That the Standing Committee on Finance be instructed to undertake a study on income inequality in Canada and that this study include, but not be limited to, (i) a review of Canada’s federal and provincial systems of personal income taxation and income supports, (ii) an examination of best practices that reduce income inequality and improve GDP per capita, (iii) the identification of any significant gaps in the federal system of taxation and income support that contribute to income inequality, as well as any significant disincentives to paid work in the formal economy that may exist as part of a “welfare trap”, (iv) recommendations on how best to improve the equality of opportunity and prosperity for all Canadians; and that the Committee report its findings to the House within one year of the adoption of this motion.
He said: Mr. Speaker, I rise today to introduce my motion M-315, on the issue of income inequality in Canada.
I would like to start by telling the House a bit about my dear friend the late Wallace McCain, a great Canadian who passed away last year. At his funeral, Frank McKenna gave the eulogy, and in describing Wallace, Frank said:
He was a steely-eyed capitalist, competing and winning against the biggest and best in the world. On the other hand, he was also a deeply patriotic Canadian, committed to a caring and sharing society. He believed the government has an important role. He believed in public health care. He believed in early childhood development, he believed in progressive social policies. He believed that we truly are our brother's keeper.
Wallace McCain used to say, “I pay a lot of taxes. I don't mind paying taxes. Everybody's got to pay their taxes. We get a lot for our tax money in this country”.
I share this story about Wallace's vision on the role of government because I do not believe that the issue of income inequality should be reduced to one of class warfare. It should be about creating and protecting equality of opportunity.
Wallace McCain would have wanted Parliament to study income inequality because he would want us to continue to ensure that Canada is a place where we can grow up in Florenceville, New Brunswick, and with education, hard work and a lot of determination, go on to conquer the world. Then when we succeed, it is about giving back. It is about building a Canada where we can hope for a better life for our children, our grandchildren and our neighbours' children and their grandchildren. It is about making sure that regardless of where we start, we can work to make a better life for ourselves and our families, that we have a chance.
As MPs, we have a responsibility to make sure that Canadians can access the tools they need to succeed, regardless of where they start. Unfortunately, in Canada opportunity remains far from equal. Income inequality across Canada is in fact growing. This has been the trend for the past generation under federal and provincial governments of all stripes.
Inequality is growing between Canadian regions as our economy is divided between resource-rich provinces and those without. Inequality is growing between urban and rural Canada, and it is growing between aboriginal and non-aboriginal Canadians. These growing inequalities result in tremendous costs for our economy in terms of lower economic growth and higher demands on health and social services.
The economic cost of growing inequity and inequality for aboriginal Canadians is particularly alarming, and the trend is getting worse. On the issue of aboriginal poverty, we face the growing cost of Canada's youngest and fastest-growing population also being the most economically disadvantaged and socially disenfranchised.
Growing income gaps have been the trend across OECD nations, although some countries are doing better than others. When it comes to the growing gap between rich and poor, no political party in Canada has a monopoly on answers or the blame, but in recent public opinion surveys, Canadians have identified growing income inequality as the most important issue they want their members of Parliament to be working on. That is why I proposed this motion: so that parliamentarians could work together across party lines on ideas to strengthen equality of opportunity for all Canadians.
The issue of growing income inequality in Canada has recently been identified as a major public policy challenge by the OECD, by the Conference Board of Canada and by Canada 2020. The level of inequality in Canada is in fact above the OECD average, and while it is true that the U.S. still has higher income inequality than Canada, income inequality in Canada is now growing at a rate faster than that in the U.S.
Even Bank of Canada Governor Mark Carney agreed that this recent growth in inequality is an important challenge, and Mark Cameron, a Conservative and a former director of policy to the , has argued that addressing the issue of growing income gaps should be a priority for the Conservative government. Let me read from Mr. Cameron's recent paper on the issue:
A society in which a small group is perceived to be benefiting unfairly, or where there are wide gaps between social and economic classes, can lead to dissension, jealousy and anti-social behaviour, even if the less well-off are still making material gains. This, in turn, can lead to increases in crime, loss of participation in social and charitable organizations, and greater demands for government intervention to help deal with these social tensions. Such a scenario should concern not only social democrats or liberals..., but also conservatives who are concerned about maintaining public support for free markets and limited government.
