Mr. Speaker, it is my pleasure to rise today to speak in support of Bill C-2, An Act to amend the Income Tax Act. As stated on January 29 by my hon. colleague, the member for Toronto Centre, Bill C-2 would help strengthen and grow the middle class, as promised in the government's election platform. Bill C-2 would deliver on that promise.
All hon. members of the House have heard about widening income inequality. On January 1, 2016, Canada's highest-paid CEOs had already earned what most Canadians earn in an entire year. With this growing gap between extreme ends of the income scale, the people who are squeezed the most are the people in the middle-income group. They are the Canadians whose real take-home pay packages have been declining, and these are the Canadians who contribute to the economy and pay their taxes and spend money so the economy can keep growing. This is the group that we would like to address with our tax cuts.
My colleagues and I have been conducting town hall meetings for this pre-budget consultation. We have engaged thousands of people and continue to do so. Resoundingly, the people who have attended the town halls have been telling us that the tax cuts we are proposing are a good move. It is the first move toward prosperity for all. However, constituents also know that the rhetoric from the Conservatives is just that. It is filled with fallacy. So they want me to get some facts right.
The Conservatives had the worst job-creation record since 1946, the worst economic growth in G7, and the worst budget deficits, with some eight deficits in a row. According to Mr. Jim Stanford and Jordan Brennan, “it turns out that the economic record of the [previous Conservative] government is actually the worst of any government since World War II—and by a wide margin”.
The first order of business this government therefore undertook, as promised in our platform, was to cut taxes for a majority of Canadians. We promised to invest in infrastructure, in physical and social infrastructure as well as green technology. Throughout the debate today, the Conservatives have been talking about job losses and want the Liberal government to clear up the mess the previous Conservative government created over 10 years. We are not magicians; in 10 weeks we cannot do that. However, there is something that we can all do together. As a person who works in the financial field, I always advise my clients to diversify and not to put their eggs in one basket. This is common sense. Unfortunately, the previous Conservative government did not believe in wider diversification.
The resource industry is an important industry, but it also needs investment in research and development to help it diversify. If the previous government had diversified the energy sector, the creative people who are intelligent would have been able to move to different areas of work, like in the clean-technology environment, and we would have maintained our market share of the clean-energy sector, which was at 74%, but we have lost it.
Canadians are intelligent, smart, and resilient. Therefore, we would like to improve economic growth for everyone by working with everyone. I hope the hon. members opposite will support this because it is a move in the right direction. We said that we would cut taxes for 90% of the people, invest in infrastructure, create good jobs, and invest in children.
Bill C-2 helps these Canadians directly by lowering the income tax rate they pay. The passage of Bill C-2 would reduce the income tax rate from 22% to 20%, and this change alone would benefit approximately nine million Canadians whose taxable income is between $45,000 to $90,000. I personally know many people in my riding of Don Valley East who would benefit from this well-deserved tax cut.
In my riding, the majority of people do not earn more than $50,000. That is what we call the “middle income”. They need the help, and with our tax cuts plus the investment in the Canada child benefit, people will move out of poverty and into economic prosperity, which will help them pay taxes and help the economy grow.
Several international organizations, such as the World Bank, the IMF, and the OECD have concluded that growing income inequality is a hindrance to economic growth. In its report entitled “Alternative Federal Budget 2015”, the Canadian Centre for Policy Alternatives found that the top 1% income earners in Canada pay less in income tax than the poorest 10%. That is unfair, which is why we have created a new category for that 1% earning $200,000 and more.
Our government has taken the bold step of bringing about a progressive taxation system. I have been to many think tanks, and as a tax consultant myself, people have been telling me that the boutique tax cuts that the previous government made deprived the treasury and benefited only a handful of people, and that is totally unfair. It is why we see ourselves in the situation we are in. It is because the previous government lacked common sense or economic sense.
The other aspect of Bill C-2 that I would like to address is income splitting. There has been much misunderstanding on this, and I will set the record straight.
Bill C-2 does not apply to pension income splitting for our senior citizens. The repeal of income splitting will only apply to a small group of families. According to the commentary from the C.D. Howe Institute, only 15% of the population benefits from this, which is why the late Jim Flaherty, the minister of Finance for the Conservatives, did not believe in it.
Bill C-2 contains critical building blocks, which are necessary to restore fairness and progressiveness in our income tax system. It would provide our government with revenues that would otherwise have been hidden from taxes to invest in people and make the economy grow.
