Jim Peterson

[Taxation, March 13th, 1998]

Mr. Speaker, it is very simple. If a business makes a commitment for an expenditure, it has to book it. If a family has a commitment for an expenditure investment, that is money it does not have to spend on other things. We are going to run our books on an open basis so that Canadians know exactly where we stand.

[Bankruptcies, February 20th, 1998]

Mr. Speaker, bankruptcies are high but they are coming down. This is the sign of the economic recovery that we are undergoing.

Over the course of the last four years we have put in place the basis for a very solid economic recovery. This is why unemployment has fallen from over 11% to under 9%. This is also why the OECD predicts that Canada will have the highest economic growth rate and the highest growth rate in jobs this year.

[The Economy, February 20th, 1998]

Mr. Speaker, public money belongs to Canadians and this is why we have been stewards of that money. This is why we have adopted a balanced approach of reinvesting in Canada's social and economic infrastructure, a balanced approach of paying down the debt and a balanced approach of reducing taxes.

We are going to meet the Reform Party's targets for deficit reduction, but we will do so without ripping apart the social fabric of this country. We have done this at the same time as we have reduced taxes.

[The Economy, February 20th, 1998]

Mr. Speaker, I am very pleased to give my response to the junior deputy leader.

We have taken a very balanced approach as we have come through these very difficult fiscal circumstances. One thing I will guarantee to this House is that when this government commits to making an expenditure, we will take responsibility for it.

Every household in Canada knows this has to be done. Our government does as well. We will pay as you go. We will not saddle future governments with announcements of investments we are making today.

[Banking, February 17th, 1998]

Mr. Speaker, I would like to thank the member for Durham not only for his question but also for his leadership on economic and financial sector questions in Parliament.

Banks with no service fees, free chequing and ready access are certainly welcome and good for Canada. More competition means more choices for consumers. Our government will continue to welcome and encourage even more innovation and more competition in the provision of financial services to Canadians.

[Supply, February 13th, 1998]

Mr. Speaker, we recognize the terrible impact of huge deficits on our economy. When we took office the deficit was at $42 billion. We are still paying about a third of every tax dollar to service the interest on our debt.

This is why, in a time period that is less than any Reform package put forward, we will have our budget in balance. We are starting to pay down the debt. At the same time we will never adopt the Reform formula for doing it. This is the party that was to cut taxes. At the same time how would Reformers have paid for it? First, they would cut drastically the programs to help with the pensions of seniors. Second, they would cut transfers to the provinces for education and for health care. Third, and probably the most draconian of all, as seen through all their budgets which keep shifting with the political winds and the latest polls, they would cut equalization to the poorest regions and the poorest people.

We will not cut taxes to break the backs of those who need it most. We never will. We will have a balanced approach. At the same time as we are gradually cutting taxes, starting with those most in need, the disabled, the students, the working poor, and helping charities and the voluntary sector do more to increase tax incentives, we are helping those who need it most by sustaining the programs that help Canadians have a secure retirement, strong education and strong health systems. Those are our priorities.

[Supply, February 13th, 1998]

I am proud of these three tax increases we brought in because we had to get our deficit under control. We in this party have legitimate concerns about the poor in Canada and sustaining the programs that keep them going.

At the same time we have started the process of bringing down gradually tax levels in a way that is sustainable, fair and does not undermine the social and economic underpinnings of our economy. We are making those investments and we are proud to do it.

[Supply, February 13th, 1998]

Civility is not within that new member's lexicon.

We must recognize that Canadians with disabilities need to have the added costs they bear each day taken into consideration. We have done that through the tax system.

Education is a great leveller in our society creating equality of opportunity. We will never as a government be able to create equality among individuals but we can at least create equality of opportunity.

This is why in spite of our fiscal difficulties over the last four years this government has introduced numerous measures to help students in the education system. These include increasing the levels for registered educational savings plans, the educational tax credit, deductibility of ancillary fees and expenses for students.

There is also the innovation foundation to which we have contributed $800 million. In conjunction with the private sector and other levels of government, there will be a $2 billion fund for investment in research and development in our hospitals and institutions of higher learning.