The fact is, equality is good for the economy. Howevever, on that front our economy faces strong headwinds. The problem of Canada's shrinking middle class has been somewhat masked by cheap credit as Canadians borrow more and increase personal debt in order to make ends meet. Canadians now owe, on average, more than $1.50 for every dollar of annual income.
The record levels of debt-financed consumption we see by Canadian households cannot continue forever. The Bank of Canada has already identified Canada's record levels of household debt as the biggest risk to our economy, and it is just a matter of time before rates start to rise. The problems of growing income inequality will grow as rates go up.
Recent studies also show that income inequality is not just growing between individuals; it is also growing between Canadian neighbourhoods. In fact, incomes in the poorest neighbourhoods in Canada are not just stalling: between 1980 and 2005, their incomes actually shrank, making the poor even worse off. However, in the top neighbourhoods, incomes continue to grow rapidly. As a result, Canadian cities, communities and towns are becoming increasingly ghettoized. This division leads to weaker communities, increased crime and worse outcomes for health and education.
The Code Red study in Hamilton, Ontario, looked at the link between income inequality in Hamilton neighbourhoods and the health of its citizens. The results are startling. It found a 21-year difference in life expectancy between those living in the richest neighbourhoods and those living in the poorest. In fact, the poorest neighbourhood in Hamilton would rank 165th in the world in terms of life expectancy.
People living in poorer neighbourhoods also require significantly more time in the hospital. They are more likely to find themselves in emergency rooms.
Healthy birth weights are an important indicator of future health. The average rate of low birth weights in sub-Saharan Africa is 15%. The study found seven Hamilton neighbourhoods where the rate was more than 20%, including one where the rate was, astonishingly, 47%.
The study described some of the poorest neighbourhoods in Hamilton as living with
...Third World outcomes and Third World lifespans—all the more shocking in a city with a major medical school and top teaching hospitals, in a country with universal, publicly funded health care.
Income inequality can be a life-and-death issue. Stats Canada has been looking at income levels and the probability of dying prematurely. The results show a Canadian male in the top 20% of income earners only has a 27% probability of dying prematurely. However, that risk rises to 35% for average-income males and 50% for those in the bottom 20% of incomes. It is 52% for an aboriginal, and there is a 69% chance of premature death for those living in a shelter or rooming house.
The issue is also about hope. For generations, Canadians have prided themselves in calling Canada a land of opportunity, a place where someone can arrive with nothing, but with hard work and perseverance can make a better life for themselves and their family, and while they are struggling to make it, Canada's social safety net will be there with them.
The economic mobility project recently asked Canadians about their current thoughts on economic mobility and their level of hope for the future. Only 47% of Canadian parents—less than half—now believe that their children will be able to match the same living standards of their parents.
As parliamentarians, we should consider that fact carefully. When people no longer have hope for the future and for their children, that is when they start getting into trouble.
When it comes to specific measures that can both reduce income inequality and improve GDP per capita, the focus of the proposed finance committee study, there are some areas in which Canada is already adopting some best practices at both the federal and provincial levels.
I believe one good idea is the working income tax benefit. This refundable tax credit helps remove disincentives to work by bridging the welfare gap faced by low- and modest-income Canadians. It helps the recipients and it helps the Canadian economy. It is an idea that was first introduced by the previous Liberal government in the 2005 fall mini-budget and the subsequent election platform, and it was implemented by this Conservative government in budget 2007 and increased in 2009. It is an idea that builds on successful provincial programs, such as Saskatchewan's employment supplement and rental housing supplement and Quebec's work premium, which are also designed to help Canadians in those provinces climb the welfare wall and get out of the welfare trap.
Another area where investments both grow the economy and help address inequality is investments in early learning and child care. Together with the provinces, communities and parents, we can support initiatives for early learning and child care and help make sure Canadian kids get a good start.
Income inequality is a complex issue. Complex, challenging issues are exactly what we as parliamentarians have a responsibility to take on here. There are groups and individuals with expertise on income inequality. There are faith-based community organizations and churches that are on the front lines of this issue. We can hear from them and learn from them. We can hear from other levels of government to help inform federal policy and help us tackle this problem together.
