Debates of Feb. 10th, 1997

Excise Tax Act

[The Deputy Speaker]

The question is on Motion No. 118. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion, the nays have it.

And more than five members having risen:

[The Deputy Speaker]

The recorded division on the motion stands deferred. The recorded division will also apply to Motions Nos. 119 and 121 to 124.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

moved:

Motion No. 125

That Bill C-70 be amended by deleting Clause 270.

[Barry Campbell, Liberal, St. Paul's, ON]

On a matter of clarification, Mr. Speaker, I am not sure if this is correct. There is another motion, Motion No. 120, and I want to make sure that we do not forget it because the government is in favour of Motion No. 120. It is a government motion.

[The Deputy Speaker]

On Motion No. 120 I believe that the vote is necessary on that one only depending on the result of Motion No. 118. Depending on how the vote goes, we may have to go back and vote on Motion No. 120.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, when it is a Liberal lawyer, it gets even more complicated, you can be sure.

I am pleased to speak to the motions in Group No. 4 concerning harmonization of provincial sales taxes in the maritimes with the federal GST. Earlier, I was listening to my Liberal colleagues speak to the motions in Group No. 3, which dealt with substantially the same issue. They are living on another planet, I told myself. They

spoke of harmony, and said that taxes must be harmonized in order to promote trade and improve economic growth over what it is right now, with the end result being job creation, that the taxation system must be modernized, and that the agreement signed between the federal government and the three maritime provinces must become a model, imagine, a model for Canada as a whole.

They have no idea what they are talking about and they are living on another planet. Right now, contrary to what they would have us believe, the situation in the maritimes is chaotic. For three days now, here in Ottawa, the finance committee has been hearing witnesses from the maritimes. The chairman of the finance committee and all the Liberal members were expecting praise for the wonderful $1 billion paid as a reward for agreeing to a new scheme to harmonize the GST with provincial sales taxes, but that was not what they got.

They took it from all sides, and they richly deserved it furthermore. Do you know why? This plan to harmonize the GST with provincial sales taxes in the maritimes is half baked. It is half baked on all counts: because of the harmonization process as such, and because the government had credibility problems when discussions first began with the governments of the maritime provinces. Everyone was reminding it of its election campaign promise to scrap the GST, and was asking why it was doing nothing about it.

Rather than talk about scrapping it, rather than get the public and the opposition riled all over again, they preferred this ruse, and decided to offer up an agreement that was billed as the event of the century as a replacement for the GST.

It is also half baked because, in order to come up with a harmonization plan that is so appealing for business and Canada as a whole, they had to dig into our pockets, dip into our money, for the $1 billion they paid the governments of the three maritime provinces who signed this agreement.

If this harmonization process was so wonderful, if it was going to contribute to greater economic growth and boost job creation, why was it necessary to pay the maritimes $1 billion? Why was it necessary to take money from people in Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia in order to hand out compensation to the governments of three provinces, including New Brunswick-more about that in a few minutes-so that they would sign. Half baked, I tell you.

The picture is no better when it comes to the mechanisms for introducing the new tax and having business implement it. The political reality of the Minister of Finance, the Prime Minister and the Deputy Prime Minister, who had promised to scrap the GST, and the economic reality which businesses have to face are two completely different worlds.

This is the reason why I have just stated that, during the three days of finance committee hearings, representatives of large and respectable businesses, which have in the past made a consistent contribution to economic growth and job creation, and continue to do so-I am thinking of Sears Canada, Canadian Tire, all those big businesses with nation-wide operations-came and told us that application of this new system in the maritimes had to be suspended. And why? For a number of reasons, but I shall go into only some of them, since I have just a few minutes left to give an overview of such a major issue.

Mr. Speaker, you indicate that I have five minutes left, and I just happen to have five reasons.

The first reason has to do with the implementation of this new harmonization system which, let us not forget, is not a Canada-wide operation as it only affects three small maritime provinces. This new system will cost businesses in those three maritime provinces $100 million to implement, a considerable amount.

