Today, I asked questions to Senator Peter Harder, Government Representative in the Senate, during Senate Question Period to continue the fight to save local businesses from unfair taxes.
Small Business Tax
Hon. Larry W. Smith (Leader of the Opposition): Honourable senators, my question is for the Government Representative in the Senate, Senator Harder. I’d like to return to something that you raised during Question Period yesterday.
As you said on Tuesday, the Department of Finance revealed that the government’s budgetary deficit for the fiscal year ending March 31 of this year stood at $17.8 billion. This is about $8 billion more than what the Liberal Party promised the Canadian people in the 2015 federal election.
Another document was released today where Finance Canada said the annual infrastructure amount lagged by $3.7 billion behind government projections. So I just took $17.8 billion and added $3.7 billion, which comes to $21.5 billion, if I understand the math.
During the press conference yesterday, the Prime Minister did not commit to establishing a timeline to eliminate the deficit. Small businesses understand the need for balanced books; while some years may be good, other years may not. When their books are in the red, small businesses understand the need for a viable plan to return to balance. The government’s proposed tax changes make it more difficult for these local businesses to survive, grow and hire more employees in our communities.
My question for the Government Representative is this: Why is the government choosing to pile more taxes upon small businesses and farmers to finance their massive deficit?
Hon. Peter Harder (Government Representative in the Senate): Again, I thank the honourable senator for his question. It is the government’s view that the budgets of the Government of Canada are in aid of the economic circumstances of the country. For that reason, the government undertook a number of initiatives in its budgets to strengthen the middle class and provide tax relief. That was the first item of business of this Parliament, as the honourable senator will be aware. The child benefit was also part of that.
I should also reference the fact that Canadian business corporation law and taxes provide a very competitive tax regime for Canadian small business in particular. I would also point to the just-released OECD outlook, which projects that the Canadian economy this year will grow by 3.2 per cent and includes projected growth in 2018 of 2.3 per cent, which would suggest that the economic initiatives undertaken by this government, supported, of course, by the workers of Canada and by the corporations and, in particular, small business in this economy, are responding to the economic policies of the government.
Senator Smith: Thank you, Mr. Speaker. If we went back to last year’s Bill C-2 and we talked about the concept of the middle class, again, would the honourable senator be able to tell us what middle class or middle income really means? Is it between category 1 and category 3, which is between $50,000 and $100,000? Is it $100,000 to $200,000?
With Bill C-2, of course, the actual rebate to people at the low end of the proposed middle class was $81 and for the people who maximized was between $100 and $200. It just makes it hard to follow and fathom the rationale, which is cute but doesn’t necessarily substantiate anything.
Cutting taxes for small businesses, reducing red tape and helping entrepreneurs get the venture capital they need are some of the actions the previous government took to help promote the environment where local businesses could succeed and create jobs our country needs, especially for our young people.
Unfortunately, with these tax changes, the current government is taking a vastly different approach, one that could seriously harm farmers and small businesses across the country. Even though we have put in the childcare credit, which is slightly different than the past government’s, it is evident that it still will cost us $21 billion. Where does the actual stimulation come from, other than taxing more and getting into more debt?
Could the senator please tell all honourable senators whether the Department of Finance actually analyzed how many businesses could close and how many jobs could be lost under Minister Morneau’s proposals? How many work hours could be cut? How many young people might not be able to find jobs? If this could possibly be done, could the analysis be tabled in this chamber so we could actually see the impact of what’s proposed?
Senator Harder: I thank the honourable senator for his question. With respect to the projections made by the Department of Finance, I will make inquiries, but I would want to assure all Canadians and senators that the Government of Canada, in putting forward a set of proposals for consultation to strengthen tax fairness, in particular with respect of the corporate tax initiatives, the government is wide-eyed and well positioned to ensure that tax fairness is at the root of its eventual legislation.