Mr. Speaker, I move that the third report of the Standing Committee on Finance, presented on Tuesday, December 10, 2013, be concurred in.

I would like to share my time with my esteemed colleague, the member for Rimouski-Neigette—Témiscouata—Les Basques. Saying this riding's name is probably the most difficult thing about this speech.

The finance committee's study examines income inequality in Canada. This debate is vital, not only for poor Canadians, but for all Canadians because the effects of inequality are clear. The facts in this report show how bad it is for our economy.

I will touch on a number of aspects of income inequality that are raised in this incredibly important report.

As New Democrats, we support many of the general proposals and the breadth of this study that was first raised by my colleagues down the way. There were some other provisions that we would have sought in the study, some harder looks and closer examination of some of the aspects of inequality in Canada. However, all those watching and listening should rest assured that the impacts of inequality in Canada do not just affect those who are immediately targeted by low incomes and the effects of poverty; we know that those effects migrate out across the broader Canadian economy. It makes the country less healthy, less prosperous, less educated when we have serious inequality and when that inequality is growing.

From 1972 until just a couple of years ago, not only has the category of middle income Canadians shrunk in terms of the size of the Canadian population that can be classified as middle income, but that group has also seen its real wages increase by a staggeringly low 0.2% over that whole time, when adjusted for inflation.

What does that mean? That means that people living and working in the early 1970s who were in the middle class have seen their wages grow in real dollar terms by only about 0.2%. It stayed virtually the same, but what has changed is the cost of living, as we all know, whether it is paying for energy to heat our homes and turn on the lights or paying for food whose costs have increased, and we have seen the cost of education increase. We have seen a steady downloading from the federal government to the provincial governments, on down to municipalities, and to the individuals. This has been steady and growing with the neo-Conservative policies that have been promoted by various Conservative and Liberal governments.

Over those 35 years—and this may strike Canadians as passing strange—virtually 93% of all the growth in disparity between the haves and the have-nots, between the wealthier and the less wealthy Canadians, grew while Liberals were in power. It is a confounding thing for many Canadians because most people do not watch the day-to-day machinations of government. That is understood. They do not tune into question period every afternoon or the work of committees. They do not study every single piece of legislation. People are busy trying to get the kids out to school, put food on the table, get a good job, and keep a good job.

Canadians who are not watching what happens when parties get into power will be confused by the fact that most inequality has grown while Liberals were in power, because most Canadians watch the campaigns. Most Canadians in particular watch the last couple of weeks of a campaign when the parties present themselves in their full force to Canadians.

The trend we have seen—and it is a worrisome and disappointing trend for my Liberal friends down the way—is that they campaign to the left and then tack right as soon as they get into government and introduce policies that are well supported by their Conservative allies across the way. Usually the only disagreement Conservatives have with Liberal taxation policies is that they are not draconian enough. They are not giving away enough in terms of tax treats to the wealthiest Canadians. That is the Conservative criticism of Liberal taxation policy.

This is connected to this conversation about inequality and this particular report from the finance committee, because we see the government's last budget. We saw one of the ministers commit to this just yesterday. In the way the Conservatives presented this budget, we wished the Prime Minister and the Minister of Finance had taken a Hippocratic oath to do no harm when it comes to income inequality, because of what is in the pages of this budget. Members should get past the title; Conservatives are good at repeating titles ad nauseam. They put this spin on every bit of legislation around the budget: jobs, growth, and long-term prosperity. The question we should ask about that little spin job is: for whom and where?

Across the country we are seeing not only growing gaps in income between haves and have-nots but also disparity between the regions and the provinces, making the have and have-not provinces grow in distance from one another.

One would wonder what the effect is, and we see it in this report from the committee. From the IMF to the Canadian Chamber of Commerce, all the way down from the most Conservative thinkers and think tanks in this country and around the world to the most progressive, there is one thing they agree on, which is that income inequality and regional disparity not only hurt impoverished individuals but also the broader economy. It has a dragging effect on the prosperity of the country as a whole.

One would think that if the economy were the number one issue for the Conservatives, as they claim, then income inequality would be one of the things that they would be focused on. That is why we wish they had taken a Hippocratic oath, because just recently we saw yet another confirmation of the Conservatives making a bad situation worse.

The specific policy that I would point to is the notion of income splitting. It would not help 86% of Canadians. It is the very policy that former finance minister Jim Flaherty, whom we all knew well and who was quite endeared to us, raised significant questions about. He raised questions about this idea because it would cost upward of $5 billion to the federal and provincial coffers. That is not a small program.

What would people do with $5 billion if they were trying to attack income inequality or help families? There is a whole slew of ideas, ideas that again come from the most progressive to the most conservative think tanks in this country.

The one idea that they say would not be great for income inequality and would not be great for helping families is income splitting, because it would help so few people and would disproportionately help those who need help the least, those making north of $150,000 a year. Those families that have great disparity between what the spouses earn need to have a big gap between their earnings in order for them to achieve any benefit from income splitting. Single moms and single dads would receive no benefit from this measure whatsoever. People who have kids aged 18 and over would receive no benefit at all. People who do not have kids would not receive any benefit. It is almost as though the Conservatives are stuck in some sort of 1950s rerun. They can only imagine a family one way, so they designed the policy for that one family. They are confused and confounded when the experts come forward and say it is 2014, not 1950.

Because it is 2014, families in Canada come in every shape and size and in all kinds of forms, and if we want to help families, we need policies that would help them all, as opposed to helping just certain families.

The Broadbent Institute put a wonderful report out yesterday that confirmed the analysis from the C.D. Howe Institute, just in case anybody is worried about whether this message is coming from progressive thinkers or from conservative ones. The report breaks down the unfairness of the income-splitting program. More than half of the people who fit within that two-parent, two-kids scenario would not qualify for any benefit if both parents are in the same income bracket or if the disparity between their wages is not great enough. Who will benefit and receive the lion's share of the benefit from this income-splitting scheme, this $5-billion program, would be those who are the wealthiest. They stand to benefit upward of $5,000 to $6,000 per year with no strings attached.

One might question whether people making north of $150,000, as members of Parliament do, need an extra $5,000 in their pockets, as opposed to single moms struggling to make ends meet paying hydro bills or as opposed to parents in the same income bracket, both making $45,000 an hour—excuse me, $45,000 a year. The people making $45,000 an hour are the folks the Conservatives are trying to help out. Those living in the real economy and trying to make ends meet would not get any help from this program at all. If they do somehow fit into that narrow 14% of middle-income and low-income Canadian families who might qualify, those families would get a couple of hundred dollars a year. The wealthiest families in Canada would get $6,000, compared to a couple of hundred bucks for those with the lowest incomes.

Obviously the Conservatives have no interest in dealing with income inequality. I just wish they would do no harm, but instead, time and time again, we see proposals to shift the tax burden away from corporations. Since the Conservatives took power, taxes for corporations, the wealthiest in this country, have gone down by $4.5 billion, but taxes on personal income have gone up by $15 billion. Individuals are bearing the burden for all those goods and services that we want from government, while corporations are giving less. The rich are paying less while middle-income earners and the poorest Canadians are paying more.

That is the Conservative world view on taxes. That is the Conservative world view on the economy. Progressives, like New Democrats, believe in something different: true fairness for Canadian families and true fairness for Canadians.

Nathan Cullen

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