44th Parl. 1st Sess.
June 18, 2024 10:00AM
Madam Speaker, I stand in the House today in full support of Bill S-224 in its original form.
I want to commend my colleague, the member for Oshawa, for his hard work and tireless advocacy on behalf of human trafficking victims. I consider him to be a friend and a mentor, in addition to being my neighbour. I have seen the hard work he has put into fighting for victims of crime and trying to get all parties on board with a common-sense idea to hold offenders who commit the crime of human trafficking to a higher standard than we hold the victims.
Unfortunately, the bill has been attacked by the Liberal government with not only an amendment that hollows it out and guts it, but also an amendment that goes so far as to actually delete all of the contents of the legislation, making it meaningless and also making the bill ineffective in challenging the status quo. Unfortunately, it is on brand for the Liberal Party of Canada to disrespect victims of crime, to maintain a status quo of chaos and disorder, and to not stand up for those who are suffering from the way the justice system currently operates.
The Liberal Party of Canada does not support victims of human trafficking, just as they do not support victims of all crimes. It is not a government interested in serving the interests of law-abiding citizens, but is more concerned with being easy on criminals. Undermining Bill S-224 is completely on brand because we know how little they care about victims of crime.
I can go over the record. Liberal bail policies, for example, have turned courthouses into turnstile houses. Police officers work very hard in our communities to make arrests, to enforce the law and to keep our communities safe, only to see those who they arrest released back into the community to commit the same crimes over and over again. Catch-and-release bail policies have contributed to a spike in all sorts of crimes across Canada, from auto theft to violent crime, and are contributing to a system of chaos and disorder.
We have also seen the Liberal government's approach to enforcing drug laws. Certainly, members would recall that in British Columbia we saw the results of a sadistic experiment to legalize hard drugs, further promoting chaos and disorder. We also have a problem of judge shortages. We have seen that the government is not interested in appointing enough judges to ensure that we have a functional justice system. Long delays have caused cases of violent crime to be thrown out of the courts.
I ask anyone hearing my words to just imagine being a law-abiding citizen, who does everything that they have been asked to do, such as going to school, getting a job, paying taxes and contributing to this country, and a crime is committed against them or their family. The system that they pay into does not have their back. In fact, it is so ineffective that the person who committed the crime against them never has to face consequences for his or her actions.
That is the system of chaos and disorder that we have under the Liberal government because, again, it does not have the backs of law-abiding citizens. Instead, it is concerned with being easy on criminals. This system of chaos and disorder is the status quo under the current Prime Minister. The reality is that by opposing Bill S-224, by putting forward an amendment that renders it absolutely meaningless, the Liberal government is clinging to the status quo. It is clinging to the chaos and disorder that it has caused.
The crime of human trafficking is a particularly heartbreaking one. It exploits the most vulnerable people in our communities. For those of us from Ontario, it hits close to home. From 2012 to 2022, two-thirds of the human trafficking cases reported across Canada occurred in Ontario. The 401 Highway corridor has become a hub for trafficking crimes. It is fair for Canadians to expect some action from the government to address these concerns. We have heard from police officers who are frustrated with the status quo and who have said quite openly that it makes it harder for them to do their jobs.
I would like to quote a member of the Durham Regional Police Service, who I am fortunate enough to say serves my home community of Durham. Constable Jeff Tucker said, “There is a lack of understanding for the victims. The victims are retraumatized every time they have to testify over and over again.... The criminal justice system provides more rights to the accused than the victims.... Victims are not protected by the system, only criminals.”
This is a very serious problem, and it is not hard to see why police officers would be disappointed with the status quo we have. Currently, under the law, only 8% of human trafficking offenders are convicted, and Bill S-224, in its original form, sought to solve this problem.
The justice system is broken, to put it bluntly, and it is not hard to figure out who is responsible. The Liberal Prime Minister, in power for nine years, is responsible. Despite all his efforts to claim no responsibility for his own actions, he has broken the justice system, and a course correction is necessary.
I would like to use my time to share the perspective of the mother of a human trafficking victim. Lynda Harlos has been a champion for Bill S-224 in its original form. Lynda is an advocate in the fight against human trafficking and is the founder of the organization Parent With A Purpose, where she is a sex trafficking and abuse prevention educator, and she shares her story of being the mother of a sex trafficking survivor.
