Thursday March 4, 1999
Hansard March 2, 1999
ORAL QUESTION PERIOD TAXATION Hansard (Unedited Copy) – March 2, 1999
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, this year the government went $7.6 billion over budget in its spending. StatsCan has confirmed it. Canadians are now paying the highest taxes that they have ever paid in history. Out of all of those people who are paying extraordinarily high taxes it is single income families who are paying the most proportionately. Why does the Prime Minister and his government discriminate against single income families?
Hon. Jim Peterson (Secretary of State (International Financial Institutions), Lib.): Mr. Speaker, since we took office, even though we were running a huge deficit reducing taxes has been one of our priorities. Even when we were in deficit we started by selective tax cuts for Canadians with disabilities, for the charitable and voluntary sector, for students. The most massive tax cut of all for the lower income Canadians was the child tax benefit going to the low income working families, $2 billion with this budget.
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, if they are cutting taxes, why does StatsCan say that they are now at record high levels? Why is the minister running away from the question? My question again is this. Why is this government discriminating against single income families? Why is a family making $50,000 paying $4,000 more in taxes than a dual income family?
Hon. Jim Peterson (Secretary of State (International Financial Institutions), Lib.): Mr. Speaker, the facts are that from day one personal income tax reductions have been an important part of our government’s fiscal plan. With this budget a two income family earning $50,000 with two children gets a 15% decrease in their income taxes. The same family with a $30,000 income pays zero federal income taxes. The same family with a $20,000 income gets a federal tax credit of $3,600. This is our commitment to the Canadian middle class. … Miss Deborah Grey (Edmonton North, Ref.): Mr. Speaker, if you want the real facts go to Stats Canada not to the minister. Take two Canadian families that earn $50,000 a year. In one family both parents work outside the home and in the other one parent stays home with the kids. One would think they would pay the same amount of taxes, right? No, they in fact do not. The family that has one parent stay at home pays $4,000 more a year in taxes. Why does the Prime Minister think that is fair? How does the Prime Minister think that is fair?
Hon. Jim Peterson (Secretary of State (International Financial Institutions), Lib.): Mr. Speaker, what we have to recognize is that we have, during the process of reducing taxes, recognized a number of these disparities. Let me recite them for the member. Where we have a single earner family we have a spousal credit of $1,500. In addition, we have the age credit, the pension credit, the disability credit and the medical credit that can be claimed. With the child tax benefit we give $1,340 more to a single earner than to a double earning family. On top of that, a single earner can contribute up to $13,500 to the RRSP of a spouse.
Miss Deborah Grey (Edmonton North, Ref.): Mr. Speaker, in spite of all the credits that the minister brags about these people are still paying $4,000 a year more in federal tax and the minister is clawing back that money off the child tax credit. The point is that last year single income families paid 92% more federal tax than dual income families. Under the 1999 budget that discrimination gets even worse. Families with a stay-at-home parent pay more than double the federal tax of a two income family regardless of what he says about credits. Families are having to live on credit now. Why does this government continue to discriminate against single income families?
Hon. Jim Peterson (Secretary of State (International Financial Institutions), Lib.): Mr. Speaker, we have from day one recognized the overly onus burden of the personal income tax and we have continually, in every single budget, taken measures to reduce it. Unfortunately we cannot afford the $25 billion in fiscal goodies promised to us by the Reform Party with a $9 billion black hole without telling us where that will come from. If we were to undertake to introduce the Reform budget, the bonding agencies would just simply laugh at us. … Mr. Dick Harris (Prince George-Bulkley Valley, Ref.): Mr. Speaker, the minister has had two days to answer the questions from our party about single income versus dual income families. The fact is since day one the government has discriminated against single income families. The single income family will pay more than double in taxes what a dual income family making the same income will pay in this year’s budget. I ask the minister why the government continues to discriminate against single income families in Canada? Why does it do it?
Hon. Jim Peterson (Secretary of State (International Financial Institutions), Lib.): * Mr. Speaker, one thing we have to recognize is that if we have two members of a particular family who are both working, first of all they are putting in twice the working hours, but they also have close to twice the expenses: the work related expenses of clothes and travel and the expenses of not having someone at home doing the housework. There are added expenses with more than one person in a household working.
Mr. Dick Harris (Prince George-Bulkley Valley, Ref.): Mr. Speaker, I am sure that all the mothers who are staying home looking after their families will be very happy with the minister’s remarks. The fact is women who stay home to look after their families and parents who stay at home work as hard as those who are in the workforce in this country. But the government does not give them one bit of credit for it. As a matter of fact it charges them for the sacrifice they make to stay home to look after their families. What kind of government has that little respect for stay at home parents in this country?
Hon. Jim Peterson (Secretary of State (International Financial Institutions), Lib.): Mr. Speaker, we recognize that there are many reductions that still have to be made to the personal income tax system. These reforms we began from the very first day that we took office. We have a progressive tax system under which if one earns in a much higher bracket, one is naturally going to pay more money. We recognized this in the last budget when we said that for the child tax benefit one pays $13.40 less.
Some hon. members: Oh. Oh.
The Speaker: Order. The hon. minister, if he wishes, may finish his response.
Some hon. members: Oh. Oh.
The Speaker: Order. We will hear the minister. The hon. minister.
Hon. Jim Peterson (Willowdale, Lib.): Mr. Speaker, having dealt conclusively with this issue, I feel there is nothing more to add. Thank you. ….
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker, for years it has been a mystery to Canadian families as to why the tax system discriminates against those who make the sacrifice of foregoing a second income to have a parent stay home and raise the children but now lo and behold we have found the government’s answer. It believes families that decide to keep a parent at home to raise the kids are not working. Let me tell the secretary of state that they work harder than many people who are generating income and they deserve recognition in this tax code. How can he continue to justify a tax system that tells stay at home parents they are second class citizens?
Hon. Jim Peterson (Secretary of State (International Financial Institutions), Lib.): Mr. Speaker, we have from the beginning of the process of individual tax reform recognized very strongly the role that a stay at home spouse can play in a family. That is why under the child tax benefits we have a $1,340 benefit that would not otherwise be available. That is why under our system it is possible where there is a single worker in the family to contribute up to $13,500 to an RRSP for that non-working spouse. That is part of our philosophy.
Mr. Jason Kenney (Calgary Southeast, Ref.): Mr. Speaker, the Liberal philosophy is to say to people who decide to keep a parent at home and forego a second income, to make an economic sacrifice, to do what they think is best by their children, that they are going to be discriminated against and have to pay more taxes than a family with more income. It makes no sense. It simply is not fair. This House recognized that in the last parliament when it passed a Liberal member’s motion to stop the tax discrimination against single income families. When will this government begin to address this gross inequity and level the playing field for families that make sacrifices for their kids?
Hon. Jim Peterson (Secretary of State (International Financial Institutions), Lib.): Mr. Speaker, we on this side of the House recognize that we have further reductions in personal income tax to make. This has been part of our philosophy from day one when we took office. That is why we have targeted in areas of priority. We recognize that we do not have unlimited funds to do everything that we might like to do. We have had to be prudent in our tax cuts. We have made many spending cuts going down to record low levels as the Prime Minister has pointed out. These have been tough choices that we have had to make on behalf of Canadians. We are committed to ongoing cuts to personal income tax and we will make- …
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