After 15 years as a member of Parliament, I am not so naive as to believe that a study by the House of Commons finance committee will solve income inequality once and for all, but it will be a start. It will engage Parliament in a constructive non-partisan effort to deal with an issue that Canadians care deeply about. It will help us understand this issue better and put Parliament on a path of progress where we can work with other levels of government and other stakeholders to address it. Canadians want us to deal with income inequality, and we should not disappoint them.
I would like to conclude on a personal note.
Growing up, I went to Dr. Arthur Hines Elementary School in Hants County, Nova Scotia. It is an area where a lot of people face very deep rural poverty. Wendy Elliott of the Kings County Advertiser has written about this issue of rural poverty. She has also written about the fact that Canada is the only G8 country with full day classes and no national school meals program.
The fact is that where I grew up, a lot of the kids went to school hungry. Of the 23 students in my grade 6 class at Dr. Arthur Hines school, fewer than half went on to graduate from high school. Those who did had one thing in common: they had access to some early learning, generally from parents who read to them. Some of the kids did not have that opportunity, not because their parents were bad parents but because their parents had trouble reading.
Today the Hants Shore Community Health Centre provides early learning to local children to help all the local children get a good start. Thanks to pioneers like former principal Hazel Dill and restaurateur Michael Howell, nutritional education is helping kids eat better food. As a result, not only are more kids from Dr. Arthur Hines school graduating from high school in Hants County, they are winning scholarships and going on to post-secondary education as well.
Let us learn from these success stories. Let us approach this with an open mind and open hearts. Let us develop ideas that can help all Canadians. Let us understand this important issue better. This motion and this study are an important step for the Parliament of Canada to understand income inequality better. It is an important step in helping us address income inequality, which is an issue that Canadians say is a top issue they want us to deal with here in Parliament.
I hope that we can, as individual members of Parliament and as political parties, put partisanship aside and approach this issue by supporting this motion. I certainly look forward to this debate now and in the coming weeks. There will not be a vote until June. I would urge all members of Parliament from all parties to keep an open mind and an open heart, and hopefully we can show Canadians that we can make Parliament work for a more equal and more equitable Canada.
Madam Speaker, I truly appreciate the opportunity to discuss today's motion introduced by the member for , although I must express my sincere disappointment.
The member for , not too long ago, would have mocked these types of grand but ultimately empty proclamations on income inequality. Indeed, in recent memory he told the House what truly drives economic growth and improves the fortunes of all Canadians. I will remind him of his own words. He stated, “Government does not create jobs. The economy does. The appropriate role of government in managing the economy is to set the conditions for investment opportunity, growth and job creation. Redistributing incomes is a poor substitute for ensuring that opportunities to participate in the economy are shared throughout all regions of the country and all sectors of society”.
I do not mind admitting that he was actually right then but he has really drifted away from that position now.
He ended up in the Liberal Party, which endorsed the lamentable and outdated policies of the 1970s, policies that created outsized government bureaucracies and endless social programs and imposed ever-increasing, damaging tax rates on businesses and individuals.
We know that during the last election, the Liberal Party, which was relying on the hon. member for as its finance critic, made raising corporate taxes a key plank in its election platform.
Against all the empirical and theoretical evidence to the contrary, the Liberal Party wanted—and still wants—to deprive entrepreneurs and businesses across the country of billions of dollars annually in order to “invest” in a “fairer” Canada. But, it does not work that way and the hon. member for Kings—Hants knows it.
Increasing corporate taxes, the cornerstone of the Liberal Party's economic policies, deters investors, kills jobs and takes money out of the pockets of Canadian families.
As respected economist, Jack Mintz, from the University of Calgary School of Public Policy, recently explained in the Financial Post:
...corporations do not pay taxes—people do. People work for businesses, owners provide financing and consumers buy goods and services. Corporate taxes are either shifted forward to consumers as higher prices or shifted back onto shareholders through lower dividends and capital gains and/or workers by reduced negotiated salaries and benefits.
If Canada reduces corporate taxes.... Businesses will invest in more machines and structures, often with the most advanced technologies. The demand for workers consequently increases—businesses bid up wages to attract workers or take on more workers.
Mintz also referenced a recent independent Oxford University study that concluded that business tax increases, like those advocated by the Liberal Party, are passed onto workers by over 50% in the short run and more than 100% in the long run due to lower worker productivity. If the Liberal Party were really interested in improving prosperity for all Canadians, why would it publish the very businesses and entrepreneurs who make it happen?