Lynda writes, “In the current global landscape, the question is not if a child will be targeted for exploitation, but when. We must ask ourselves this: are our protocols robust enough to prevent them from becoming victims and, if they do, to ensure justice is served? Every night, I lay my head on my pillow, tormented by the knowledge that my naivety led to my daughter's trafficking. Can you, as policymakers and leaders, rest easy without feeling shame and guilt, knowing that justice remains out of reach for her due to a lack of 'proof' for her suffering? Was she expected to photograph the moment she was being waterboarded for not complying with a client's demands? Should she have documented her trafficker threatening her son's life as retribution for her refusal to allow further abuse? In a household of three women, two have endured repeated sexual assault, yet these incidents remain unreported. Why? Because we are painfully aware that current laws will revictimize us without delivering justice. My daughter would willingly face revictimization if there were any hope that justice would prevail. While local organizations excel at addressing victims' basic needs, they fall short in securing justice. The solution is straightforward: punish those who exploit our children and the perpetrators who buy from them, not the victims. It is imperative that we strengthen our legal frameworks to protect and deliver justice for the most vulnerable among us.”
I thank Lynda for her work and for her advocacy. I thank all of the people who stood up in support of victims of violent crime, including the member for Oshawa, who has been a tireless advocate.
Members of the House have an important decision to make. Will they support Bill S-224 in its original form, or will they allow a Liberal amendment to continue promoting chaos and disorder across our country? It should be a no-brainer. It should be very obvious that change is needed and that the course correction of this country is in the hands of its leaders to listen to the people of Canada. I leave that on the conscience of all members of the House, and I am thankful for the chance to speak in support of victims' rights.
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- Jun/18/24 5:44:33 p.m.
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Resuming debate.
Is the House ready for the question?
Some hon. members: Question.
The Assistant Deputy Speaker (Mrs. Carol Hughes): The question is on Motion No. 1. A vote on this motion also applies to Motion No. 2.
If a member participating in person wishes that the motion be carried or carried on division, or if a member of a recognized party participating in person wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.
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- Jun/18/24 5:45:16 p.m.
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We request a recorded vote, Madam Speaker.
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- Jun/18/24 5:45:22 p.m.
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Pursuant to Standing Order 98, the division stands deferred until Wednesday, June 19, at the expiry of the time provided for Oral Questions.
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- Jun/18/24 5:45:32 p.m.
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Madam Speaker, I suspect if you were to canvass the House, you would find unanimous consent to see the clock at 6:30 p.m. so we can get to Government Orders.
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- Jun/18/24 5:45:39 p.m.
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Is it agreed?
Some hon. members: Agreed
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Madam Speaker, after that 15-minute break to discuss Bill S-224, I am going to return to my speech on Bill C-69. I want to focus on the division that creates the federal framework for the open banking system and centralizes powers.
As I said before the break, under this bill, banks under federal jurisdiction would have only one set of regulations to follow, whereas an institution under provincial jurisdiction, like Desjardins, would be caught between two governments: the Government of Quebec, for its general operations, and the federal government, for its technological interactions with customers. The fact that these institutions will be subject to two uncoordinated regulatory bodies could be downright dysfunctional and give banks an egregious advantage over co-ops, trust companies, credit unions, Alberta Treasury Branch Financial, and so on. Why always favour Bay Street? This is unacceptable.
Bill C‑69 places Quebec in a dilemma in which there are no good options. If we refuse to join the federal framework, our institutions will stay trapped in the 20th century while their federal competitors step into the technological 21st century. Maybe we could let our financial institutions opt in to the federal framework, but then Quebec would have to waive the right to apply its own laws to their activities that come under the open banking system, which is unacceptable, especially with the Civil Code, consumer protection laws and so forth.
Then there is the worst-case scenario. In order to survive against its federal competitors, an institution like Desjardins could choose to stop being a Quebec institution within the meaning of Quebec's Cooperatives Act and become a federal institution under Canadian co-operative bank legislation. Trust companies would face the same choice. Since the open banking system could eventually be expanded to cover insurance, all of our insurance companies could switch over to federal regulation. That is what is at issue in Bill C‑69.
