Mr. Benjamin:

I could not get a single Tory or a Liberal Government in the 20 years I have been here-and it is my anniversary in a couple of days. They all agree as my hon. friend from Dartmouth-Halifax East (Mr. Forrestall) agrees-to do it. We have tens of thousands of Canadians on high incomes. We have thousands of Canadian corporate leaders, making $2,000, $3,000 and $4,000 a day.

Mr. Forrestall:

That is not true.

Mr. Benjamin:

And we have farmers losing farms and fishermen losing their boats and little storekeepers going broke. These high earning guys have tax benefits, preferred stock options that are non-taxable. They have tax dividend credits. The president of the one corporation I know makes

$4,000 a day. That is more money than 90 per cent of Canadians make in one, two or three months. Do not talk to me about private enterprise, free enterprise and market forces when you allow that kind of an unfair system to prevail. It is so patently unfair.

This Government said it would do something. The Prime Minister (Mr. Mulroney) in the television debate, after the Hon. Member for Oshawa (Mr. Broadbent), our Leader, raised the subject about tax fairness and tax reform, said: "You are right, Ed". That was four years ago. The Hon. Member for Oshawa is still right and the Prime Minister is still wrong. We still do not have tax reform. We have nothing but the juggling of the books. I will keep talking until you cut me off, Mr. Speaker. Do you want to do it now?

Mr. Deputy Speaker:

Yes.

Mr. Benjamin:

Go ahead.

Mr. Deputy Speaker:

I thank the Hon. Member. Debate. The Hon. Member for Ottawa Centre.

Mr. Mike Cassidy (Ottawa Centre):

Mr. Speaker, the amendment put forward by the Hon. Member for Churchill (Mr. Murphy) calls for the inclusion in the total amendment on this particular Bill the requirement that there be a corporate minimum tax. I will read it. We are saying that Bill C-139 as it stands right now should not be brought forward at this time among other reasons because the Bill fails to ensure that corporations make a fair and regular contribution to federal tax revenues by imposing a minimum corporate tax.

Mr. Forrestall:

Who is the author of that?

Mr. Cassidy:

I am the author of that, Mr. Speaker. As the spokesperson on taxation and finance for the New Democratic Party, I am proud of the last two and a half years in a very responsible way to put forward policies which will be fair to average Canadians, not the kind of Tory tax reform we have been having which seems to be much fairer to people who are rich and to corporations than it is to the average citizen.

After Conservative tax reform there will still be some 60,000 Canadian corporations which are profitable and which each year will not pay any tax at all. Is that easy to defend? I do not think it is. When we begin to tax families below the poverty line and when we begin to tax individuals far below the poverty line, why is it that we turn around and have this unusual consideration for all these profitable corporations, not loss making, but profitable corporations, leaving them in a position where they do not pay any tax at all?

You may recall that I indicated the concerns of my colleagues in the New Democratic Party over the question of the unfairness of the tax system which in 1983, and I believe in 1984 and 1985 as well, took more in income tax from a teller working for the Royal Bank of Canada than it took from the Royal Bank of Canada in its multibillion dollar entirety. There is something wrong and fundamentally unfair about that.

July 21, 1988

1 heard with interest the comments of the Eton. Member for Edmonton-Strathcona (Mr. Kilgour). I was glad he entered the debate but I was confused by what he had to say. I think perhaps the Conservatives are somewhat confused about this as well. They have tried to wrap themselves in the rhetoric of progressive tax reform, but as in so many other things that is a deception, a snare. It is false and it is wrong. They are legitimizing and perpetuating tax privileges for wealthy Canadians.

Wealthy Canadians get an average tax cut of $4,165 whereas the average Canadian at $25,000 a year, a very modest income, gets a cut of only $140. Average Canadians will pay more tax under the Tories after four years despite tax reform. Wealthy Canadians will pay less tax under the Tories after four years because of tax reform.

I have a couple more things I want to put on the record which I think are extremely significant. I have the summary for taxpayers which was released last December by the Minister of Finance (Mr. Wilson). On the front page it says "Lower rates, fairer system". What is fair about this, Mr. Speaker? Income earners from $20,000 to $25,000 pay a marginal rate of federal and provincial tax at 26 per cent. If their income goes from just over the poverty line of $25,000 to $30,000, their marginal rate rises to 38 per cent. If their income goes from $30,000 to $40,000, just getting into the middle-income range, then they pay a marginal income rate of 46 per cent.

