Bill Morneau

[Natural Resources, January 29th, 2016]

Mr. Speaker, first, we want to set the record straight. There have not been pipelines to tidewater over the last nine years.

We need to have a new process, a process that would engage Canadians, because we understand that Canadians need to have confidence in any measures we take. We are working together with all constituents to ensure that we can actually improve our situation, in this new government.

[Natural Resources, January 29th, 2016]

Mr. Speaker, we recognize that people in Alberta, Saskatchewan, and Newfoundland are challenged with changes in commodity and oil prices. We are working together with them. The right thing to do is to help Canadians.

I spoke yesterday with the Alberta Minister of Finance to see how we could work together. I am pleased to say that he understands that there is a stabilization fund that Alberta can apply for, and the potential is for up to $250 million. Should Alberta apply, we would work expeditiously to move forward on that request.

[Income Tax Act, January 29th, 2016]

Mr. Speaker, we believe it is critically important that we are open and transparent with Canadians. We also believe it is very important that we help Canadians understand their tax situation. Therefore, in introducing this measure early, we enabled people to have a good understanding of what their 2016 tax situation is.

Tax reductions start at the beginning of the year. This allows employers to actually manage their deduction process.

Tax-free savings accounts start at the beginning of the year. This allows people to plan for their financial situation.

We believe it was critically important to get this out so that people could understand their position and plan accordingly.

[Income Tax Act, January 29th, 2016]

Mr. Speaker, I would like to thank the member for Ottawa West—Nepean for her question. It provides me with an opportunity to reinforce the importance of both this first step and some other steps that we are taking to help Canadians who are struggling to get by or who have not had a raise for many years.

First and foremost, this first plan is critically important. Nine million Canadians would have more money in their pockets this year as a result of this reduction in taxes. It is a critical first step, one that would aid those families who have found that their net after-tax income has been stagnant for a long time.

However, we are not going to stop there. We plan, in budget 2016, on making a very important step toward helping our economy to grow. We know that economic growth is the thing that is most important for families who are struggling to raise their children. We plan on investing in infrastructure across this country—infrastructure that can be started quickly, in many cases—to make a long-term, productive impact on our country. We know that is what is critically important, not only for middle-class families today but for their children and grandchildren. If we can make investments that would make a difference for them, it is critically important.

We will also be making investments for those people in our economy who are vulnerable and challenged, like those people from our indigenous communities and those who are most vulnerable, so that they too—

[Income Tax Act, January 29th, 2016]

Mr. Speaker, I would first like to thank the member for Rimouski-Neigette—Témiscouata—Les Basques for his important question.

Our tax cut for the middle class is a first step, one that we think is very important. With this first step, we will be helping nine million Canadians by lowering taxes, leaving more money in their pockets.

This is only the first step, because we know that other measures need to be introduced to help the most vulnerable Canadians. That is why, in our 2016 budget, we will introduce our second step, which is the Canada child benefit. That will be a very important step for the most vulnerable Canadians, and it will help nine out of 10 families with children.

What matters, I think, is that this measure is going to help hundreds of thousands of children currently living in poverty. This means that we can help families and children living in poverty, and at the same time, this will also help the economy. Thanks to these measures, those who are the most vulnerable and the middle class will have more money to spend, which will stimulate the economy.

[Income Tax Act, January 29th, 2016]

Mr. Speaker, I first want to thank the hon. member for his question. I think it is an important question.

We campaigned on a commitment to have an open and transparent government. We campaigned with the commitment to listen to Canadians and to make sure we understand their views.

It was in that spirit that we took it upon ourselves to have pre-budget consultations that would be more extensive than ever before in this country. We went, as was mentioned, from coast to coast to coast. My parliamentary secretary and I started on the east coast of Canada and moved to the west coast of Canada. We made a clear objective, and we satisfied that objective of meeting with people not only from different regions across the country but from different sectors. We met with small business people. We met with farmers. We met with people from rural and urban environments. We met with chambers of commerce. We met with first nation groups. We really endeavoured to ensure that we could hear from as many people as possible.