Only a few short years ago, the member for understood the folly of the left's reflexive demands for higher taxes on businesses. In this very House he said:
Innovative, forward-thinking governments globally have proven that we can build a competitive economy with dramatic reductions to corporate taxes....
We only need to look at the Netherlands, Sweden.... Australia and New Zealand....
The Scandinavian example is particularly important to help guide us because Scandinavian countries value investments in social policy...and, at the same time, they saw the need to reduce their corporate tax levels to some of the lowest corporate taxes in the world.
The old globaphobic, socialist, Luddite nonsense that somehow innovative and forward-thinking economic policy is contrary to good social policy is wrong.
We have tried to work with that Liberal member and hoped that the Liberal Party would listen to evidence presented at committee to disprove its flawed thinking but I am not overly hopeful. When it comes to waiting for some rational thinking from the Liberal Party, to quote Benjamin Franklin, “He that lives upon hope will die fasting”.
Let us be clear. Since coming to power, the Conservative government has brought in strong economic policies that have allowed us to offer more opportunities to more Canadians, and especially to low- and middle-income Canadians.
Furthermore, these economic policies are achieving results. Since 2006, some 1.1 million net new jobs have been created, which represents the strongest growth in the G7. This means that 1.1 million more Canadians are working than under the previous Liberal government.
What has contributed to this job growth? As I just said, the Conservative government has taken major steps to reduce the tax burden on businesses that create jobs. The result? Canada has the lowest overall tax rate on new business investments in the G7 and can finally compete with all major OECD countries regarding corporate tax rates. This has allowed Canadian job creators to offer better salaries and to invest in training, equipment and technology, so they can compete more effectively on the global market, thereby protecting jobs in Canada and creating new ones.
As Canadian Manufacturers & Exporters president, Jayson Myers, recently declared that without the Conservative government's aggressive tax reduction agenda “the recession would have been deeper and unemployment would have certainly been higher. Now, however, we have a business sector...better poised to take advantage of new market opportunities, which will, in turn, continue to generate job growth”.
However, we have done much more than that. Since 2006, and especially through Canada's economic action plan, we have made key investments in infrastructure, science, research and development and much more. We have also kept transfers to provinces and territories for health care and schools at record high levels, unlike the previous Liberal government that gutted them. It was a shameful Liberal legacy that hurt the most vulnerable Canadians.
Furthermore, we have taken targeted action to help low income Canadians. This includes removing more than one million low income Canadians from the tax rolls completely and one-third of the personal income tax relief provided by our Conservative government is going to Canadians with incomes under $42,000 even though they pay about 13% of taxes. Additionally, we introduced the working income tax benefit to reduce barriers for low income Canadians to enter the workforce, something that nearly everyone agrees has been tremendously positive, except for the Liberal Party that voted against its creation.
In the words of McMaster University professor, Bill Scarth, “[WITB] stimulates employment rather than subsidizes people not to work. ...it's a fundamental and beneficial change”.
While our Conservative government has been pursuing smart economic policies to encourage job creation, today's motion from the member for , and more important, the Liberal Party's embrace of far left economic thinking of higher taxes, is not what Canada needs.
We have committee work to do. It is a charged agenda in the finance committee. We have tried to work with that member in the finance committee. I am not sure why he refuses to work with the rest of us. We tend to get along very well with the NDP members in committee. That lone member just does not seem to get that the economy is a priority of Canadians and we will work toward ensuring that Canadians' priorities are addressed with or without him.
Madam Speaker, I am very pleased to rise today to speak to this motion of income inequality. One of the fundamental tenets of the NDP is the promotion of a more equal society and therefore we will be supporting this motion.
Increased inequality is one of Canada's greatest challenges. Most Canadians' real wages have remained stagnant for several years now. In fact, the average income of Canadians has increased by only 5.5% over a period of 33 years.
According to the Conference Board of Canada, income inequality is growing faster in Canada than it is in the United States. Much of this growing inequality can be attributed to an increase in the revenues of the richest 1% of the population. Canadians who belong to that 1% have increased their share of the nation's total revenue from 8.1% in 1980 to 13.3% in 2007.
In fact, Canadians in that 1% are responsible for nearly one-third of all total income growth between 1997 and 2007. This growth occurred at the expense of other income groups.
