Mr. Speaker, I am very pleased to rise in the House as the NDP's finance critic to debate Bill , which was introduced in December and which is now being debated in the House.
I had the opportunity to ask the a question earlier today after his opening remarks. Unfortunately, I did not get an adequate answer. I did not get an answer to the fundamental question raised by this bill: how does the Liberal Party define the middle class?
This is a fundamental question, because since the election, the Liberal Party, which now forms the government, has boasted about making tax cuts for that much talked-about middle class. However, as the parliamentary budget officer's report very clearly and succinctly states, the middle class will get nothing from the tax cuts the Liberal government is promising.
With Bill , there is the good and there is the bad. I will start with the bad, and then talk about the good.
Any definition of the middle class must be based on a common definition. One way to define it would be to use the median income, which is $31,000 a year per person in Canada. That means that half of Canadians earn less than $31,000 a year and the other half earns more than $31,000 a year.
Will someone earning the median income benefit from this tax cut? No. In fact, those earning $45,000 or less a year will not benefit at all from the tax cut promised by the Liberals. Even those earning between $45,000 and $90,000 a year will only receive part of what was promised. The devil is in the details. In reality, someone earning $50,000 will probably only receive twenty or thirty dollars.
Taxpayers earning more than $90,000 a year will benefit the most from this tax cut. Even someone who earns $200,000 a year will receive the maximum from this tax cut. An individual would have to earn $210,000 a year before receiving less, due to the new tax bracket, but they would still receive a large part of this reduction.
If we take this definition of the middle class, whose members earn around $31,000 a year, and exclude all those whose income is among the top 20% and those whose income is among the bottom 20%, then we have a middle class that makes up 60% of the population. The range of income of that middle class would be between $20,000 and $60,000 a year. A very small portion of those people would benefit only slightly from the tax cut.
If we take the median income, people will receive nothing. If we take the income that everyone associates with the middle class, in other words, $45,000, people will receive nothing. Those who will receive the biggest slice of the tax-cut pie are the top 20% income earners. That is not the middle class.
When the ways and means motion was tabled, we made a counter-proposal because if we really want change, and considering that on October 19, Canadians voted for a tax cut for the middle class, then this tax cut has to be given to the middle class.
That is why we proposed a change to the Liberal proposal. Instead of targeting the second tax bracket, as the Liberal government wants to do, we should change the first tax bracket so that a larger portion of the population can benefit from such a tax cut. Our proposal seeks to reduce the first tax bracket from 15% to 14% to ensure that all taxpayers, those who pay income tax, can benefit from this change.
Our proposal seeks to give people earning the median income a tax cut as high as $250 annually, as those people are currently receiving nothing.
Someone who earns $200,000 per year and who will get a tax cut worth about $600 would be forced to pay a portion because of the higher tax rate and the new bracket that we would leave in place.
It is clear that the Liberals' proposal is merely a smokescreen. In his response to my question about the Liberal Party's definition of the middle class, the minister did not answer the question. He simply said that this is just the first step and that the next step is the child benefit. We have not seen that yet. Maybe it will actually be a good thing for families with children, or maybe not—we will see. However, that does not answer my question.
This measure will not really help the middle class at all. A child benefit might help families with children, but it will not do a thing for single people, couples without children or seniors. Any of those people who earn less than $45,000, and especially if they earn less than $90,000, will not benefit at all from the Liberal promises for the middle class, even if their income is lower.
It is important to look at everything the Liberals are proposing. We believe that our proposal would help the middle class much more effectively than the Liberal measure, which, as I said, will benefit only the top 20% of income earners and do very little for everyone else.
I began by talking about the bad, and there is a lot of it, but now I would like to talk about the good, and one key measure that we support in this budget. I am talking about dropping the contribution limit for tax-free savings accounts, or TFSAs, from $10,000 to $5,500. We regard TFSAs as a useful tool for saving, and they should be used for that purpose. However, what the previous Conservative government proposed, raising the contribution limit to $10,000, is very harmful to Canada's public finances and does very little to help taxpayers and investors who want to use that tool.
This is because anyone can open a TFSA, and among those who can afford to do so, only 7% are contributing the maximum at this time. This measure is extremely costly. The numbers speak for themselves. In 2020, if the limit stays at $10,000—and it could even be indexed later on—it is estimated that it will cost the Canadian treasury $2.3 billion, all for a single investment tool that benefits only a small minority of Canadians. In 2030, 10 years later, the lost revenue or tax expenditures are estimated to be $9 billion. In fact, the parliamentary budget officer, whose job it is to study the impact this would have on the Canadian treasury, went as far as to say that in the medium term—I am talking about 2040-50, since the horizon might well extend that far ahead—tax expenditures, which is income lost by the Canadian government, will account for nearly 0.7% of GDP.
I would like to point out that this House is not budging and that previous governments did not budge on the issue of international aid and reaching the target, which was set at 0.7% of GDP under the agreements. The previous government considered it to be too costly to move forward on that. We were never even close to the 0.7% target. According to the parliamentary budget officer, with the TFSA alone we would reach 0.7% of GDP in foregone revenues, those revenues that would no longer be paid to the Canadian government, by 2040-2050. The TFSA is a savings vehicle that we fully support. However, if we were to head in the direction that the Conservative government proposed, it is a measure that could be extremely debilitating for Canada's fiscal capacity and its ability to provide the quality programs and services that Canadians expect.
As I was saying, the TFSA is a beneficial savings vehicle. The $5,500 contribution limit, indexed to inflation in $500 increments when this amount is reached, is quite adequate. Only 7% of Canadians currently contribute the maximum. If we look at just individuals who have already opened a TFSA, only 17% of them contribute the maximum. Increasing the contribution limit will only help the 17% who already contribute the maximum. Thus, this is a very expensive measure that very few people take advantage of.
If I am dwelling on the tax-free savings account, it is probably because outside of the tax cut in Bill C-2, it is the key issue in terms of finances. The TFSA is a useful tool for promoting savings and a tax shelter appreciated by those who use it properly. However, it could also become a means of tax avoidance, and that is what we must prevent.
