Madam Speaker, I have heard this bill referred to as a number of housekeeping items. Before I became a member of Parliament for quite some time I had a construction company. Most of my construction was new housing, rather than existing, fixing up, remodelling or, if you would, housekeeping.
But occasionally, either as a filler or as a favour to a friend, we would do a bit of remodelling. But you do not go into a house and redo the drywall in that house if the roof is leaking. You do not do an expensive renovation inside if the foundation is rotten and the house is going to fall down some time after you have completed it.
The government is tinkering with the Income Tax Act which is so rife with problems throughout. It seems absolutely foolish to be putting in a bill the size of a mid size town's telephone book to tinker with a problem that needs major reform.
In West Kootenay—Okanagan I hold town hall meetings throughout the riding. This year I will be holding 15. Five I held in January before we came back to Parliament. I do not know what kind of statistics the Liberals claim they are getting, but in my riding and in the ridings of a lot of my colleagues I have talked to, the priorities for those people are tax reduction and debt reduction.
The government says it is going to put a little money into that but a its priority is new spending. Right now it is patting itself on the back rather vigorously for saying that it is getting close at least to balancing the books, getting rid of the deficit. When the government came in our interest rate was a lot higher than it is right now. Under the previous Liberal government in the early 1980s it hit the 20% mark. A one per cent increase in interest rates would cost, based on our $600 billion worth of debt, $6 billion a year in extra interest payments.
They like to make magic with figures on the other side but that is a pretty simple figure. If you have $600 billion worth of debt and you have to pay 1% a year more on that, that is $6 billion.
At one time our interest was 12% to 14% higher than it is right now. In our economy right now we see incredible pressure to increase the interest rates to look after our falling dollar. Some people wonder why the Bank of Canada is holding back so much instead of putting the interest rate up. There is part of the reason. If the interest rate goes up, there goes the government's deficit balancing plan.
Even if the government manages to hold it down there, it most assuredly needs to start bringing that debt down. Sooner or later in the evolution of things we are likely to see, at least in the short term, an interest increase and that is going to knock the government's deficit plan right off the tracks.
There should be new spending but this has to be in very targeted areas. Those areas are health care, education and technology. Even there any increase in spending must be smarter spending than what we are doing right now.
At one time Canada considered itself central Canada, the area of primarily Ontario and Quebec. They were in the areas where development was taking place and we in the west were considered the hewers of wood and the drawers of water. That is what the west originally was and we accepted that. Now we are starting to come into our own. The west is the new development. It is the new frontier in terms of technology, in terms of the economy of this country.
Yet right at the time that we are starting to come into our own, we are seeing the entire nation go into decline. Things like capital gains taxes are high in this country. Yet the government has even taken away many of the exemptions for capital gains that existed, while in the United States the capital gains taxes are much lower and they are dropping. While they are investing in vehicles to improve their economy, we are returning to being the hewers of wood and the drawers of water on a national scale.
If the government has to roll back something, it should not be the advancements in our economy that we have made in the last hundred plus years. If it is going to roll something back, it should be the taxes and it should be the debt.
This country needs tax reform. The government knows that. Just like the skits on This Hour Has 22 Minutes and the Royal Canadian Air Farce where they keep lampooning the leader of the Reform Party saying “I just love the word reform”, maybe that is what stops the Liberals because they know reform is needed. It just galls them to think that they have to use that word. We do need reform and we need genuine reform, not just tinkering which is what this piece of legislation does.
We need to do things like end the discrimination between working and non-working spouses which basically forces people out of the house into a job in order to get a balanced income tax. Someone making $60,000 a year where their spouse chooses to stay home and raise the family pays a lot more income tax than two family members making $30,000 each. The basic exemption needs to be balanced and need to be increased so that we get rid of this bracket creep.
The Minister of Finance keeps rising and saying no new taxes. The reality is in the last term of the Liberals there were 37 tax increases and the government still pats itself on the back.
We have this incredible system of tax in, tax out, the goods and services tax. Aside from the fact that it is the most hated and aside from the fact that the Liberals promised they were going to get rid of it, if we have to have it, it should be done in a lot more efficient manner. Right now the government taxes people making $8,000 or $9,000 a year. Those people cannot afford taxes and yet they get taxed in any event.
The government says it knows they cannot afford it. That is why it has programs to supplement their income. With the bit of money they have left, they are charged GST on everything they purchase. The government says it knows they cannot afford GST, therefore it has a GST rebate program.
There is something inherently wrong with a system that taxes away someone's money with one bureaucracy and creates another bureaucracy to give some of it back, using up most of it in the process.
We have payroll taxes. CPP is going up 73%; a 73% increase in a pension plan that if they pay in for a generation it will give them less than $9,000 a year back. In the meantime, the MPs opposite gave themselves a 18% reduction in their pension plan which will see them getting a much more generous pension.
The Liberals are going to take away the seniors tax exemption and give them the seniors benefit, the old age pension and guaranteed income supplement tax free.
Heaven help those people who are collecting that if they see fit to go out and look after themselves by raising so much as an extra dollar because the government is going to take 50 cents of it away. It will take away the non-taxable part. They will have to pay tax on the part that is left.
In terms of spending, we do need to spend money on health care. When health care was first introduced, there was a 50:50 partnership. By 1993 in British Columbia it was down to a 28% federal share. Since that time on the national level, the Liberal government has taken another $7 billion away and at the same time it ties the hands of the province in how to deal with this.
We talk about health care. We do not have health care. We have sickness care. When I said we have to start spending our money more wisely, we have to start addressing keeping people healthy instead of paying their bills after they get sick.
Likewise with education, if we are going to stick the next generation with increased CPP, with ever escalating taxes and with a $600 billion debt, we better make sure we provide it some way to equip itself for dealing with the mess we have left.
There are a few good measures in this bill but basically it is like getting a pat on the back while at the same time getting a kick in the butt. If the Liberals want to do something, either start doing some serious fixing of this tax act or else stop kicking Canadians in the butt.