Jim Flaherty

[Income Trusts, November 6th, 2006]

Mr. Speaker, let me try to understand the position of the Liberal Party on this matter.

Two weeks ago, on October 18, the critic for finance, the member from Markham said that we had no definite position on this issue. Then the other day, with the leader I gather, they decided in some kind of knee-jerk reaction that they would vote against seniors and vote against pensioners on this bill. The reason seemed to be that it was absolutely the right thing. It went something like “We had started on this track to protect the tax base, to ensure tax fairness, and to work for the productivity of the--

[Income Trusts, November 6th, 2006]

Mr. Speaker, the intention was always to provide income security for seniors which we are doing through the splitting of pension income. For pensioners with $40,000 worth of income, instead of paying at the current $40,000 marginal rate, they will now pay at a $20,000 marginal rate each which would be a saving for them of $2,500. At the $60,000 level the savings would be about $2,700. These are direct savings for pensioners in Canada commencing January 1, 2007. I am surprised the Liberals are not going to vote in favour of the bill.

[Income Trusts, November 6th, 2006]

Mr. Speaker, the member opposite talks about muzzling a critic. Here is another view, “It was absolutely the right thing and we had started on this track to protect the tax base, to ensure tax fairness and to work for the productivity of the nation”. That was the member from Markham yesterday afternoon on television. Perhaps the member opposite would like to muzzle his own critic.

[Income Trusts, November 6th, 2006]

Mr. Speaker, what is confusing is the position of the Liberal Party on this matter. This is a file that it bungled last year. This is a matter that it failed to address. It has now been addressed and addressed clearly.

If the member opposite is interested in what corporations, business leaders and economic columnists in Canada think about this, he can read the press from coast to coast that is almost uniformly recognizing that this was the right thing to do, people like Domenic D'Alessandro, the CEO of Manulife, who said, “I think it's the right thing. I agree with the--

[November 3rd, 2006]

Mr. Speaker, the Department of Finance conducts regular projections of Canada’s financial situation and outlook, which cover the medium term outlook, i.e., the next five fiscal years. Two year fiscal projections for 2006-07 and 2007-08 were published in the budget presented to the House of Commons on May 2, 2006

In addition, in preparing for the economic and fiscal update to be released in the fall of 2006, the Department of Finance is preparing five year fiscal projections to the year 2011-12, based on the average of private sector economic forecasts. Private sector forecasters have also been hired to prepare five year projections of the government’s financial situation.

[November 3rd, 2006]

Mr. Speaker, the issue of fiscal balance has garnered much public debate and study.

Many academics, think tanks and stakeholder organizations have produced studies on fiscal balance. The only studies commissioned by the Department of Finance were those from the Expert Panel on Equalization and Territorial Formula Financing. The expert panel was tasked by the Department of Finance with reviewing the two federal transfers and, as part of its work, commissioned studies, undertook consultations and met with a number of provincial and territorial governments, academics and experts. The expert panel was established on March 21, 2005, and it presented its final reports to the Government of Canada on June 5, 2006. These reports are available publicly at http://www.eqtff-pfft.ca/english/epreports.asp.

In addition to commissioning this major report, the Department of Finance produces its own analysis on the issue of fiscal balance, as well as analyzing academic and stakeholder commentary and proposals in the development of its advice to the Minster of Finance.

“Restoring Fiscal Balance in Canada,” the companion paper to the budget presented to the House of Commons on May 2, 2006, was a major study prepared by the Department of Finance.

Following the tabling of “Restoring Fiscal Balance,” the Department of Finance continues to work on proposals to meet the fiscal balance commitments. It sought the input of Canadians through online consultations, and is in the process of reviewing the submissions, many of which were released publicly by stakeholders.

[Taxation, November 2nd, 2006]

Mr. Speaker, I thank the hon. member for his question. I certainly acknowledge the extensive work the hon. member did with respect to advocacy on the issue of income splitting for pensioners in Canada.

That policy is now going forward. It is a major change in tax policy in Canada. There is special reason to make the change with respect to pensioners, to encourage investment and savings for retirement through pension vehicles.

I understand the principle that the member speaks about and certainly it is worthy of further study, as are other tax measures.

[Income Trusts, November 2nd, 2006]

The platform, Mr. Speaker, certainly pledged income security for seniors and there is a major tax change that was announced on Tuesday. I know the Liberal Party is opposed to pension splitting for seniors in Canada. I know that is the position of that particular political party.

We recognize that this is a major change in tax policy that is vitally important for seniors and pensioners in Canada who have sought this tax change for many years. This is a tax change that was recommended more than 40 years ago. The government listened to pensioners in Canada and has responded with a major change in tax policy.

[Income Trusts, November 2nd, 2006]

Mr. Speaker, the commitment of course was to support financial security for seniors in Canada and what we saw this year was an acceleration of the creation of income trusts.

There were more than $70 billion worth of income trusts announced this year alone. Not only did we have this acceleration of income trusts, we also had the reality that income trusts were entering into active areas of business requiring investments in technology, machinery and equipment, particularly in the telecommunications sector. This presented a clear and present danger to the health of the Canadian economy.

[Minister of Public Works and Government Services, November 2nd, 2006]

Mr. Speaker, I dare say, if we are talking about arrogance, how arrogant is it to expect ordinary Canadians to bear a tax burden greater than large corporations bear in this country? How arrogant is it to say to average Canadians and pensioners that they should not be entitled to split incomes for pensions? That is arrogance. That is the position of the Liberal Party opposite.