This increase in equality of the 1% has had serious implications for the majority of Canadian families.
Lars Osberg at Dalhousie University argues that over the period from 1981 to 2006 the life experience of most Canadian families has changed. The new normal has been that entering cohorts of young workers have earned less in real terms than their parents' generation did at the comparable age.
We also now see double the unemployment rate for young Canadians. The national unemployment rate is already far too high. Our young people are also facing a much tighter job market. Conservative budget plans call for unemployment to actually rise. Women, aboriginal people, racialized communities and recent immigrants also suffer from disproportionate poverty relative to other Canadians. Such inequality has societal consequences.
In 2009 a groundbreaking book on inequality by British scholars Richard Wilkinson and Kate Pickett demonstrates that inequality, more than GNP or GDP, has a significant impact on a range of social indicators, indicators like health outcomes, such as the average life expectancy, and in other measures of human development, such as rates of literacy, teenage pregnancy or incarceration.
I see this growing poverty, this growing inequality, in my own neighbourhood, in , where people suffering from poverty, from mental health problems, from lack of housing are seeing their condition worsen.
This is not the legacy that we should be leaving to the next generation.
Before the mid-1990s, Canada's tax and benefit system was just as effective at stabilizing inequality as those of Nordic countries, offsetting over 70% of the rise in income inequality. However, the impact of redistribution has declined since then. The OECD found that taxation and benefits now offset less than 40% of the increase in inequality.
The Conservatives tend to focus on an economic spinoff model with respect to income distribution. They seem to think that higher incomes for the rich will ultimately trickle down and benefit the rest of us. However, tax cuts for big corporations and the richest Canadians have resulted in rising income inequality, stagnant economic growth and increasing unemployment. They are really on the wrong track.
Moreover, several university studies have concluded that census data are critical to accurately measuring income inequality. The elimination of the long form census will interfere with our ability to tackle the problem.
The Liberals presided over increased income inequality when they were in power during the 1990s and 2000s. They have also consistently supported Conservative budgets that have led us down the wrong path. We saw during the Liberal government the most massive cuts to our social programs, which had serious and dramatic effects in increasing inequality.
Even when the Liberals had the financial ability with surplus budgets to make positive changes, they cut the national housing strategy and the funding for housing. They cancelled the national minimum wage. They failed to create a national child care program. They also failed to make serious and meaningful investments in our infrastructure.
The motion introduced by my colleague from is a starting point, but the suggested study is limited in the taxes it would examine. Inequality is not influenced only by personal income tax and transfers. It is also influenced by consumption taxation, corporate taxation and international taxation. The motion would be stronger if it included some of these items in the scope of the study. Furthermore, there is no reason that this study should constrain the tools with which we can combat inequality.
It is important to learn from our mistakes, Liberal and Conservative mistakes, mistakes made around the world, and identify precisely what has contributed to the increasing inequality in the latter half of the 20th century.
The specific references to the welfare trap and the disincentives to paid work in the formal economy may open the way to unduly focusing the study on the characteristics of the poor and/or the unemployed as a cause of inequality. This is typically the manner in which the Conservatives approach the issue.
A stronger, more progressive approach would look at the full range of micro and macro economic and structural determinants of inequality, such as income redistribution through taxes and transfers, access to and the process of collective bargaining, access to education, health care and other social services, especially mental health services, structural changes to Canada's industrial composition, the government's role in employment transition and regional inequalities.
The suggested study also limits itself to recommendations to improve equality of opportunity. This is not consistent with the rest of the motion. If we are to study income inequality, there should be recommendations regarding the reduction of inequality.
Income inequality is a serious problem with serious consequences, and Canadians want us to take action.
According to the results of a recent EKOS poll, Canadians' primary concern is inequality. Another recent survey shows that 77% of Canadians believe income inequality is a serious problem, and that they are ready to do their part to find a solution.
The occupy movement gave rise to a major public debate in many western nations about income inequality. The OECD stated that governments like Canada's should do more to reduce income inequality because inequality undermines growth and social cohesion.
The OECD's 2011 report also underlined “the need for governments to review their tax systems to ensure that wealthier individuals contribute their fair share of the tax burden.”
One of the fundamental goals of the NDP is a more equal society and even in its present form, the motion is consistent with that goal.
