Conservative senators amend government's middle-class tax plan

In a rare move, Conservative senators on the Red Chamber's finance committee have amended a spending bill passed by the House to rewrite the government's proposed middle-class tax plan.

Conservative Senator Larry Smith moved an amendment to Bill C-2, which he said would make the plan revenue neutral a promise the Liberals made during the last election, but subsequently broke as their plan will cost the treasury an additional $1.7 billion a year and would deliver a larger tax break to middle-class Canadians earning between $45,282 and $90,563.

For example, a Canadian earning $60,000 a year would get a tax cut of $570.12 under Smith's plan, versus the $261.36 the Liberals had originally intended, according to figures provided by Smith at committee.

But the amendment also reduces the tax savingsLiberals had promisedthose earning between $90,563 and $200,000.

For example, a tax filer with an income of $120,000 would see tax savings drop from $766.37 to only $87.15 a year,Smith said.

Smith's plan would, however, keep Trudeau'stax hike to those earning more than $200,000 a year, who will see their bracket increase from 29 to 33 per cent of income.

The Quebec senator, a former presidentof the CFL's Montreal Alouettes,said that the Liberal plan actually delivered the largest dollar amount reductions to these higher earners, to thedetrimentof those earning less.

"We're increasing the debt and we're not giving the benefit to the people who are supposed to get it," Smith told committee Tuesday. "What we are trying to do is help focus the bill where the prime minister said he wanted to focus middle-income Canadians."

The tax changes made under C-2 already took effect as of Jan. 2, 2016, meaning Smith's changes would have to be applied retroactively.

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The amendment was adopted by the committee in a 9-3 vote, and will now be sent back to the chamber for a vote by all sitting senators.

If the amendment is carried by the Senate, the bill will be punted to the House of Commons for further debate and another round of votes. (The bill already passed the House in September.)

Amendment 'surprising': Morneau

Finance Minister Bill Morneau said Tuesday he found the amendment "surprising," and that he preferred how the bill was initially drafted.

Independent Senator Andre Pratte, one of Trudeau's new appointees, criticized Smith for surprising the committee with this proposal.

"Sober second thought is not doing calculations on a napkin," he said, while questioning the legitimacy of the Conservative-dominated committee to pass this amendment when Independents hold a plurality in the chamber itself.

Grant Mitchell, a deputy of Peter Harder, the government's representative in the Senate, said the committee had no advancewarning the amendment was coming and that the committee needed further details before voting but was ultimately overruled, with Independent Senator Anne Cools also siding with the Conservatives.

All Senate committees currently have a Conservative majority. Committee membership was determined when Parliament returned after the last election, when the Tories still had a plurality in the chamber.

Smith said this wasn't a partisan issue, or an attempt by the Conservative caucus to flex its muscles. "If we can deliver, and make this [legislation] better, then I think there's a real opportunityto help Canadians."

Harder is in the midst of negotiations with leadership from the partisan Liberal and Conservative caucuses to change committee standings to reflect the growth of Independent senators.

Prime Minister Justin Trudeau has appointed 28 new senators this year, and all will sit as non-affiliated members.

The current count of non-affiliated (or Independent) senators stands at 44, meaning they are in a plurality in the 105-seat body.

There are 21 independent Senate Liberals and 40 Conservatives.