If this worst-case scenario comes to pass, the entire financial sector and all of its activities will be completely outside Quebec's jurisdiction. That is a serious threat to Montreal's status as a financial hub. In short, by using its power over banks to regulate all companies that interact with them, Ottawa is trying to force Quebec and the provinces out of the financial sector, which it failed to do when it was trying to regulate securities.
Rather than taking the unilateral, centralist route, Ottawa should have chosen co-operation. It could have called a federal-provincial finance ministers' working meeting on open banking. It could have encouraged them to release a joint statement at the end of this meeting in which the governments announce their intention of developing a common regulatory approach with a clear deadline, such as 2025, and possibly setting up a federal-provincial office. It could have sent a clear message to all financial institutions, not just banks, telling them to agree on a common technology, such as a secure data transfer protocol, because open banking is coming. It could have worked on common regulations on accreditation rules for fintech companies, security standards, clarification of financial liability, and consumer and data protection.
We asked the government to take out the division on open banking that centralizes the sector exclusively at the federal level, to take a few months to coordinate with the various players and the provinces and then to come back in the fall with a framework that respects jurisdictions and does not put provincially regulated institutions at a disadvantage. This government rejected our proposal, so now we are going to have to build this new system on a very bad foundation.
Another concern is that, in Bill C‑69, the government delegates the administration of the framework to the Financial Consumer Agency of Canada, an agency that mainly promotes financial literacy and does not have any of the required expertise. In committee, FCAC representatives acknowledged that they did not have expertise in sharing financial data in a way that minimizes the obvious cybersecurity risks. They also told us they do not currently have a plan for developing the expertise needed to oversee the security aspect of open banking.
We also asked several questions that the FCAC representatives said they were unable to answer. For example, since fintech companies are not banks, they are not federally regulated.
Did the government obtain the consent of the provinces, particularly Quebec, which has its own civil laws, before introducing this bill? They are unable to answer.
During the briefing on the notice of ways and means preceding the bill, it was my understanding that provincially regulated financial institutions could opt in to the federal framework provided that the province consents and declines to regulate those activities involving the open banking system. Is that the case? They do not know. They are unable to answer.
Which provincial laws will have to take a back seat to federal laws? They cannot answer this, either.
Who will be tasked with certifying the technology companies? Will it be Ottawa or the Autorité des marchés financiers? They are unable to answer.
Will Quebec's Consumer Protection Act apply to the activities of the open banking system? They are unable to answer. In the event of fraud or damages, will it be possible to launch a lawsuit or class action under the Civil Code or the Consumer Protection Act against a fintech company? Once again, they are unable to answer that question.
Will the sharing of financial liability between the financial institution and the technology company necessitate changes to the financial institutions' prudential standards? Will the Autorité des marchés financiers need to change its rules to comply with the federal framework? Again, they are unable to answer.
None of this is surprising. The Financial Consumer Agency of Canada is not well placed to administer this framework. It learned it would be receiving this role the day before the budget was tabled. When it comes to behaving like amateurs and making things up on the fly, this government takes the cake.
To avoid a disaster or some risky backpedalling, we asked the government to remove this division from Bill C-69. We suggested reworking it this summer and coming back with a good bill this fall. The government refused.
We are opposing this bad bill that sets this entire sector up on a terrible foundation. It is unacceptable.
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- Jun/18/24 5:53:21 p.m.
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Madam Speaker, I appreciated a number of the comments the member made. I can understand why, through technological changes and advancements in web design, consumers rely more and more on Internet banking.
The member gave the impression that the reason he is voting against the budget bill is that specific issue. Is my interpretation right, or are there other aspects to the legislation the member opposes?
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- Jun/18/24 5:54:06 p.m.
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Madam Speaker, that is a big problem for us with this bill.
The bill is 660 pages long and amends or creates 67 laws. Some of it is good, and some is not so good.
One example of something good is that it changes the rules so that companies that declare their profits in tax havens are taxed more effectively. That is a step forward. That is good. We applaud that.
The $11 billion being given to the gas industry to make hydrogen is a subsidy, a program tailor-made for the gas industry. It is not a plan to fight climate change. Therefore, we oppose it.
