House of Commons Hansard #127 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was taxes.

Topics

Presence In Gallery
Oral Question Period

3 p.m.

Some hon. members

Hear, hear.

Presence In Gallery
Oral Question Period

3 p.m.

The Speaker

On a point of order, the hon. parliamentary secretary.

Presence In Gallery
Oral Question Period

3 p.m.

Liberal

Paul Zed Fundy Royal, NB

Mr. Speaker, there has been some consultation among the parties regarding a committee report that we would want to be presented at this time. I wonder if there is unanimous consent to revert to Routine Proceedings under presenting reports from committees.

Presence In Gallery
Oral Question Period

3 p.m.

The Speaker

Does the hon. parliamentary secretary have the permission of the House?

Presence In Gallery
Oral Question Period

3 p.m.

Some hon. members

Agreed.

Presence In Gallery
Oral Question Period

3 p.m.

Some hon. members

No.

Presence In Gallery
Oral Question Period

3 p.m.

The Speaker

Orders of the day.

The House resumed consideration of the motion that Bill C-70, an act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related Acts, be read the third time and passed.

Excise Tax Act
Government Orders

February 11th, 1997 / 3:05 p.m.

The Speaker

I think the hon. member for Charlesbourg had 14 minutes left.

Excise Tax Act
Government Orders

3:05 p.m.

Bloc

Jean-Marc Jacob Charlesbourg, QC

Mr. Speaker, I mentioned earlier that, with Bill C-70, the Liberal government was trying to make us forget the promises made by the Prime Minister and the Deputy Prime Minister.

I also drew a parallel between these and promises made by Liberal Party guru Pierre Elliott Trudeau, who, in the late 1970s, promised to abolish the gasoline tax. This most unfair and inequitable tax was hampering economic growth. But when the Liberal Party was elected, Trudeau, far from abolishing the gasoline tax, raised it.

It is clear that this Prime Minister and his government have taken a similar course of action with the GST. They had promised to abolish it and, with Bill C-70, they are trying to disguise it through the so-called harmonization process, thereby enabling the Liberal government to renege on its promises. This also creates some unfairness or inequity.

The agreement signed with the provinces provided for $961 million in compensation to be paid to the three provinces concerned, namely New Brunswick, Newfoundland and Nova Scotia. Since Quebec had harmonized its sales tax with the GST a few years earlier, Quebec Deputy Premier, Bernard Landry, asked for some compensation. He also wanted to know the specific formula used to work out this $961 million compensation package for the maritimes and what would be an equitable amount for Quebec.

Some mentioned $1.2 billion, while others pegged the amount at $1.9 billion or $2 billion. At any rate, it is clear that, in this case as in many others, when Quebec asks to be treated as fairly and equitably as the other provinces, its demands are inevitably denied.

Between 1972 and 1974, Quebec justice minister Choquette, a Liberal minister, asked his Liberal federal counterpart, who is now the hon. member for Notre-Dame-de-GrĂ¢ce, for $1.3 billion or $1.4

billion to cover costs incurred for RCMP services. Costs were incurred in all the provinces for the services of the RCMP and these costs were paid by all the provinces together, even though Ontario and Quebec made very little use of that police force.

As we all know, the RCMP has, for years, been acting as the local police force in some municipalities. All Canadians pay for this service, but Quebec and Ontario have their own provincial police forces. A claim in excess of $1 billion was made. Again, Quebec's request was rejected, even though it had been made by a Liberal government to another Liberal government. It is clear to me that Quebec does not receive equal treatment. This is again very clear and obvious with the harmonization of the GST.

Why, when the maritimes decide to harmonize their tax with the GST, do they get compensation or a subsidy? This system, in a federation that is supposed to be fair, generates unfair competition.

Recently, during Team Canada's trip to Asia, the premier of New Brunswick used some of the tax benefits related to the $400 million in compensation his province will receive to attract Quebec and Ontario businesses to his province.

This, to me, is unfair competition. When federal money is used by a province to attract businesses from another province that does not enjoy the same tax benefits, it can only be called federal unfairness. And Bill C-70 is a good example of that.

I also want to discuss certain technicalities. It was mentioned that an harmonizing process had taken place and that there would be a four-month adjustment period, so that the tax could be integrated into the price of the goods or services being sold. You will remember that, around October or November 1994, when they were still saying that the GST would be abolished, that it was unacceptable to try to hide the GST in the cost of goods or services, that Canadians had to know how much tax they were paying, so they could see what the government did with their taxes.

The Liberals are now singing a different tune; they want to hide the GST in the price of goods, which is just the opposite of what they used to say. In any event, from what we can see, this government often does the opposite of what it says, and here we have the proof once again. I like to think, I am even certain, that when another election is held the public will remember false promises, hollow commitments that are not being respected.