New Democrats have a long history of fighting to reduce inequality and fighting for equality. Unlike the Conservatives, we will not work actively to increase inequality. Unlike the Liberals, we will not say we want to reduce inequality and then do the opposite.
Supporting the motion will be a continuation of our decades of work on income inequality. Canadians can count on New Democrats to work for a prosperous Canada for all.
Madam Speaker, I am very pleased to have the opportunity to speak to the motion from my colleague from .
I was disappointed by the Conservative response in particular, because the motion was presented in a totally non-partisan way to address an issue which more and more Canadians have come to regard as of critical economic importance. I do not think it is a right wing or a left wing issue.
The parliamentary secretary kept talking about corporate taxes. My colleague never said a word about corporate taxes. It does not necessarily involve corporate taxes. The parliamentary secretary went on about all the accomplishments of the Conservative government. Well, maybe yes, maybe no, but that is not the point.
The point is whether we can make Parliament work, whether we can have a study over a course of one year to deal with a problem that is increasingly important in the minds of many Canadians and many people around the world. I do not know why the Conservatives are so hostile to that idea, although the good news is they have more than a month until the vote, so with any luck they might choose to reconsider.
Very rich people are concerned about inequality. The late Wallace McCain, as my colleague quoted Frank McKenna on, was concerned about that. The case of Warren Buffett is well known. He was concerned that his secretary paid a higher tax rate than he did. These are not raving socialists. These are very rich business people.
I therefore cannot understand the government's attitude in this regard. I hope that it will change its mind over the coming weeks.
A lot of work has already been done on this, particularly by the OECD. I can perhaps mention some points made by the OECD.
The OECD spoke about three important areas for improving income distribution. First, build human capital; second, build a tax and transfer system; and third, create jobs.
All three of these areas are important for the subject at hand. We do not know enough about them all, which is why the proposed study is so important. We do know something. The first of these, the creation of human capital, is really important for the improvement of income inequality and the increase in equality of opportunity.
As my colleague mentioned, if children are educated how to read at a young age, that will improve their life skills and life chances and this will have a positive effect. There are many other areas, training and retraining, education. All of these are critical to the success of younger and older Canadians. That is one major domain, human capital or human skills, that is of critical importance in this area. We could have done the study, and hopefully we will have such a study, to examine best practices in various places around the world.
There is the Quebec child care program. There are experiments and important lessons to be learned, perhaps from Germany or some of the Scandinavian countries. If we do not do this study, we will not achieve any of this.
The second domain is the tax system and social transfers. The government mentioned the working income tax benefit, WITB, which was a joint program in a way because we brought it in in the 2005 budget. We then lost the election and the Conservatives reintroduced it. This is a very effective program to both increase the efficiency of the economy and to reduce inequality.
However, we cannot solve the whole question of inequality with one WITB program. I think if we had this study, we would find more WITBs, more things to do that would reduce inequality, while at the same time potentially increasing productivity and the efficiency of the Canadian economy.
Germany, again, is a good case. Germany has actually had stronger growth recently than Canada, lower unemployment and less inequality. Maybe we can learn from the Germans what they have done well in the area and how Canada could copy some of the ideas.
There is not a socialist government in Germany. We do not have to be fearful of those dangerous socialists from Germany. It is actually a conservative government.
Finally, there is the third point of the creation of jobs. As others have said, the best solution to poverty is a job. That is certainly true. I am sure all sides of the House agree that continued success in creating jobs is a really important ingredient both for its own sake to create those jobs and also in terms of the reduction of inequality and increase in equality of opportunity.
In closing, let me say I think this motion was presented in a positive and non-partisan spirit. It is a balanced proposal, neither left nor right. It has the potential to launch us on a track that will allow the government and Parliament to address one of the more pressing issues affecting Canadians today. The only regrettable side of things is that the Conservatives have provided so far a very partisan and negative response. I can only say, in concluding, that I hope in coming weeks they will have sober second thoughts and possibly be able to support this motion.
Madam Speaker, I would like to thank the member for for giving me this opportunity to discuss the government's contribution to building a prosperous Canada and the important action we are taking to reduce inequality. Certainly Governor Carney yesterday indicated that this is a global issue.
