Mr. Speaker, thank you for allowing me the opportunity to speak to this NDP proposal to grant some preferential treatment in the area of taxes to a select few Canadians.
Before I continue, let me say at the start that our Conservative government is tremendously proud of the talent and accomplishments of Canada's artists, whether they are international stars such as Justin Bieber, Ryan Reynolds, Seth Rogan and Carly Rae Jepsen or our local stars in our community theatres like my son, handsome actor Michael Strickland, who is always a star in his mother's eyes.
The arts and artists not only enrich our lives; they also express and strengthen the Canadian identity, and that is why we appreciate and support them. By this I mean more than moral support. We have made major investments in the arts sector since 2006. The following are a few examples of these. We have established two new national museums. We have increased Canada Council for the Arts funding to an unprecedented level. We established the Canadian Media Fund to support Canada's film and television industries, and the creation of content for digital media. We have invested in cultural infrastructure. We introduced the children's arts tax credit.
We have also expanded our contributions to the arts through various initiatives in the economic action plan 2012. For example, we gave further support to museums through the Canada travelling exhibitions indemnification program, and maintained our record level of financial support to the Canada Council for the Arts in spite of the current budget situation. I am pleased to point out that these initiatives were warmly welcomed by the arts community.
The Canada Council said that it was “enormously heartened by the positive message sent by the 2012 budget and the support of the government in recognizing the Council's leadership role…This vote of confidence in the Council is a clear signal of support for the arts as the creative heart of the nation.”
The Canadian Museums Association added that it was, “very pleased with this budget…museums are being identified as important generators of jobs and growth in Canadian society.”
Indeed, we support and value the arts not only because they contribute culturally to Canada, but also because of their importance to the Canadian economy. The arts sector generates $46 billion in economic activity in Canada and provides jobs for more than 635,000 Canadians, twice as many as in the forest industry.
One thing is clear: the arts play an important positive role in employment and growth across Canada. They generate many jobs, help to attract investment to our communities and contribute much more as well. As we said previously, the arts are an integral part of a vigorous economy.
That is only one of many reasons why our government will continue to provide solid and full support to Canadian arts and artists through sound but affordable policies to help them compete and succeed.
That brings me to the conversation around the NDP proposal today. We have to ask if today's NDP proposal is the kind of affordable policy that would truly help the arts to grow. Would it be fair to other taxpayers? First, let us look at the issue of fairness.
While the idea of giving artists alone special tax treatment to reduce their tax bill in high-income years may sound attractive to high-income artists who would benefit, it likely would raise concerns for other taxpayers, especially those who also may see big swings in their incomes from year to year. This list would include everyone from our farmers, fishermen, real estate agents, car salesmen and self-employed contractors to seniors who may realize large capital gains, such as in the selling of a family cottage. The list goes on and on. I am sure we would all agree that, even though they work in different ways, artists and all the groups I mentioned work very hard and with dedication.
To suggest that someone's work is more valuable than another's by giving them a special tax break would not be well received and would raise serious fairness concerns. On that note, I will quote the well-known and widely respected University of British Columbia economics professor Kevin Milligan. Professor Milligan looked closely at this proposal and concluded the following:
[T]he NDP's tax policy proposals still need some more rehearsal time....
[I]ncome averaging is an extremely clumsy apparatus for supporting the arts--to the extent it would even help at all. Let the debate on support for culture flourish, but let's keep income averaging out of it.
Quite clearly the NDP's proposal for income averaging would make the tax system more complex and only benefit a select few Canadians, with questionable effectiveness. Indeed, general income averaging for all Canadians, not only for artists, was permitted in Canada at times in the 1970s and the 1980s. It proved such a policy failure then that it was phased out completely. Moreover, with reforms to the personal tax system since the 1990s, the case for income averaging is even weaker.
Again I quote Professor Milligan:
[I]ncome averaging deserved its death, and should stay that way.
First, [in the 1970s and 1980s] the averaging mechanisms became extremely complicated.... [They] added a substantial administrative burden to the tax system.
Second, we don't have so many tax brackets any more. In 1971, there were 17 different federal tax brackets.... Now in 2011, with only four broad brackets, volatile income creates fewer problems.
Nevertheless, even if we were to ignore all the other policy concerns with this proposal, like its lack of fairness and administrative complexity, we would still have to consider its cost. In times like these, Canadian taxpayers want to know that their tax dollars are being used wisely and that their elected representative knows and considers the cost of any proposals he or she makes.
We have looked at the cost of today's NDP proposal, and it would be significant, in the tens of millions of dollars at a bare minimum, and likely much more depending on the take-up. We have also asked the Parliamentary Budget Officer to cost the proposal to further illustrate the significant cost.
I am somewhat disappointed to note that we had to cost this proposal because the NDP simply did not bother to do so initially. Indeed, last year, when the NDP first proposed income averaging for artists, this is what the NDP said when asked about its cost at a press conference. I am quoting the hon. member for Timmins—James Bay in a 680 News story that is still posted online for all to see. When questioned about the total costs, the NDP member could not give an answer. He simply said, “We don't have the exact number....”
No responsible Canadian family would ever consider adding something to their household budget when they did not know the cost, and they would expect the same of their MPs.
To conclude, our government will take action and will support the arts, as it has repeatedly demonstrated. But it will do so by supporting sound, effective and affordable policies.
I stand here today on behalf of the Government of Canada, saying that we respect all taxpayers equally. We expect equal treatment. That is something the NDP has said time and time again in this place. I would ask them, how on earth could they propose such a bill that would treat Canadians differently? I would suggest that they rethink this. It is not fair to most Canadians who are in the exact same situation. If one looks at the costs to include all Canadians who face this very type of situation, we are looking at significant costs that have not even been considered by the NDP member who submitted this. I would suggest it is something that ought to have been done before he got so deeply into this.