Madam Speaker, the member said that her son played hockey, which is not inexpensive, and that she benefited from the tax credit. As a kid, I did not play hockey because it was too expensive and my mother's revenue did not qualify for a non-refundable tax credit.
That is the difference in approach between the previous government and our government. The Conservative government focused on boutique tax credits that would help some but not all and often not those who needed it the most, like my mother when she was raising me. That is the starting point where there is a difference in approach between the Conservatives and our party and our government.
It is with pleasure that I rise in this debate to speak to Bill C-394, which will amend the Income Tax Act by providing a non-refundable tax credit of 15% on income earned from the employment insurance maternity and parental benefits program. The proposed amendments would also make it possible to carry forward the credit or any unused part of the credit for a period of one year, and to claim it in the following taxation year.
We understand the good intentions behind this bill and share most if its values. However, Canadians must be able to count on a government that will help create good, well-paid jobs that support a strong economy and that offer families opportunities to prosper. It is important to note that Bill C-394 misses the mark in that regard.
The proposed tax credit is not an effective means of achieving the objective set out in the bill, which is to offer help to all parents who take leave to care for a newborn or adopted child. That is one of my many concerns regarding this proposal.
We believe in supporting parents who need help with the high cost of raising kids, and helping kids have the best start in life. The member for Regina—Qu'Appelle, through his PMB, wants to continue the Harper practice of boutique tax credits that benefit some but not all, while we are helping everyone by providing more to the middle class and to those who need it most. In fact, under Bill C-394, the following groups would not even qualify for the non-refundable tax credit: almost all of those who are self-employed; those who do not pay federal personal income tax; those who do not qualify for EI maternity or parental benefits. Our approach, however, puts more money every month directly into the pockets of nine out of 10 Canadian families, helping lift hundreds of thousands of children out of poverty.
Even the Parliamentary Budget Officer has voiced some reservations, mentioning that given the tax credit is non-refundable, not all families would have sufficient income to claim their total eligible amount in 2018-19. The PBO also estimates that this tax credit would result in forgone revenues of $607 million in 2018-19 and a future fiscal liability of $261 million that could be claimed in future years.
On this side of the House, we have taken action to strengthen the EI system to better support new parents. Mothers can now access maternity benefits up to 12 weeks prior to their expected due date. In addition, parents can now choose to receive parental benefits over a longer period at a lower benefit rate.
In budget 2018, we have also announced a new employment insurance parental sharing benefit that would give greater flexibility to parents by providing an additional five weeks of EI parental benefits when both parents agree to share parental leave. Taken together with our government's investments in early learning and child care, we have a plan that is working for Canadian families.
Here is another concern I would like to highlight.
It is best to amend the Income Tax Act as part of the budget process. Doing so enables the government to consider all the options, to balance priorities, and to make new fiscal commitments, but only if they are affordable. This means we can continue to offer the programs and services Canadians need while keeping taxes low for middle-class families.
That goal is especially relevant in the case of Bill C-394, which could be a $1-billion line item according to the Department of Finance. That cost will probably go up, plus the tax credit is for just one aspect of the employment insurance benefit system.
Bill C-394 has many more shortcomings that could result in much more paperwork and compliance issues. For example, unless the provinces choose to bring in parallel measures, all income earned in a given province will still be taxed on those amounts.
Once again, we see a major flaw in this bill. Although it aims to help parents who receive EI parental or maternity benefits, it offers nothing to parents who do not receive such benefits when they take leave to care for a newborn or newly adopted child. Self-employed workers, people with no insurable earnings and people whose income is too low to be taxable would receive no tax relief under the proposed credit.
The government does not believe that Canadian families would be well-served by a wide range of highly targeted tax credits that benefit certain people, but that do nothing for those who may be most in need. That is why, over the last few years, we have eliminated poorly targeted and ineffective tax expenditures. The proposed parental tax credit falls squarely into that category.
The government wants to ensure that the federal tax system and the benefits that are part of it are fair and effective, and that the system works for all Canadians, but that is not the case with the proposal before us.
The government has implemented a plan that helps the most people through, among other things, the Canada child benefit and the strengthening of the EI system to better support new parents.
Since 2016, Canadian families have received additional support through the Canada child benefit. Not only has that benefited Canadian families, but it has also lifted hundreds of thousands of Canadian children out of poverty by giving more money each month to low- or moderate-income parents to help them cover the high costs of educating children.
As well, the Canada child benefit is entirely tax-free, unlike the former child benefit system. The Canada child benefit is also simpler, more generous, better targeted and gives more help to the people who need it the most.
Approximately 3.3 million families with children receive more than $23 billion per year under the Canada child benefit. Approximately 54% of families who receive the maximum benefit amount are single-parent families and, in 90% of cases, are single mothers.
For example, a single mom of two children aged five and eight with a net income of $35,000 in 2016 will have received $11,125 in tax-free Canada child benefit payments in the 2017-18 benefit year. That is $3,500 more than she would have received under the previous child benefit system. That is important to mention. That amount makes a big difference in the lives of many families, single-parent and others, across the country, which the measure proposed today does not do.
Under the bill accompanying budget 2018, our government is strengthening the Canada child benefit by indexing the benefits each year to follow the increase in the cost of living, as of July 2018, two years earlier than planned.
The Canada child benefit helps families invest in the things that give kids a good start in life, like a safe living environment, healthy food, music lessons or sports camps. As well, to support greater gender equality at home and in the workplace, budget 2018 proposes to create a new employment insurance parental sharing benefit. Such a measure has been in place for years in Quebec and has had very conclusive results: 83% of fathers take parental leave. That benefit will result in additional take-it-or-leave-it weeks of EI parental benefits when both parents agree to share parental leave. This measure should be in place by June 2019.
At a time when Canada has a strong and growing economy, the government is making smart and necessary investments to ensure that the middle class, including all parents, continues to benefit from that growth. We want growth and prosperity to be inclusive.
The Canadian economy has been booming for two years. Canada has the strongest growth in the G7, 600,000 jobs have been created and the unemployment rate is at its lowest in 40 years. It is important for that prosperity and that growth to benefit the most people and for the social elevator to work in Canada.