Provincial Choice Tax Framework Act

An Act to amend the Excise Tax Act

This bill was last introduced in the 40th Parliament, 2nd Session, which ended in December 2009.

Sponsor

Jim Flaherty  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Excise Tax Act (the “Act”) to implement, effective July 1, 2010, the new fully harmonized value-added tax framework in Ontario and British Columbia. It also facilitates the new framework to accommodate any province’s decision to have the provincial component of the harmonized value-added tax under the Act apply in that province by achieving a common understanding with Canada in respect of such a new framework, including the provision of rules and mechanisms to ensure
(a) the proper imposition of the provincial component of the harmonized value-added tax in respect of that province;
(b) the proper application of any element of provincial tax policy flexibility contemplated under the common understanding, including rate flexibility for the provincial component of the harmonized value-added tax, rebate flexibility in respect of the provincial component of the harmonized value-added tax and the temporary recapture of certain input tax credits in respect of the provincial component of the harmonized value-added tax;
(c) the proper functioning and application of the Act in all respects, including provisions flowing from the provincial tax policy flexibility contemplated under the common understanding and the addition of every province that chooses to join the new framework; and
(d) the proper administration and enforcement of, and compliance with, the Act.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Votes

Dec. 9, 2009 Passed That the Bill be now read a third time and do pass.
Dec. 9, 2009 Passed That Bill C-62, An Act to amend the Excise Tax Act, be concurred in at report stage.
Dec. 9, 2009 Failed That Bill C-62 be amended by deleting Clause 37.
Dec. 9, 2009 Failed That Bill C-62 be amended by deleting Clause 14.
Dec. 8, 2009 Passed That the Bill be now read a second time and referred to the Standing Committee on Finance.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:30 p.m.
See context

Jonquière—Alma Québec

Conservative

Jean-Pierre Blackburn ConservativeMinister of National Revenue and Minister of State (Agriculture)

Madam Speaker, I would like to come back to what my colleague said and talk again about the harmonized tax.

We believe that the provinces should be treated equitably and have the right to make their own decisions. Why would this Parliament object to the idea of a province harmonizing its sales tax with the federal tax? On what basis should we tell British Columbia and Ontario that we will not let them harmonize their tax with the federal tax?

It is healthy and democratic, in a country that wants the system to work, to enable the provinces to make things easier for taxpayers to understand and to harmonize their taxes. We are not forcing them to do this. They asked us to bring in legislation that would let them harmonize their sales tax if they wanted to. That decision will be up to the governments of British Columbia and Ontario.

I would also like to quote some statistics, because my colleague also said that the country was not in good shape. He mentioned the unemployment rate. Not only did the unemployment rate go down from 8.6% to 8.5% in November, but 80,000 jobs were created in this country. That is significant. It means that the economic action plan is working and is producing tangible results. We do not wish anyone ill, but while Canada gained 80,000 jobs, the United States lost 15,000 jobs. That shows that this government made the right decisions to help workers and stimulate the economy. All sorts of statistics prove it.

I would remind this House that the government has introduced four different measures to support unemployed workers, in addition to new measures to help self-employed workers. Because of a whole series of actions we have taken, Canada's economy is in relatively good shape at present. Of course, it is still fragile, but at least we made the right decisions in taxpayers' interests.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:35 p.m.
See context

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, I appreciate the minister's comments. It is really symptomatic of the government's Jekyll and Hyde approach to this. It is saying that the world economy is collapsing, that it had nothing to do with it, and that it has no role or responsibility. We have all these job losses. However, it can become the government that creates all these jobs and takes credit for it.

I used to worked on behalf of persons with disabilities. When we look at the way in which we gather statistics through Service Canada and other measures, it is interesting that we do not count the people who have fallen off the system or are no longer looking for work. They no longer count. They almost do not exist in our society. About 50% of people with disabilities are unemployed in this country and many of them are not even counted in the actual roles that are out there.

