This bill is from the 39th Parliament, 1st session, which ended in October 2007.
Jim Flaherty Conservative
This bill has received Royal Assent and is now law.
This is from the published bill.
Part 1 of this enactment mainly implements proposed measures relating to the Goods and Services Tax and Harmonized Sales Tax (GST/HST). Part 2 contains measures relating to the Excise Act, 2001 and other Acts with respect to the taxation of tobacco, spirits and wine. Finally, Part 3 contains measures relating to the Air Travellers Security Charge.
The GST/HST measures, contained in Part 1 of this enactment, are principally aimed at improving the operation and fairness of the GST/HST in the affected areas and ensuring that the legislation accords with the policy intent. In some cases, adjustments have been made to the legislation as originally proposed in response to representations from the tax and business communities.
The principal GST/HST measures are as follows:
(1) Health: confirms the GST/HST exemption for speech-language pathology services; exempts health-related services rendered in the practise of the profession of social work; zero-rates sales and importations of a blood substitute known as plasma expander; restores the zero-rated status of a group of drugs, collectively known as Benzodiazepines; broadens the specially equipped vehicle GST/HST rebate so that this rebate applies to motor vehicles that have been used subsequent to being specially equipped for use by individuals with disabilities.
(2) Charities: ensures that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property.
(3) Business Arrangements: provides transitional GST/HST relief on the initial asset transfer by a foreign bank that restructures its Canadian subsidiary into a Canadian branch; removes technical impediments that hinder the use of existing group relief provisions under the GST/HST; simplifies compliance by excluding beverage container deposits that are refundable to the consumer from the GST/HST base; permits an agent to claim a GST/HST deduction for bad debts, and to claim adjustments or refunds of tax, in respect of sales made on behalf of a principal where the agent collects and reports tax; extends the existing agent rules under the GST/HST legislation to persons acting only as billing agents for vendors; better accommodates special import arrangements between businesses in certain situations where goods are supplied outside Canada to a Canadian customer; ensures that GST/HST group relief rules cannot be used to exempt from GST/HST otherwise taxable clearing services that are provided by a group member to a closely related financial institution who will then re-supply those services on an exempt basis to a third-party purchaser outside the group; clarifies the treatment of the right to use certain types of amusement or entertainment devices, such as the playing of a game, when it is provided through the operation of a mechanical coin-operated device that can accept only a single coin of twenty-five cents or less as the total consideration for the supply; confirms the policy intent and Canada Revenue Agency’s existing practice that no GST/HST or provincial sales taxes on a passenger vehicle are included in calculating the maximum allowable value for input tax credit purposes.
(4) Governments: ensures that a small supplier division of a municipality is treated in the same manner as a municipality that is a small supplier; exempts a supply of a right to file or retrieve a document or information stored in an electronic official registry.
(5) HST-related Rules: as announced by the Government of Nova Scotia, limits the availability of the current Nova Scotia HST New Housing Rebate to first-time homebuyers and reduces the maximum rebate available to $1,500; includes in the Act the draft Specified Motor Vehicle (GST/HST) Regulations, which prescribe the value of a specified motor vehicle for the purposes of calculating the 8% provincial component of the HST in circumstances where the vehicle is brought into a participating province and prescribe the manner in which that tax is required to be paid.
(6) Administration: adds a discretionary power for the Minister of National Revenue to accept late-filed applications for the GST New Housing Rebate and the Nova Scotia HST New Housing Rebate for owner-built homes, where exceptional circumstances have prevented an applicant from meeting the normal filing deadline; adds a discretionary power for the Minister of National Revenue to accept late-filed elections between closely related financial institutions for adjustments that they are required to make for the provincial component of the HST; permits the Minister of National Revenue to exchange GST/HST information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters; adds a discretionary power under the Act for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act.
The measures contained in Part 2 of this enactment amend the Excise Act, 2001 to implement minor refinements that will improve the operation of the Act and more accurately reflect current industry and administrative practices. They also implement related and consequential amendments to the Access to Information Act, the Customs Act, the Customs Tariff and the Excise Tax Act.