I say that, because when we are talking about $10,000, which will one day be indexed, a lot of Canadians see the tax-free savings account as an account where they put after-tax money, which will yield non-taxable interest. They can then withdraw that money as they see fit, which is not a bad thing. However, what these people often do not know is that you can put many things other than cash in these accounts. You can put in stocks or financial instruments, and anyone who can afford it can put up to $10,000 in stocks, for example, into a tax-free savings account and enjoy capital gains that will not be taxed within that account.
Right now, 50% of capital gains are taxed, at a rate of about 40%. The TFSA can be an attractive vehicle for those who want to avoid paying tax on capital gains and are able to contribute up to the limit of $10,000, in which case they do not really need to save.
In that sense, the TFSA can be useful for Canadians, and that is why we support it. However, we want to prevent these accounts from becoming a way for people to avoid paying taxes, and that is why we oppose increasing the contribution limit to $10,000. We think that the $5,500 limit is a perfectly adequate way of helping Canadians who want to ensure their future financial security.
Let us remember that there are also other savings vehicles, such as RRSPs. These private savings are one of the main ways to ensure one's financial security. Others include company pensions, the Canada pension plan, the Quebec pension plan, and old age security, which can be supplemented with the guaranteed income supplement.
If we tally the good and bad points that I talked about earlier, it is clear that the Liberals' decision to reduce taxes for the richest 20% and increase them for the richest 1% is not an appropriate measure if the government really wants to help the middle class.
Eventually, under an NDP government, there will be a way to review this decision and really help the middle class. We are extending an olive branch to the government here, because the other thing that could be done is to make the necessary changes in committee so that we can come back to the House and adopt a measure that will really help the middle class.
We are therefore going to resubmit this proposal in committee for review. It is largely based on the excellent work done by the parliamentary budget officer.
Lowering the TFSA limit is extremely important from a tax perspective in order to ensure that the Canadian government can offer these services, function properly, and ultimately, or so we hope, make significant reinvestments in areas where the Conservatives cut funding to the bone or even deeper.
That is why we will support the bill at second reading. We hope the government and its members will be willing to listen in our committee meetings. This would eventually open the door to amending the provision to lower taxes for the richest 20% of Canadians and instead helping 80% of Canadians, many of whom are getting nothing right now. Of course we will support the second measure, which is to lower the contribution limit for TFSAs.
This is the first bill introduced in this new Parliament. I truly hope the government will take a new approach. I think all parliamentarians have already noticed a change in tone and dynamics, which is very much appreciated. However, after four years of hearing meaningless slogans and catchphrases to try to justify things that are simply not supported by the facts, we might still be in for another four long years.
This morning, when the introduced Bill and delivered his speech justifying the tax cut, I was hoping he would at least understand or acknowledge the auditing work done by the parliamentary budget officer, but that was not the case.
I wish he would accept a fact that has been proven over and over. The middle class will not benefit from these measures; only the richest 20% will. The facts prove it. The parliamentary budget officer proved it, and we ourselves proved it before the report was released. He wants to stay the course and perpetuate the myth that the middle class will benefit. This is a snow job.
A lot of Canadians are going to be surprised and disappointed when they fill out their income tax returns. They thought they voted for a party, the Liberal Party of Canada, that would give them a tax cut, but they are going to find out that they are not eligible. A good 80% of people will find out that this does not apply to them. I predict some nasty hangovers for them.
I sincerely hope that the government will pay more attention to the opposition parties, especially when we are trying to help by suggesting improvements that should help the government achieve its goals. I would like it to say so publicly.
The most disappointing thing about the 's speech is the fact that he is trying to deal with the problem by sending up yet another smokescreen. We have not yet seen the Canada child tax benefit, which is really just going to be a remix of existing programs. That is still nothing but a promise.
The fact is that only couples with children and single-parent families will benefit from this money. Those people will be happy to get some extra money. Couples without children, singles without children, and seniors, even the poorest of them, even those who earn, say, $45,000, $30,000, $20,000, or $10,000, will get nothing. They will not get a tax cut, nor will they benefit from the Liberals' upcoming measure.
I would like the Liberal government to be consistent, to respect the Canadian public, and to tell the truth about the real impact of the measures it is introducing. This was the government's first opportunity to do so. I think it has missed its opportunity, but it will have another chance in committee. I hope that the government will be listening. If the government continues in this direction, I think that the next four years will be very long and full of hype, catch phrases, and empty rhetoric, but very thin in terms of measures that will truly help Canadians, especially middle-class Canadians and those with such low incomes that they struggle to make ends meet.
I look forward to questions from my colleagues in the House, but I want to reiterate that we will support the bill at second reading, because it maintains the TFSA contribution limit at $5,500, which has considerable tax implications, and we will try to make changes to the bill in committee.
Madam Speaker, I did not have a chance the last time I spoke in the House to thank the constituents of Coast of Bays—Central—Notre Dame for putting me back in office. I would like to do that now. The vast majority of them have been doing so for five elections now. I keep testing the limit every time I run out there. Nevertheless, I want to thank them for their generosity and for giving me the opportunity of a lifetime to represent them in the House of Commons in the nation's capital. Indeed, it is the opportunity of a lifetime for all of us to sit in the House of Commons.
I am honoured also to talk about a bill this morning that we talked about much during our campaign. We talked about it as a way of helping the middle class of this country grow Canada's economic engine. We faced challenges as we started the campaign, and the challenges continue to this point. Right now, we have challenges in certain aspects and geographic areas of this country that are certainly unprecedented. I talk of the price of oil and natural gas. I also talk about the fact that many of the provinces also find themselves in a precarious situation given the fact that a lot of their revenues are based on royalties and taxes they collect from this particular sector. We also have a low dollar, something that for many people may produce some opportunities but in other cases could provide many challenges. It too is at an unprecedented level of less than 70¢ to the American dollar now.
I want to talk today about Bill and some of the measures we hope to bring forward that would provide some tax relief to Canada's middle class. As I said before, the middle class is the economic engine of this country. When I say the middle class is the economic engine of this country, I am talking about the individual talents of those individuals and their ability to provide a living for their families.