In ridings like mine and other places, people are running out of employment insurance. That is why it was important to get some extension of benefits. I did appreciate working with the government on that extension of those benefits. It is an important thing that is helping some people, but the clock is ticking down on them. It is turning into a situation where people are getting a little bit more desperate. The statistics are very deceiving as to what the real economy is right now.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:35 p.m.
See context

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Madam Speaker, the member for Windsor West correctly pointed out in his speech what the complicity is here between the government, the opposition and the premiers of the two provinces.

The reality is that the government knew that this legislation had to be introduced months ago and yet it waited until the very last week of Parliament. It introduced time allocation and closure motions to ram it through when people are paying the least attention. This is very obvious to people on our side of the House and probably obvious to anybody listening to the debates over the last couple of days.

Why does the member think the government had to go this way? Why could it not have at least let the process go through its natural course and have public hearings, as we proposed just yesterday?

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:35 p.m.
See context

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, this is really the most offensive thing and I think Canadians understand this. They understand the issue, not only in Ontario but in British Columbia where the polls indicate 80% of people understand the implications of the HST, what it means to them and their families. They are opposed to it.

The most offensive part about this is that the Conservatives and Liberals are telling people, who have concerns about the HST, that they do not matter. The Conservatives and Liberals do not care. It does not matter whether it is ordinary citizens who are now going to have to pay the HST when they buy something for their kids or a necessity of life. All the experts in the different industries that have analysed the effects of this type of policy have been told to get lost.

The government says it is not going to hear from them. It will not hear their concerns. It will not listen to ways that may improve the situation or soften the impact or look at a transition of some of the measures. All the concepts that are out there want to be proposed and are available from people who want to testify. The government, on the other hand, aided and abetted by the other parties, is basically saying it does not matter and it does not care.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:35 p.m.
See context

Liberal

Paul Szabo Liberal Mississauga South, ON

Madam Speaker, I thought it was interesting when I heard one of the member's last comments about getting some input on how we could ease the imposition and make some changes on the impacts of the tax on people.

Bill C-62 has nothing to do with that. The legislation that is coming before Ontario and B.C. does. He has contradicted himself and I want to know whether he is aware of anything in Bill C-62, the bill we are debating right now, which would assist solving the question that he has raised, or is he in fact simply going to admit that what he is asking for is what should be handled in the provincial legislatures?

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:40 p.m.
See context

NDP

Brian Masse NDP Windsor West, ON

Madam Speaker, I know the member has been in the chamber trying to talk himself into believing this is good.

It is important to note that this legislation can contain what it wants. It can contain exemptions. We have heard about aboriginal people who are being affected. There could be all kinds of different things attached to this legislation, there is no doubt about it, but the whole point is that it should go through the proper process so that amendments can be made. We amend government bills all the time.

In fact, it is even done by the unelected Senate. On Bill C-6 it brought in a number of amendments that the government does not agree with and I do not agree with, either. I am concerned about some of those as well. However, that is the normal process we go through.

I do not know how the member can actually participate in this debate with any sincerity. He always argues for due process in committees like the one he is on. We should go through that due diligence. We have seen the effects on this.

When the Conservatives changed the Investment Canada Act, they did not run it through the normal process. They attached it to the budget, then it got support from the Liberals at that time and the Investment Canada Act never went through committee. The result of that is there is actually a loop-out clause.

Nortel, just a few months ago, sold for over $1 billion. After the sale took place, Ericsson then suggested the listed price was under $321 million, which is the threshold for the Investment Canada Act to be triggered. What happened? The government agreed and it did not have to go through the Investment Canada Act. That was despite the fact that the day before it paid over $1 billion for Nortel.

It is an example of the problems that emerge if we do not do our job right and we are not doing our job right here. This is going to have an impact across a number of different sectors that are critical to the Canadian economy. It is going to create an imbalance.