The principal measures related to the Excise Act, 2001 are as follows:
(1) Tobacco: extends the requirement to identify the origin of tobacco products to all products, including those for sale at duty-free shops or for export, consistent with the Framework Convention on Tobacco Control, an international treaty on tobacco control; clarifies that cigarettes, tobacco sticks, fine-cut tobacco or cigars, but not packaged raw leaf tobacco, may be supplied to the export market or the domestic duty-free market.
(2) Alcohol: authorizes private laboratories, provincial liquor boards and vintners to possess a still or similar equipment and produce spirits for the purpose of analysing substances containing ethyl alcohol without holding a spirits licence; defers the payment of duty by small vintners selling wine on consignment in retail stores operated by an association of vintners until the wine is sold.
(3) Administration: permits the Minister of National Revenue to exchange excise duty information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters; adds a discretionary power under the Act for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act.
The measures pertaining to the Air Travellers Security Charge (ATSC), contained in Part 3 of this enactment, include previously announced relief provisions, as well as technical changes to the Air Travellers Security Charge Act.
The principal measures related to the ATSC are as follows:
(1) Relief: relieves, in particular circumstances, the ATSC in respect of air travel sold by resellers or donated by air carriers.
(2) Administration: provides authority for the Governor in Council to add, delete or vary by regulation the schedule of listed airports.
All sorts of information on this bill is available at LEGISinfo, an excellent resource from Parliament. You can also read the full text of the bill.
Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-40s:
Alex Atamanenko NDP British Columbia Southern Interior, BC
Mr. Speaker, my hon. colleague mentioned the visitors GST rebate program and the fact that it is going to be scrapped. Some correspondence which has come to my desk recently from a small businessman in my riding says that according to a study the government will actually be losing money and not saving money on this program.
I wonder if the member could comment on this, please.
David Christopherson NDP Hamilton Centre, ON
Mr. Speaker, that is why I commented earlier that it makes no sense to do this. It makes no common sense; it makes no dollar sense.
The reality is that the amount of money involved is relatively small when we talk about the GDP of Canada or our national budget. Its impact from a marketing point of view, its impact in terms of making Canada an appealing destination point for a whole host of reasons including conferences, conventions and outright tourism means that this was a non-starter.
All we can hope for is that given it is not in the bill, the government has reconsidered and it will not be brought in as it is a bad idea from all perspectives.
Derek Lee Liberal Scarborough—Rouge River, ON
Mr. Speaker, for a while I thought the NDP was going to claim authorship of the Constitution and one of the books of the Bible.
I am pleased to continue the debate on Bill C-40. It is a tax amendment bill. Many have called it a technical amendment bill and it certainly is that.
One of the points I would like to make is that it is never possible to make tax policy changes in a vacuum. Even though this bill may be regarded as technical, Parliament must always be vigilant, as should taxpayers, to make sure that tax changes, however small they are said to be, do not radically change the strategic direction of tax policy unless it is the will of Parliament to do so.
On at least three occasions not involving this bill, the government appears to have made three separate policy moves to alter tax policy, I feel, in a vacuum, in a way that has had negative impacts.
One of them was the possibility of revoking the GST rebate for visitors. Reference has already been made to this. The government appears to have walked from that, but the very fact that the statement was made may have altered the perception of visitors to Canada and travel agents who organize visits to Canada. That was a mistake, frankly. The amount collected in that tax is relatively small.
I realize one of the reasons for considering the revocation was the extent to which fraud had taken up some of those resources, but again, it is a small amount of money and it is probably worth the enforcement costs to make sure our visitors feel they are welcome in Canada and welcome to spend here in Canada. That was a mistake.
Another mistake, as my friend from the NDP discussed at some length, was the 1% reduction in the GST. That reduction is small to many Canadians. One could class that GST 1% reduction as regressive because it is the big spenders who will get the biggest tax reduction. If one lives hand to mouth in Canada, if one is not spending big bucks, if almost all of one's money goes out for rent and food, then 1% of nothing is nothing. There is no tax rebate available to those people. Maybe the government would rather have the photo op and the glamour tax reduction statement instead of really considering the tax impact on individual Canadians.
The third mistake had to do with the taxation of unit trusts. In a flagrant, obvious, blatant reversal of an election promise, one Friday afternoon the finance minister announced that the government would terminate the tax vehicle known as the unit trusts. This had huge downside financial implications for thousands of Canadians who had put their savings into unit trusts relying on that commitment and the existence of the tax interpretations. This issue is being canvassed at this time by the finance committee.