For example, in my area of Newfoundland and Labrador the greatest exports right now in dollar value alone would be seafood exports. We also have mining and forestry and many other sectors with great exports. To be honest, one of the greatest and most exciting exports that we have right now in central Newfoundland, the area that I predominantly represent, is the people and their talents.
We do have skilled people in the oil and gas sector but we also have many skilled people in other sectors such as mining. They have a skill and a trade that they export around the world. Each and every week I travel from my home riding to Ottawa or to other parts of the country, I run into people that I have grown up with or I talk to people that I have met in my tenure as a member of Parliament. These people talk to me about the areas where they have been or where they are going, such as Russia, the North Sea, northern Africa, or Alberta, Saskatchewan, and British Columbia right here in Canada. In the field of hydroelectricity, they have travelled to Quebec and Manitoba. It is phenomenal how they do this. They travel vast distances. They go away for weeks at a time then return home and bring that wealth home with them. This is a precarious position for them right now, given the situation in the oil and gas sector. Some people would say that the reason they have created that value is the oil and gas itself, but I would disagree. What created that value for them was their own talent and ability to adjust to the world markets. On the one hand, I am worried about the price of oil and gas in this country and around the world, but on the other hand I am not worried because of the versatility these individuals have shown over the past while. The majority of them are certainly in that middle-class income bracket.
I am pleased to participate in this important discussion on the government's middle-class tax cut. My objective today is twofold. First, I want to provide the House with a quick assessment of our economic and fiscal situation and, second, I want to tell members why the middle-class tax cut would help grow our economy.
As we embark on an agenda of economic growth and long-term prosperity, there is no doubt that we are facing considerable headwinds as I discussed earlier. Globally we continue to experience what International Monetary Fund Managing Director Christine Lagarde famously called “the new mediocre”. In its latest economic outlook in January, the IMF expects global growth to pick up modestly to 3.4% in 2016 and 3.6% in 2017. This is down 0.2 percentage points for both 2016 and 2017, compared to its October 2015 world economic outlook.
Though the recent performance of the U.S. economy is encouraging, the European and Chinese economies are cause for concern. We have seen this happen in Europe now for the past seven years and most recently with the Chinese economy. Although China's GDP is very large and is still growing, it is not growing as much as it did in the past four to five years. Many if not all of us here have experienced the benefit of global trade and have had conversations with people in business in our ridings who deal with many Chinese companies. Members, of course, know of what I speak.
As I mentioned earlier, global crude oil prices remain at less than half of what they were in mid-2014 due to persistent global oversupply and softening demand. What is happening beyond our borders has real and tangible consequences for us all.
In Canada, our economic performance in the first half of 2015 was poor, mainly due to the collapse of oil prices in 2014. Consider this. Last April, just to put some numbers on this, the government projected an oil price of $71 a barrel by the end of this year. As I speak, oil is now trading at about $30 a barrel, less than half the projected price. As I mentioned earlier, coming from Newfoundland and Labrador, I know how we are hit directly and indirectly by the resulting large hole in our provincial budget. We are directly hit, of course, because our offshore exploration has diminished and it is our offshore supply that directly benefits us in the way of royalties and taxation for our province, and indirectly through the employment that it creates, including for individuals who travel around the world in this particular sector.
We know that growth will be lower than was expected in the last budget projections. This has important implications for our currency and our fiscal situation. The good news is that real GDP growth resumed in the third quarter of 2015. The IMF, it its latest economic outlook released January 19, expects growth in Canada to pick up over the next two years in relation to 2015. We also maintain an enviable position of having a low debt-to-GDP ratio, abundant natural resources, and one of the most educated, intelligent workforces in the world.
Our policies will strike a balance between fiscal responsibility and controlled investments that promote economic growth. One of the most important components of this is restoring middle-class economic progress, which is, as we all know, the backbone of our economy and has been since our inception for close to 150 years now.
This is why one of the government's first orders of business back in December when we arrived was to table a notice of a ways and means motion to cut taxes for the middle class. This was the right thing to do for our economy. The proposed middle-class tax cut and accompanying proposals will help make the tax system fair so that all Canadians have the opportunity to succeed and prosper.
Specifically, Bill proposes, first, to reduce the second personal income tax rate to 20.5% from 22%; second, to introduce a 33% personal income tax rate on individual taxable income in excess of $200,000; and third, to return the tax-free savings account annual contribution limit to $5,500 from $10,000 and reinstate indexation of the TFSA annual contribution limit.
I will expand on the three points.
The first one is the reduction of the middle-income tax bracket, which is taking effect January 1. It is expected that about nine million Canadians will benefit from this measure in 2016. Single individuals will see an average tax reduction of $330 per year, and couples will see an average tax reduction of $540 per year.
Second, the government is introducing a new personal income tax rate of 33% that will apply to individual taxable income in excess of $200,000 per year. This means that only Canada's top income earners are expected to pay more tax as a result of the government's proposed changes to personal income tax rates. As with other bracket thresholds, the $200,000 threshold will be indexed to inflation.
Third, the government is returning the tax-free savings account annual contribution limit to $5,500 from $10,000, effective January 1, 2016.
These are some of the issues that we discussed during the campaign, including my colleague for . He was just here and talked incessantly about how wonderful his riding is and how hard it is for him to get around his large riding. He likes to talk about all these new policies we are bringing in to help the middle class in that beautiful area known as Cape Breton.
I can reassure members that the change to the TFSA is not retroactive. The TFSA annual contribution limit for 2015 will remain at $10,000. However, returning the TFSA annual contribution limit to $5,500 is consistent with the government's objective of making the tax system fairer and helping those who need it the most. When combined with other registered savings plans, which we are all familiar with, the $5,500 TFSA annual contribution limit will permit most individuals to meet their ongoing savings needs in a tax-efficient manner.
Indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time. This is referring to the consumer price index and how we will tie the limits to the increase in inflation.
Finally, before I conclude, I would like to highlight some of the other measures that are included in today's legislation, Bill .
