Ziad Aboultaif

[Income Tax Act, January 29th, 2016]

Madam Speaker, all members should worry about their grandchildren.

By the way, as proud Conservatives, we do spend based on what we make. We make money, then we can spend money. We do not spend out of the pocket of the future generations. Our grandchildren matter to us.

[Income Tax Act, January 29th, 2016]

Madam Speaker, the members opposite sound as if they are the gods of saving and leaving money for others, while we know their history very well.

They keep referring to the past. They keep referring to what governments have done. They were never able to tell us, not in 100 days, what the complete plan is. What is it they are trying to do?

We would like to hear from them what the plan is, in dollars and cents.

[Income Tax Act, January 29th, 2016]

Madam Speaker, I would like to welcome two of my constituents visiting from Edmonton.

I will be splitting my time with the hon. member for Perth—Wellington.

The bill we are discussing today proposes to amend the Income Tax Act. It would reduce the second-lowest personal income tax rate from 22% to 20.5%, and introduce a new personal marginal tax rate at 33% for taxable income in excess of $200,000. Additionally, it would amend the act to reduce the annual contribution for tax-free savings accounts from $10,000 to its previous level with indexation of $5,500.

The question that must be asked is this. Why make these changes? Are they for the good of the country or are they political posturing?

Underlying the proposed legislation are opinions that investment in the middle class is the best way to generate economic growth and development, and that TFSAs disproportionally benefit wealthier Canadians. Quite simply, that is wrong.

These income tax changes would not be revenue neutral, as the member opposite claimed when the change was an election promise. These changes would plunge the country further into deficit spending.

As a father, I have worked hard to teach my children about the importance of living within our means and to be careful with their money. It may be a cliché, but I have told them that money does not grow on trees. By implementing these proposed changes, we would be sending my sons the opposite message. We would be saying that being fiscally responsible does not matter.

Tax breaks for the middle class are not in themselves sufficient to stimulate the economy. We cannot spend our way to growth, and we cannot tax our way to prosperity. What is needed is an economic plan, not politically motivated and hastily conceived legislation. By increasing government debt, these changes would negatively impact all Canadians. The bill lacks a concrete, targeted plan to stimulate economic innovation. In effect, it ignores the pressing need to develop these initiatives.

The parliamentary budget officer is quite clear that these changes are not a revenue neutral election promise, but a drain on the public purse. According to PBO research, the bill's proposed income tax bracket changes would lower government revenues by $8.9 billion over six years. This may not be important to those who believe the budget will balance itself. However, for those of us who live in the real world, numbers matter.

Based on Finance Canada's estimates, the new Liberal tax plan amounts to an average $6.34 a week extra for those individuals who qualify. We know this small tax break is not enough to grow our economy. Nor does throwing money at the middle class stimulate growth and innovation. Perhaps the government should be less worried about the income tax and focus on creating jobs so more people will be paying in.

The Liberal tax plan would raise taxes on higher-income earners, those who traditionally create jobs and grow our overall economy. By increasing taxes on these job creators, we are discouraging success and are punishing those who have done well for themselves.

The lack of transparency surrounding the cost of these changes is cause for serious concern. Canadians have the right to know how the taxation system impacts them and the country. This is not just about the present, but about the future of Canada.

The PBO's financial calculation drew from behavioural considerations of how people at different income levels might respond to the tax changes. It included taking steps toward lowering tax payments. Other reports have pointed to a high likelihood of brain drain for professionals in the upper tax bracket. People may choose to leave Canada for employment elsewhere rather than pay high taxes.

Apparently, the current government could not anticipate that. When facing a tax hike, some people will work to find ways to reduce their taxes. That is simple human nature.

In popular debate, in the media, and in academic research, a brain drain out of Canada is cited as a very real possibility and a logical outcome to these changes. Most doctors, lawyers, and other skilled professionals are found in the upper tax brackets, and their departure could be very dangerous for Canada.

Tax avoidance through reporting less income, using tax planning techniques to reduce the tax burden, working fewer hours, or even not seeking job promotions are very real possibilities.

Progressive income taxes like this reduce the return on education, since high incomes are associated with high levels of education. Such taxes reduce the incentive to build human capital.

The consensus among experts is that taxes on both corporate and personal income are particularly harmful to economic growth, as economic growth ultimately comes from production, innovation, and risk-taking.

Tax-free savings accounts are effective saving tools for all Canadians. They can be used to reduce economic vulnerability and dependence upon government. Limiting their usage will negatively impact Canadians across the socio-economic spectrum. It is not only the rich who open TFSAs but Canadians of all ages and all walks of life. Moreover, limiting the potential for TFSA contributions would result in greater vulnerability and dependence of Canadians. TFSAs are used widely by many Canadians. Thus, these policies affect an extremely wide variety of citizens.

According to the parliamentary budget officer, Canadians have the largest personal debt of any G7 country. I find it strange that any Canadian government would introduce measures that would discourage savings, yet in reducing the tax-free savings account limits, the government has done just that instead of encouraging thriftiness, living within one's means, and saving for a rainy day.

The current government wants to spend its way out of debt. Two and two does not add up to five, and wishing it were so does not make it so.

For many years I was a businessman, owning and operating a number of small businesses. I can assure members that a business with spending that consistently exceeds revenue does not stay open very long.

As custodians of the taxpayers' hard-earned funds, it is our responsibility to act responsibly, not recklessly, with the nation's finances.

These new measures will affect all taxpayers as governments move deeper into deficit and the national debt grows increasingly larger. Someone at some point will be called upon to foot the bill. When our children and grandchildren are struggling to maintain essential services and climb out from under a mountain of government debt, they will be asking why we failed to act in a responsible fashion. What will we tell them? Will we tell them that we truly believed budgets would balance themselves?

For the good of Canada, this bill needs to be defeated.

[Income Tax Act, January 29th, 2016]

Madam Speaker, the majority of TFSA accounts belong to low- and middle-income earners. In fact, two-thirds of TFSAs are held by tax filers with incomes of less than $60,000. How does the member opposite expect these Canadians to save for their future amid rising living costs?

[Organ Donation, January 25th, 2016]

Mr. Speaker, more than 200 Canadians die needlessly every year waiting for an organ transplant. Their deaths could be prevented if only more people were aware of the need and were willing to help. In 2003, I donated part of my liver to my son, Tyler, who needed a living donor. Any father would have done the same. Then his liver failed again, twice. Two grieving families came forward anonymously. Their gift allowed my son to live.

Sadly, for far too many, the outcome is not such a happy one. It seems potential donors or their families are unaware of the good they could do.

I urge all members to support the creation of a national organ donor registry to coordinate and promote organ donation across Canada.

[Taxation, December 8th, 2015]

Mr. Speaker, when the Liberals proposed changes to the tax system, they claimed the cuts would benefit the middle class. However, their proposal would give the maximum benefits to those who are making over $89,000 per year. Was it the government's intent to give the biggest tax break to people making between $100,000 and $200,000 annually?