Mr. Speaker, as has been said, Bill C-456 is a proposal to amend the Excise Tax Act to exempt cloth and disposable diapers for children from the goods and services tax.
I would like to preface my remarks by saying that I think all members in the House would agree that the role of families, and in particular the role of mothers, in nurturing their families is an extremely important part of what makes Canada the kind of place it is. A society that believes in nurturing its young and attempts to find those ways through the taxation regime to help and assist in that nurturing is the kind of civil society that we all believe in.
I would suggest that while there are the kinds of problems with the tax regime that exists, and which this motion tries to come to grips with, the government has done a great deal through the tax regime to help families, particularly low income families with children.
Before I address the specifics of this bill, I would like, as has been done already, to allude to some of those initiatives that the government has taken in order to come to grips with those challenges facing Canada's low income families with children.
As we know, cumulative tax relief of $100 billion was announced in 2000 under the five year tax reduction plan. The plan has reduced federal personal income taxes by 21% on average, and for families with children that figure is in fact 27%. We have been attempting over the last five years to take the $100 billion and in fact apply it strategically to families in the low income category to lower, reduce and soften the impact of the tax system.
I also would draw the House's attention to the fact that personal income tax reductions account for three-quarters of those tax reductions and are providing significant relief, particularly for low income and modest income families with children.
I would like to remind the House that families with children have also benefited from these particular improvements: the reductions in tax rates for all income levels; the elimination of the deficit reduction surtax; the increases in the amount they can earn tax free and the amounts at which higher tax rates apply; and finally, the restoration of full indexation of the personal income tax system, which protected families against automatic tax increases and the erosion of benefits caused by inflation.
However, the government has not stopped there. As I mentioned earlier, in terms of broad-based help for families with children, the 2003 budget built on the five year reduction plan by providing additional support for low income families and taking further steps to encourage investment, job creation and economic growth.
For example, the national child benefit supplement was increased by $150 per year in July 2003 and will be increased by $185 in July 2005 and by another $185 in July 2006.
In addition to that, a new child disability benefit was established as a supplement to the Canada child tax benefit for low income and modest income families with a child with a disability. It provides annual support of up to $1,600 a year.
Most recently, the 2004 budget builds on previous commitments by increasing support for early learning and child care.
Ensuring that all children get the best possible start in life and equal opportunities throughout their early lives is a fundamental part of the legacy Canadians leave to future generations. This has been a longstanding priority of the government.
Previous speakers have alluded to the $500 Canada learning bond available to children born after 2003 in families entitled to the national child benefit supplement.
The budget also makes changes to the successful Canada education savings grant to further help children in low income and middle income families. The enhanced CESG will be available to the families of more than 4.5 million children and is expected to cost $80 million annually.
Early learning and child care also play an important role in promoting the development of young children, which is why the 2004 budget proposes to accelerate implementation of the multilateral framework on early learning and child care with an additional $75 million in both the 2004-05 budget and the 2005-06 budget.
Over the next two years, the total federal commitment to early learning and child care will be $375 million and will result in up to 70,000 fully subsidized spaces for children from low income families.
I believe that the government puts forward these kinds of improvements to illustrate that the commitment by the government is to help lower income Canadians, particularly those with families, and this is the approach to do it.
The bill before us today asks that the GST be removed from disposable and cloth diapers. While I certainly appreciate that the bill is presented with the intent of helping low income families, and I congratulate the member for putting the bill forward, this government believes that personal income tax benefits can be better targeted to low income and middle income families rather than providing GST relief on specific items such as diapers.
Removing the GST from certain items risks eroding the tax base and restricting the government's ability to keep the GST at a relatively low rate. Furthermore, I trust that hon. members can appreciate that high income individuals as well as low income families may purchase such items.
Earlier I mentioned the tax reduction initiatives taken by the government to assist low income and middle income families. In addition, hon. members are no doubt aware that GST relief is provided for individuals and families through the GST credit, which has proven to be effective in targeting and delivering tax relief, particularly to low income families. Last year, for example, the government provided over $3 billion in tax relief to lower income families and individuals.
This is the fairest and most efficient means of providing targeted tax relief to those who need it most.
In view of these remarks, although we agree with the intent of the bill, the government would have to ask hon. members not to support the bill in its present form.