Wilfred P. Moore moved second
reading of Bill C-253, An Act to amend the Income Tax Act
(deductibility of RESP contributions).
Will the honourable senator take another question?
Lillian Eva Dyck:
Honourable senators, I listened to Senator Moore's comments
with great interest. I agree with him that education is a
great equalizer in terms of bringing people up to a more
equitable income level. I believe the honourable senator
mentioned that close to 50 per cent of the families that
will contribute to RESPs were in the bottom three tax
brackets. From the way he said it, it sounded as though that
might be the number of plans that are incorporated. Does the
honourable senator have any data to indicate the size of the
plans? Certainly, those people in lower income brackets will
not be able to contribute as much as those in the higher
income brackets. My concern with the bill is that those
people with more money will have access to education to a
greater degree than those with less money to contribute. In
the Aboriginal community in Saskatchewan, for example, where
people do not have much money, it will not provide much of
an advantage. That is my greatest concern.
I thank the honourable senator for the question. To clarify
a couple of the numbers I mentioned, currently, only 27 per
cent of Canadian families participate in the RESP program.
As well, 44.9 per cent of the RESPs are owned by households
in the bottom three tax brackets. To help give the
honourable senator some comfort, as I mentioned to Senator
Segal, under this program whatever a person can contribute
will be deducted from their taxable income. Currently, the
money contributed to an RESP is in after-tax dollars. The
current program clearly favours those with more resources.
This program will provide the opportunity for many more
Perhaps I am not hearing the honourable senator's answer
correctly but, in my view, lower income families will still
be disadvantaged because they will not be able to contribute
to the same extent as higher income families. It will depend
on how much money one is able to put forward into an RESP. A
lower income family will not be able to contribute and gain
the tax benefit to the same degree as a higher income
family. Certainly, lower income families will benefit but
not to the same degree.
What can I say to the honourable senator to give some
encouragement here? Currently, those lower income families
are probably not participating. This program will give them
an opportunity and more encouragement to do so, as well as
members of their family who might want to put funds toward a
grandchild or a godchild's education program. There is an
opportunity here. We will see what comes out of discussions
On motion of
Senator Di Nino, debate adjourned.