I spent all my allotted time talking about open banking for a reason. It is a big deal. It is a big deal for Quebec, for Montreal's status as a financial hub, and for our financial institutions, like Desjardins. It is unacceptable. Once again, I condemn the government's failure to listen. As soon as there is a chance to favour Bay Street over its competitors in the financial sector, the government seems to kowtow to the big Bay Street banks. That is unacceptable. That needs to change.
The framework will not be put in place until next fall. Why not take the summer to coordinate and build on a solid foundation rather than on such a shaky, poorly managed framework?
It is a disaster waiting to happen.
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- Jun/18/24 5:55:45 p.m.
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Madam Speaker, honestly, I have lost count of how many attempts this government has made to impoverish people, to make them feel insignificant. It is interfering in our most fundamental jurisdictions, in the areas that are the most important to us. In 2021, I realized just how important securities are to Quebec and how symbolic they are. I would like my colleague to expand on that.
When it comes to finance, the government and even the opposition present themselves as champions of the economy, but they forget that there is so much room for improvement. I am referring here to the securities framework, but also to capital gains. We made some intelligent proposals, but once again, we have not heard anything from the government. I would also like my colleague to comment on that.
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- Jun/18/24 5:56:40 p.m.
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Madam Speaker, I thank my friend, the member for Shefford, for her comments.
First, the capital gains tax comes into effect on June 25, but the bill does not yet exist. We are told that there will be a draft bill at the end of July and that it will not be introduced, debated and studied in the House until this fall. We certainly intend to make amendments to improve it. We will make sure that millionaires pay a higher tax rate than middle-class working people. That is not currently the case. We will also make sure that collateral victims get better protection than we expect to see in the bill.
Symbolism matters when it comes to Quebec's model for financial institutions, for securities, for the open banking system we are talking about here. The government symbolically recognizes the Quebec nation, but the more than 100,000 well-paid jobs at the Montreal Exchange and all the associated expertise, plus everything to do with insurance, is more than just a symbol to us. We do not want to be at the mercy of companies like Power Corporation, Sun Life or Canada Life. We see how badly that is working.
Quebec has expertise when it comes to the financial sector and insurance. We want to maintain that expertise. The federal framework allows it, but the pursuit of excessive centralization we see with this government and other governments we have here is hurting us. It is a constant struggle just to protect our turf.
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- Jun/18/24 5:58:19 p.m.
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Madam Speaker, I am really privileged to serve on the finance committee with my hon. colleague, and I want to thank him for all of his excellent contributions at committee. My question to him is on the capital gains exclusion issue, which is not covered by this bill, but, as he points out, will be in legislation coming to this House soon.
He heard evidence today suggesting that when the Conservatives raised the capital gains inclusion rate in Canada in 1988 and 1990 from 50% to 66.6% to 75%, there was no material effect on investments by businesses. It did not have any negative effect on their investments in machines or equipment. Nor has there been an increase in investments as capital gains have come down since the year 2000. In other words, he heard evidence that there is no real relationship between the capital gains inclusion rate and investments by businesses.
Can the member tell the House what his thoughts were after hearing that evidence?
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- Jun/18/24 5:59:30 p.m.
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Madam Speaker, I thank my colleague. I am also pleased and privileged to work with him at the Standing Committee on Finance. We sit next to each other and I think we are learning to work well together, which is a great privilege.
I raised this question, this thought earlier today in committee. The irony is that it was the Conservatives who increased the capital gains inclusion rate to 75%. It is the Liberals who lowered it to 50%. Now, the roles are reversed. The Liberals want to increase it to two-thirds and the Conservatives are getting all worked up.
As for the economic consequences of this, I am no expert. The International Monetary Fund just said that the impact, if there is one, would be quite marginal. I do believe, however, that for the principle of tax fairness, it is something that would be important to implement.
However, we have a lot of concerns for people who are not part of the wealthiest 1%, but could get caught up in this when selling a home for their retirement. This happens a lot in Quebec. We want to properly study the upcoming bill to determine what it is all about and to better protect any potential collateral victims.
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- Jun/18/24 6:00:46 p.m.