Why would we not actually want to know what the issues are going to be, whether the concerns are valid, and how we could address the ones that are valid before we shove this out the door? It is unacceptable.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:40 p.m.
See context

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Madam Speaker, I would like to share my time with the member for Sault Ste. Marie.

I believe it is essential for me to speak today, on behalf of my constituents, against this insidious new tax. I say this because when it became clear that the party in power was determined to inflict a new tax on the people of Ontario and British Columbia, I sent out a mailing to the residents of London—Fanshawe. I asked them what they thought of the HST, the new tax that Conservatives and Liberals plan to enact on July 1, their gift to Ontario and British Columbia on Canada Day.

I communicate quite regularly with my constituents and they respond in significant numbers. We have a good dialogue, and I always appreciate hearing from them.

However, the response to the HST survey was astounding. I received hundreds and hundreds of mail-backs, emails and letters. I have never had such a response. Despite nearly four years of mismanagement by the members from across the aisle, four years of cynically telling Canadians that our environment does not matter, that child care can be had for $100 a month, that housing does not have to be affordable, that first nation children do not need a school, after four years of ideological agenda from this group that basically says that there is no room for the aspirations of Canadians or the values that we cherish, my constituents have responded with renewed and greater anger, greater than I have ever seen. Because of those nearly four years of bad government, my constituents said, with absolutely clarity, that they had enough. This tax grab was the last straw and they counted on New Democrats to defend their interests.

We have heard repeatedly from the Minister of Finance that this legislation is the will of the provinces, that this is democracy in action. The truth is we are fighting a bill, in the name of the Minister of Finance, to amend the excise tax and enable the HST.

The party in power insists it is innocent. According to the Minister of Finance, the bill is to accommodate the provinces. Despite his insistence that this is not a federal bill, despite his persistent attempt to wash his hands of this bill, it stands in his name. I would suggest he has much greater responsibility than he cares to admit.

I can understand his desperate need to distance himself from the HST because it is, quite simply, the wrong tax, at the worst of times. It will increase the cost of haircuts, home heating, gasoline, firewood, Internet, cell phones, snow removal, newspapers, magazines, camping fees, veterinary care, taxi fares, carpet cleaning, landscaping, utilities, commercial property rentals, postage stamps, courier fees, domestic air, rail and commercial bus tickets, funerals, all of these and more, by an additional 8%.

Imagine one earning minimum wage, trying to raise a family and, now, despite all the sacrifices, is hit with an additional 8% cost of living. Many women in Canada will face particular hardships due to this increase in the cost of living. It is well known that single women and single mothers face higher poverty levels than any other group.

According to the Canadian Centre for Policy Alternatives, most anti-poverty strategies in Canada and elsewhere have concentrated on reducing child poverty, but other groups within the population are even more disadvantaged. In 2007, for example, 9.5% of young people under age 18, the child poverty measure, had low incomes and 23.6% of Canadian women heading lone-parent families had incomes below the after-tax level. In fact, the incidents of low income for female lone-parent families was almost five times as high as that of two-parent families with children.

At the same time, 14.3% of women aged 65 and over, who are on their own, had low incomes. Seniors living on their own experienced a low income rate almost 13 times higher than seniors living in families in 2007. The depths of poverty of these groups was significant. On average, the after-tax income of senior women on their own was $2,400 below the poverty level. However, the average after-tax income of women who had lone-parent families was $7,500 below the after-tax income level.

To a large extent, these groups of women might be described as the forgotten poor. They are generally not mentioned in budgets or stimulus packages, and with one or two notable exceptions, no specific programs are developed to address their needs.

Of course it goes without saying that children are poor because their parents are poor. Many poor children live in low-income lone-parent families headed by women, but it has become more acceptable to talk about child poverty than women's poverty.

