Mr. Speaker, I am very pleased that the Reform Party is giving us an opportunity to deal with the important issue of tax equity and tax fairness for Quebec and Canadian taxpayers.
As you probably know, tax fairness has always been a concern for the Bloc Quebecois. Since the 1993 election campaign, we have never stopped stressing the need for a personal and corporate tax system that is based on fairness and equity.
In November 1996, the Bloc Quebecois released a study on corporate taxation which looked at tax expenditures for businesses, that is the provisions included in the Income Tax Act to allow businesses to pay less federal tax.
Less than a year later, we tabled an in-depth report that reviewed personal income tax and tax expenditures, and in which we showed the evolution of that tax component since the Carter report, at the end of the sixties, and the obvious injustices we found in the tax system, particularly for middle income taxpayers.
We also proposed corrective measures to the Minister of Finance, who was favourable to the report when it came out. These measures are aimed at making the federal taxation system fairer to middle income earners and a bit less generous for taxpayers earning $250,000 and up, for instance, or for millionaires and billionaires.
At the time, we analysed the tax spending of individuals and concluded that there were $4 billion dollars of tax resources spent on tax advantages for individuals that were outdated, exemptions that no longer served the purposes for which they had been designed.
We took these $4 billion in tax exemptions and reallocated them within the system. We also generated over $2 billion in savings that could be put towards tax relief for low and middle income families and correcting inequities in the system, such as those denounced by the Reform Party this week.
The Minister of Finance was quite impressed by our analysis and set up a task force that held closed door meetings for over one year but apparently looked only at corporate taxation, not individual taxation, because he did not want to spoil things for his rich millionaire friends.
This group, headed by Mr. Mintz, an Ontario academic, tabled its report last year. It has been on the back burner ever since. This may have been a good idea, because what it contained was not necessarily what was desired, at least as far as a good number of the recommendations were concerned.
In response to a very serious need for fair taxation, the Minister of Finance struck a bogus group that turned out a bogus report, which led to bogus decisions, for the latest budget contains no significant personal or corporate income tax measures aimed at correcting injustices.
There is flagrant injustice as far as the income categories are concerned. One need only look at the taxation rates by level of taxable income to see that there is a serious problem. That problem must be addressed, not ignored or studied by bogus task forces.
Let us take the example of a family with two taxable incomes of less than $30,000. Both the man and the woman earn less than $30,000, let us say $29,500. Their tax rate will be 17%.
On the other hand, for a single earner family whose income is less than $60,000, that is to say one person who earns under $60,000, instead of two with a total income of under $60,000, the tax rate will be 26%. This makes no sense, particularly since there has been no indexation since 1984. When I refer to indexation, I do not mean just indexed tax credits, personal exemptions and other deductions, I mean also indexation of the various taxation levels.
Since there is none, we find ourselves in a situation where the 17% tax rate this year ought to apply not only to taxable incomes of $29,590 as it does at present, but to taxable incomes of $36,918.
In other words, those with an annual single or family income of between $25,590 and $36,918 ought to have paid only 17% tax this year, but instead they pay 26%. Can members see the double injustice here? If we compare a family with two incomes totalling less than $60,000 and a family with a single income of less than $60,000, there is a difference in the tax rates, one being 17% and the other 26%, which is a blatant injustice.
Moreover, the 17% tax rate would not apply only to incomes of up to $29,590, but also to incomes of up to $36,918, had full indexation been in place.
Do members know how many taxpayers are affected by this situation? If we look at the tax brackets for Canadian taxpayers, we see that 70% of them are in the under $35,000 category. This means that if the Minister of Finance had the political will to correct the gap between families with one income and families with two incomes, and if he decided to fully index the tax tables and tax brackets, 70% of all Canadian taxpayers would benefit from such a measure. This is a lot of people.
However, because the Minister of Finance does not have that political will, and because of the fact that he has been relying on economic growth since he took office, the government is maintaining injustices such as the ones condemned by the Reform Party and by the Bloc Quebecois since 1993. Furthermore, there is a lot to be done regarding the tax system.
As I said, we released two in-depth studies on corporate and personal income taxes, and we found that, in addition to the injustices being discussed today, the tax system is full of inconsistencies.
Let us take, for example, the child care expense deduction. Does it make sense that Canadian families earning over $100,000 save a minimum of $313 in taxes on each $1,000 they spend on child care, while those earning in the neighbourhood of $30,000 save only $175 for the same $1,000? This is not right.
If the Minister of Finance had done more than just pay lip service to the Bloc Quebecois' analysis of personal income tax, he would have corrected this a long time ago. The figures we provided in 1997 were very eloquent.
We pointed out that 25,000 Canadian couples earning over $100,000 had reported child care expenses of almost $25 million in 1993. Their tax savings were $7.6 million. We are talking about $7.6 million for 25,000 couples earning $100,000 and over.
If these 25,000 couples had earned around $30,000, their tax savings on child care expenses would have amounted to only $4 billion, or almost half what those earning $100,000 end up saving. There is something wrong here.
There are many similar injustices in the taxation system. I am sure there will another opportunity later on, because we have to keep bringing these things up, to give other examples of unfair situations that must be urgently addressed. These injustices affect low and middle income families and prevent them from contributing fully to the economic activity of the country.
The government must wake up and take a look at what needs doing instead of taking advantage of the situation and congratulating themselves on producing a surplus on the backs of employed and unemployed workers by dipping into the EI fund. It should be doing some serious work and not producing the likes of the Mintz report.
We will be supporting the Reform Party motion and will continue to work for fair taxes.