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Madam Speaker, I want to congratulate my colleague on his excellent speech. Personally, I think this is a case of major interference in Quebec's businesses and financial services. How does my colleague think the financial community in Quebec will react? What dynamic can we expect to see?
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- Jun/18/24 6:01:15 p.m.
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Madam Speaker, I thank my colleague and friend from La Pointe-de-l'Île for his intervention.
Yes, it is interference, and yes, it is a concern for provincially regulated financial institutions. Desjardins is subject to Quebec regulations. Representatives of Desjardins appeared before the committee and raised many serious concerns in their testimony. Federal governments of every political stripe always work for the big Bay Street banks at the expense of other players, such as credit unions or Desjardins.
If the government had any respect for the federative nature of the country we are currently in, it would never dream of interfering like this. First, it should negotiate, and then it should coordinate. That is all we are asking the government to do, but it refuses to do it. It always comes down to John A. Macdonald's great dream of a legislative union rather than a federation. That had no support back then, and it has none today either. The compromise was a federation where each government, each assembly, was sovereign in its own jurisdictions.
Rather than properly managing problems within its own jurisdictions, this government is trying to encroach on the jurisdictions of Quebec and the provinces. It is trying to boss them around and tell them what to do. It is trying to steal powers so it can turn the federation into a legislative union. It seems that Quebec, Quebec's specificity, no longer counts, even though the House has officially recognized Quebec as a nation. The government does not seem to be listening. That is unacceptable.
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- Jun/18/24 6:03:00 p.m.
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Madam Speaker, I heard my colleague talk about capital gains earlier. I heard the Leader of the Opposition say earlier this week that this bill could not be amended in committee.
I was confused. The leader of the official opposition has been a member for 20 years. Is it possible that the leader of the official opposition does not know how a bill works?
I would like my colleague to elaborate on that.
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- Jun/18/24 6:03:34 p.m.
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Madam Speaker, I served with the current Conservative leader on the Standing Committee on Finance. He knows perfectly well how it works.
When he says that the forthcoming bill cannot be amended or modified, that amendments cannot be brought forward, he is lying shamelessly. He is lying through his teeth.
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Madam Speaker, I am pleased to stand and speak to the budget bill, Bill C-69, here in the House today.
I think budgets are an opportunity for us to examine the values that we have as a nation. To many people in this House, government can be a force for good, but others, and I am thinking of my Conservative colleagues, view government as something to be feared, something to be shrunk and something to be incapacitated. We, on the New Democrat side, believe that government plays a vital role in Canadian society to deliver services that Canadians individually cannot and that the market is also unable to provide. Others in this House, and again, I think of my Conservative colleagues, believe that individuals ought to be left to fend largely for themselves, to sink or swim as they may.
On this side of the House, in the New Democrat caucus, we believe that government can be a force to build a fairer, more equal society. Others in this House do not share that value. They believe that politics is a dynamic that exacerbates division or that aggrandizes differences. In the New Democratic Party, we believe that good politics focuses on what is working well in society, and we look for ways in which we can harness optimism and collective strength to make things better. Others in this House, and again I look across the way to my Conservative colleagues, sell a line to Canadians that everything is broken, exploiting fear and insecurity.
I am reminded of President Joe Biden's famous dictum, which he actually stated well before he was ever president, where he said, “Don't tell me what you value. Show me your budget, and I'll tell you what you value.” I think this budget provides a great opportunity to show Canadians what the various values are of the various parties in this House.
New Democrats know that millions of Canadians are really struggling right now from coast to coast to coast. The cost of living is up dramatically. It is getting much harder to pay the rent or the mortgage, if one is lucky enough to own a house, to buy food and to pay one's bills. At the same time, we know that large corporations and the well-off in this country are doing better than ever in some cases. There are certain sectors, like the oil and gas sector and the grocery sector, that are making record profits, profits higher than they have ever made in the history of their operating in this country, while at the same time often gouging Canadians with sky-high prices, either at the pumps or in the grocery aisles. Even with corporate profits soaring, the investment of the business community in this country in Canadian workers, in machinery and equipment, in technology, and in the Canadian economy is declining. Major shareholders and top executives are often reaping enormous benefits without the promised trickle-down to workers, communities and consumers that right-wing economists promised us some 30 to 40 years ago.
