Hon. Catherine S. Callbeck:

Honourable senators, I wanted to add a couple of words on the finance bill, Bill C-13. There are a couple of areas that I want to speak briefly about. The first is the non-refundable tax credits.

My colleague Senator Day has mentioned a couple of those, including the Children's Arts Tax Credit and the Volunteer Firefighter Tax Credit. There is also the Family Caregiver Tax Credit, which has a value of $2,000, 15 per cent of which is $300. These credits come off of the federal tax that a person owes. Therefore, there is no question that it is a benefit to many people. However, it will not benefit the low-income family, the people who do not pay income tax.

In my province of Prince Edward Island, 106,000 Islanders file income tax returns every year, of which 30,000 do not pay any federal income tax. Therefore, these credits we are talking about are absolutely worthless to them.

As far as Canada is concerned, 25 million people file income tax every year. Of that 25 million, 10 million do not pay any income tax. Therefore, these credits will be of no benefit whatsoever to 40 per cent of people who pay income tax. They will benefit the high income and the medium income, but the people who need it the most cannot take advantage of them.

I believe that the government should not be excluding these low-income people. To make it fair, they should be providing cash refunds to people who do not pay taxes for that credit. As I said, in my opinion, that is the only fair way to go about it.

The other area I want to talk about briefly is the Hiring Credit for Small Business. There has been a lot of talk about this credit. The title seems good, just like those other tax credits I mentioned. However, when one really gets into the details, it is a different story. As I said with tax credits, they are absolutely worthless to people who do not pay income tax, which are the people who need it the most.

With this Hiring Credit for Small Business, one does not have to hire anybody to get the credit. I do not really know where the name comes from. It is for small businesses that pay less than $10,000 in EI premiums throughout the year. Really, that does not even include half of the small businesses that pay into the EI fund. The bottom line is that EI premiums are going up this year and less than half of our small businesses will be able to take advantage of this credit.

I would have thought this government would have wanted to do something for small businesses because of the type of economy and the challenges they are facing. We have to remember it is small business that drives the economy and creates jobs. Here we have a Hiring Credit for Small Business. As I said, one does not have to hire to get the credit. However, less than 50 per cent of small businesses will get anything out of this. The EI premiums are going up, creating another challenge for small businesses that create jobs and drive the economy.

Those are two areas that I wanted to comment on briefly because I am extremely disappointed with these tax credits. For the people who deserve and need the money most, those tax credits are absolutely worthless to them. I thought the government would be interested in doing something substantial for the small businesses that drive our economy.

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