moved that Bill C-394, An Act to amend the Income Tax Act (parenting tax credit), be read the second time and referred to a committee.
He said: Mr. Speaker, I rise today to begin debate on my private member's bill, the supporting new parents act.
The arrival of a new child, whether the first, second, or fifth, is one of the biggest milestones in life. As a father of five, I can say it is also one of the greatest joys a couple can experience. With every new child, the experience does not get any less joyful and exciting but it is also a great responsibility.
All parents know just how tough those first few years can be. The financial pressures can seem overwhelming. The ever-increasing cost of raising a child can be very high.
It is not cheap to raise a child in Canada. New parents have to make sacrifices to afford the basic necessities for the new baby. It is often surprising how quickly the costs can add up. With diapers, toys, bottles, new clothes every three months, it is not easy.
That is especially true for families where one parent has to take time off to care for the new baby. While Canadian families were hoping for lower taxes and higher benefits in 2015, the fact is that many families are struggling under this government. This government's tax hikes are leaving less money in Canadians' pockets. The Liberals are breaking their promises.
The average family in Canada is already paying over $800 more in taxes every year under the Liberal government, and the costs are going up. Life gets evermore expensive. Groceries, hydro, or power as we call it in Saskatchewan, gas, and with kids in the house, all the extra trips parents are making to care for a newborn, families do not see the costs of these necessities going down anytime soon. Canada's Conservatives understand the importance of supporting young families with children during those important early years.
We also think the best way to support Canadian families is to keep taxes low, foster a positive environment for job creation, and make sure parents are free make their own decisions for their families.
That is my motivation for introducing the supporting new parents act.
The supporting new parents act would create a federal non-refundable income tax credit for any federal income tax paid under EI parental leave programs.
Quebec residents receiving benefits under the provincial parental insurance plan will be eligible for a tax credit for an equivalent amount. I would like to explain to hon. members how that will work.
We are fortunate in Canada to have EI maternity benefits and EI parental programs that benefit so many Canadians. However, every Canadian who receives these benefits has to deal with certain costs associated with them.
When someone goes on maternity or paternity leave, they take a pay cut. Benefits cover only 55% of their salary, but on top of everything, they also have to pay income tax on the benefits they receive.
When parents go on EI parental or maternity leave, they sacrifice up to 45% of their salary. After making that sacrifice, they have to pay tax on the benefits they receive. With tax being withheld from every cheque, it means that families with a parent on leave see their take-home benefits cut down, and many get hit with an extra tax bill afterwards when they file their income taxes.
My proposed bill offers a major tax relief to young families. It will give Canadians on parental leave a break by offering a tax credit for any income earned under the EI maternity and EI parental programs. We want to leave new parents with more money in their pockets. We know the parents know what is best for their child.
The only way the government in Ottawa can help parents of newborns is to leave more money in their pockets and let them spend it as they see fit. Once passed, my bill will tangibly benefit thousands of young Canadian families. For example, a Canadian mom who was earning $50,000 a year before going on benefits would be eligible for a tax credit of about $4,000.
My hope is that once this bill is passed, CRA will support Canadian parents by applying the credit automatically so Service Canada no longer needs to withhold taxes on parental and maternity benefits. This is a limitation I have as a private member's bill, but when we are government, we can ensure the Canada Revenue Agency automatically applies the credit.
At the very least, new parents would not be hit with a surprise tax bill when they file their taxes. I think we can all agree that is not right. At a time in their lives when they need every penny to raise their newborn, parents still get squeezed by the tax collector.
I have already spoken with families across Canada about the supporting new parents act. We want them to know what this bill is about. They tell me they want the supporting new parents act to become law. They can see how they are going to benefit. The new law would put money in the pockets of hard-working families.
I want to share one story with my hon. colleagues.
I spoke with one mom in Ontario who told me that Service Canada withheld 10% of her maternity and parental benefits, and she still got hit with an $1,800 tax bill when she filed. She had to pay on top of all the money that was being withheld. That is a lot of money after a stressful year, with a lot of new costs, to have to write a cheque to the Government of Canada for benefits she received after taking a pay cut of up to 45%.
What else could she have spent this money on? It could have gone toward buying a car seat or a new pair of boots for the baby. One never knows what types of extra costs add up. However, instead, the government handed out these benefits with one hand and then took a cut of it with the other.
An hon. member: That is what they do.
Hon. Andrew Scheer: That is what the Liberals do.
That is unfair to her and to millions of Canadian families that are having trouble making ends meet. The Conservatives of Canada think that the government should put the interests of Canadians above its own interests. People should come before the government. I think that is what Canadians have always expected of us.
We also think that the government should not tax Canadians' money twice and that it should certainly not tax the time they spend taking care of a new baby.
For any young family, this important tax relief could make a huge difference in the cost of raising a newborn.
When we think about what important tax cuts and benefits have been cancelled by the Liberal government, we can come up with a pretty big list very quickly. The family tax cut is gone, credits for kids' sports and arts programs were taken away, the tax free savings account was been cut back, a carbon tax coming, and higher EI and CPP premiums have cut more and more out of families' weekly paycheques.
All of these measures are harmful to the well-being and financial security of Canadian families. Why did the government do away with the tax break for families? That was a bad decision since this small but very important tax break for parents put up to $2,000 back in the pockets of over 1.5 million families across Canada.
By giving Canadian parents an incentive to sign up their kids for arts classes and sports programs, we make sure that our children grow up healthy and engaged. Engaging in those extracurricular activities helps our children meet new peers, make friends, and learn about the importance of team play. Instead, the current government decided to cancel this benefit for purely political and partisan reasons. Playing politics with Canadian families should never be a motivation for a government policy.
According to a recent Fraser Institute report, Canadian families, as I mentioned, are paying over $800 more in taxes today compared to previous years. This is a big burden for any Canadian family, but especially for families with newborns. By 2022, 90% of Canadian families will be paying higher taxes.
When Canadian families decide to have a baby, they want assurances that their government will support them and that they will have enough money to raise their children. We know that the government should work for young parents and not the other way around.
I am pleased that in the short time since I introduced this bill I have already received the support of hundreds of families all across the country. What I am offering today in this bill is a very simple yet extremely effective way of showing our solidarity and making the lives of Canadian families a bit easier. Young families should not be punished financially for their decision to have children. They should have our help instead.
Conservatives understand that Canadians work hard for their money. That is why, instead of making families pay more taxes, the government should focus on giving more money back to those hard-working families.
We believe in the tax break because we truly believe that Canadians know how to spend their money better than the government. We think that when free people are able to make free decisions about what to buy or where to invest, for example, it creates a better quality of life than when the government takes that money and spends it for them.
There are some fundamental things the government must do, like invest in critical infrastructure, keep our borders safe, and make sure that our armed forces have the tools they need to protect Canada in times of crisis. Beyond that, the government needs to have a very good reason to forcibly take money out of Canadians' pockets and then spend it on their behalf. Our Conservative position is always to start off with the default of leaving money in the pockets of hard-working Canadians in the first place. We are always fighting for lower taxes, not just because it is good for individuals but because it is good for society as a whole.
Now is the time for this House to take action and show our support for hard-working Canadian families. There is no good reason not to prioritize Canadian families and put their interests first. The current government has a choice: to say no to Canadian families for partisan reasons or to support my initiative and say yes to helping young Canadian families.
I hope that all members will unite to support this important bill.