The New Democrat caucus has used our power in this minority Parliament to deliver results for people. In this budget alone, we have compelled our partners in the Liberal government to build more homes, to preserve existing affordable housing and to protect renters. We used our power to bring in universal single-payer pharmacare, setting the stage for the biggest expansion of our health care system in a generation, starting with contraception and diabetes medication and devices. We pushed to establish a groundbreaking national school food program. We are the only country in the G7, and one of only a handful of countries in the industrialized world, that does not have some form of universal access to school nutrition, something that hurts our kids and puts an added cost on families that are struggling to pay their bills. This budget reverses damaging cuts to indigenous services. It invests in accessible, high-quality, non-profit child care. It establishes a dedicated youth mental health fund.
This is the work of New Democrats, who used our values to try to bring in policies and programs and to allocate resources to Canadians in need in this country. We did not sit and just tell Canadians that we think everything is broken. We rolled up our sleeves and came up with policies that would make things better for Canadians. My colleagues on the Conservative side of the House have done none of this, but instead just preach a narrative that everything is broken and that nothing can be done about it. That is not a value that we share.
While these achievements illustrate in part what a New Democrat government could accomplish, the 2024 budget does not fully reflect our party's vision. This is not an NDP budget, but it is a budget that was influenced by the NDP. Likewise, Bill C-69, the budget implementation act, includes many positive measures that the NDP was able to compel the Liberals to implement. However, we want to underscore that this legislation does have several shortcomings. There is much, much more, in our view, that the federal government can do to make life easier for people and to provide opportunities for generations to come. New Democrats will not stop working to deliver results for people.
I just want to talk briefly about some of these positive aspects. The national school food program would be in place as early as this fall and would help some 400,000 children access food that they need to grow up healthy. This is an important first step toward establishing a national program that we hope and envision will provide universal access to nutritious food for all elementary students, some 2.8 million kids in this country in grades 1 to 8.
Across Canada, nearly one in four children does not get enough food, and more than one-third of food bank users are children. These are shocking statistics in a G7 country. According to Children First Canada, there has been a 29% increase in food insecurity in children in the last year alone. A national school food program would not only give students in Canada access to nutritious food, helping them learn better, but it would also make healthy eating a daily lesson for our kids. Countries with national school food programs have documented better academic performance, improved short- and long-term health for children, help for family budgets and improved efficiency in the health care system. This is something that Conservatives are voting no to.
Bill C-69 includes measures to make housing more affordable. I want to touch on a few of the measures. It would enhance the homebuyers' plan by increasing the withdrawal limit from $35,000 to $60,000 and temporarily adding three years to the grace period before repayments to that RRSP are required. It would crack down on short-term rentals, hopefully to unlock more homes for Canadians to live in, by denying income tax deductions on income earned from short-term rentals that do not comply with provincial or local restrictions. The bill would continue the ban on foreign buyers of Canadian homes for an additional two years to ensure that homes are used for Canadians to live in and not as a speculative asset class for foreign investors.
I am always struck by my colleagues in the Conservative Party, who tell us to just wait until they are in government and then they will fix housing. The New Democrats are not waiting for that day, which we hope will not come. We are working now, because we know that Canadians need help with decent housing now, not a year or two or three from now. We also, by the way, are mindful of the Conservative record. When the Conservatives were in government, they did not build any affordable housing in this country at all. In fact, it was the Mulroney government in 1992 that took the federal government out of social housing for a generation, leading, in large part, to the crisis that we experience today.
Bill C-69 has a myriad of other measures that would make life more affordable for Canadians in important ways. It would make it easier to find better deals on Internet, home phone and cellphone plans by amending the Telecommunications Act to better allow Canadians to renew or switch between plans and to increase consumer choice to help them better find a deal that works for them. We know that Internet use and cellphone use now are consumer staples. They are really essential utilities that every Canadian needs to stay connected and function in their communities, in their homes and at work.
This budget would crack down on predatory lending by strengthening enforcement against criminal rates of interest to help protect vulnerable Canadians from harmful illegal lenders.
It would make it easier to save for children's education by introducing automatic enrolment in the Canada learning bond, to ensure that all low-income families receive the support they need for their children's future.
