Mr. Speaker, I rise to speak in respect to our budget, and there are many wonderful things to be said about some of the measures across the board. However, I will spend the limited time I have speaking in respect to the family tax measures.
I sincerely believe, after now some 18 years in this place, and I have seen it more and more across our country, that support of family is absolutely vital. It is very crucial. If we support family, we will not be paying the costs in terms of the health care system, social welfare system, and justice system. However, if we choose to undermine and hurt family by way of regressive tax policies and numerous other things, then we do it to our own detriment, and we will eventually pay through the nose in various other programs.
I am pleased to see that our Conservative government has followed through on its election promise to introduce income splitting with our new family tax cut. Of course, there is always more that can be done in these areas in respect of providing tax relief for individuals, but I am excessively proud of the fact that we have done this for our country and for our families in particular.
I was one of a handful individuals in the early days some years back who agitated, pushed, and provoked for this. The groundswell, that momentum, grew such that we have these very commendable provisions of income tax splitting for families.
To get into specifics, the family tax cut is a federal tax credit that would allow a higher-income spouse to transfer up to $50,000 of taxable income to a spouse in a lower tax bracket. That credit would provide tax relief, presently capped at $2,000, for couples with children under the age of 18, effective for the 2014 tax year.
Income splitting is already helping seniors across the country. I hear reports of that in my riding, with gratefulness expressed on the help that it is to them. It is also why the government is now proposing a similar relief for other families as well.
Increasing the universal child care benefit, UCCB, for children under the age of six is a measure we are implementing. As of January 1, 2015, parents would receive a benefit of $160 per month for each child under the age of six, which is up from the current $100 per month, and that is important. In a year, parents would receive up to $1,920 per child.
Expanding the UCCB to children aged 6 to 17 is another one of our measures here. It is a new measure as of January 1, 2015. Under the expanded UCCB, parents would receive a benefit of $60 a month per child aged 6 through 17. Therefore, in a year, parents would receive up to $720 per child through that particular measure.
As another measure, we are increasing the child care expense deduction dollar limits by $1,000 effective for the 2015 tax year. The maximum amounts that can be claimed would increase to $8,000 from $7,000 per child under the age of 7, and it would increase to $5,000 from $4,000 for children aged 7 through 16.
It would also increase to $11,000 from $10,000 for children who are eligible for the disability tax credit, which is near and dear to my heart. I understand, on a personal and first-hand basis, the challenges of parents and families who have kids with disabilities. They are special children in our world, and our government, thankfully, is taking some measures to effect some positive benefits for these families in respect to those dear children.
Families could claim the family tax cut in the spring of 2015 when they file their 2014 tax returns. They would begin to receive payments under the enhanced UCCB in July 2015, this coming summer. The July UCCB payment would include up to six months of benefits to cover the period from January through June, and so it would be a catch-up for the prior six months. The enhanced UCCB would replace the existing child tax credit, CTC, for the 2015 and subsequent tax years.
I should remark, so that there is no misinformation or misunderstanding—because we have had questions in my constituency office, as other members will no doubt—on the enhanced UCCB replacing the existing child tax credit, CTC. I want to be clear that this is different from the Canada child tax benefit, or CCTB. There are all these acronyms that are important to understand. That significant benefit would continue on. The Canada child tax benefit is a significant benefit to low-income families and some middle-income families. It would continue on in addition to these new benefits that have just been announced to kick in starting January 1, 2015.
The government would continue the Canada child tax benefit, but as I said, it would merge the child tax credit with the universal child care benefit.
The child tax credit provides up to about $344 per child, per year, and it only goes to families with children under the age of 18 who paid federal income tax, whereas the UCCB would provide at least $720 per child, per year, and would go to every family with children under 18 years of age. It is not a means-based, income-tested provision, but it is one that would go to every family.
Members across the way, including the Liberal member who spoke just prior, have inferred that it would not apply to a lot of people, only 15%. If I were not in this place, I would use another term to describe what those members said. They are trying to confuse Canadians by giving them misinformation with respect to this. This would benefit people across the board. I think it is some 80%. The majority of Canadian families would benefit from this.
These new provisions mean that all families with children would benefit from these new measures introduced by our government. The average tax relief and benefits for these families would be $1,140 in 2015. Low- and middle-income families would receive two-thirds of the overall benefits provided by the package. The family tax cut would eliminate or significantly reduce the difference in the federal tax payable by a one-earner couple relative to a two-earner couple with a similar family income.
Earlier this month, the government announced its intention as well to double the children's fitness tax credit and make it refundable. It would come as an actual cheque instead of being taken off income tax paid.
The maximum amount of expenses that may be claimed under the credit would be doubled from its current limit to $1,000 for the 2014 tax year and subsequent tax years. The credit would be made refundable, effective 2015 and subsequent tax years.
Canadians at all income levels benefit from the federal tax relief measures introduced since 2006, with low- and middle-income Canadians receiving proportionately greater relief.
I want to give a case study as to how the family tax cut would work for many Canadian families.
As an example, Pat and Chris are a two-earner couple with children. Pat earns $60,000 of taxable income and Chris earns $12,000, for a combined taxable income of $72,000. Pat faces a marginal federal tax rate of 22% and Chris is in the first tax bracket, where income is taxed at 15%. Since the value of Chris' non-refundable tax credits is greater than the tax on taxable income, he does not pay any federal tax presently. So, for federal tax purposes under the proposed family tax cut, Pat would be able to, in effect, transfer $24,000 of taxable income to Chris and that would bring their taxable incomes for the purposes of calculating the credit to $36,000 each, which puts both of them in that 15% tax bracket. In addition, Chris would be able to use up his unused non-refundable tax credits with the notional transfer of income. As one person in the couple may claim the family tax cut, they decided Pat would be the one to do so. The family tax cut would reduce Pat's tax payable by about $1,260 in 2014, taking into account both the reduced tax on their taxable incomes and the additional value of the non-refundable credits that Chris is able to use. That would give them a great benefit.
I would like to explain what the combined benefits of the family tax cut and the enhanced UCCB would mean to another Canadian family. Dale and Kelly are a two-earner couple with two children aged seven and three. Kelly earns $95,000 and Dale earns $25,000. To sum it up, this family would be better off by about $7,285 in 2015 as a result of all of the benefits that would be derived from this recently announced package.
I am proud of this. If we can help families, then we are helping society. We are also helping ourselves as a government. There would be less of a tax burden in the welfare system, the justice system, and the health system.
Helping families, the basic building blocks of society, is always a good thing to do. I am very proud that our Conservative government is doing just that.