The bill proposes to change the current flat top rate of taxation rules applicable to trusts to a new rate of 33%, which is in line with the 33% tax rate as we proposed. The bill proposes to set the tax on split income to the new rate of 33%. It would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate. Finally, it would increase the special refundable tax and the related refund rate imposed on investment income of private corporations to reflect the proposed new 33% personal income tax rate.
Also, the government will introduce proposals in the upcoming budget to create a new Canada child benefit, which will take all of the benefits and put them into one tax-free Canada child benefit. This is something that has been talked about in my riding for quite some time. The biggest complaints were about benefits from government that suffered from tax clawbacks, which affected all benefits no matter what they were. We have now put forward this Canada child benefit that puts the tax aside for the sake of and benefit of our families. I look forward to the budget in the spring to talk about this.
Of course, nowadays there is an added pressure regarding things such as child care and child spending. Therefore, this is one of the proposals I look forward to in the upcoming budget that we talked about in the campaign, which Canadians overwhelmingly accepted as a way of financially helping themselves during their child-rearing years.
All these initiatives demonstrate that our sights are clearly set on the future. This legislation will help strengthen the middle class by putting more money in the pockets of Canadians to save, invest, and grow the economy. More broadly, it will help grow our economy in the context of a difficult global economic climate so that all Canadians benefit.
I heard some of the debate earlier, and I appreciate some of the concerns the opposition put forward. Of course, we have taken a strategic approach to provide a benefit to middle-class Canadians, especially those facing tough times.
To address these tough times in the future, I look forward to the budget, as I mentioned earlier, with things such as the Canada child benefit, which I think will enhance a way of life for those bringing up children now. For those who are suddenly unemployed, the situation is very difficult. As we deal with the situation in the next few months and certainly within the next few years, my colleagues, no matter what party they belong to, would certainly agree with me that we have challenging times ahead.
Again, for those provinces dependent on revenues from the oil and gas sector, and I speak of Alberta, Saskatchewan, and my own province of Newfoundland and Labrador, there are difficulties ahead, certainly when it comes to social programs. There will certainly be added pressure, but we believe that measures taken, such as those contained in Bill and in the upcoming budget, will help to alleviate some of those concerns.
For the budget coming up, consultations are going ahead. I would advise all members to conduct consultations in their ridings, as I will. It is a perfect opportunity to get back to our ridings as members of Parliament. I am travelling to 15 communities in an area the size of Germany. I wish all members the best, because I know that travel can be very taxing on our families, but it is certainly worth it.
In my situation, I know what I will hear. I will hear a lot about the resource sector. I am going to hear a lot about the challenges that lie ahead but also about things like skilled trades and infrastructure spending to help spark the economy and to help communities deal with transit and their future investments.
I will leave it at that for now. I look forward to the questions and comments from my hon. colleagues.
Mr. Speaker, today I will be sharing my time with the hon. member for .
I am honoured to rise today to speak on Bill . This is my maiden speech, and I wish to start by thanking the people of Elgin—Middlesex—London for giving me the opportunity to represent them in the House of Commons for the next four years.
I would not be here if not for the amazing volunteers and friends, but most of all my incredible family. To start, I know that as I speak today my mom and dad are watching these proceedings. I would like to thank my parents, Patricia and Harold Martyn, for all of the opportunities and support they have always given me. As the daughter of people who farm turkeys and pigs, I understand hard work and commitment, and I thank them for instilling these values in me. Whoever thought the girl from Sparta would be sitting in the House of Commons.
To my siblings who have always held me accountable, and doing so with love, a huge thanks for believing in me: Linda, Ann, Paul, and my in-laws, Greg, Scott, Trish, Lisa, Pete, and David. I thank them all. To Sandra and Bill, a.k.a. Nana and Pops, who have always been there for me, I love them both.
Making this decision to get into federal politics was not an easy decision, but I truly had a head start. My mentor and former boss, sat across this aisle from 2004 to 2015. “Trust me” was a common phrase used daily in our discussions. Today I would like to thank Joe for encouraging me. Without his support, this would not have been possible.
Now for the hard part, naming the people I miss every day as I serve this amazing country: Dakota, Garrett, Marissa, Hannah, and Christian. I hope from this new chapter of my life they will realize that anything is possible, will believe in themselves, and surround themselves with good people. I cannot wait to see what the future holds for them.
Finally, to Michael, my better half, the guy from band camp whom I married, I miss our evening walks, but I am definitely thankful for Facetime, or this journey would never have been possible. Although we are 640 kilometres apart, he is always with me. I believe in him, just as much as he believes in me, and I look forward to kicking off our bucket list in the next 20 years.
Elgin—Middlesex—London is an incredible riding. It is filled with beautiful lake harbours, rich agricultural land, small and large vibrant businesses, but most of all, great people. The volunteers not only on my campaign but throughout this riding helped mould me and educate me.
I would like to personally thank all the people who got me here, including Brian, Fran, Francine, Marci, Whitney, Jeff, Jen, Betty, Ena, Blake, Bob, Mae, Terry, Reinhardt, Dan, Shirley, Dean, Bridget, Melissa, and all the residents on Crescent Ave. I thought if I went fast, no one would know if I missed them. I send a special thanks to Ninja Turtle Noah, Maddie, Lauren, and Sarah.
To the ladies in the office, Cathy, Kaylie, Jena, and Kim, knowing that they are a part of the team makes me confident that Elgin—Middlesex—London is in good hands.
It is with all of these wonderful Canadians in mind that I stand in the House to oppose the proposed alterations to the Income Tax Act. Canadians have utilized the tax-free savings account since its introduction in 2009. This program has provided Canadians with incentives to develop attitudes of economic responsibility.
TFSAs are helpful tools for Canadians who are seeking to save or are preparing for unforeseen economic vulnerability, a tool used by many of my constituents in Elgin—Middlesex—London, both young and old.
The current Liberal government has proposed a reduction in the maximum amount of funds that Canadians can invest in these accounts per year. Unfortunately, the government does this on the false pretence that doubling of the TFSAs only benefits the highest earning Canadians rather than just the middle class.
