Guy Caron

[Income Tax Act, January 29th, 2016]

Madam Speaker, we do have concerns about how the government is conducting its pre-budget consultations. They are not necessarily the same concerns, but the government is holding its own pre-budget consultations, just like the previous Conservative government did. That is perfectly legitimate, but the consultations are limited because they are organized by the government.

We asked the Minister of Finance to have the Standing Committee on Finance hold formal pre-budget consultations. We recognize that there is limited time because the committee has not yet been struck. However, we proposed an intense schedule for the Standing Committee on Finance, which would meet for two or even three weeks, from morning to night if need be, so that each party, including the government, could hold public consultations that would be open to all Canadians. That would provide input other than that sought by the government.

Naturally, if the government organizes its own pre-budget consultations it controls the entire process, including the selection of witnesses. It is important to recognize the role of the Standing Committee on Finance, which has members from the three recognized parties, and to ensure that Canadians in all situations and from all walks of life and all philosophical backgrounds are heard in the House, even if within a shorter period of time. I believe that the Standing Committee on Finance is prepared to do this work. All we need is for the government to agree.

[Income Tax Act, January 29th, 2016]

Madam Speaker, in fact, the numbers indicate that the bill does a lot for the 20% of Canadians with the highest incomes. It does nothing for 80% of Canadians, who will get little to nothing out of the tax cuts that were promised.

Compare the Liberals' proposal to ours, which seeks to change the first tax bracket in order to help far more people. The median income is around $31,000. People earning that amount have nothing to gain from the tax cut the Liberals promised, but would receive $200 through our proposal. An individual whose income is between $11,000 and $45,000 has nothing to gain from the Liberals' proposal, while they would receive $170 on average from ours.

The parliamentary secretary said that people earning $200,000 will start to pay more. However, under the Liberals' proposal, a person earning $210,000 a year will get a net total of $279. Under our proposal, they would pay an additional $66 in tax.

That is why I think the government is using smoke and mirrors when it talks about the middle class, since the tax cut they are promising does not help the middle class. It does nothing for 80% of the population. It redistributes supplementary income from the top 1% to 20% of the wealthiest Canadians. We do not think this measure helps the middle class.

[Income Tax Act, January 29th, 2016]

Mr. Speaker, I am very pleased to rise in the House as the NDP's finance critic to debate Bill C-2, which was introduced in December and which is now being debated in the House.

I had the opportunity to ask the Minister of Finance a question earlier today after his opening remarks. Unfortunately, I did not get an adequate answer. I did not get an answer to the fundamental question raised by this bill: how does the Liberal Party define the middle class?

This is a fundamental question, because since the election, the Liberal Party, which now forms the government, has boasted about making tax cuts for that much talked-about middle class. However, as the parliamentary budget officer's report very clearly and succinctly states, the middle class will get nothing from the tax cuts the Liberal government is promising.

With Bill C-2, there is the good and there is the bad. I will start with the bad, and then talk about the good.

Any definition of the middle class must be based on a common definition. One way to define it would be to use the median income, which is $31,000 a year per person in Canada. That means that half of Canadians earn less than $31,000 a year and the other half earns more than $31,000 a year.

Will someone earning the median income benefit from this tax cut? No. In fact, those earning $45,000 or less a year will not benefit at all from the tax cut promised by the Liberals. Even those earning between $45,000 and $90,000 a year will only receive part of what was promised. The devil is in the details. In reality, someone earning $50,000 will probably only receive twenty or thirty dollars.

Taxpayers earning more than $90,000 a year will benefit the most from this tax cut. Even someone who earns $200,000 a year will receive the maximum from this tax cut. An individual would have to earn $210,000 a year before receiving less, due to the new tax bracket, but they would still receive a large part of this reduction.

If we take this definition of the middle class, whose members earn around $31,000 a year, and exclude all those whose income is among the top 20% and those whose income is among the bottom 20%, then we have a middle class that makes up 60% of the population. The range of income of that middle class would be between $20,000 and $60,000 a year. A very small portion of those people would benefit only slightly from the tax cut.

If we take the median income, people will receive nothing. If we take the income that everyone associates with the middle class, in other words, $45,000, people will receive nothing. Those who will receive the biggest slice of the tax-cut pie are the top 20% income earners. That is not the middle class.

When the ways and means motion was tabled, we made a counter-proposal because if we really want change, and considering that on October 19, Canadians voted for a tax cut for the middle class, then this tax cut has to be given to the middle class.