Second, not only will it cost $100 million to establish this new taxation system, but in addition businesses like the ones I just referred to, as well as the medium sized businesses which deal with consumers across Canada, will have to pay some $90 million yearly in recurring annual adjustment costs.

This means that, for as long as these companies continue to do business, they will have to bear additional costs of $90 million annually, costs they would not have had to bear if there had not been that political agreement designed to help a Minister of Finance with a taste for the limelight and a Prime Minister in trouble because of his unkept promise to abolish the GST and make them look good. Ninety million dollars a year.

One of these costs is fairly obvious. Take Sears Canada or Canadian Tire, major companies which tend to have huge centralized warehouses in some regions of Canada, where they put price labels on merchandise before they send it out to retail stores. In other words, these huge warehouses contain the tires, household appliances and all the other products sold by Canadian Tire, Sears or other stores, and this where the pricing is done.

The problem with the agreement with the maritimes is that the products will have to be divided into two groups: one for all of Canada, showing only the selling price to be used in the branch stores of these major retailers and, on the other side of the warehouse, the same products but with a label that will also show the retail price of the product, but with the new sales tax, the so-called harmonized tax, for the maritimes.

This is the sort of cost that the government did not assess. And I will tell you that, when the representatives of these businesses came to express their dissatisfaction to the Standing Committee on Finance at a special meeting in January, the committee chair was busy expecting accolades for the excellent work of his excellent government in the matter of the GST, which is excellent for us, but not for them. When people came to say the opposite, when they said the bill made no sense, that it was hastily thrown together and

costly and would generate annual adjustment costs, the Liberal members of the committee were stunned. They then realized that the Minister of Finance had done a job that looked good politically, but appearances are what the Minister of Finance is about, always looking good. However, in practical terms, he won nobody over with this new agreement.

Mr. Speaker, you are giving me the peace and love sign? Oh, you are indicating to me that I have two minutes left. So he won nobody over with this new agreement. The fact that the Retail Council of Canada, which represents 65 per cent of retail business in Canada, appeared before the finance committee to say, and I am quoting from their brief, that to include the tax in the sales tax in the maritimes would increase costs and confusion. Instead of making things more harmonious and easier for business, this so-called harmonization policy increases confusion, uncertainty and costs.

I ask the government to reverse its decision and to put off implementation of this senseless agreement, which is costing Canadians and Quebecers $1 billion and which, in addition, will cause disorder and discord in the maritimes, rather than improve things. Perhaps it is time to take a better approach, to think and for once set aside partisan politics so we can implement things that make sense.

[Barry Campbell, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, we have been debating these motions for many hours.

A number of themes have been repeated over and over again because they strike members of the opposition as good sound bites, ways to attack the government. Who can fault them for that? That is what they are here to do. The trouble is that it distracts this House and people who may be viewing this debate from considering the real issues at hand.

What we are doing in this harmonization agreement with the provinces that are coming onboard now is we are moving to a system of sales taxation that is coherent, is in the interests of consumers, and is more efficient and easier for businesses. It is a win all around.

It is interesting, particularly as I rise after a member of the opposition, the Bloc Quebecois, to hear the unrelenting criticism of harmonization from that side of the House. One has to ask why that might be. Consider that in the province of Quebec we already have harmonization. So how can it be that members of the official opposition have been in this House day after day attacking harmonization?

As I just said in English, Bloc members are against harmonization, which is very odd because they have harmonization in Quebec. Everyone knows that. Is it because they want to keep the benefits of harmonization for themselves, for their own companies and consumers?

Could it be that they want to preserve for their businesses and their consumers the benefits of a more efficient harmonized sales tax system? I looked at a map of Canada the other day, which one should do from time to time, to remember that Quebec borders New Brunswick. If New Brunswick goes to harmonization and has the benefits of that, then Quebec loses some of the comparative advantage it has had through harmonization. Those advantages will now be available in Atlantic Canada and eventually throughout the country. It is the right way to go for business and it is the right thing for consumers.

