a 20% drop in the number of businesses providing coverage. Broken down by size, 26% of the companies with fewer than 20 employees stopped providing health plans, while only 7% of the companies with 500 or more employees dropped their health coverage.
After hearing from a number of small business owners who are worried about being the latest Liberal tax target, it is easy to understand why this tax will burden small businesses more than large corporations. Small businesses that can afford to provide health benefits do so by purchasing group insurance plans. The more employees enrolled in the group plan, the cheaper it gets to provide coverage to each employee. A minimum number of employees is required to qualify for a group plan, and it could be that if someone opts out the minimum level for a plan would be too low for anyone in the business to be covered. What is worse, if the health plan gets more expensive, the Canada Revenue Agency, which the Minister of Finance empowered in the last budget to raise billions more in taxes by increased tax enforcement, might argue that the value of the benefit has increased and tax those left in the plan even more. If the tax rate goes up, more people drop their plans, and the group plan costs go up, on and on in a downward spiral until the company drops the plan altogether.
Just like the Liberal carbon tax, a tax on private health care and a Netflix tax will raise prices for Canadians while undermining innovation and leave us at an economic disadvantage.
Bad spending does not justify tax increases. The time has come for the current government to quit mortgaging the future of our young people.