That is why we proposed a change to the Liberal proposal. Instead of targeting the second tax bracket, as the Liberal government wants to do, we should change the first tax bracket so that a larger portion of the population can benefit from such a tax cut. Our proposal seeks to reduce the first tax bracket from 15% to 14% to ensure that all taxpayers, those who pay income tax, can benefit from this change.

Our proposal seeks to give people earning the median income a tax cut as high as $250 annually, as those people are currently receiving nothing.

Someone who earns $200,000 per year and who will get a tax cut worth about $600 would be forced to pay a portion because of the higher tax rate and the new bracket that we would leave in place.

It is clear that the Liberals' proposal is merely a smokescreen. In his response to my question about the Liberal Party's definition of the middle class, the minister did not answer the question. He simply said that this is just the first step and that the next step is the child benefit. We have not seen that yet. Maybe it will actually be a good thing for families with children, or maybe not—we will see. However, that does not answer my question.

This measure will not really help the middle class at all. A child benefit might help families with children, but it will not do a thing for single people, couples without children or seniors. Any of those people who earn less than $45,000, and especially if they earn less than $90,000, will not benefit at all from the Liberal promises for the middle class, even if their income is lower.

It is important to look at everything the Liberals are proposing. We believe that our proposal would help the middle class much more effectively than the Liberal measure, which, as I said, will benefit only the top 20% of income earners and do very little for everyone else.

I began by talking about the bad, and there is a lot of it, but now I would like to talk about the good, and one key measure that we support in this budget. I am talking about dropping the contribution limit for tax-free savings accounts, or TFSAs, from $10,000 to $5,500. We regard TFSAs as a useful tool for saving, and they should be used for that purpose. However, what the previous Conservative government proposed, raising the contribution limit to $10,000, is very harmful to Canada's public finances and does very little to help taxpayers and investors who want to use that tool.

This is because anyone can open a TFSA, and among those who can afford to do so, only 7% are contributing the maximum at this time. This measure is extremely costly. The numbers speak for themselves. In 2020, if the limit stays at $10,000—and it could even be indexed later on—it is estimated that it will cost the Canadian treasury $2.3 billion, all for a single investment tool that benefits only a small minority of Canadians. In 2030, 10 years later, the lost revenue or tax expenditures are estimated to be $9 billion. In fact, the parliamentary budget officer, whose job it is to study the impact this would have on the Canadian treasury, went as far as to say that in the medium term—I am talking about 2040-50, since the horizon might well extend that far ahead—tax expenditures, which is income lost by the Canadian government, will account for nearly 0.7% of GDP.

I would like to point out that this House is not budging and that previous governments did not budge on the issue of international aid and reaching the target, which was set at 0.7% of GDP under the agreements. The previous government considered it to be too costly to move forward on that. We were never even close to the 0.7% target. According to the parliamentary budget officer, with the TFSA alone we would reach 0.7% of GDP in foregone revenues, those revenues that would no longer be paid to the Canadian government, by 2040-2050. The TFSA is a savings vehicle that we fully support. However, if we were to head in the direction that the Conservative government proposed, it is a measure that could be extremely debilitating for Canada's fiscal capacity and its ability to provide the quality programs and services that Canadians expect.

As I was saying, the TFSA is a beneficial savings vehicle. The $5,500 contribution limit, indexed to inflation in $500 increments when this amount is reached, is quite adequate. Only 7% of Canadians currently contribute the maximum. If we look at just individuals who have already opened a TFSA, only 17% of them contribute the maximum. Increasing the contribution limit will only help the 17% who already contribute the maximum. Thus, this is a very expensive measure that very few people take advantage of.

If I am dwelling on the tax-free savings account, it is probably because outside of the tax cut in Bill C-2, it is the key issue in terms of finances. The TFSA is a useful tool for promoting savings and a tax shelter appreciated by those who use it properly. However, it could also become a means of tax avoidance, and that is what we must prevent.

I say that, because when we are talking about $10,000, which will one day be indexed, a lot of Canadians see the tax-free savings account as an account where they put after-tax money, which will yield non-taxable interest. They can then withdraw that money as they see fit, which is not a bad thing. However, what these people often do not know is that you can put many things other than cash in these accounts. You can put in stocks or financial instruments, and anyone who can afford it can put up to $10,000 in stocks, for example, into a tax-free savings account and enjoy capital gains that will not be taxed within that account.

Right now, 50% of capital gains are taxed, at a rate of about 40%. The TFSA can be an attractive vehicle for those who want to avoid paying tax on capital gains and are able to contribute up to the limit of $10,000, in which case they do not really need to save.