These are all examples of why Parliament cannot let a government make tax policy decisions in a vacuum. One has to look at the entire picture.
Mr. Speaker, I realize we are getting close to members' statements. Perhaps this might be a point when we could pause and I will resume my remarks later.
Sales Tax Amendments Act, 2006Government Orders
The Acting Speaker Andrew Scheer
I appreciate that from the hon. member. The hon. member will have approximately 16 minutes at the end of question period to resume his remarks.
The House resumed consideration of the motion that Bill C-40, An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts, be read the second time and referred to a committee.
Derek Lee Liberal Scarborough—Rouge River, ON
Mr. Speaker, I believe I have some 15 minutes left in my time but I am not going to take all that time.
When we broke for members' statements and question period I was reviewing the importance of a government not making tax policy on the run and not making tax policy in a vacuum. I had made reference to the miscue in the government's announcement that it would revise the GST rebate for visitors, in fact the broken promise of the government in flagrantly going back on its commitment not to revise the trust unit taxation regime which affected thousands and thousands of Canadian trust unit holders, and the political desire of the government to extend a GST 1% tax reduction which affects big spenders.
If we do the math, when a big spender spends $10,000, there is a $100 tax reduction if there is a 1% reduction in the GST. However, for persons of very modest means who have to spend most of their money on rent and food which are either tax exempt or zero rated, there is virtually no tax reduction. As I said in my remarks, 1% of nothing is nothing if one is a poor person.
That particular tax reduction, in my view, is conspicuously manifestly regressive, not helpful, other than in terms of politics. It remains to be seen just how Canadians will view that.
This particular bill then, while I am not saying it is a shotgun blast without any strategic goals, I do say that Parliament has an obligation to look at every tax bill carefully to make sure that the tax objectives are strategic, useful and fit within our fiscal framework.
I am going to quickly refer to two or three of the components of this amendment bill because I think the provisions are useful. They are not major tax changes but they reflect a responsibility to execute a tax policy that is sensitive to different sectors of Canadian society. The first has to do with the extension or creation of exemptions in the health care area involving social work, speech language pathology, and the zero rating of plasma blood substitutes.
In another area, and I think this is quite an interesting tax change, occasionally a foreign bank which maintains a fully owned subsidiary in Canada will wish to Canadianize the branch and Canadianize the banking arrangement. In so doing, there are often potential tax implications to make the transfer; to make the flip of the assets there are tax implications. These tax implications are actually obstacles to the Canadianization of the banking operation. This amendment would remove at least a part, if not all, of that taxation obstacle when the banking changes are made. Those would be GST-HST taxation implications.
Another one is really a fairness provision. We are all familiar with taxation deadlines, applications for rebates, filing for taxes and really filing for anything where there is a deadline. The government believes, and quite properly, that there is an argument to be made that some discretion should be left with the minister to allow for late filings in exceptional circumstances.
Some particular incidents came to light recently involving GST-HST applications in the province of Nova Scotia. I think that a discretionary late filing exemption under exceptional circumstances is a good idea. I know that over time these exemptions can be taken for granted sometimes. We will have to keep an eye on that.
Another area that I noted, and I would commend the change, has to do with a taxation problem that hearkens back to the days of prohibition, when there was absolute prohibition on anything that produced alcohol. That includes a still or any of the equipment that would be used to make illegal alcohol in a business, a home, a basement or a shed anywhere across the country.
As a result of that structure, modern businesses in winemaking and provincial health laboratories that test and need some kind of a distilling operation to do their health care testing find that they have to pay taxes, GST and excise tax, when they purchase or maintain the equivalent of stills for making alcohol, and of course that is totally inappropriate. In the modern world, a provincial laboratory, a winemaking operation or a private laboratory doing health care testing, all of which are licensed, of course should not have to pay excise tax in addition to what they have to pay to set up these facilities. This exemption is quite appropriate.
Those are three things that the bill does. They may seem small to the parties affected and they may loom large, but it is an adaptation of our taxation regime intended to reduce the negative impact on these commercial and government operations.
All in all, the changes contained in the bill are not what one would call strategic. They are not large in tax implication. They mostly have to do with fairness and removing clogs or obstacles in the taxation system that the common sense of a Canadian would say should not be there.