I travelled across the country with the finance committee. Members of all parties, even the third party, supported harmonization, but we would hardly know it from listening to the debate of the last few days. We travelled across this country and Canadians said: "While you are fixing the GST please do something about this anomaly. We are the only country in the world that has 10 sales taxes: nine provincial sales taxes and one federal tax". Travel anywhere in this world and try to find that. You will not.

I will speak to one other misconception that has been advanced in this Chamber, which is the issue of hiding tax. Consumers said to us overwhelmingly-and I will have more to say about this in later stages of the debate-that they wanted tax inclusive pricing. As for those who said they did not want the tax to be buried, I asked them if they had ever travelled outside North America and had looked at a cash register receipt in almost any country of Europe or if they had looked at a receipt from the gas pump, whether it was in Alberta or Quebec City and had seen the amount of tax indicated on the receipt. I did not hear a great hue and cry about hidden taxes in gasoline prices in this country. And I have yet to run into anybody in Europe who says: "The Government of France is hiding the tax from me". It is right there on the receipt, as it will be in Atlantic Canada.

I have taken these few minutes to come back to basics. I look forward to hearing what the members opposite have to say, particularly if it is something new and not something that has been said over and over again without looking at the substance of what is being done here, about the wishes of consumers and retailers in Atlantic Canada about what makes sense for economic efficiency in this country. It makes sense in Quebec where they have been doing it for years. It must make sense for the rest of the country as well, and indeed it does.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I rise on this set of motions to add a few more arguments to this debate.

I understand the member who just spoke is the vice-chairman of the finance committee and does a good job chairing the committee meetings. However, I do sometimes question the ideas and philosophy he supports because I do disagree with him.

First he says that if it is good enough for Quebec, it should be good enough for the rest of the country. Let us put the Quebec issue in perspective. With everything the federal government seems to do and wants to run as a federal government, the provincial governments of Quebec have always said: "No, no, no. We will do it. We will handle it. We can do it better than the federal government. We will look after our own pensions. We will look after our own sales tax and harmonization. We will do it ourselves". Quebec implemented a harmonized system right from day one. Whether or not that tax is popular in that province I will leave for Quebecers to decide.

One thing the members of the Bloc Quebecois are doing right now in objecting to this bill is they are saying loud and clear that the Bloc Quebecois representing Quebecers objects to the fact that the Atlantic provinces received a lump sum payment of $964 million or $971 million, somewhere in there. Let us round it up to $1 billion because by the time they exchange all these cheques that is what it is going to cost. These three Atlantic provinces received a $1 billion lump sum payment. Why? The government says it is in order to make up for the shortfall in revenues the provincial governments will have. Who pays for it? All taxpayers. And the majority of taxes are paid outside those three Atlantic provinces.

Some people call it a bribe. I myself call it a bribe, an inducement or an enticement to participate in something that looks good on paper: "We can lower your taxes from 18 or 19 per cent down to 15 per cent and for the loss in revenue we will supply you with $971 million to do that. You are in, you look great. How can you argue against lower taxes? It is going to help your economy. Harmonization, what a wonderful word. Everybody will be co-operating. We will harmonize and have one tax. It will be easy to administer. It will be a lower cost. It will just be wonderful. You guys will be elected for years. You will be heroes. And you are helping us as the federal government to keep our election promise to abolish the GST. You will be helping us to keep our election promise in the red book because we went door to door and said we would harmonize the sales tax".

The Liberals said they would get rid of the GST. They said they would not take money out of the back pockets of Canadians with the GST but out of their pockets with a harmonized sales tax. At the door, the Liberals said that if in any province the combined tax was higher than the 15 per cent, or whatever the combined tax rate is, they would give them a lump sum to make up for that lost revenue.