All we have to do is look at the distinct society issue, the wonderful declarations of love at Verdun just before the referendum, this promise to scrap the GST, how the government is being run, and so on.

Or even look at the Somalia inquiry, and their assurances that they would get to the bottom of things. This even came up in oral question period. It is certain that we will never get to the bottom of things in the little time remaining, because the Department of National Defence and the armed forces have boycotted this inquiry for almost a year so as not to provide it with information. They are boycotting the inquiry. They are getting ready for an election. They hope to bury the promise to scrap the GST. They are winding up the Somalia inquiry. They tried to cover up the tainted blood scandal. They are spending millions to solve the Pearson Airport problems. They even settled out of court with the former Prime Minister in the Airbus affair.

They are busily getting ready to bury all the issues they have not really delivered on, or that involve promises they want Canadians and Quebecers to think they have kept when they have not.

I do not think these misrepresentations or supposed solutions are going to wash with the public.

I would like to add in closing that companies such as Sears Canada, Canadian Tire, Woolworth and others in the maritimes which also do business across Canada point out that, if Bill C-70 is passed as it is, despite the Liberals' becoming aware at a certain point that the bill had been prepared in such a rush that 113 amendments had to be made-and even then there was not enough consultation, it was done too quickly-they will have to prepare a product pricing system for provinces where there is harmonization and another for those where there is not.

When we think about the fact that the Canadian federation was supposed to have a certain efficiency across its entire territory, how can it be that, within different areas, standards are established which do not apply to all locations? That is somewhat what we are experiencing with this bill. When these companies attempt to have a price with tax and a price without tax for the period of transfer to the provinces where there will be no harmonization, they will be forced to make new catalogues or to set up some new system.

We should not forget, when this measure comes into force, that the government mentioned a transition period of four months with respect to services. When a lawyer, a notary or a labourer advertises an hourly rate, like a notary who works for $100 an hour, he may include the HST, the harmonized sales tax. In that case he would indicate $115, while his competitor, since he has three or four months to adjust to the situation, can simply advertise a fee of $100 an hour.

There are other examples. A plumber or an electrician who works for $25 or $30 per hour has the option of including or not including the tax, for a certain period of time. Imagine the

administrative headaches for all these small businesses, and meanwhile, the consumer who tries to make sense of it all.

I am sorry, but I think this bill was drafted far too quickly, without sufficient consultation. Large companies like Sears say that it will cost them several million dollars more to make adjustments in the catalogues that are distributed across Canada. Parliament should at least think twice before adopting this kind of legislation and make sure that all intervenors agree.

The Bloc Quebecois has repeatedly pointed out that not enough time was allowed for debate. Just 24 hours before we started second reading, 13 amendments were brought in. Now we have 113 amendments. We had only three days of public hearings. The government decided that was enough. Enough said about the GST.

It is time the public was aware of all the so-called promises that were not kept. And when they are not prepared to admit they made a mistake, they create a diversion and try a different strategy.

In concluding, I want to say that the public will judge this government on the commitments it was not prepared to keep and its lack of respect for all intervenors who came to discuss this bill but did not have sufficient time to express their views.

Excise Tax Act
Government Orders

3:15 p.m.

Liberal

Paul Szabo Mississauga South, ON

Mr. Speaker, the member who has just spoken on behalf of the Bloc has raised the issue which the Bloc has raised since the outset of the discussion on the harmonized sales tax, which is the demand for compensation.

I want to ask the member if he is aware of the input tax credit situation with regard to the provincial component. The fact is that Quebec effectively harmonized its federal and provincial taxes some time ago. By moving toward a common base it has effectively broadened the tax base for the provincial side and is now taxing more at a provincial level which means that it has the same impact as tax points or the transfer of tax points to the ability to tax.

On that basis alone, it would appear to me that the taxing authority within the province of Quebec because of the harmonization move has generated it billions and billions of dollars of additional revenues which it otherwise would not have received. Would the member not agree that the harmonization in Quebec, which was done some time ago, has generated billions and billions of dollars to the provincial coffers which were not available to other provinces?

Excise Tax Act
Government Orders

3:15 p.m.

Liberal

David Walker Winnipeg North Centre, MB

Mr. Speaker, on a point of order.

Excise Tax Act
Government Orders

3:15 p.m.

The Speaker

Before giving the floor to the hon. member for his point of order, I want to ask whether he heard the question?

Excise Tax Act
Government Orders

3:15 p.m.

Bloc

Jean-Marc Jacob Charlesbourg, QC

Yes.

Excise Tax Act
Government Orders

3:15 p.m.

The Speaker

The hon. member for Winnipeg North Centre.