Mr. Speaker, how could anyone be against a bill that allows the provinces to harmonize taxes that affect everyone? We must ask ourselves this question. In Quebec, we do not understand how anyone could oppose it, since we harmonized our taxes in 1992. At that time, we thought it was only right that we should take over the management of our own affairs. It was only natural for us to govern in a different way. Business was business at that time, and accordingly, for services rendered, the Government of Canada reimbursed the Government of Quebec $130 million a year for administrative costs. It is an administrative arrangement: the federal government has what it has for $130 million. This has nothing to do with compensation.
At the time, the Government of Canada did not offer any compensation. As least that is what it said, until it offered three provinces—New Brunswick, Nova Scotia and Newfoundland—compensation equivalent to 1.5 percentage points of the tax base. That is how those three maritime provinces received nearly $1 billion, $961 million to be exact, beginning in April 1996, to be paid over four years, thereby compensating for 100% of the difference for the first two years, 50% for the third year, and 25% for the fourth year. No matter what administrative arrangements were made, there were arrangements and there was compensation.
It is up to the provinces to decide whether to let the Government of Canada collect the tax. I see this as yet another difference between Quebec and the Canadian provinces. Quebeckers would rather we control our own tax revenue ourselves. That is one of our rights, one of the rights we have claimed, one of the rights we exercise, and nobody is going to come and take that away from us.
However, since 1996, Canada's tax system has been blatantly unfair. The maritime provinces were compensated, but Quebec was not. Of course, there are those who say that since 1995, the federal government has been allowed to do whatever it wants to Quebec.
The value-added tax system is a much better system that Quebec has favoured for ages. This is another example of what a great job Quebec is doing running its own affairs. It is doing such a great job that Canada's two largest provincial economies have now accepted that this is the best way to do things and are working on harmonizing their taxes.
And now, in one fell swoop, the Government of Canada wants to be in charge of collecting these taxes for free on top of providing compensation.
Compensation for these two provinces is more than peanuts. It will be around $4.3 billion for Ontario and $1.6 billion for British Columbia, a total of $5.9 billion in current 2009 dollars. Those two provinces will cash in, but Quebec will still get nothing.
This morning, one of the speakers estimated that the $5.9 billion will actually end up costing a little over $10 billion because of the interest that the Government of Canada will have to pay on the money it borrows to pay that $5.9 billion.
I did the opposite calculation and came up with some numbers of my own. If the government has owed Quebec $2.6 billion since 1992, what would that be worth today? How much? At an interest rate of 5% over 17 years—I did this properly using a 5% interest rate, not 10%—the current value of the $2.6 billion owing to Quebec since 1992 would be $6 billion. Now, $6 billion compared to $5.9 billion, that is saying something.
In other words, what the federal government will be giving Ontario and British Columbia is equivalent, in today's dollars, to what has been owed to Quebec since 1992. It could not be more unfair.
But we have no intention of interfering in the negotiations between the federal government and the Government of Quebec regarding the compensation. They have the power to negotiate and we will let them do so. But in order to negotiate, you need at least two parties.
One has to wonder about the willingness of the federal government to negotiate with Quebec. Despite a unanimous motion from the Quebec National Assembly, we have not gotten anything. When their interests are at stake, Quebeckers generally support the minister, regardless of his or her party.
The former Quebec finance minister had a very long exchange with Canada's Minister of Finance. Ms. Jérôme-Forget was practically waving a white flag in one of the letters that she sent to the current federal Minister of Finance, because she said that she would give him what he wanted.
She told the minister that he was right to open the door to compensation for Ontario, and that we would do everything we could to get the same compensation. Seven years ago, the door was also opened to British Columbia, but the door is always slammed in Quebec's face. Ms. Jérôme-Forget wrote the following:
—with respect to all the pertinent clauses, the agreement will be modelled for the most part on the Canada-Ontario agreement signed last March.