Every Liberal in Ontario said they would do that. I know because I have friends who live in Ontario. They know that the Liberals promised to replace the GST with a harmonized sales tax and to give lump sum payments to provinces to induce them to participate. I know they said that. That is exactly what they said and what they promised.

The Quebec representatives in the federal House here, the Bloc Quebecois, are angry and upset. They are demanding their chunk of the money that was given to the Atlantic provinces. Therefore, do not stand here and tell us, as the member on the Standing Committee of Finance just did, that if it is good enough for Quebec it is good enough for everybody.

We have heard a number of times where the Reform Party supported harmonization. Let us put this into context. This party likes to have quotes in context. It does not like to have things piecemeal, ad hoc and out of sync. When the Liberals said that we supported harmonization, we were on a big committee reviewing how to help this government get rid of the GST. We were actually trying to help it keep a promise. We listened to all the people and a lot of suggestions were made.

The first thing this government wanted to do was to bring in a shoe box business transfer tax. That is what it was supporting. It then came around to this other form of tax. It talked about a national sales tax. In this context of a national sales tax, it does not mean three provinces out of ten; that is not national but regional. A national sales tax is where we could have just one tax at the lowest possible rate. Yes, we do support that and every one of the Reformers who are here today would support that.

Anytime we can eliminate taxes, get rid of one set of taxes and replace it with another, especially if we replace it with one that is lower, you bet we would support that. That is what is in our minority report. If we had one blended sales tax, if it was a national sales tax and not a regional piecemeal, ad hoc tax like this one, we would support it. If it had the lowest single possible rate-single possible rate, we were hinting at 9 per cent or 10 per cent-we would support it, but not 15 per cent.

I was taunting the Liberals earlier today about why the Ontario government is not supporting it. It is so obvious. For Ontario a 15 per cent combined sales tax, the GST and PST, would be revenue neutral. Why would Ontario not support it? One tax, harmonized and blended. Call it the HST or the BST, it does not matter. It has to be good for Ontario business people. It has to be good for Ontario because it will simplify the tax system.

Why are all those arguments not being bought? It is quite obvious. First of all, just to get the Atlantic provinces to play the game it is going to cost Ontario taxpayers $400 million, their share of the $1 billion bribe.

Second, yes you are making it easier for retailers. Yes, you are making it a little bit easier for consumers not to get that shock price at the wicket. But what you are doing is transferring the costs that will now be on the goods and services that were not there before with the provincial sales tax, on to the GST along with it. Now the price of some goods and services will be raised that were only taxed at 8 per cent. Now they will be taxed at 15 per cent. Transferring that cost to the consumers of Ontario according to their finance minister will cost $2 billion to $3 billion. That is what is not in the cards for Ontario and that is what members of this Liberal government cannot get through their thick heads as to why Ontario will not take it.

Talk about something new and talk about something that is despicable as far as I am concerned what frustrates me is they introduce it at the last minute through their regulations. They have this white paper and they introduce changes. It is always an excise book, an excise act. It looks something like this one which relates to alcohol and tobacco products. They have it for the GST. In the fine print they put in that tax inclusive pricing is mandatory. Then they say how and where it has to be done.

I am sure the committee went through hell. We read about it in the newspaper all through January. There were complaints from the Atlantic region and all these people who supported them. The Canadian Federation of Independent Business and the retailers association, they all turned on them and turned against them because they did not want this tax included pricing the way the Liberals wanted it. It hurts the most now.

I do not know if Canadians know this but every related agency that gives a service from the federal government all across Canada is going to have tax included pricing. This is going to confuse airline tickets. It is going to confuse a lot of financial services although they do not have much, just safety deposit boxes.

It is ridiculous to make all these businesses go through the high cost of changing computers in order to have two prices all across Canada, one in Atlantic Canada, especially national retailers such as Eaton's or companies like Carleton Cards. They came before the committee and said: "We are going to lose money. It is going to cost millions of dollars. We are not sure if we can pass along these costs for this product because all we sell are cards".