On that basis, although the bill covers a number of different taxes, including the excise tax, the GST and the air travellers safety tax, the Liberal opposition is on balance quite prepared to support the bill. We hope the bill can move through the House and the other place quickly so that we do not have to waste too much time.
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Mr. Speaker, since the member talked about the GST, I would like to ask him a question. What does he think about the visitors' GST rebate?
Derek Lee Liberal Scarborough—Rouge River, ON
Mr. Speaker, as I understand it, that provision is not contained in the bill. There exists a GST rebate for visitors. It actually looks quite good to visitors coming into Canada and leaving Canada to know that the amounts they do spend on GST can be rebated. I think that is a great thing. It does not involve a lot of money. It does involve some money, but it is not a lot of money.
The problem we have is that the signal that we might want to remove it may seem discourteous or inappropriate when we are trying to foster tourism. Taking an overall look at the strategy of tourism and attracting visitors, it is our view that we should not be tinkering with this. We should continue to hold out a GST rebate to visitors to Canada.
Pierre Paquette Bloc Joliette, QC
Mr. Speaker, we have before us an extremely technical bill. It contains a whole series of measures. In terms of necessary adjustments, as well as the collection of GST and the various excise taxes, it is definitely a bill that makes sense. And this is why the Bloc Québécois will support it.
However we must say that it is not the most exciting of bills. Accordingly I found it quite characteristic, significant and symptomatic that the previous member should broach matters pertaining of course to finance, but that raise rather more issues than this necessary bill which, as I mentioned earlier, is not all that exciting.
Before going any further in describing the bill and the Bloc Québécois' assessment of it, I would point out, as the previous member did, that we in the Bloc Québécois are extremely concerned about the Conservative government’s decision to take another look at the visitor rebate program.
We know that a notice of ways and means was announced in this connection, but that it has not yet been put to a vote, which is a good thing. I hope that it is because the Conservatives have realized that they were on the wrong track, since this program is found in more or less all countries seeking to have a vibrant and productive tourism industry. It is a bit strange that the government and the Minister of Finance should want to reconsider a program that many countries are thinking about putting in place to attract, in particular, international conventions and groups coming from abroad.
So I take this opportunity to ask the Minister of Finance and the government to think carefully about what they hope to achieve by reconsidering this program. For example, when we go to Europe, everyone is very familiar with this program. Mexico is thinking of setting up an equivalent. So careful thought has to be given to the place of Canada and Quebec as tourist destinations, at a time when the Canadian dollar has risen significantly. Abolishing this program would increase the costs of large conventions in particular by 6%.
Obviously, there is probably room for improvement in this program. I hope that in the next budget, or at another time, the Conservative government will implement an effective program with the same objectives, in other words, to encourage conferences and groups of foreign tourists to come here.
There is another comment I want to make about this bill. It has to do with the fiscal imbalance and the reductions in the GST. We know full well that during the election campaign the Prime Minister announced a reduction in the GST from 7% to 6% and then from 6% to 5%. On July 1, we had the first reduction from 7% to 6% and were told that in a few years time there would be a second reduction from 6% to 5%.
I want to take this opportunity to warn the Prime Minister and the Minister of Finance against confusing the issue of resolving the fiscal imbalance with the issue of reducing the tax burden on Canadian and Quebec taxpayers.
I remember the election campaign very well. The Prime Minister was a candidate and leader of the Conservative Party and made his GST reduction announcement standing next to a cash register. In no way could this reduction be interpreted as the tax room that could have been left to the provinces who wanted it to resolve in part—since this is not enough—the fiscal imbalance.
I am therefore warning the government and the Minister of Finance not to try to have it both ways in the next budget by announcing the reduction of the GST from 6% to 5% and by announcing that the provinces, such as Quebec—perhaps—that want to recover this tax room, will be able to do so as part of a solution to the fiscal imbalance. This would be totally unacceptable. It would be unbelievably cynical. I think the public, Quebeckers in particular, would not fall for it. I prefer to let the Minister of Finance and the Prime Minister know right away that such a move would be totally unacceptable to the Bloc Québécois.
This bill has given me the opportunity to relay my two messages. I hope they will be heard.