In that sense, the TFSA can be useful for Canadians, and that is why we support it. However, we want to prevent these accounts from becoming a way for people to avoid paying taxes, and that is why we oppose increasing the contribution limit to $10,000. We think that the $5,500 limit is a perfectly adequate way of helping Canadians who want to ensure their future financial security.

Let us remember that there are also other savings vehicles, such as RRSPs. These private savings are one of the main ways to ensure one's financial security. Others include company pensions, the Canada pension plan, the Quebec pension plan, and old age security, which can be supplemented with the guaranteed income supplement.

If we tally the good and bad points that I talked about earlier, it is clear that the Liberals' decision to reduce taxes for the richest 20% and increase them for the richest 1% is not an appropriate measure if the government really wants to help the middle class.

Eventually, under an NDP government, there will be a way to review this decision and really help the middle class. We are extending an olive branch to the government here, because the other thing that could be done is to make the necessary changes in committee so that we can come back to the House and adopt a measure that will really help the middle class.

We are therefore going to resubmit this proposal in committee for review. It is largely based on the excellent work done by the parliamentary budget officer.

Lowering the TFSA limit is extremely important from a tax perspective in order to ensure that the Canadian government can offer these services, function properly, and ultimately, or so we hope, make significant reinvestments in areas where the Conservatives cut funding to the bone or even deeper.

That is why we will support the bill at second reading. We hope the government and its members will be willing to listen in our committee meetings. This would eventually open the door to amending the provision to lower taxes for the richest 20% of Canadians and instead helping 80% of Canadians, many of whom are getting nothing right now. Of course we will support the second measure, which is to lower the contribution limit for TFSAs.

This is the first bill introduced in this new Parliament. I truly hope the government will take a new approach. I think all parliamentarians have already noticed a change in tone and dynamics, which is very much appreciated. However, after four years of hearing meaningless slogans and catchphrases to try to justify things that are simply not supported by the facts, we might still be in for another four long years.

This morning, when the Minister of Finance introduced Bill C-2 and delivered his speech justifying the tax cut, I was hoping he would at least understand or acknowledge the auditing work done by the parliamentary budget officer, but that was not the case.

I wish he would accept a fact that has been proven over and over. The middle class will not benefit from these measures; only the richest 20% will. The facts prove it. The parliamentary budget officer proved it, and we ourselves proved it before the report was released. He wants to stay the course and perpetuate the myth that the middle class will benefit. This is a snow job.

A lot of Canadians are going to be surprised and disappointed when they fill out their income tax returns. They thought they voted for a party, the Liberal Party of Canada, that would give them a tax cut, but they are going to find out that they are not eligible. A good 80% of people will find out that this does not apply to them. I predict some nasty hangovers for them.

I sincerely hope that the government will pay more attention to the opposition parties, especially when we are trying to help by suggesting improvements that should help the government achieve its goals. I would like it to say so publicly.

The most disappointing thing about the Minister of Finance's speech is the fact that he is trying to deal with the problem by sending up yet another smokescreen. We have not yet seen the Canada child tax benefit, which is really just going to be a remix of existing programs. That is still nothing but a promise.

The fact is that only couples with children and single-parent families will benefit from this money. Those people will be happy to get some extra money. Couples without children, singles without children, and seniors, even the poorest of them, even those who earn, say, $45,000, $30,000, $20,000, or $10,000, will get nothing. They will not get a tax cut, nor will they benefit from the Liberals' upcoming measure.

I would like the Liberal government to be consistent, to respect the Canadian public, and to tell the truth about the real impact of the measures it is introducing. This was the government's first opportunity to do so. I think it has missed its opportunity, but it will have another chance in committee. I hope that the government will be listening. If the government continues in this direction, I think that the next four years will be very long and full of hype, catch phrases, and empty rhetoric, but very thin in terms of measures that will truly help Canadians, especially middle-class Canadians and those with such low incomes that they struggle to make ends meet.

I look forward to questions from my colleagues in the House, but I want to reiterate that we will support the bill at second reading, because it maintains the TFSA contribution limit at $5,500, which has considerable tax implications, and we will try to make changes to the bill in committee.

[Income Tax Act, January 29th, 2016]

Mr. Speaker, I would like to congratulate the Minister of Finance on his appointment. We have talked on a few occasions, and I am looking forward to working with him over the next few years.