On the contrary, statistics demonstrate that this investment tool is utilized by many middle-class Canadians. Half of those holding TFSAs earn less than $42,000 a year. In fact, 60% of Canadians who take advantage of the TFSA's limit earn $60,000 or less a year. What is more, in 2015, 600,000 Canadian seniors invested in TFSAs, maximizing their yearly deposits while earning less than $60,000 a year.
CARP, Canada's association for the fifty-plus, was in favour of increasing the limit the TFSAs to help seniors form fiscally responsible plans for the future. When the Conservatives raised the limit on TFSAs, the majority of Canadians supported that decision. Lowering the limit on TFSAs will do absolutely nothing for the low-income families, including financially burdened Canadians, to which the government must remain accountable.
The proposed changes in Bill will negatively affect Canadians by noticeably reducing their incentive to save for the future, creating a heavier reliance on government support during financial crises. Further, it will limit the choice of Canadians.
Why put up roadblocks for people who want to engage in responsible saving practices? Why remove the sensible avenue for saving, which costs the government very little?
Bill would do more than limit the choices available to the middle class. It would also reduce the amount of attention given to the vulnerable people in Canadian society. Instead of worrying about nitpicking a program that already works for Canadians, the Liberal government should be seeking out programs and initiatives that would actually aid in giving a hand up to this country's most vulnerable people.
The current government needs to continue to support programs such as the housing first initiative, which was undertaken by the previous Conservative government. This initiative was directly aimed at ending homelessness by identifying those most desperate in Canadian society and ensuring they were given a real opportunity for self-advancement. By seeking out these programs, the current government would have the ability to ensure that its efforts to end social issues do not go a mile wide and an inch deep. Spending well, rather than just spending, is the key to improving social issues today. Unfortunately, spending responsibly does not seem to be the current government's strongest attribute.
These tax cuts are aimed at making the public feel better about Canada's current position during this time of economic uncertainty. However, these cuts are not enough to provide true relief for Canadians being affected by the dipping dollar. It will take much more than just tax cuts to regrow the Canadian economy. This remedy is a mere surface solution to a much more serious problem.
Even more indicative of the Liberals' spending habits are the alterations to revenue that Bill would cause. Originally, the Liberals claimed that their new tax programs, including the lowering of the ceiling of the TFSA, would be revenue neutral. However, the tax bracket changes contained in this bill would actually cost the government $8.9 billion in the next six years. Since the government failed to accurately project and report these financial results, why should we trust the Liberals' promises that they will aid Canadians in the long run?
My constituents in Elgin—Middlesex—London have addressed this issue to me personally and are concerned about these changes. All age groups from all tax brackets have been using this method of saving their money for the future. Young adults have been putting their money away through TFSAs to invest in new homes, families have been using it to invest in their children's education, and many have been using it as a retirement tool.
As the official critic for families, children, and social development, I can assure members that I have spoken to many constituents and Canadians who want to see the ceiling of the TFSA contributions remain at $10,000 per year.
I look forward to continuing to hear from my constituents in the great riding of Elgin—Middlesex—London and to working with all Canadians in my new role. I would like to thank this House and my hon. colleagues for indulging me and for the opportunity to speak to this very important piece of legislation that would affect all Canadians.
Mr. Speaker, I have already committed the cardinal error of public speaking, which is following a terrific speech. I want to thank my colleague for her wonderful maiden speech. She is a welcome addition to the Conservative family in the House. I think we will all have to run like crazy to keep up with her, and that is a good thing.
Before I talk about the subject at hand, I would like to refer to something that came up in question period, which quite vexed me.
The member for talked about Ukraine and said that the government was crying crocodile tears for Ukraine. I remember in November 2014, I had the honour of accompanying the then prime minister to the G20 meeting in Brisbane, Australia. At that particular meeting, the prime minister had to shake hands with Vladimir Putin. He said to Mr. Putin, “I'll shake your hand”, and then he looked him right in the eye and said, “You need to get out of Ukraine”.
Imagine those on the other side, with the leader they have, ever doing such a thing, standing up for Canada, standing up for principle. He would probably want to take a selfie.
As well, the other side downplays the human tragedy that is occurring because of the economic downturn. Often anecdotes and personal experiences are as important or more important than numbers and statistics.
There is a gas station just outside of Winnipeg that I stop at when I drive back and forth between Winnipeg and my constituency. I chat with the proprietor. We have become friends. We were talking about the low price of gas and he was quite worried about it. I asked him why. He said that every day there would be a person or a family stop at the gas station. These people were heading back home to the Maritimes. With the Alberta economy collapsing, they have lost just about everything and their only alternative is to return to the Maritimes. The Maritimes are a wonderful part of the world to be sure, but they are economically stressed. However, these people have to pack up everything, leave secure, well-paying jobs, and go back home to live with mom and dad, trying to rebuild their lives.
The Liberal and NDP war on the resource industries is a war on rural communities as well. These have real and dire human consequences that we lose sight of at our peril.
On the topic at hand, I would like to point out that the Conservative approach is very much one of encouraging personal growth and development through our taxation and financial policy systems. Our goal is to ensure that people are as independent as they possibly can be, that they have fulfilled their ambitions, and that they are allowed to chart their lives in a way they choose. Government policies can encourage that kind of independence or can discourage it.
As Conservatives, we firmly believe that government's role is to enable self-sufficiency and reduce the reliance on government so people can chart their own course, and TFSAs are exactly in that mould.
I hate to say it, but I think it is true, and the record bears it out, that both the Liberals and the NDP on the other hand want more people dependent on government, and I am not sure why. The policies and programs that Liberal and NDP governments have put in place at both the provincial and federal levels across the country result in more and more people becoming dependent upon government. The creation of that kind of dependence, in my view, creates grave problems for society.
Canadians have a lot of pride, and charting one's own path in life enhances that pride. Government has a role to provide mostly a hand up as opposed to only a hand out.
Again, I would like to bring in the personal here. When we brought in our last budget with income splitting, the universal child care benefit, and all those great benefits for families, I received an email from a single mother from the town of Swan River in my constituency, from Ms. Mackenzie Danard, and she gave me permission to use her name.