I will now talk a little about what is in Bill C-40. This bill amends both the GST and the excise tax collection. It is comprised of four parts. First, some changes are aimed at improving and specifying certain measures pertaining to the collection of the GST. Second, the act is being changed to exempt certain goods and services from the tax, particularly medical and social services. I will get back to this. Third, the government is amending the excise tax to specify different measures concerning the taxation of wine, beer and spirits. Finally, a fourth part changes the rules pertaining to the air travellers security charge, a charge that is currently collected at different airports.
Let us start by examining in greater detail the bill as it concerns the measures affecting the GST and the harmonized sales tax. In Quebec, it is the Quebec sales tax. These measures are comprised of five distinct categories. Thus, the bill changes the rules concerning health, charities and business arrangements. These rules also affect governments, particularly municipalities. Furthermore, some provisions change the GST administration process.
Concerning health measures, the first category under the goods and services tax, the government is amending the act so that speech-language pathology services will now be tax exempted. For parents who use speech-language pathology services because their children have language difficulties, this is excellent news. This will make it easier to access these services and minimize costs. This is true for parents of children with speech problems, but also for many of our fellow citizens who have had strokes. Often, they are forced to re-learn to speak and also need speech-language pathology services. In a sense, costs will also be reduced there and access to these services will be easier.
I think it is interesting that in its bill, the government decided to exempt health-related services rendered in the practise of the profession of social work from the GST. Here too, there may be groups, institutions, families and individuals who need the expertise of a social worker. They will no longer have to pay the GST. For people who have insurance, this means their deductible will be lower. Insurance rarely covers the entire cost of social workers. This reduction would therefore apply to the cost paid by the institution, the organization or the individuals for the services of a social worker.
Next, in its bill, the government wants to zero-rate sales and importations of a product that can, to a certain extent, replace blood. This product, plasma expander, is a blood substitute that can be injected during treatment of major hemorrhaging, serious burns or open fractures. Although they do not contain the red blood cells and anticoagulants found in blood, these substitutes offer an alternative at various stages of critical intervention to save the lives of seriously injured patients. Here too, I think it is simply humane to exempt these products from the GST, an indirect taxation measure.
The government will also zero-rate a group of drugs known as benzodiazepines, which includes Valium, Ativan and other similar drugs.
These drugs are used to treat anxiety, for example, during withdrawal in cases of detox, and as preanaesthetic medication. Once again, it is simply of question of humanity to not tax these products, which are used in extremely difficult situations and when there is no other choice. It is not a matter of saying: “Should I take this or not?” The patient has no choice but to use these products.
Lastly, the government is going to rebate the GST on motor vehicles that have been used subsequent to being specially equipped for use by individuals with disabilities. We see a number of amendments on the health side that are most welcome, that are not likely to be the subject of any history classes in the future, but that are certainly consistent with common sense.
As for charities, that is the second category regarding the GST and other sales tax. These amendments will ensure that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property. For example, a charity leases a building and, at the same time, leases a photocopier, phone service and computer system. At present, those products must be supplied not only at a cost, but taxes must also be paid on those goods and services. Charities will be able to use the same supplies without paying the GST. Obviously, anything that can help reduce the operating costs of charities is most welcome. In that sense, this is also a step in the right direction. A step, once again, that will not answer all of the funding problems facing charities in terms of the support they need from our government, but at least some openness has been shown in this regard. Let us hope that the government will take such steps even further in the future.
As for business arrangements, I think there are some good changes. A foreign bank that has a subsidiary in Canada will now be able to restructure it into a Canadian branch in its own right and enjoy GST relief during a transitional period.
The Finance Committee, this House and the various governments we have witnessed recently have all tried to foster competition in the financial institution sector and especially among banks. Unfortunately, though, there is still not enough competition for us to really speak of a marketplace where supply and demand play a key role. We know very well—and have had recurrent debates about it—that many of the bank fees added over the last few years are due to the fact we have oligopolistic competition, that is to say, just a few big players, especially five large Canadian banks. Despite the legislative changes made over the years to encourage the establishment of banks or foreign banks to move to Canada, there is still not enough competition to generate sufficient pressure to ensure that consumers get their money’s worth. There are certain other group relief provisions as well, but I will not get into that.