It would also launch Canada's consumer-driven banking framework to provide Canadians and small businesses with better, secure access to more financial services and products. Again, these are measures that the Conservatives are voting against.
Finally, Bill C-69 includes measures to support workers by protecting gig workers and by strengthening prohibitions against employee misclassifications in federally regulated industries. It would establish an important first historic right to disconnect to help restore work-life balance for workers. It would extend additional weeks of employment insurance for seasonal workers in 13 targeted regions. It would advance employee ownership trusts to enable employees to share in the success of their work by encouraging more business owners to sell to an employee ownership trust.
Before I leave the positives, I just want to comment that there are disappointments in the budget. One of the primary ones, for me, is the Canada disability benefit. The Liberal government promised to bring in a Canada disability benefit for which the New Democrats have been pushing for years. The Liberals said the benefit would lift people living with disabilities out of poverty; that is what they promised.
However, the Liberal government's plan announced in the budget is to provide a maximum of $200 a month. That is based on holding a disability tax credit certificate, which applies to only a fraction of the Canadians who need such assistance. At present, a single adult with a disability will live below the poverty line if they receive funding from any of the provincial programs across Canada, and an additional $200 a month is not enough to bring them above the poverty line. Over 1.5 million people with disabilities currently live in poverty across Canada, yet the plan would be accessible only to an estimated 600,000 people. It will not lift even them out of poverty.
New Democrats are deeply disappointed to see the lack of investment and, frankly, a colossally broken promise to people who need it the most. A $200-a-month maximum benefit going to fewer than half of those who need it is simply unacceptable in this country. We will continue to push the government to significantly increase the benefit to make sure that all Canadians living with disabilities receive the money they need to truly lift them out of poverty.
Now I want to talk a little about tax fairness. In the 1960s, the Carter commission spent four years looking at Canada's tax situation. It came to some very important conclusions, one of them famously summarized by the phrase, “A buck is a buck [is a buck]”. That means that no matter how people receive their income, it should be taxed the same. Now, unfortunately, through successive Liberal and Conservative governments, we have built a tax system where that principle has not been respected at all.
We heard today at the finance committee from the Canadian Labour Congress economist who authored a report entitled “Canada’s shift to a more regressive tax system, 2004 to 2022”, which found that overall, Canada's tax system is only moderately progressive through the bottom half of the income distribution and is regressive at the top of the distribution, due to several sources of untaxed or lightly taxed income, such as capital gains, inheritances and bequests and employer-provided benefits, which predominantly go to top earners.
The report found that in 2022, the total tax rate for the lowest household income decile, that is the bottom 10% in Canada, was 35%, whereas the total tax rate for the top 1% in Canada is 24%. In other words, the top 1% pay taxes at a rate 11% lower than the poorest 10% in this country. Moreover, the report found that the top 5% paid a lower rate in 2022 than the bottom 95%, with the top 1% paying an even lower rate.
Canadians should ask themselves why Canada's tax system imposes a higher total rate on the lowest-income households, versus the top 5%. Can anybody in the House go back in their communities this summer and explain why, in Canada's tax system, the top 1% of households pay the lowest total tax rate of any income group? I cannot explain that.
According to the report, a comprehensive tax review in the United Kingdom concluded that a good tax system must be both progressive and neutral. That is to say that it can raise the revenue government needs to achieve its spending and distributional ambitions while minimizing economic and administrative inefficiency, keeping the system as simple and transparent as possible and avoiding arbitrary tax differentiation across people and forms of economic activity. It reads, “A fair tax system should be based on...‘horizontal equity’: the principle that two people with the same amount of income in a given year pay the same rate of tax regardless of the source of that income.”
Bay Street accountant Kenneth Carter, who headed the important Royal Commission on Taxation in the mid-1960s, captured that notion, yet since the 1960s, we have built a tax system in this country, again, through Conservative and Liberal governments, that fails to achieve a tax system based on horizontal equity, despite the recommendations of the Carter commission.
I will turn back to the issue of the capital gains matter, which the Conservatives have raised with such furor in the House. The capital gains tax was first brought into this country in 1972, and it was brought in by a Liberal government at the rate of 50%. However, it was the Conservatives who raised the capital gains inclusion rate, in 1988, to 66.6%. They then raised it again in 1990, to 75%.