I would like to make special note that according to CCPA, while many people seem to believe women to choose to work part-time or on a temporary basis so they can more easily combine their paid employment with family responsibilities, in 2008 among women in the main childbearing age group, 25 to 44, 27% of those who were employed part-time worked part-time because they were unable to find full-time jobs. About 38% of women in this age group were working part-time because they were caring for children.

Women in Canada still have unacceptably high rates of poverty, especially if they are on their own as lone-parent heads of families or as older women living alone. While we used to talk about the feminization of poverty, addressing women's poverty no longer seems to be a high priority among policymakers.

The HST is a policy that continues to ignore the feminization of poverty in our country. The worst of it is the tax is inherently regressive. It disproportionately hits those who have no choice but to spend all or a large part of their income and it favours those with income to save. This is doubly true in a recession where less than 50% of the unemployed qualify for EI, where social assistance rates are well below the poverty line and the cost of essentials looms larger and larger.

Those with the lowest income have no choice but to pay the tax and sacrifice consumption elsewhere. The HST is hitting those who can least afford it harder than anyone else. The tax is quite simply unfair.

The Conservatives have demonstrated a callous disregard for the plight of low and moderate income households. They cannot be trusted to apply the HST fairly. It has been argued a sales tax is bad for investment compared with a tax on profits. Then why is the removal of sales tax from inputs not matched by an increase in corporate income taxes? In fact, the opposite is true.

The HST is accompanied by corporate income tax cuts, both at the federal and provincial levels. In other words, the HST is part of a general and indiscriminate tax shift, shifting the burden from corporations to individuals and families without adequate compensation.

The claim that it will lower prices assumes businesses will pass along their savings to consumers. Studies show that much less than 100% of the savings are passed on to consumers. Price increases are virtually inevitable. Remember when the GST was introduced? Prices to consumers did not decline.

One of the arguments the Conservatives put forward states that because it applies to a wider range of goods, it is more efficient as a generator of revenue and hence, under progressive governments, provides support to high-quality public services. Scandinavian countries depend on HST for much of their revenue. This, of course, does not apply to the current situation because the party in power is far from progressive and it has done nothing but undermine services to Canadians.

It should be noted that I have refused to call this a government. A government leads with integrity and places the needs of people before its own. A real government would never have done what the Conservatives have done to undermine women's rights, deprive first nations, use the resources of government to mislead and create dissension among its citizens.

Finally, last evening the members across the aisle invoked closure to stifle debate, to force through its undemocratic and unfair tax. It wants, like its finance minister, to wash its hands of responsibility for the people of Ontario and British Columbia, just as it washed its hands of its obligations to this nation and to its people.

That is a group I cannot call government because, quite simply, it is not.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:50 p.m.
See context

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Madam Speaker, I note the member pointed out that she had an outpouring of support from her constituents for her position against the HST. She is backed up in that by the Ipsos Reid Canwest News survey just out yesterday, which shows a whopping 74% of the people in Ontario are against this tax.

The fact is just yesterday the member for Vancouver East introduced an amendment which would have allowed the Conservatives, the government, a way out. It would have allowed them to do the right thing by having hearings on the bill, which they should have had. It would have allowed the finance committee to go on the road, hear from witnesses and then come back with a report to the House before February 28. This still would have given them ample time to get their legislation through and would have taken away the cloud of suspicion that hangs over their heads and will continue to hang over their heads because of the way they have operated the House on this bill.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:50 p.m.
See context

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Madam Speaker, it is interesting that I did receive an overwhelming response from my constituents. They were very clear. They do not like this tax. They see it as a tax grab. They see themselves as the victims of this tax. They are willing to fight back, and I can assure the House that I am willing to fight back.

I have also had consultations with first nations. They are particularly angry because their treaty rights have been violated in terms of point of sale. They will be required to pay a tax that they have never been required to pay before, and that group across the aisle refuses to listen. It is simply not interested.

In terms of hearings, those are essential. In any democracy we have to listen to the people. That is the first rule. The Conservatives refuse to listen to anyone. They do not want this aroma of tax to linger too long.