It is interesting that if these couples then go from $40,000 to $50,000, the marginal rate is 40 per cent, actually lower. If they go from $50,000 to $60,000, the Government's own figures indicate that the marginal rate is lower again, 43 per cent. If they go from $60,000 to $75,000, the marginal rate bounces back up to 46 per cent.

Beyond that, if Mr. Jean de Grandpre, the Chairman of Bell Canada Enterprises, gets an increase in his income from $1 million to $1,100,000 per year, he too pays a marginal rate of 46 per cent, give or take 1 per cent. There is something fundamentally wrong with that when a family not far above the poverty line will be paying the same marginal rate of tax as one of the high-priced corporate executives with an income of $500,000 or $1 million a year. In fact, the Conservatives have actually used the language of tax reform but have put in place a flat tax for most Canadians.

It is interesting that while the Conservatives copied that flat tax from the United States, when it came to a progressive measure found in the United States, the minimum tax on corporations which is a part of the package Congress put into force just two years ago, the Conservatives were not prepared to adopt that measure. The Conservatives in Canada are even softer on corporate taxation than the Republicans in Ronald Reagan's America. I find something reprehensible about that.

The Americans are taking increases in corporate taxes at about three or four times the rate of the increase taken here in

Income Tax Act and Related Acts

Canada. The average of the contribution to federal tax revenues from corporations after tax reform will be a lower percentage of total tax revenues in Canada than it was in 1984 when the Progressive Conservatives took power.

I know that my time is limited, but I was just looking at some very significant calculations which I would like to note on the record. These are some figures prepared by Trestet Resources, a firm which did an excellent analysis for the Finance Committee, which it submitted to us a few months ago.

Taking the example of one earner with two children earning $30,000 a year, this report indicates that that family was paying $3,300 in income tax in 1984. That figure has gone up to $4,436 in 1988 before reform, it will drop to $4,200 after reform and rise again to about $5,000 in 1991 if we take it all in real dollars. This means, as we have been saying all along, that Tory tax reform is not tax reform at all.

People come to us and say that they are puzzled about their taxation rates, they feel that they are paying more but they cannot put their fingers on it. That is because it is hard to remember what we were paying four or five years ago. However, average Canadians are paying more and more under the Conservatives. They are being soaked one way or the other.

That same family making $30,000 a year paid in consumption taxes $1,575 in 1984, up to $1,800 before tax reform, a bit higher after tax reform and up to $1,925 in 1991, post-tax reform. Over-all, the taxation on that family under the Progressive Conservatives will have risen from about $4,900 in 1984 to about $6,900 in real dollars in 1991. That is a measure of how duplicitous the Conservatives have been with their tax reform.

These figures show as well that the increase in the tax burden over that period of time has been the highest for families earning average incomes. What about wealthy Canadians? They are actually paying less or getting very small increases in their tax burdens.

We will be fighting an election very shortly. I will be talking about how the Progressive Conservatives have ignored my constituents of Ottawa Centre. I know that my colleagues from Hamilton Mountain, Winnipeg North Centre and Regina will be talking about how Tory tax reform has ignored their constituents as well.

My constituents expected fairness when tax reform came down the pipe. They did not expect to see the rich pay less while average Canadians paid more. My constituents expected fairness. They did not expect to see corporations continuing to go tax-free while families living below the poverty line had to pay more. My constituents expected fairness. They did not expect a tax system in which the Conservatives held back the sales tax reforms because they were going to soak average Canadians with increases in sales taxes if they managed to get themselves re-elected.

July 21, 1988

Income Tax Act and Related Acts

Mr. Speaker, Canadians are intitled to fiscal fairness. They did not get it from the Progressive Conservative Government. I ask all Members here in the fJouse to support our subamendment which calls for a measure of fairness by imposing a minimum tax on corporations. It exists in the United States, even under President Ronald Reagan. I don't see why it could not exist here, to ensure that we have a fair system and to make sure that all corporations that are making a profit pay taxes every year.