More important, we engaged with Canadians in ways in which they wanted to be engaged; so, we had in-person consultations with people, and we also, as mentioned, had engagement over online methodology, which has not been used in the past.

An enormous outpouring of interest came. As I mentioned, 80,000 people actually listened in on our sessions online, but 150,000 people have now gone further than that and look at and clicked on them. Of importance is the number 3,400, which is the submissions from all across Canada. That is a very important number. As I mentioned, it is almost three times the amount received last year. As I said, those submissions have been from all parts of Canada, all different sectors.

We have endeavoured to make sure we have listened to Canadians and—

[Income Tax Act, January 29th, 2016]

moved that Bill C-2, an act to amend the Income Tax Act, be read the second time and referred to a committee.

Mr. Speaker and hon. members of this esteemed House, I appreciate the opportunity to discuss the merits of the middle-class tax cut the government introduced in December and that this bill, Bill C-2, would enact.

On January 1 of this year, nine million Canadians received a tax break. Our government was elected on a plan to grow the economy, and these changes are an important first step in that plan.

Our government believes that a strong economy starts with a strong middle class. Canada's middle class has gone too long without a raise, and in challenging economic times, we have taken action to help them.

The global economic downturn has presented some new realities for the Canadian economy. This means that our plan to grow the economy is now more important than ever.

As we pursue this plan, we will continue to keep Canada's debt-to-GDP ratio on a downward track. We will be prudent in our expenditures and will return to a balanced budget by the end of our mandate.

The government's job is to help Canadians succeed. We are lucky to have one of the most highly educated and talented workforces in the world. In order to harness the power of our people to build a stronger and more prosperous country, we need to improve direct support to the middle class and those working hard to join it. The legislation before the House today does just that.

This bill would cut the tax rate on income earned between $45,282 and $90,563 in 2016 by 7% and would introduce a new tax rate of 33% on income earned above $200,000.

The middle-class tax cut and accompanying changes will make the tax system fairer. Specifically, the bill proposes to reduce the second personal income tax rate to 20.5% from 22%, introduce a 33% personal income tax rate on individual taxable income in excess of $200,000, return the tax-free savings account annual contribution to $5,500 from $10,000, and reinstate indexation of the tax-free savings account annual contribution limit.

Let me elaborate on the three points. First, the personal income tax rate changes took effect on January 1 of this year. As I mentioned at the outset of this speech, it is expected that about nine million Canadians will benefit from this measure this year.

Second, in conjunction with this tax cut, the government is introducing a new personal income tax rate of 33% that will apply to individual taxable income in excess of $200,000. We are asking the wealthiest 1% of Canadians to pay a little more to help the middle class and those working hard to join it. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax rates. As with other bracket thresholds, the $200,000 threshold would be indexed to inflation.

Third, the government is returning the tax-free savings account, TFSA, annual contribution limit to $5,500 from $10,000, effective January 1, 2016. Let me reassure all members of the House that this change is not retroactive. The TFSA annual contribution limit for 2015 will remain at $10,000. I should also note that the limit is cumulative and builds over time.

Eliminating the previous government's increase to the TFSA contribution limit is consistent with our objective of creating a tax system that is fair and that helps those who need it most. Keeping the limit at $10,000 would have helped Canada's wealthiest save more while costing the federal treasury hundreds of millions of dollars over the next five years.

We know that only 6.7% of eligible Canadians contributed the maximum in 2013. Doubling it did nothing for the 93.3% of Canadians who could not max out their contributions with the existing limit. Indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time.

While these three elements are what I expect will be discussed during the parliamentary debate, I would like to highlight some of the other measures that are included in today's legislation.

Today's bill proposes to change the current flat top-rate taxation rules applicable to trusts to use the new rate of 33%.