Therefore it is really something to hear the Conservatives rail against a measure today that would set the capital gains inclusion rate in this country at 50%, the lowest it has ever been, for the first $250,000 of capital gains, and then to 66.6%, a moderate amount, which they themselves raised all capital gains to in 1988.
I will read from a couple of very important witnesses who appeared at the Finance Committee today. Dr. Jim Stanford from the Centre for Future Work said this: “A capital gain results not from producing and selling a product or service, but rather from acquiring and reselling an asset. It reflects speculation, not production. Other forms of income (like wages) must be fully declared. Granting asset traders this unique preference is morally unfair, and fiscally wasteful.”
I cannot say it any better than Bea Bruske, the president of the Canadian Labour Congress, who asked why we tax a worker who flips burgers for a living at 100% of her income, but someone who flips stocks for a living, who is wealthy, we tax at only 50% of their income.
That is the principle that faces Canadians today, and it is something that I challenge Conservatives to explain to Canadians. Why do they believe that workers like mechanics, teachers, servers and cleaners have to pay tax on 100% of their income because they get it in the form of wages, but wealthy people, or people who are declaring a capital gain of over a quarter of a million dollars, have to pay on only 66.6%? By the way, the measure that is being announced in the budget would still permit one-third of all capital gains that anybody has in this country to be tax-free, and still the Conservatives are apoplectic.
As well, there is zero evidence that the rise of the capital gains inclusion rate through the 1970s, 1980s and 1990s had any negative effect on business investments in this country, nor is there evidence that the reduction of it in the year 2000, back to 50%, had any positive influence on investments in this country. There is zero evidence, but of course my Conservative colleagues are more interested in rhetoric than facts. I think Canadians will understand this when we come to talk to them in the summer about fair taxation and why the wealthy should pay their fair share of tax in this country, just like the working people of this country have always done.
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- Jun/18/24 6:24:10 p.m.
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Madam Speaker, the member once again gave us a lot to think about. It is interesting, because we often do not hear about some of the history and what decisions different governments made. What I find interesting is that he brought up the late Right Hon. Brian Mulroney, because it definitely demonstrates really what a Progressive Conservative government is like versus what the neo-con Reform-Conservative government is like.
What I also found interesting was that Prime Minister Brian Mulroney brought forward the GST and that it was Prime Minister Stephen Harper's government that lowered it by 2%. How it tried to recoup that was by making seniors work two extra years. The same people, seniors who have built the foundation of our country and have given so much, were told by Conservatives that they were going to have to work harder, for two extra years, so the Conservatives could lower the GST for everyone, which is a consumption tax.
My question really involves what the member believes is the vision of the Conservative Party, which today is against increasing capital gains on the wealthiest 1% of Canadians, yet whose history demonstrates it had no problem increasing taxes or having some of the most vulnerable in our communities contribute more, whether they were youth or seniors. I would love to hear the member's comments on that.
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- Jun/18/24 6:25:40 p.m.
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Madam Speaker, there is a lot to that question. I would say to Canadians that this is not their fathers' Conservative Party, but a mean-spirited, fact-free, Donald Trump-influenced party that has reduced politics to slogans. I call it “nursery rhyme politics” or “bumper sticker politics”, where Conservatives take complex, serious issues in this country and reduce them to a jingle. That is not going to work.
I think the Mulroney government may have had different policy ideas than my party, but it was serious about the issues of the day, which is why it increased the capital gains inclusion rate in this country. I have not heard my Conservative colleagues say a word about that. They look down at their shoes as soon as I raise the issue, because they cannot explain why their party raised the capital gains inclusion rate.
Of course, the reason it did that back then was that in the 1980s, I think all parties in the House were concerned about tax fairness because we paid attention to the Carter commission and the facts as established by a royal commission; we were not whipping up division and making up false numbers that do not make any sense. However, Canadians know the answer; most Canadians know that they are not going to be selling buildings and making capital gains over a quarter of a million dollars every year, like the Conservative colleagues' wealthy benefactors do, so we will know which party will support good tax policy in this country.
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