The government is not listening. For some strange reason the Liberals insist on proceeding. They believe that if they get Atlantic Canada to use the harmonized blended sales tax for a couple of years-and this is where they are going to find it wrong-they think that by forcing all government related agencies to also include this tax included pricing across Canada, they will embarrass, force, coerce or browbeat everybody into participating with our own money, with our own tax dollars and then they will have kept their promise to eliminate the GST.

What they have done is entrenched the GST according to the finance minister, the master of myth, the minister who said one thing on this side. He lost some integrity when he walked across to the other side and now is saying another thing.

It is like the infrastructure spending. There is only one taxpayer and darn it and damn it we are paying for everything all across this country. For programs they say that this is federal and this is provincial and it is not. Infrastructure comes out of our pockets. It is ridiculous.

Even if the premiers of Alberta and Ontario, these people who are in control of their budgets, support infrastructure-Alberta just signed on-it is absolutely ridiculous. Alberta is making a mistake because if Alberta with a surplus wants to improve its infrastructure it has the money to do it. Taxpayers across this country could be saved some money but no. It is all a fight over budgets: "This comes out of the federal budget, so we will take some. This comes out of our budget and this comes out of the municipal budget. Let us go one-third, one-third, one-third".

We have to stop this kind of extravagance which is at the expense of taxpayers.

[Dan McTeague, Liberal, Ontario, ON]

Mr. Speaker, I am pleased to speak today in the context that my hon. colleague for Calgary Centre has just alluded to.

I do not know if he is an expert on the GST or matters of taxation. I certainly did not believe that the hon. member was one who felt it was important to recognize that there is one taxpayer and at the same time not move toward something that is both symbolically and realistically an attempt at addressing the fact that the one taxpayer deserves a one tax system in this country.

It compels me to wonder and worry aloud about the hon. member and the other member from the third party, the hon. member for Simcoe Centre who spoke very passionately, although not necessarily always accurately on this very important debate of C-70 with respect to the harmonization of the GST. If the hon. member and his colleague who spoke earlier believe in this issue so strongly, it is unfortunate that they may not be able to join us here in the next Parliament. I know there are problems in that party and they are not just the problems evidenced by some of their policy issues they have had in the past. I think it is abundantly evident with this issue of the GST.

The name of my riding, Ontario, is fitting certainly in the context of the debate. I believe the hon. colleague who spoke before me was completely wrong when he said that this is about politics.

The record will show that the current premier of Ontario, Mike Harris, was very emphatic the day before he was elected in June 1995, that he would work with the federal government to harmonize and to make a better sales tax regime in this country. I know that may be hard for my friends in the third party to recognize. I see them shaking their heads, probably because they are not sure whether the Harris government is a Conservative government or a Reform government. Either way, we know it is a hopeless government.

When discussing the issue of taxation there are very few opportunities to discuss it in the context of virtue. Everybody has their own idea on taxation. All of us in this country would not want to pay taxes or would want to minimize them.

The experience in Ontario is a telling one that I want to relate to my friends in the third party. Budget cuts based on the presumption of reducing taxes are being made to the direct detriment of the poor, the people who are the most defenceless in our society and people who do not have an agenda to hurt other people.

There are politics and policies and there are dangerous politics and dangerous policies. I suggest any party that wants to undertake an ideological view of their politics with respect to taxation must first take into account that one of the most symbolic, rallying points of our nationhood is our ability to look out for the weak, the defenceless and those in our society who through no fault of their own find themselves at the low end of the scale. This consumption tax, the tax to be blended in the maritime provinces, is a positive step forward. It takes into account the recognition that there is indeed one taxpayer.

A very important point is that it takes into account from an international perspective examples of consumption taxes in those countries with one single sales tax regime, one retail sales tax regime. We have spoken to the chambers of commerce and the boards of trade in my riding and across the country. We must make sure that we do not have 13 or 14 different sales tax regimes such as we currently have.