That is our amendment, Mr. Speaker. It is part of our campaign for fiscal fairness and for a government that is honest and fair to its citizens.

Mr. Cyril Keeper (Winnipeg North Centre):

Mr. Speaker, I would have liked to have had an opportunity to pose questions, but I understand that that is not possible right now. I want to focus on the NDP amendment, which is an amendment to the Liberals' amendment. Today we have taken some time in the House to point out the inadequacies of the Government's policy on taxation and the unfairness of the Government's approach to taxation. It is not surprising that the Liberals would be able to come up with an amendment that appears to make sense.

The Liberals are basically saying that this House opposes in principle the taxation measures of the Government because the Bill seeks to impose a tax system that first is lacking in progressivity. What is that? Progressivity simply means that those who earn little pay little in taxes and those who earn a lot would be expected to pay a lot in taxes. It means that those who can afford to pay ought to be able to pay. It is a great principle.

Second, the Liberals say that the tax system places unfair burdens on families. That is true and it ought to be stated. Third, the Liberals state that the tax system unjustly taxes middle-income earners. That as well is true, and I spoke earlier today about the very heavy tax burden that has been placed on the middle-income earners of Canada.

Fourth, the Liberals say that the new tax system is more complex than the one presently in place. Anyone who had to fill out a tax form or who had to hire someone to fill out a tax form knows that the taxation system is very complex. There is a need for simplicity as long as that simplicity leads to greater justice in the tax system.

The fifth and sixth points made by the Liberal Party are the ones that I find interesting. The Liberals say that the new tax system discourages capital formation and reduces the competitiveness of Canadian corporations. Obviously we need capital in order to have economic growth, and our firms must be competitive, so those are good points. However, that is where the Liberals stopped. Therefore, we moved an amendment adding that we oppose the Bill because the Bill fails to ensure

that corporations make a fair and regular contribution to federal tax revenues by imposing a minimum corporate tax.

We seek to complete the circle. The Liberals have indicated they are in favour of those things that will help people, such as a progressive tax system, because the burden is unjustly laid upon middle income earners. They make that point but fail to explain how the revenue loss will be made up. When they deal with the corporate side of the ledger, they deal only with the need of corporations to be competitive and a necessity for the tax system to recognize that fact. They fail to deal with the other side of the ledger, which is that if we are to relieve the tax burden on ordinary families, as they suggest in their motion, then we have to find the revenue some place.

We in this Party believe in putting the whole picture before Canadians. The place to find that revenue is from those corporations which are making profits but not now paying taxes. I understand there are some 60,000 of them. Our amendment points out that if we are to have a just tax system, if we are to give some relief to ordinary Canadian families, it will have to come from those who now get away without paying any taxes.

The Liberals fail to recognize the problem and fail to provide the solution. They criticize the Government, which is a necessary part of being in opposition, but if you want to change the situation, you must have a solution to the problems. The Liberal motion does not do that.

That is why, when I spoke earlier today, I indicated that when Canadians look for an alternative to the tax policies they have experienced over the last four years and they look to the Liberal Party, they are looking in the wrong place and they will inevitably be disillusioned.

That is why we moved this motion. The amendment introduced by the Liberal Party was only a half measure. It was like trying to take a step by lifting up your foot and forgetting to put it down again. They have identified the problem but failed to outline the solution.

We think that problems should not only be identified, they should be solved. We think what is needed is not just a change in government but a change in direction. What is needed is not only a capacity to analyse the injustices in society, but a capacity to take the action necessary to solve those injustices and bring about a better community for all Canadians.

Mr. Deputy Speaker:

Is the House ready for the question?

Question.

Mr. Deputy Speaker:

The question is on the subamendment (Mr. Murphy).

Is it the pleasure of the House to adopt the motion?

No.

July 21, 1988

On division.

Motion (Mr. Murphy) negatived.

Mr. Deputy Speaker:

The next question is on the amendment. Debate.

Mr. Les Benjamin (Regina West):

Mr. Speaker, I rise to complete the second stage of my debate.

Mr. Forrestall:

Yes, you said you would keep us here until Christmas.

Mr. Benjamin:

I will do the 10 minutes on the amendment if you do not mind.

Mr. Forrestall:

It is becoming boring.