Mr. Speaker, I appreciate this opportunity to participate in a debate for the first time in 2017.
May I say, first, that normally I like to stick to the motion. The motion did read:
That, given the average middle class Canadian is already overburdened with taxes, the House call on the government to abandon any plans it may have to in any way tax health and dental care plans.
That was a good motion about this time yesterday. However, during question period, the Conservatives had an oops moment when the Prime Minister announced that this particular tax expenditure was not under review.
Just as a point of information, there are about 180 tax expenditures that are in the tax code. As budget 2016 announced—so it is hardly a secret—all of those tax expenditures are under review. Most tax expenditures are put in for perfectly good reasons. They are trying to achieve some sort of social good of one kind or another. However, sometimes they do not work the way they are supposed to work, and sometimes they create a whole other level of inequities.
Let me just use the one that we were supposed to be debating today, which we are now not debating today, namely the health and dental issue, as kind of an example of where there is an inequity that was probably unintended by the original drafters. If I am an employer with an employee and I have a health and dental plan, I can deduct the cost of that plan as an employer, and on the other hand, the employee does not have to declare that benefit as income, and therefore it is tax-free. However, if I as the employer say to my employee, “Here is $1,000 to go and buy a health and dental plan”, it is deductible in my hands as an employer, but it is taxable in the hands of the employee.
Therefore we see that there is an inequity that is immediately set up; hence the government's desire to review all expenditures on a continuous basis because of unintended consequences. Those unintended consequences create real inequities for Canadians. For Canadians who are fortunate enough to work for an employer who has a health and dental plan, versus one who does not, there is an inequity that is created there.
However, we are talking gossip, and the motion yesterday was founded on mainly gossip. It does seem kind of regrettable that the Conservatives would even introduce a motion based on gossip. The Conservatives have now amended their gossipy motion to read “such as taxes on carbon, savings, payroll, small businesses and children's arts and sports programs”.
The taxing of carbon is largely done by provinces. About 80% to 90% of the population already, one way or another, pays a price for carbon pollution, so it is hard to know what the Conservatives are talking about there, other than anticipated gossip. I have no idea what they are talking about with savings, payroll, or small businesses. Let me just go on to talk about the children's arts and sports programs, which on the face of it is a good idea, encouraging children to participate in sports and arts programs. However, it may well be that individuals either do not have a child so it is not beneficial to them, or if they have children, they would like to put them in a tutoring program or a reading program or something else that might actually cost money. Those individuals would not actually qualify under a sports and arts program. Therefore there may be a better way to achieve a social benefit by the review of a tax expenditure such as that.
The second inequity is that people in the upper tax brackets can afford sports and other programs for their children, but people in the lower tax brackets frequently cannot. Again, an inequity is created among Canadians based upon their income.
Therefore, what exactly are we talking about today, other than the Conservative posturing that would have us believe that they are the only ones capable of managing the economy and the fiscal framework. The mantra usually has something to do with taxes and hard-working Canadians.
The presumption of the motion is that somehow or another the Harper Conservatives were absolutely brilliant with their tax brackets, but if we compare the tax brackets between 2015, the last year of the Harper regime, and 2016, the first year of this Liberal government, we can note that on the first bracket, which is 15%, both brackets remain the same and are quite comparable, however, the threshold has moved up $500 under the Liberals. In effect, people have to earn $500 before they leave that 15% bracket.
The second bracket, and this is where the dramatic change is, under the Conservatives was 22%, but under the Liberals it is 20.5%, a significant change in the bracket, which is inaccurately referred to as the middle-class bracket. In addition to the drop of 1.5 points between the percentages, people have to be earning a further $1,000 before they leave the bracket under the Liberals. It is a double benefit.
The 26% bracket, which is the third bracket, remains the same, as does the 29% bracket, but there is a new bracket that is created under the Liberals that taxes income over $200,000 at 33%. It is a major initiative, and it is an attempt to offset some of the costs of lowering the brackets in the lower brackets so that there is not a huge hit on the fiscal framework.
The second major initiative was under the Canada child tax benefit on which the tax was eliminated to the benefit of nine out of 10 Canadians, including my own grandchildren. The rhetoric does not match the rates.
Then we can look at the fiscal situation that was passed on to the Conservatives back in 2006. Prime Ministers Chrétien and Martin reduced the national debt by $90 billion. Under the Harper regime, that was not only reversed but increased by a further $60 billion. So, $90 billion down by Chrétien and Martin; $150 billion up by Harper.
The Conservatives would like us to believe that this was all due to economic circumstances, such as in 2008. Actually, it was a self-inflicted wound, because, foolishly, against every advice given by every economist in the country, the Conservatives cut the HST. That was $14 billion a year, right out of the fiscal framework. The reason they did that was political rhetoric and nonsense. Hence, the difficulties we are now faced with, having to increase the national debt by a mere $150 billion.
As I finish up here, we are basing our discussion on gossip. I cannot support a motion that is based on gossip. I cannot support a motion that is based on amended gossip. The motion does not seem to understand the difference between taxes, tax rates, and tax expenditures. The proponents of the motion have no credibility on tax rates, on deficits, or accumulated debt.