If members are truly interested in representing the interests of their constituents they would be working beyond and above to transcend the politics on which this debate seems to founder to one of trying to find a co-operative, harmonious approach. I believe the best way for us to do that is to follow through on taxation, but taxation that permits individuals at the end of the day to have a system that is far more efficient and that makes more sense for business and consumer alike.

I have had over 46 public forums in my riding since I was elected. That is virtually one for every month that I was elected. It seems to me that while there are those who would like to make the GST a big issue and certainly there is plenty of cannon fodder on both sides for that, I do not think there is anyone in this House who has not given that subject some consideration or who has not been outspoken on that issue.

The far greater and more important problem is the one of getting our financial house in order and at the same time making sure that we can provide an environment that helps people get back to work. Anything else in my view, and I think in the view of those in my riding, is simply nonsense.

While it is important for a government to proceed with the question of harmonizing these taxes, I think credit must be given where credit is due. The Minister of Finance, in concert with the people who worked on the committee on both sides, have tried to hammer out the best of all worlds in a situation where we understand that the current sales tax regime is not one that is acceptable to people.

The hon. member just yelled something. I am not exactly sure what it is he said but that is very consonant with the views of his party.

The arguments in favour of a sales tax are one, we certainly appreciate-

We could perhaps for the first time discuss getting rid of taxes in this country. In a perfect world, people can always make that kind of promise. In my opinion, however, a responsible government, a government that wants to show leadership, has to manage its affairs so that, at the end of the day, it can honour its commitments and be accountable to the consumers we represent. It must do everything in its power to build a tax system that protects the interests of both consumers and entrepreneurs.

In the case of the Atlantic provinces, we are looking at both sides of the question: will harmonization mean that a range of goods will be taxed that would not be taxed without harmonization? I think we have the ability to make arrangements to ensure that these people will be protected.

We also have the ability to find a balance. This balance exists in paying a tax which is not 7 per cent plus 8 per cent, that is 15 per cent, but is somewhere around 12 or 13 per cent, as in the maritimes.

This Parliament has undertaken many contentious issues. There will be many more in the days to come. The GST, the harmonization of the tax with provincial taxes is an excellent first step, but I hope that the House and those who are seeking to make political points and profiting from the rhetoric understand fully that they are profiting at the direct expense of individuals, of people in our constituencies across the country who expect leadership and expect

us at the end of the day to do what is right. Doing what is right is trying to do what people expect you to do.

Harmonization is an excellent first step but it requires the provinces to get on line. Let us not break down on the question and the subject of partisanship. Mr. Harris, I am calling on you this evening, as they have done in the province of Ontario to do the same.

[The Deputy Speaker]

I ask the hon. member to please not call on people other than the Speaker in this House.

[Dan McTeague, Liberal, Ontario, ON]

I am sorry, Mr. Speaker. I was referring the premier of the province of Ontario.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, as this debate winds its way to a close, the member for St. Paul's earlier said that this is an occasion for marvellous sound bites and it is. It is an occasion for the Liberals opposite to rest uncomfortably in their chairs as the odour of this particular piece of legislation wafts through the country.

The hon. member for Ontario, who just concluded his comments, suggested that this is legislation that is really very good for the country, that it has no detrimental effects and that the rest of the provinces should get on with it and harmonize the GST.

As Canadians know, this bill will put the legislation through the House to finalize the deal with the three Atlantic provinces. The three Atlantic provinces are the barber shop trio. They are singing in harmony with the federal government. They are singing in harmony with the Liberal government because they have been bribed, as earlier speakers have indicated, with our money.

The problem is this. The reason this issue raises the ire of Canadians and has raised the ire of the opposition is that the Liberal government has a majority. The majority is in good measure because of the government's promise during the election campaign to scrap and abolish the GST. The number of seats that the Liberals were able to achieve during the last election and the number of votes they were able to achieve, which may well have swayed some of the other votes, which would have affected the official opposition in the country, is the direct result of the Liberal promise to scrap the GST.