The Canada-B.C. agreement is the same as the Canada-Ontario agreement.
I cannot be accused of partisanship since we are not in the same party.
The more the Minister of Finance agreed to what the federal Minister of Finance asked for, the more he asked for. He does not seem to want to resolve the issue. It is as though, during a three-period hockey game, the federal government decided that the players would play four quarters of football and, in the fourth quarter, that the players would play nine innings of baseball and then, in the ninth inning, it claimed to have made a mistake and decided that the players would now play 18 holes of golf.
It has been 17 years. If they want to play golf, they will be resolving the issue next year.
I therefore call on the Minister of Finance of Canada to show that he can manage the public purse fairly. It is his duty to compensate Quebec pronto, because Quebec harmonized its tax 17 years ago. He should respect the people of Quebec and their National Assembly.
All Quebeckers support the current Minister of Finance, Mr. Bachand, who is the member for Outremont. I am deliberately mentioning the minister's riding. Quebeckers do not really understand why the other member for Outremont, who sits here, is going to vote against the bill. All Quebeckers support the provincial member for Outremont. Only one federal member from Quebec does not support the bill, and that is the member for Outremont. I am sure that it is because his motto is “Canada first”.
Of course, any bill can be improved, but I believe that this one respects the provinces' jurisdiction. Since that is a rare occurrence these days, we will vote in favour of the bill.
Some provisions do leave me confused, though, such as the advance notice required for changes in provincial value-added tax rates. From now on, the provinces will have to notify the federal government 120 days before making any changes. This means that a provincial finance minister will no longer be able to announce in a budget speech that effective at midnight, the tax rate will go down or up by a given percentage. I am getting into administrative details, but the fact remains that the substance of the bill is good.
The bill offers less flexibility and is sort of a Canadian compromise.
My first official speech in this House supports the unanimous motion in the National Assembly, where I sat for 15 years, including the beginning of the harmonization period. The motion read:
WHEREAS Québec was the first province to harmonize with the Federal goods and services tax (GST) in the early 1990s: [I was there]
WHEREAS since then, three Atlantic provinces have harmonized with the GST in 1997 and have received compensation for this from the Federal Government totalling close to 1 billion dollars;
WHEREAS the Government of Ontario announced that it would harmonize its sales tax with the GST beginning on 1 July 2010;
WHEREAS the Federal Government will grant a 4.3 billion dollar compensation to Ontario for this harmonization, an amount that is justified in the Canada-Ontario memorandum of understanding particularly owing to the desire to stimulate economic growth and job creation, and the Federal Government will administer this new provincial tax free of charge on behalf of Ontario;
WHEREAS the Ontario sales tax will be very similar to the Québec sales tax (QST) since certain goods, such as books [that is important to us], will not be subject to the provincial tax and that input tax refunds in Ontario may be identical to those agreed to by Québec for an 8-year period;
WHEREAS Ontario is the fourth province to receive compensation from the Federal Government as part of the harmonization of the provincial and federal sales taxes, while Québec has not received any compensation to this day even though it was the first province to harmonize its sales tax;
BE IT RESOLVED THAT the National Assembly ask the Federal Government to treat Québec justly and equitably, by granting compensation that is comparable to that offered to Ontario for the harmonization of its sales tax with the GST, which would represent an amount of 2.6 billion dollars for Québec.
The National Assembly of Québec voted on that motion on March 31, 2009. Naturally, British Columbia was not there.
This should be respected. In my opinion, this first speech also condones fiscal freedom for the provincial governments. Subtle or not, the result is that there is a certain respect for provincial jurisdictions. I am calling on the Government of Canada to continue in that vein and compensate Quebec.
This first speech also reflects the views of an independent thinker who is practical, realistic and patient and who realizes again and again that having just one fiscal policy, ours, and just one collection authority, ours, would be a much better way to run Quebec. Add to that all our own laws and signing our own agreements and what we have is the definition of sovereignty.