We do not need another study. When there is an issue, I am proud to be part of a government that acts. I think it is important. We just looked at the information that the previous member for gave us. He talked about the numerous studies and he talked about three areas that are very important for us to move forward with. We are moving forward. I think this comes back to my nursing days in Emergency. We know what a problem is and we take action. We do not need to navel-gaze forever. It is an important issue. Our government is taking action.
Some of my comments are going to perhaps help the member look at the budgets that he has voted against and how they apply to some of things where he has voted against supporting equality for Canadians.
Since coming to office in 2006, our Conservative government has recognized the needs of individuals and families in our country and the challenges they face, which is something that today's motion neglects to mention.
For example, since 2006, our Conservative government has cut taxes 140 times, while ensuring that low- and middle-income Canadians receive the greatest benefit. These tax reductions are leaving significantly more money in the pockets of low- and middle-income Canadians. In fact, the average family of four now saves more than $3,100 per year in taxes than it did under the previous Liberal government, of which, I must point out, the member for was a member. Indeed, the progressive tax system that he calls for is alive and well here in Canada.
As a recent Ottawa Citizen editorial reminds us, “In 2009, more than 19 million Canadians reported income of less than $50,000. They paid an average income tax of 7.5%. Those who made more than $250,000 paid 32.1%. That is pretty progressive.”
As a mother and a Canadian who has worked hard to make ends meet, measures introduced by our government have done more for Canadians who struggle with poverty than the motion before us ever could. Not only that, it fails to acknowledge the important work of the Standing Committee on Finance which has already undertaken numerous studies.
And so, again, really, do we need another study? Or should we just act?
For too many low-income Canadians, working can mean less money than staying on social assistance. For these Canadians, it is irrelevant that hockey players make millions of dollars a year. The important thing is finding a job that enables them to support their family. That is why budget 2007 invested more than $550 million a year to establish the working income tax benefit. Not only did the working income tax benefit fulfill our government's commitment to make work more rewarding for low-income Canadians already in the workforce, it increased the incentive for more Canadians to find work.
We went even further in budget 2009, when we doubled the tax relief provided by WITB, paying out over $1 billion in benefits to vulnerable Canadians and their families. I am proud that this program is making a real difference in the lives of Canadians who need it most, lowering the welfare wall so people can keep more of their hard-earned money.
For example, without the WITB, a typical low-income, single parent in Manitoba would have only kept about 28¢ of every additional dollar earned between $3,000 and $1,000 due to reduced benefits in federal and provincial income-tested programs and taxes. Because of our government's action, the same family now keeps 53¢ of every additional dollar earned. Programs like WITB demonstrate our government's commitment to the most vulnerable Canadians. However, we did not stop there.
Recognizing that families are the cornerstone of our society, budget 2011 introduced measures to further reduce the tax burden on hard-working Canadians. Some families need extra help. For example, many Canadians have added responsibilities in caring for their parents and other family members. These family caregivers make enormous sacrifices, often leaving the workforce and forgoing employment income.
In support of these families that care for one another, our Conservative government introduced the family caregiver tax credit, which came into effect this year.
We also recognize that parents of children with severe disabilities face emotional strains and financial hardships that can be overwhelming. Based on the recommendations of the 2006 Expert Panel on Financial Security for Children with Severe Disabilities, we established the registered disability savings plan. It is designed to help parents save for the long-term financial security of a child with a severe disability. Last fall, the government launched a review of the RDSP program to ensure that RDSPs are continuing to meet the needs of Canadians with severe disabilities and their families. Based on the feedback received during the review, economic action plan 2012 proposed a number of measures to improve the RDSP, including greater access to hard-earned savings.
Another area that he talked about was how important jobs are. Despite the targeted action our government has taken to help low-income Canadians access greater opportunity, the economy and job creation remain our top priorities because we know without a doubt that they are the best way to ensure a brighter financial future for all Canadians. That is why economic action plan 2012 contains important measures to respond to current labour market challenges and meet longer-term labour market needs.
We are taking action to help under-represented Canadians, including immigrants, persons with disabilities, youth, aboriginal people and older Canadians, to find good jobs. For example, we increased funding to expand the ThirdQuarter project, an innovative initiative led by the Manitoba Chamber of Commerce to help employers find experienced workers who are over 50 by connecting them with potential employees. Furthermore, we are extending the temporary hiring credit for small businesses for one year, continuing an important incentive for job creation.
