Second Reading (C-2) ac act to Amend the Income Tax Act
We actually do not have room at all to run these massive new reckless deficits, and of course this large debt-to-GDP ratio, including the provincial level, is led by the very large deficit and debt here in the Province of Ontario. The policies of the Kathleen Wynne government, which, I think, unfortunately the current government wishes to emulate, have made Ontario the most indebted sub-sovereign borrower on earth. We cannot go in that direction at the federal level as well. We are already significantly weighed down by that combination of federal, provincial, and municipal debt.
Bill C-2 would make tax changes that would have a significant cost to our treasury. By ignoring the value of tax-free savings accounts, they would also have a significant cost to our economy. This bill would cut tax-free savings accounts and lower some taxes while raising others, but it is not revenue neutral. According to the parliamentary budget officer, it would cost the treasury $1.7 billion per year. It is clear that the current government is not sticking to its $10 billion per year deficit commitment. The Liberals have no serious plan to balance the budget in year four, their tax changes would not be revenue neutral, and estimates are now that they would increase instead of lowering the debt-to-GDP ratio. Over the next four years, it is projected that the Liberals will increase the debt more than we did in 10 years, they will increase the debt-to-GDP ratio, and they will do it not because of a financial crisis but because they have no regard for the importance of planning for the next generation. They are spending today with no regard for the future at all and certainly again making nonsense of their initial budget commitment.
The Liberals said as well they would cut taxes for the middle class and those hoping to join it. The details do not measure up to that commitment at all. Their proposal is a modest tax reduction for those making between $45,000 a year and $90,000 a year. Individuals making less than $45,000 would get nothing. Perhaps families with a combined income approaching $90,000 a year get nothing. Whether those people consider themselves middle class or those hoping to join it, they in fact would lose because of these proposed changes. Even individuals at the low end of that tax bracket may be worse off because of the other changes the current government would bring in with respect to tax-free savings accounts.
Those who would benefit most, as has been pointed out, would be those making over $90,000 per year, perhaps families with a combined income approaching $200,000 a year. That is the reality of these changes. As a member of Parliament, I know I make a good salary, and my wife, as a part-time physician, does as well. With two incomes, each individually less than $200,000 a year, we are in the group that would benefit the most from these proposed changes. The fact is, members of Parliament and senators do not need tax cuts. Canadians do; hard-working, middle-class Canadians, and those who are hoping to join it. The rhetoric just does not match the reality in this bill at all. Instead, what the Liberals would do by reducing tax-free savings account limits is hurt those Canadians who need the help the most.
Here are the real numbers on tax-free savings accounts. Over 65% of tax-free savings account holders make less than $60,000 a year, almost half of TFSA holders make less than $40,000 a year, and over half of those who currently max out their TFSAs make less than $60,000 per year. The Liberals somehow behave as if those making over $90,000 a year count as middle class for the purposes of their rate cut, but those making less than $60,000 a year for the purposes of tax-free savings accounts count as wealthy. This is a clear paradox in their plan. Why would they cut benefits for those who make less than $60,000, while increasing benefits for those who make more than $90,000 a year?
Again, this bill would drive a stake through the Liberals' election commitments. They promised to run three modest deficits of $10 billion, balance the budget after that, and ensure tax changes were revenue neutral. That was and is nonsense. They promised to cut taxes for, in their words, the middle class and those hoping to join it and to pay for those tax cuts with tax increases on higher-income Canadian. Again, clearly if we look at the numbers this is total nonsense.
Those of us who are on the Conservative side of the House and even our colleagues in the NDP have convictions, we stick to them, and we try to advance them. However, it is clear that the current Liberal government already has no regard for its platform. The Liberals have broken more promises in a mere four months than we did in 10 years, so shame on them for that.