The bill sets the tax on split income to the new rate of 33%.

The bill amends the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate.

The bill increases the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the proposed new 33% personal income tax rate.

The measures included in this legislation are a priority for this government. However, there are many unique issues that confront Canadians today. That is why reaching out and listening to Canadians is so important. We have a plan to grow the economy, and we need the input of Canadians to learn how to best implement our plan in their cities and communities.

Over the past few weeks, my parliamentary secretary and I have heard from Canadians about what we can do to help the middle class right across the country.

We asked Canadians directly how the government can support them and grow the economy. We met with people from all walks of life: business leaders, farmers, small-business owners, members of our indigenous communities, and community leaders. I also engaged with students by holding a Google hangout and two Facebook live events that attracted a total audience of more than 80,000 Canadians. I am encouraged that young Canadians have found new reasons to become engaged with their government. Our goal is to listen and engage with Canadians on the issues that are important to them, and it has, to date, been a very successful endeavour.

As part of these consultations, I was pleased to have spoken to the member for Milton and the member for Rimouski-Neigette—Témiscouata—Les Basques, my colleagues across the aisle, and I assure the House that their input will be thoughtfully considered.

Although we are both back in Ottawa now, these consultations continue online. Since the opening of the online consultations, we have already reached over 150,000 Canadians and have received over 3,000 submissions, in fact 3,400 submissions as of today, from Canadian individuals and groups, more than twice the submissions, almost three times the submissions, in fact, received last year under the previous government.

It was especially important for me to hear from Canadians about the effect the economic situation is having on them. The stories I have heard have reaffirmed for me the importance of our plan to grow the economy in the short, medium, and long term.

Collaboration is a critical element of our plan to deliver real change in a way that takes into account the priorities and opinions of Canadians. As we implement our plan, we will continue to be open and transparent every step of the way.

This legislation is an important first step to help strengthen the middle class. It puts more money in the pockets of Canadians to save, to invest, and to grow the economy, but it is just a first step. In budget 2016, the government will introduce a new Canada child benefit that will lift hundreds of thousands of Canadian children out of poverty and will help nine in 10 Canadian families with children to be better off. It will replace the universal child care benefit, which is not tied to income, and it will simplify and consolidate existing child benefits while ensuring that help is targeted at those who need it most.

Taken together, the measures we intend to introduce will help grow our economy to the benefit of all Canadians. The government will invest in our economy, in our communities, and in Canadians themselves. We will make transformative investments in infrastructure that will increase the productive capacity of our economy while improving the day-to-day lives of Canadians.

After 10 years of weak growth, we have an ambitious economic agenda to grow the economy and the mandate to implement it. It started in December with this middle-class tax cut and will continue with the introduction of the Canada child benefit and our historic investments in infrastructure over the next decade.

I encourage all members to support this legislation and to help us deliver on our plan to support the middle class and those working hard to join it.

[Finance, January 28th, 2016]

Mr. Speaker, Canadians decided in October that they do in fact deserve transparency. They elected a new government that committed to being fair, open, and transparent. We immediately came out with an update to the numbers, so that Canadians could understand the situation we are actually in. We have seen a continued deterioration in our economic situation, which is a result of 10 years of failed policies.

Happily for Canadians, we can now move to a new set of policies that will make a real difference for the future of our country.

[Finance, January 28th, 2016]

Mr. Speaker, I had the opportunity in December to introduce an economic and fiscal update to make absolutely clear the situation we inherited from the members across the aisle.

We inherited a deficit, a deficit of $3 billion. Ten failed years of low growth have led us to a situation where we have failed to make the investments that will allow us to grow the economy.

We have a new plan, one that will lead us to a place where we can actually grow the economy, to put Canadians in a better place in the future.

[Finance, January 28th, 2016]

Mr. Speaker, we have a plan to grow the economy, and we have already started.

In the 2016 budget, we will introduce infrastructure investments that will help us increase economic growth.