I would like to begin with some comments on the much-touted middle-class tax cut. That is what the government is calling it. There are various ways to define the middle class. One way is based on median income, which divides Canadians into two equal groups, half earning income above that amount and half below. In Canada, the median income is about $31,000. If we were to expand that definition and include everyone who is not part of the poorest 20% or the wealthiest 20%, the range would be from $20,000 to about $60,000 per year.

The Liberals' proposed tax cut, the so-called middle-class tax cut, excludes virtually all incomes under $89,000. An individual earning between $43,000 and $57,000 would get only about $26 on average. Basically, this tax cut takes money away from the richest 1% and gives it back, more or less, to the richest 20%, leaving most of the 80% who earn less out in the cold.

My question is simple. What is the Liberal government's definition of the middle class?

[Business of Supply, January 28th, 2016]

Madam Speaker, there was some bias in the question. First, I hope the member is not hinting that we should set the bar as low as possible for environmental protection and the assessment of risks and benefits, two vital components of such projects.

Second, in regard to the list of countries the member mentioned, we often forget that much of the oil we have comes from the North Sea, for example, and that never makes the list of countries or elements suggested by that party.

As for the different means of transport, I would direct her to the report on this very subject by the Standing Senate Committee on Transport and Communications, which I carefully read in 2013. The report is very helpful for understanding the problems associated with the transport of oil and other dangerous substances.

[Business of Supply, January 28th, 2016]

Madam Speaker, I am going to ignore the attempt to impute motives that is implicit in the question.

The NDP looks at the merits of any infrastructure project to be approved by the federal government. We look at the arguments for and against before taking a position.

The role of the National Energy Board should be to provide pertinent information and the expertise that is rarely available in the House, even in the government. In that sense, the process is extremely important. As I was saying, when considering the arguments for and against, we must look at the economic, legal and environmental aspects.

I have a good understanding of the situation, as I generally follow what is happening in the country, including the unfortunate economic situation in Alberta. I am very proud to be of the same political stripe as the current government in Alberta, which is working very hard to fix the problems created by previous governments.

It inherited an extremely difficult situation and has shown a willingness not only to create jobs, but also to promote the sustainable development of natural resources while bearing in mind the need to fight climate change.

[Business of Supply, January 28th, 2016]

Madam Speaker, first of all, I would like to say that I will be sharing my time with the member for Skeena—Bulkley Valley.

Since this is the first opportunity I have had to address the House other than in question period, I would like to take a moment to thank the voters in Rimouski-Neigette—Témiscouata—Les Basques for putting their trust in me for the second time. It is a privilege for me to represent them in the House. There is a lot of work to be done.

When the last session of Parliament ended, I was the official opposition critic for energy and natural resources. Obviously, the issue of pipelines, and energy east in particular, was very important. It was a major concern for me. This issue generated a lot of debate across the country, but particularly in Quebec. I took the issue very seriously because it affects me directly as an MP. The route proposed for the pipeline then and now goes through Témiscouata in my riding to get to New Brunswick. I had the opportunity to speak to many residents, mayors, and regional elected officials regarding their completely legitimate concerns about the project.

As the NDP's energy and natural resources critic, I undertook a consultation. I held some information sessions in my riding, across the Lower St. Lawrence, the region I represent, and across Quebec. It is important to note that every resident from a given municipality was invited to come hear about the project and to learn about different aspects of it. For example, the economic aspect is important and is often underestimated. In Quebec, we often forget that the natural resource, gas, and oil industry is important not only to the west, but also to Quebec. This was an opportunity to inform people who had an interest in the pipeline about the economic spinoffs of the project, not just in terms of investments, but also in terms of jobs. My consultations were as neutral as possible, to give residents the facts about the various studies that have been conducted on this topic, including a study carried out by the Conference Board of Canada and the Deloitte report. The consultation also included other studies from organizations that did not necessarily support the project. I presented all of this, and I shared my comments as an economist.

We also had a legal component in order to inform the public about the nature of the National Energy Board and how it works. Again, this is a little-known organization in Quebec because we are not used to having transboundary pipeline projects that come under the responsibility of the NEB. There was a lawyer on hand to talk about the process in an informative way.

Finally, we discussed some important environmental aspects that are the main cause for concern when it comes to energy east, as they are for any pipeline project we discuss in Quebec. This is about the potential impact on landowners, more specifically farmers who might end up with a pipeline traversing their fields. This is about the repercussions for the waterways and the watersheds. We shared the information as objectively as possible with residents of the municipalities where we had the chance to speak. Some of those municipalities were in my riding and in the Lower St. Lawrence. In fact, there were eight in all. I was able to speak to people in the municipalities that, under the current plan, would be crossed by the pipeline. People in Yamachiche, Lanoraie, Saint-Augustin-de-Desmaures, Terrebonne, and Saint-Bruno-de-Montarville had concerns and they wanted to hear about these issues.