She wrote to us to thank us for our tax policies. Keep in mind, this is a single mother on a very low income. She wrote, “This helps a lot for single parents”. She also added, “Thank you for helping us raise our children”. So much for the idea that Conservative budgets are for the rich. As I said in my speech yesterday, Conservative members of Parliament are the party for the working people of the country. No one should ever forget that.
TFSAs, tax-free savings accounts, are exactly in line with our philosophy of promoting independence. Again, I am not one who thinks government does not have a role in society. It certainly does. I have never been shy to encourage the spending of government resources on projects and programs that help people. We certainly need tax resources to ensure the health of our society, but they should be kept at a minimum.
The tax-free savings account is kind of a companion to the RRSP. It helps people to become independent. TFSAs are open to all citizens over 18. Let us contrast this with the Canada pension plan. Many members opposite want to see the Canada pension plan contributions increase.
The Canada pension plan, in and of itself, is a pretty good program. However, it is a matter of degree. TFSAs are complementary to the Canada pension plan. Unlike the Canada pension plan, tax-free savings accounts introduce choice in how one invests their money. They also accumulate in one's own personal account. If people contribute to CPP, even an added CPP, and they unfortunately happen to pass on before the eligibility date, there is nothing left for the family. At least with a TFSA a legacy is left that can be passed on to the next generation.
The attacks on the tax-free saving plan are completely unwarranted. My colleague who spoke before me listed chapter and verse the number of groups across the country, including seniors groups. I am in the over 60 club, if the truth be known . My generation is strongly supportive of the approach our government put in place.
I would like to go to the personal about TFSAs. On May 13, 2015, in Hansard, I quoted a constituent of mine who sent me an email. She gave me permission to use her name. Ms. Wendy McDonald is a hard-working wife from Newdale, Manitoba. Her husband farms, and they have children. They were visiting in Ottawa. They said:
The reason we were able to afford our trip to Ottawa was due to our income tax refund, which was larger than expected due to income splitting law...our family chooses to put the child care benefit money we receive directly into RESP for our 2 children, and I will be one of the Canadians that will benefit from the increased allowance on TFSA accounts because saving is important to me and allows me to be fiscally responsible in my own household
This is a family, the McDonalds from Newdale, that is charting its own course in life. These people are independent, saving money for their kids and for their retirement, using the tools our government put in place. These are tools the new government is trying to take away.
My last point is in regard to the so-called tax hike on the wealthy. A typical Liberal, NDP trait is to always penalize success, always envious of people who do well, always thinking that people who succeed in life are just lucky. Most people succeed in life because of hard work and governments should have policies in place that support and reward hard work.
I have The Fiscal Monitor from the Department of Finance. It is very clear. For the April to November 2015 period of the 2015-16 fiscal year, the government posted a budgetary surplus of $1 billion. What could be clearer than that? Our government left a financial legacy of which I am very proud. It is a government that I was certainly proud to be a part of, and in four short years we will be back.
Madam Speaker, I will be sharing my time today with my colleague, the member for .
Madam Speaker, I am honoured to be able to take this opportunity to speak about the government's middle-class tax cut, a tax cut that would provide needed tax relief to nine million Canadians.
First, I would like to elaborate on our government's ambitious economic agenda that sets Canada on the path of economic growth.
No one will be surprised to hear me say that the Canadian economy is going through a difficult period, some regions more than others. While there are encouraging signs with our biggest trading partner, the United States, which is facing an upswing in its economy in 2016, there remain concerns that slower growth in certain emerging markets such as China has the potential to stifle prosperity. Also, the Bank of Canada revised downward its economic forecast twice over the last 12 months and undertook two rounds of interest rate easing.
Nevertheless, in the face of this real challenge, there is a real opportunity to put in place the conditions to create long-term growth, growth that will create good jobs and help our middle class prosper, the lifeblood of our economy. Indeed, the good news is that we were elected on a plan to grow the economy, and we have already started.
In December, we introduced the middle-class tax cut. This amendment to the Income Tax Act is what we are to discuss in the House today.
After 10 years of weak growth, our government is redoubling its efforts to ensure that Canada is poised and prepared to compete and succeed in these challenging economic times. However, it is clear that we cannot go at it alone. It means that we need collaboration.
A key component of our plan is to work closely with provincial and municipal governments to deliver results for Canadians. From infrastructure projects to responsible environmental stewardship, we are providing needed leadership. Our government will work in a renewed spirit of collaboration with our provincial and municipal partners. That work has already begun, with the first ministers' meeting held by our shortly after our government was sworn in, as well as by the finance ministers' meeting just before the Christmas holidays.
Our priority is to implement our agenda while pursuing a responsible fiscal plan suited to the challenging economic times. Indeed, we fully intend that our plan for economic growth will benefit all Canadians through targeted investments.
Let me reassure members that our government is not daunted by the challenges before us. We are cognizant of our fiscal realities and we know that our plan is more important than ever. We will work together with both the private sector and our provincial and municipal counterparts to advance our shared priorities across a range of fronts. Some of these areas include making targeted investments in public infrastructure that will grow the economy, get Canadians moving, and open up more cost-efficient trade options for our exporters, with the focus on public transit, green infrastructure, and social infrastructure.
Working together with all of the provinces and territories for a cleaner environment and to fight climate change, Canada has a plan to invest additional funds each year in clean technology producers so they can tackle Canada's most pressing environmental challenges and create more opportunities for Canadian workers. The government will also invest to support innovation and the use of clean technologies in the natural resources sector.
As our has emphasized, a strong economy and healthy environment go hand in hand. We are committed to leaving our children and grandchildren with a more sustainable and prosperous country.
The government's plan will be realistic, sustainable, prudent, and transparent. The plan will also include further details on measures that are intended to steer Canada toward a more prosperous, inclusive, and sustainable economic future.
Before turning to the contents of Bill , I would like to mention that the government's plan includes proposals to create a new Canada child benefit. We aim to have payments under the new Canada child benefit begin in July 2016. The proposed Canada child benefit would simplify and consolidate existing child benefits. It would replace the universal child care benefit, which is not income-tested. The new Canada child benefit would be better targeted to those who need it most.