Last fall our Prime Minister announced that access to education is very important to him and to this government. He announced the creation of the millennium scholarship fund. The finance minister a couple of weeks ago said that we can look forward to ongoing measures to assist students in the next budget.

These are some of the concerns we have had about creating opportunity for all Canadians. We have put our money where our mouth is.

From the NDP we have heard about, and I will quote the member for Qu'Appelle who was supported by the member for Vancouver East, “the obscene profits made by banks”. Yes, they made record profits last year but they have also paid record taxes in Canada. Canadian banks pay 64% of their net income in Canadian taxes.

Compare that with the United States where it is only 54% of net income and the U.K. where it is 52%. Canadian manufacturers pay 47%. Canadian credit unions pay 45%.

Are hon. members in the NDP suggesting that credit unions should be brought up to a 64% of net income tax level in Canada? Let us hear about it if the Canadian bank profits are obscene. Do they want even higher taxes on the banks in light of these figures?

I say to the hon. member for Qu'Appelle that on December 4, 1996 the leader of the NDP said in a press release that she welcomed bank profits if they were earned through good management, sound long term investment and progressive participation in the Canadian economy. The leadership race in the member's party is over. He lost. Maybe it is time he started to support his leader.

We take no back seat to anybody in terms of taxes in these areas. We are the ones that increased the corporate surtax, the large corporation tax, and introduced the temporary surtax.

[Supply, February 13th, 1998]

Would the hon. member please show a little bit of respect if he has nothing intelligent to contribute. If the Reform Party member has nothing better to add to this debate than inane accusations not based on fact and shouting and screaming, I wish he would—

[Supply, February 13th, 1998]

Fair taxes. If fair taxes is the issue, then let us look at Canada's overall tax structure.

We all know that in the global world we have to have a tax structure which is relatively competitive with those of our neighbours. When we look at Canada among the G-7 countries, we are square in the middle of the seven. Our total tax burden is 36% of GDP. At the highest end there is France where it is 43%. At the lowest end there is the U.S.A. where it is 28%.

The competitive realities are that we cannot get too far out of line with the Americans to the south. Our overall tax burden is about 30% higher than that of Americans. However, I would never advocate that we should go down to American levels. Part of the difference is because we have a health care system which the Americans do not have. It gives Canadians tremendous security and it also gives us a competitive edge over the Americans.

Nevertheless when we consider our comparative tax levels we will find that the personal income tax in Canada is 13.4% of our gross domestic product and in the U.S. it is 9.8%. In Japan it is 6.4%. On top of that we have a capital gains tax which is among the highest in the western world.

The progressivity of our tax system is something which I think hon. members from the NDP should take into consideration. They have great envy for the rich. Maybe a lot of people do. However, these are the facts. Only 2% of tax filers in Canada have incomes over $100,000 and they pay 21% of all federal taxes. The lowest 60%, those with incomes under $25,000, pay only 4% of our taxes. We believe that a highly progressive tax system is an ingredient in creating equality of opportunity and fairness, and we do not back away from that one bit.

What have we heard in terms of solutions? I have talked about their cry for tax fairness. Do they want to tax the rich more? That alternative is there. Ours is still the most highly progressive personal income tax system in the western world.

If the concern of NDP members is for those who have been marginalized in our society or for those who have the greatest difficulty in coping, then we have no dispute with them. We would hope that they would support the measures that we have brought forward.

One of our major concerns has been low income working families. The Caledon Institute and studies by the finance department revealed that there was a welfare wall. A family on welfare taking in all of the benefits provided by governments was about $3,000 ahead of a family with two children and parents working at low wage levels.

That is what was called the welfare wall. It was a barrier to leaving welfare and going into the workforce. We addressed the matter not by lowering benefits to the lower income people on welfare but by increasing the tax incentives for those who were actually working.

This is why we brought in the working income supplement. This is why in an agreement with the provinces we have entered into the national child tax benefit. This government has committed $850 million to the child tax benefit which goes to those low income families. We promised during the course of our mandate to beef that up by another $850 million. This is at a time when all parties in this House recognize that our deficit and debt are major economic problems and challenges for us.

At the same time, we have increased the tax incentives available to Canadians with disabilities. We recognize that the costs of working and being disabled, or existing and being disabled are very high.