I remember some time ago when the Conservatives talked about cowardice. They talked about cutting and running, not living up to one's responsibilities. I would say we have seen a prime example of cutting and running.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:50 p.m.
See context

NDP

Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON

Madam Speaker, before I ask a question of my colleague, I want to read a letter from one of my constituents, Carole Lalonde, from Elliot Lake. She says:

Hope U are fighting for us NOT to have HST in Ontario. It may help the Ontario gov't, but it sure would NOT help us, the seniors, and lower income people. This is going to cost us an additional 8% on so much, and our income stays the same. I don't hear of any plans to increase our pensions, and we could sure use it. Everyone gets a raise except the ones that need it the most.

My colleague spoke about pensions and she spoke quite eloquently about the needs of women. Could she maybe speak a little more on that and respond to the fact that too many seniors live in poverty, especially single women seniors, and why we would not move forward on legislation right now to increase the pensions of seniors as opposed to taxing them more on something they cannot even afford right now?

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:55 p.m.
See context

NDP

Irene Mathyssen NDP London—Fanshawe, ON

Madam Speaker, the committee for the Status of Women has been looking at women who are seniors and their pensions. We have found, very clear, that a lot of women who had to leave the workforce or who were never able to enter the paid workforce live in poverty. We do not have a pension system that is adequate.

When I get correspondence from my constituents, it is elderly women who are saying that they cannot afford rent, or food or any of the necessities. They want to know how they will pay 8% more. The answer is, they cannot afford to pay 8% more. Someone in the House, across the aisle, simply does not care.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:55 p.m.
See context

Some hon. members

Oh, oh!

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:55 p.m.
See context

NDP

The Acting Speaker NDP Denise Savoie

Order, please. Could I have a little order on this side of the House.

Resuming debate, the hon. member for Sault Ste. Marie. He can begin his comments, but I will have to interrupt him in about four minutes.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:55 p.m.
See context

NDP

Tony Martin NDP Sault Ste. Marie, ON

Madam Speaker, I understand that I will only have a few minutes before question period, but I will be able to pick up where I left off after question period is over. I ask those who might be waiting to hear what I have to say to hang on. Question period will be interesting, for sure, as it always is, but what I have to say will be important as well.

What we are entertaining here in our short, limited opportunity to debate this bill is the imposition by the federal government on the provincial governments of Ontario and British Columbia to increase taxes on items that people have to buy for themselves and their children on a daily basis to keep themselves going.

The Retired Teachers of Ontario said it best. They indicated that the HST is basically a tax on daily living. They hit the nail on the head when they said that northerners will be hit with significantly increased heating costs due to long winters. Lighting, water and heating are necessary for survival.

An extra 8% tax on almost all goods and services will be difficult for retirees or for those on a fixed income. There are a lot of people across this province, particularly in northern Ontario and in my own riding of Sault Ste. Marie, who are living on fixed incomes and are already finding it difficult to get by. An extra 8% on the cost of basic necessities that they cannot do without simply will be devastating for them.

Today, I want to put on the record a few thoughts on behalf of northerners. I have already laid out a couple of things that are unique to northern Ontario compared to the rest of the province. It will be very challenging as this new 8% sales tax comes into effect. I also want to speak on behalf of the folks in Sault Ste. Marie and Algoma who have taken the time to phone, write or email, and speak to me in person about this issue.

They asked me very sincerely if I would do everything that I could to try to put the brakes on this and stop it before it comes into effect and begins to affect them and their families. I also want to talk about the impact of this new tax on the poor, the most marginalized and at-risk citizens who need less than anything else to be confronted with this 8% increase in their cost of living.

I see the Speaker is about to rise. I will finish after question period is over.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 1:55 p.m.
See context

NDP

The Acting Speaker NDP Denise Savoie

The hon. member will have seven minutes when he resumes his comments.