Our government will also be working collaboratively to implement the Canada child benefit, which will lift hundreds of thousands of Canadian children out of poverty and place them on a surer footing for a brighter future.
We are committed to a strong and growing middle class. We want to ensure that all Canadians have a fair and real chance to succeed. The legislation before the House today takes an important first step in this direction. Bill would cut the tax rate on income earned between $45,000 and $90,000 in 2016 to 20.5% from 22% and introduce a new tax rate of 33% on income in excess of 200,000. As of January 1, the government is putting more money in the pockets of about nine million Canadians each year through our middle-class tax cut. This is the smart and fair thing to do.
Recently, the and the parliamentary secretary travelled across the country asking Canadians directly what our government can do to better support the middle class. They met with indigenous leaders, business leaders, cultural leaders, with the intent of putting Canadians' views front and centre and engaging in discussions to find practical solutions to the challenges and opportunities they are facing. These pre-budget consultations continue online. The response rate and comments received have been tremendous. With over 146,000 Canadians reached to date, this has been the largest pre-budget consultation on record.
Through these consultations, Canadians confirmed that they want a government that delivers on strengthening the middle class and helping those working hard to join it. The measures in this bill would help strengthen the middle class. That is a priority for the Government of Canada.
During the pre-budget consultations, it also became increasingly clear that Canada's economic outlook has changed since the election. This only reaffirmed the government's commitment to the path we were elected to follow, but, more importantly, by engaging with Canadians we have been able to consider new perspectives and refine our plans to be included in the future federal budget.
The government's approach to consultations recognizes that collaboration is essential to delivering real change. The government has committed to and already demonstrated its willingness to listen, engage, and collaborate with members from all parties to identify ways to find solutions and avoid escalating conflicts unnecessarily. Given what we have already heard from Canadians and many members of other parties, I look forward to discussing and debating how best to serve Canadians.
The tax relief proposal in this legislation would help millions of Canadians. It would give middle-class Canadians more money in their pockets to spend, invest, and grow the economy. I encourage all members of the House to vote for this important legislation.
Madam Speaker, I would like to congratulate my colleague on her excellent speech.
I am pleased to participate in this debate on the middle-class tax cut that we announced in December. It is an important Government of Canada measure for Canadians.
I want to do two things today. First, I would like to give a brief overview of our economic and fiscal situation. Then, I will explain why the middle-class tax cut will help grow our economy.
There is no doubt that, as we begin to put our plan for economic growth and long-term prosperity into action, we are up against fierce headwinds. As we all know, we are still dealing with very difficult economic conditions.
In its January economic outlook, the International Monetary Fund, the IMF, projects that global growth will pick up modestly to 3.4% in 2016 and 3.6% in 2017. The IMF's October 2015 outlook for 2016 and 2017 was 0.2 percentage points higher. We all know that is not good news.
Although American economic performance is encouraging, and we are all thrilled about it, the European and Chinese economies remain a serious cause for concern. Global crude oil prices remain at less than half of what they were in mid-2014, mainly due to persistent oversupply and softening demand.
Clearly, what happens outside our borders has real and very serious consequences here at home. In Canada, our economic performance in the first half of 2015 was weak, and that was largely due to the collapse of oil prices in 2014. I will leave it to my colleagues to judge for themselves. Last April the federal government forecast that the price of oil would be approximately $71 U.S. a barrel by the end of the year. Right now, oil is trading at about $30 a barrel, which is a huge difference. We now know that growth will be weaker than what was forecast in the last budget projections.
The economic situation is therefore much more difficult than the previous government predicted. This will of course have important implications for our currency and our fiscal situation.
However, there is also some good news. The gross domestic product, or real GDP, growth resumed in the third quarter of 2015. In its economic outlook released on January 19, the IMF projects that growth in Canada will pick up over the next two years in relation to 2015. We are also in an enviable position because of our low debt-to-GDP ratio, not to mention our wealth of natural resources, or the fact that we have an extraordinarily skilled workforce, compared to what we see around the world.
A focal point of our economic agenda is to put the debt-to-GDP ratio on a downward track. In the end, we also want to return to a balanced budget, which is extremely important to us. To achieve these goals, our policies will strike a balance between fiscal responsibility and controlled investments that promote economic growth.
One of the most important elements is to restore economic growth to the middle class, which is the backbone and the heart of our economy. That is why one of the first items on the government's agenda was to table a notice of ways and means motion to cut taxes for the middle class. This is the right thing to do and it is what we are doing.
The tax cut for the middle class and the accompanying proposals will make the tax system fairer and help Canadians succeed and prosper. Let us look more closely at what we are proposing. Specifically, the bill introduces the following measures: first, we will reduce the second personal income tax rate from 22% to 20.5%. Then, we will introduce a 33% personal income tax rate on individual taxable income exceeding $200,000 a year. Lastly, we will also lower the contribution limit for the tax-free savings account, the famous TFSA, from $10,000 to $5,500 and reinstate indexation of the annual contribution limit.
I would quickly like to explain these three points.
First, I will talk about the changes to personal income tax rates. The changes came into effect on January 1, and this measure is expected to benefit approximately nine million Canadians in 2016. For example, single individuals will see an average tax reduction of $330 a year. Couples can expect an average tax reduction of $540 a year.
Second, as I mentioned, the government adopted a new personal income tax rate of 33% that will apply to people who earn over $200,000 a year. That means that only those with the highest incomes will have to pay more taxes. Period. Like the other tax bracket thresholds, the $200,000 threshold will be indexed to inflation.
Third, the government dropped the TFSA annual contribution limit from $10,000 back down to $5,500 as of January 1, 2016.
However, to reassure those who are wondering, this change is not retroactive. The TFSA contribution limit for 2015 will remain at $10,000.
Restoring the annual contribution limit to $5,500 is consistent with the government's objective to make the tax system fairer and help those who need it most.
Combined with other registered savings plans, a TFSA with an annual contribution limit of $5,500 will enable most individuals to meet their ongoing savings needs in a tax-efficient manner.