The Liberals were very vocal about it in the 34th Parliament. They knew full well when they made the promise to scrap the GST that they could not. The country had to have that revenue. If they went on the hustings and were elected on a promise to scrap the GST, to abolish the GST, the hated tax, which they failed to do while in opposition, then it logically follows that the government was elected on a fraud. It should not be sitting here in the first place.

Our responsibility is to ensure that Canadians understand full well that the Liberal government did not tell the unvarnished truth during the election campaign and it should not get away with it.

In politics in our country we should expect our politicians, when they knock on the door, and our Prime Minister, when he looks us in the eye on television, to tell the truth. Is it too much to ask that our politicians, the highest elected officers in our land, tell us the truth?

A few months ago I read an article in a newspaper which said that Canadians do not really expect the people who they elect to tell the truth. Therefore, why should we be surprised when they do not? That article was written by a respected pundit of this country. It went on to say that people should not expect politicians to keep their promises because circumstances and situations change. The situation and the circumstance of the GST did not change after the election. The circumstances were exactly the same. That promise should have been kept.

What kind of a country do we have when the end justifies the means? Should we not go into an election prepared to tell the voters exactly where we stand, exactly how we feel about an issue and then be held accountable for it? That is what the real issue is. The real issue is not the harmonization of the GST. It is the fact that the Liberals were elected on a promise to scrap the GST. They did not, and now they are trying to crawl out from under it.

It will cost us roughly a billion dollars in a bribe to the Atlantic provinces. It will cause untold grief, untold extra work all across the country, but that does not matter. What matters to the Liberal government is its ability to say that it kept a promise, to whitewash this whole issue.

I would hope that when the Liberals come knocking on the door asking for the support of Canadians in the next election, every single Canadian will look them in the eye and say: "Did you keep your word? Did you do as you promised to do prior to the last election?" They will say: "Oh yes, we harmonized the GST". Then, Mr. and Mrs. Canadian, look them in the eye and say: "Where in your election platform did you say anything about harmonize? You said scrap. You said abolish. You said get rid of. You did not say harmonize".

Every single Liberal should be taken to task, even the member for Broadview-Greenwood who is certainly no friend of the GST, whether harmonized or not. Even the member for Ontario who spoke so recently is no friend of the GST and neither is the Deputy Speaker who changed political parties because of the hated, despised GST. Members can imagine how uncomfortable that hon. gentleman feels as he stomachs that hated GST.

There are two aspects to a consumption tax. Most people, in fairness, will say that a consumption tax is not a bad way to tax. It is incremental. It is broadly based. It means that everybody pays on everything. People cannot get out from underneath paying the tax. However, there are two aspects to it. There is the rate, that is, whether 8 per cent or 7 per cent.

That was the problem with the old manufacturers' sales tax. People were afraid to go to sleep at night because they knew the federal government would raise the tax because it was hidden. That is why it has to be visible.

There is the rate and there is the base. The base means to what is the tax applied. This is never brought up. The problem is that the base, the products to which the taxes are applied in the provincial sales tax is quite a bit narrower. Not nearly as many products are taxable under a provincial sales tax.

When the tax is harmonized, it becomes a question of applying it on as broad a base as can possibly be done so that the rate is as low as it can possibly be. It is a combination of low rates and wide base that makes sense. To apply it on a narrow base but at a very high rate is counter productive.

As this debate winds down-I recognize that I may be the last person to speak on this-I want once again to make sure that all Canadians are reminded of the hypocrisy, the duplicity, the outright lie on which the Liberal government was elected. It should be ashamed and ashamed for a long time to come.

[The Deputy Speaker]

Pursuant to order adopted earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the report stage of the bill now before the House.

The question is on Motion No. 125. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.