For younger workers, the government currently invests more than $330 million annually to support young Canadians through the youth employment strategy, including youth at risk and recent post-secondary graduates. Last year alone this investment helped to connect nearly 70,000 youth with the work experience and skills training they needed to build the foundation for success in the job market. Our economic action plan 2012 builds on this investment by providing an additional $50 million over two years to assist more young people in gaining tangible skills and experience. This funding will focus on connecting young Canadians with jobs in fields that are in high demand.
Our Conservative government has dedicated itself to helping low-income Canadians and I know we are on the right track to improving the economy for Canadian families. While the member for wants to study income inequality, we are hard at work building a fair and prosperous Canada with opportunity for all Canadians.
In conclusion, I am very proud to be a part of a government that acts and does not sit and study and study issues. When action is required, it is not a right issue or a left issue, it is an issue that requires action. I am proud to be acting.
Madam Speaker, I am very pleased to rise today to discuss the hon. member for ' motion to undertake a study on income inequality.
First, I would like to congratulate the hon. member and tell him that this is a very good topic. Before I begin talking about the motion, I would really like to thank all of my colleagues on the Standing Committee on Finance who agreed to examine my motion on tax havens and tax evasion, whether they are on this side of the House or the other.
I would now like to come back to the motion in question and the studies that have been conducted. Contrary to what the government says, it is important to examine what is happening. Right now, it seems as though the government is not making decisions based on facts. It is saying that everything is fine and that the system is working. However, if we look at the facts and rely on the studies that have been done, we realize that the inequality between the rich and the poor is continuing to grow.
An OECD report dated December 5, 2011, clearly states:
The gap between rich and poor in OECD countries has reached its highest level in over 30 years, and governments must act quickly to tackle inequality.
This report examines what is happening in Canada and other countries, and points out that inequality is increasing quickly in the rest of the industrialized countries, including the United States. Thus, the gap between rich and poor continues to grow.
Personally, in my role as the member for , I have observed this trend. Some of my constituents are workers. The husband and the wife work, have children and must now use food banks. Why? Because, despite the fact they have jobs, they do not make enough to cover all the increases in the cost of living and housing. There is a problem.
It is deplorable when the government decides not to look at what is really happening, because it ignores the real problem and does not ask the right questions. Even my Liberal colleague has admitted that this problem was created not just by this government, but also by previous governments.
When we look at the numbers and how things have evolved over the years, we know that we are heading in the wrong direction, here in Canada and in other industrialized countries. Some countries, such as Denmark, are dealing with this gap. In Canada, the problem is that we are not considering it. The fact that the government does not want to conduct a study is somewhat disappointing.
In September 2011, another agency—the Conference Board of Canada—truly studied the problem. It pointed out that since the mid-1990s, income inequality has been growing faster in Canada than in the United States. We were under the impression that in Canada, everything was going well, and that our country ensured equality between the rich and the poor, but on the contrary, inequality is growing faster here. In the United States, there is truly a significant gap between the rich and the poor and that is where Canada is headed. If the government does not wake up and realize what is happening, we are going to hit a wall. The government also has to listen to what the population is saying.
Does the government realize that there are currently occupy movements in Canada? A number of people, students and families alike, are outraged. The population is speaking and they are saying there is a problem. Studying this problem, with this type of motion, is a start.
Unfortunately, we will have some work to do in order to amend the motion to take it a little further. However, this is a step in the right direction and we can work with the other parties in order to really ensure that we identify the problem and come up with solutions.
One of the things that the Conference Board of Canada looked at was the Gini index, which most people do not know about. Basically, it is a means of measuring the degree of income inequality in a given society. The Gini index ranges from zero to one, with zero meaning perfect equality and one meaning complete inequality. The goal should be to use this index, but unfortunately, Canada does not.
We know these numbers, but Canada does not use them. Furthermore, as the government did with Statistics Canada, it is taking away more and more information and facts that otherwise would allow us to really take stock. If we want to know what is really happening, we need tools like the Gini index.
The Conference Board of Canada is not overly left or right leaning, but I would have to say that it leans a little to the right, if anything. What matters is understanding the effects, the repercussions and what is happening right now, so we can respond.
That is why we will support a study on this. And simply to—