The indexation of the TFSA annual contribution limit will be reinstated so that the annual limit maintains its real value over time.
Before closing, I want to highlight some other measures included in today's bill, because I think they are very important.
Today's bill proposes to change the current flat top-rate taxation rules applicable to trusts to use the new rate of 33%.
The bill would amend the charitable donation tax credit to allow higher income donors to claim a 33% tax credit on the portion of donations made from income that is subject to the new 33% marginal tax rate.
I could go on, but it is clear that the Government of Canada is committed to helping the middle class in a practical way, through this bill and other bills that will strengthen our economy, create jobs, and ensure that Canada has a better future.
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 .
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.
Madam Speaker, I am pleased to rise in the House today to speak to Bill an act to amend the Income Tax Act.
Since this is the first opportunity for me to address the House at some length, I would like to take this opportunity to thank the good people of Perth—Wellington for bestowing on me the honour of serving this House as their member of Parliament. In all I do, I pledge to the good people nothing but my hard work on their behalf.
As all members know, none of us can do this job without the love and support of our family. I am certainly no exception. I could not have gone through this 11-week campaign without the love and support of my wife Justine, who has been ever patient; my darling daughter Ainsley, who was a lot younger when we started the campaign and is growing like a weed; our extended family, my parents Bill and Darlene and my in-laws, John and Laurie; and our countless campaign team members, including people like Keith and Matt, Tim and Tim, Sue, Irene, Cynthia, Lee, and Ross.
The members of that team have all been with me throughout the campaign, working from sun-up to sundown on my behalf and on behalf of the good people of Canada to advance their vision for a more perfect country. They campaigned through all weather conditions, from the heat of the summer to snow our last week in the campaign. They were there with me and with us throughout the campaign.
The great riding of Perth—Wellington comprises a number of municipal organizations. We have seven lower-tier municipalities, two single-tier municipalities, two county governments, and dozens of small towns and villages. During the campaign, we criss-crossed it all. By election day, we had knocked on over 30,000 doors from Harriston to Harmony, Mount Forest to Milverton, from Stratford to Staffa to St. Marys, and all points between.
We heard one consistent message at the doors: families were concerned about the economy and they were looking to the government to extend a helping hand. At every doorstep, in every community hall, in every church basement, and on every main street, voters were not hesitant in expressing their views. They appreciated programs like pension splitting for seniors, income splitting for families, the universal child care benefit, and the first-time homebuyers' tax credit. Each of these initiatives provided targeted tax relief to Canadians who actually needed it.
Now we have a new government, and I think it is important to highlight some of the contrasts between the current government across the way and our previous Conservative government.
When our former Conservative government came to office in 2006, we also introduced a Bill . That bill was the Federal Accountability Act. It strengthened conflict of interest rules, expanded access to information to crown corporations, increased transparency in lobbying activities, and overhauled political financing rules to ban not only corporate donations but union donations as well.
Now, let us fast-forward a decade and here we are with another Bill . However, let us make no mistake. This bill is nothing but smoke and mirrors in an effort to implement a misguided and misleading Liberal campaign promise. Under the provisions of this Bill C-2, the most benefits would go to those people making a significant amount of money. Those making over $100,000 a year would be quite happy with the measures that would be brought forward in Bill C-2. However, for those families who are struggling, for those families in Perth—Wellington who are trying to get by on $40,000 or $45,000 a year, this bill would do absolutely nothing.
I said, when I was first elected to this place, that I would try to work collaboratively and co-operatively with all members of this House, but I simply cannot support a measure that is not in the best interests of my constituents. Let us look at my riding of Perth—Wellington and the people who have given me the honour of representing them. Under the provisions of this Liberal bill, as many as 84,000 of my constituents would see no benefit from the bill. Nearly 80% of the residents of my riding would have no tangible benefit from Bill . That is why I am voting against it and why I think all members on this side of the House will be voting against it. We understand that we need to make bills and policy in the best interests of our constituents who have sent us here to speak on their behalf.
My riding is overwhelmingly made up of middle-class Canadians. They are people like Steve and Bettie from Listowel who have three children and are trying to save for their children's education and pay their bills. This bill would do nothing for them, but it would give people making $200,000 a significant tax break. This is wrong.
What is more, Canadians were told during the election campaign that these measures would be revenue neutral. We have found out that this simply is not the case. The parliamentary budget officer said that these Liberal measures would actually add $1.7 billion to the structural deficit that Canada's new is quickly building.
Where will this $1.7 billion come from? Will the Liberals cut the tax credit for first-time homebuyers? Will they cut the tax credits for families who put their kids in sports and artistic activities? Will they cut tax credits for students or apprentices? We simply do not know, because they have not told us.
It is not just income taxes. Bill would reduce the contribution limit for tax-free savings accounts for more hard-working Canadian families and seniors. TFSAs have quickly become one of the most effective and popular savings tools. They allow families to save more for a rainy day, whether it is a down payment on a new home, money to make much-needed renovations to their existing home, or to plan for their retirement.
Do not just take my word on it. Experts in the business community recognize the value of a higher contribution limit for the TFSA. In fact, one chief actuary from a well-respected HR firm said, “I think it’s really quite a positive move for retirement security in general”. Who said that? It was the chief actuary from the Toronto-based HR firm Morneau Shepell. I would encourage our finance minister to perhaps talk to his former colleagues about the benefits of the TFSA and the increase in contribution limits for all families.
During this past election, I spoke often about TFSAs and often got the most positive response from young people, those who recognized this was an effective tool for them to save for their future. It is ironic that the Liberal government, which claims to represent the millennial generation, would rather give millennials a selfie than an effective and worthwhile savings tool.
In December, I received an email from a constituent, Tyler, from Mount Forest. He told me the reduction in the TFSA limit would personally affect his ability to save for the future. This is simply not right.
Bill does nothing to provide meaningful tax relief to the Canadians who actually need it. It leaves way too many Canadians out in the cold. That is why I am proud to vote against the bill and in favour of my constituents in Perth—Wellington who will not benefit from it.