An excerpt from remarks by Kamloops-Thompson-Cariboo MP Cathy McLeod in Parliament on Sept. 19, 2016.
BILL C-2 was introduced in December of last year and we are now at third reading. That really illustrates the Liberals' inability to move what they say are important pieces of legislation through the House. However, I would rather have no legislation than bad legislation, which Bill C-2 is.
Because it has been so long, as a quick refresher, Bill C-2 contains a number of measures such as the change in the marginal tax rate, the TFSA reduction in limit, and of course some other things. There are general clean-up measures dealing with such things as charitable donation tax credits and income earned by trust, among others. Clearly what we will hear from the debate is that those clean-up measures are relatively uncontroversial. Really the issues around the marginal tax rate and the TFSAs are the most problematic.
Again today the debate has predominantly focused so far on the Liberals proudly proclaiming that their middle-class tax cut was a significant move forward. However, the Liberals really forgot to tell Canadians two very important things. One is that they never have clearly defined the middle class. I think most Canadians, as they listen to this, might be thinking that as the middle class, members of Parliament will see $700 where people who earn $23 an hour will see nothing.
We have a very poorly defined middle class, and I do not think many of us would really call members of Parliament middle class who are deserving of the biggest tax cut. As Conservatives, we certainly support tax cuts in whatever form, but the bigger problem is that tax cut and what it would actually do. The government had a big oops in its math. The Liberals went to Canadians and said they were going to give this tax cut and that it was going to be revenue neutral because they were going to increase taxes for higher income earners. That was the commitment and the promise the Liberals made to Canadians. Lo and behold, they are in government and it is “wow, we've made a really big math error in that particular calculation”. That is an $8.9 billion error that will be over six years. The mistake the Liberals have made is over $1 billion a year.
We also had a commitment that they would have a $10 billion deficit. It has gone to $30 billion now. This is just one of the measures that has added to the deficit that will create problems into the future.
This is not a promise kept. This is a promise that has been broken to Canadians because it is not revenue neutral. It has been said in the past that debt is deferred taxes. For the $600 or $700 to someone who earns $160,000 a year, their children and grandchildren will have to pay. To be quite frank, the government is irresponsible to put that kind of debt and deficit on our children and grandchildren when it is not necessary. It is quite shameful.
The other piece I want to focus some comments on is the tax-free savings account. There really is no justification for the way the Liberals have structured their marginal tax reduction. They have reduced the ability to contribute to a tax-free savings account from $10,000 down to $5,000 plus a bit of change.
Let me talk about what the tax-free savings account is all about. This is from a Department of Finance document that looks at tax expenditures and evaluations.
Ensuring that the tax system provides meaningful incentives to save supports a more efficient allocation between current and future consumption. In particular, the accumulation of personal savings allows Canadians to improve their living standards and better align income and consumption when planning for important life events such as retirement [or purchasing a house]....[It is] increasing the funds available for capital investment, which leads to a higher capacity to produce goods and services.
The evidence from the program shows that Canadians have taken advantage of these tax savings opportunities. It is a popular means of saving for Canadians of all ages. I would commend to anyone who is interested in the TFSA and its impact. This is an excellent document, and it certainly talks about the benefits.
What is the Liberals' argument with respect to why they had to reduce the tax-free savings account? They said that it was only benefiting the rich, that not everyone could put money into it and therefore it was not a good thing to do.
There are 440,000 GIS recipients who have put $4.3 billion into their tax-free savings accounts. That gives us a really good example. I think anyone could imagine that living on old age security and the guaranteed income supplement is a challenge for any senior. However, let us say that there are seniors who have a house but really no major means of support. They then sell their houses and have tiny nest eggs that they can put into their tax-free savings accounts and have the interest that they make to support them during their retirement and very difficult times. Having that allocation is a very important mechanism for seniors putting a little from the sale of a house into a GIS, or young people in Vancouver or Toronto. Right now we know how difficult it is for young people to get into the housing market. Therefore, it is a real step backward and a real shame to see the measures the government has taken in that area.
The Liberals do not like allowing us the personal freedom to make choices about our own money.
I am very concerned that the government is showing a massive predisposition toward spending taxpayer money that it does not have, deficits, debt, and creating a one-size-fits-all government-run program that is not good for meeting the needs of Canadians in all of their diversities.
Michael Crawford says:
September 21, 2016 12:31pm
Yes, the bloom is nearly off the Trudeau rose for many Canadians but most are still feeling relieved that at least some of the Harper-era policies are gone or going.
September 23, 2016 07:30am
Liberal deficit is structural which means they have no plans on returning to balanced budget or paying back any of the new debt they are acquiring. Our children will continually pay the interest for this folly. Is this what you are advocating?