Mr. Speaker, I will be sharing my time with the hon. member for Victoria.
The widening income gap, whether on a global, national or community scale, is clearly a social justice issue. However, it also poses a threat to our prosperity, our safety and even our health.
As a number of studies have shown, in a more egalitarian society, the poor as well as the rich are healthier. Equality benefits everyone.
High income inequality, globally and in Canada in particular, is a concern to many people. Yesterday, Christine Lagarde, the managing director of the IMF, addressed the issue and called it an obstacle to our country’s return to greater prosperity. It is a problem that therefore needs to be addressed, not only for the sake of social justice, but also for the sake of our collective well-being.
Unfortunately, Canada has been moving in the opposite direction for a number of years now. The gap between the rich and the poor continues to widen, as does the gap between the rich and the middle class and the gap between workers and the big bosses.
There is a tendency to place much of the blame for this state of affairs on Conservative government policies. Some of the responsibility must indeed be borne by the Conservatives, but at the same time we need to realize that they are not entirely to blame. In fact, 94% of the increase seen in income inequality over the past 35 years occurred on the Liberals' watch.
However, I get the impression that the Conservatives felt they had not done enough to widen the gap. They decided to press the issue. They have proposed income splitting for couples with children under 18 years of age. Basically, this will benefit mainly the wealthier members of our society. Under the proposal, one spouse would be able to transfer up to $50,000 in income to the other spouse for tax purposes.
To better understand the situation, consider the example of an MP with children and a spouse who does not work. I think all of us can identify in some respects with this example. This MP would be able to transfer $50,000 in income to his or her spouse. I imagine that some MPs would be delighted to be able to do that. The problem is that while this measure may be advantageous for MPs and high income earners, for the vast majority of Canadians, it will be of little or no benefit.
Let me describe to you those who would not benefit in any way whatsoever. There is no benefit for people earning less that $44,000 a year. A couple earning more than $44,000, where both spouses have relatively similar incomes, regardless of what that income might be—$100,000, $200,000 or $300,000—will not see any benefits if they are more or less in the same income bracket. Income splitting will not benefit single persons, childless couples, couples with adult children, single mothers and fathers, and divorced parents. For the vast majority of other people, the benefits will be relatively minor.
According to figures released by the C.D. Howe Institute and the Broadbent Institute, income splitting would benefit only 10% to 15% of families, and obviously the wealthier families.
I have nothing against tax cuts, but they should target the people who need them the most. If we take a closer look at the numbers, we see that this measure will actually benefit 5% of the wealthiest families, at the expense of taxpayers in general, because public funds are involved.
The measure would cost the federal government $3 billion annually to implement and, according to the Canadian Centre for Policy Alternatives, the price tag for the provinces would be about $2 billion. There are quite a few zeros in $5 billion. I wonder if this government has given any thought to what it else it could possibly do with such a large sum of money.
I can think of many things it could do. For instance, it could help every single family, not just the wealthiest, find housing. In one part of my riding, 25% of households with children live in one-bedroom or studio apartments. Yes, in Canada. I am deeply shocked.
Could the government not earmark the tidy sum of $1 billion to help people in this situation? Could it not set aside a little more money for seniors' pensions or for infrastructure that is in need of repair? Is there not some way to help all families, not just a few?
Unfortunately, this government would rather focus on a small number of Canadians who are already among the wealthiest citizens. This government is Robin Hood in reverse. It continues to raise taxes and cut services to the middle class. It chips away at EI, raises the retirement age and delivers a fatal blow to Canada Post, all for the sake of providing some tax breaks to the wealthiest members of our society.
Indeed, I would call this government “Dooh Nibor”, which is Robin Hood backwards. It continues to take from middle-income citizens who have trouble making ends meet, through taxes and cuts to services, to give to the wealthiest.
This bill has even more harmful effects because it might discourage women from joining the workforce. I am not the only one to say so. The rather well-known C.D. Howe Institute also says so.
It says that income splitting would significantly increase the marginal effective tax rate for most spouses with a lower income, which would create an obstacle to employment or a return to work. This would reduce the work experience of married women, who unfortunately often have a lower income, which would make them more vulnerable. The Institute is of the opinion that income splitting would not achieve its self-proclaimed objective of equality if the objective is to support families with children and that this measure could actually benefit families with no children.
Among the harmful effects of this measures is a geographic imbalance, in that some provinces would benefit from it more than others. One of the provinces that would benefit less is Quebec, which this government has completely abandoned.
It was minister Flaherty who said, and rightly so, that this was not really a good idea. For all these reasons, I will stand with my NDP colleagues and strongly oppose this bill.