As I said, these are legitimate concerns and they have to be part of the public debate. My problem with the motion is that it asks us to take a position and support the project before it ever undergoes a process of assessment and legitimate consultations whose objectives would include providing important information to the government so that it can make an informed decision.

That is why, this morning, my colleague and our House leader, the member for New Westminster—Burnaby, tried to amend the Conservative motion to include an element stating that the House should express its view that pipeline reviews must be credible, thorough, open, and free from political interference. The reason why this is so important is that one of the primary obstacles to this project in particular and others across the country is the lack of credibility; people do not trust the process or the National Energy Board.

It is extremely difficult to get support for a project and allow it to move forward without social licence and the knowledge that the people who will be affected by such a major piece of infrastructure are okay with it. Much of the blame lies with the Conservatives because they watered the process down and dismantled it to the point that people lack confidence in the National Energy Board and the process.

As for the consultation process, the Conservative government limited the consultation period to 15 months. For such an important project that runs from Alberta to New Brunswick and crosses thousands of waterways, the ramifications are absolutely endless, and yet a single body was asked to examine the entire issue in just 15 months before making a recommendation to the government. That is extremely problematic.

Another thing that is problematic is the restrictions imposed by the previous government, once again, on identifying people who can come forward and express their concerns or their opinion about this project to the National Energy Board, or NEB. In the case of the energy east project, when the NEB opened its doors and invited people to register for hearings, nearly 3,000 requests were received, but over 90% of them were rejected. For a consultation process that is supposed to be transparent and open to all Canadians, the fact that 90% of those who applied will not be able to submit a brief or even appear before the NEB is extremely problematic with respect to social licence.

It is the same problem with environmental assessments. Who was responsible for environmental assessments before the Conservative government made changes in the last Parliament? It was Environment Canada in co-operation with the provincial environment departments involved in the project.

Today, the National Energy Board is required to consult all of the people affected by such a long pipeline and conduct the environmental assessment. After speaking with many stakeholders, not only in my region, but also in the rest of Quebec and Canada, I can say that people have major doubts about whether the National Energy Board is competent and credible enough to work on the environmental assessment of these projects specifically. There was a reason why these two processes were separate. Each process required a different type of expertise. Now, the same organization is responsible for analyzing the entire file.

Obviously, I will not go back over what we learned yesterday about the report of the commissioner of the environment and sustainable development, who raised serious questions about the National Energy Board's ability to ensure that the conditions it imposes on such projects are met.

I could go on about that for a long time. I am very familiar with the topic. I will let my colleague have the chance to speak, but I would like to say that, as an economist, I fully understand the economic importance of this project. I understand that it is important not only for Alberta and the western provinces, but also for Quebec and the entire country. However, although it is important to look at the economic aspects of a major project such as this, if we want to gain Canadians' trust, we also need to consider the environmental and legal aspects. Unfortunately, they have not really been discussed in this debate.

[Employment Insurance, January 27th, 2016]

Mr. Speaker, the government has not engaged in any pre-budget consultations here in Parliament, as is usually the case.

Instead, it is using the Liberal Party website to consult people and, unintentionally I am sure, collect information that can be used for partisan fundraising. The economy has slowed down, more and more jobs are being lost, and 38% of people who pay into employment insurance do not have access to it.

Instead of looking out for itself, will the government help those in need immediately and create a universal 360-hour eligibility threshold for EI?

[Natural Resources, January 26th, 2016]

Mr. Speaker, the report of the Commissioner of the Environment and Sustainable Development showed that there are serious flaws in the pipeline oversight system. First of all, the contingency plans and oversight system are outdated. The report also indicated that the public was being kept in the dark, and to top it all off, the National Energy Board is not even ensuring that the conditions imposed on companies are being met.

How are Canadians supposed to have confidence in the system? When will the Liberals realize that it is going to take more than a band-aid solution to fix this completely inadequate system?

[Finance, December 7th, 2015]

Mr. Speaker, that being the case, under the Liberals' fiscal plan, people who earn a median income do not get anything. However, those who earn between $89,000 and $200,000 will receive the maximum tax cut.

Does the minister believe that people who earn a median income are not part of the middle class or will he agree to work with the NDP in order to ensure that 90% of the population gets something out of this?