In another area, the bill simplifies the application of the GST to beverage container deposits refundable to the consumer because this was a rather bureaucratic obstacle to recycling and the collection of the tax on these cans. This measure excludes the container deposit from the GST and will thereby facilitate recycling, the protection of the environment, and the lives of all the small retailers who now handle these deposit returns.
There are a few other technical measures as well. For example, there are provisions on agents who sell products and have bad debts that they cannot recover. When this happens, they will have GST deductions.
The same applies to persons acting as billing agents—they are not the ones who will have to pay the GST—and for special arrangements between businesses in certain situations where goods are supplied outside Canada to Canadian customers. Things will be made simpler in this case also.
The bill also ensures that GST group relief rules cannot be used to exempt from the GST otherwise taxable clearing services that are provided by a group member to another in order to avoid a situation where a third-party purchaser outside the group would benefit from the GST exemption even though the services were provided by one member to another.
It also confirms the policy intent and Canada Revenue Agency’s existing practice that no GST or provincial sales taxes on a passenger vehicle are included in calculating the maximum allowable value for input tax credit purposes.
In the case of governments, the bill will exempt a supply of a right to file or retrieve a document or information stored in an electronic official registry. This means that the GST will not apply, which will facilitate the transfer of a certain amount of information by municipalities and government agencies. In some way, this is what the bill is all about. It will facilitate the flow of information. It will also ensure that a small supplier of a municipality is treated in the same manner as a small municipality.
Other amendments deal with the application of the law with regard to the GST. For example, the bill adds a discretionary power for the Minister of National Revenue to accept late-filed applications for the GST new housing rebate and the Nova Scotia HST new housing rebate in exceptional circumstances.
A number of measures such as these give some latitude to the Minister of National Revenue as well as to the revenue agency to take into account exceptional circumstances.
A number of amendments were made with regard to the excise tax. For example, the rules pertaining to tobacco were tightened. Everyone here will agree it is very important to tighten the rules because of smuggling. There will have to be greater compliance in terms of the origin of tobacco products and their source, in particular for duty free shops.
In the case of alcohol, the bill contains measures to support the development of the Canadian wine industry. This industry is flourishing, particularly in Île Ronde in the Lanaudière region, which is producing wines comparable to those being imported. Once again, this measure will help this increasingly important and high-end industry—associated with regions such as Lanaudière—to develop.
I would like to close by saying that there has been some relief with respect to the air travellers security charge. Under this legislation, airports that should not have been included, in our opinion, on the lists have been removed from them. For example, La Grande III airport and La Grande IV are not commercial or tourist airports. Some tourists use them, but the majority of users are workers.
In conclusion, although this bill does not represent a tax revolution, it is moving in the direction of common sense. The Bloc Québécois will support this bill because it corrects certain shortcomings, reduces the cost of access to some medical services, reduces the tax burden on charities, assists small producers of wine, tightens provisions pertaining to the sale and production of tobacco in order to help the fight against smuggling, and adjusts the air travellers security charge to reflect reality, particularly that in Quebec. We are therefore pleased, not in the name of revolution but rather in the name of common sense, to support this bill.
The House resumed consideration of the motion that Bill C-40, An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts, be read the second time and referred to a committee.
Peter Julian NDP Burnaby—New Westminster, BC
Mr. Speaker, I listened with great interest to the presentation by the hon. member for Joliette on Bill C-40. He talked about the GST relief for foreign banks. There is another very important element: the situation currently experienced by school boards.
In my riding of Burnaby—New Westminster, the school boards in Burnaby and New Westminster have spoken out about the need to get the same GST exemption as municipalities and governments. It is fair and wise to give these school boards the opportunity to reduce their costs and devote more resources to students. In fact, what is at stake here is our children's education, hence the importance of this issue. GST relief should be provided to school boards, thereby freeing up more resources for the students.
My question to the member is very simple. Does he support this idea that school boards should be exempt from GST so that they can devote more resources to the students, our children?
Pierre Paquette Bloc Joliette, QC
Mr. Speaker, I thank my colleague from the NDP for his question and also for having listened to my speech. I was somewhat under the impression that only some of my colleagues from the Bloc were listening. So, I am glad to know that at least one other person was also listening.
The Bloc Québécois and I totally support the demand made by school boards, including by Quebec school boards, to be treated like municipalities with regard to the GST. In fact, that is included in the recommendations that the Standing Committee on Finance made to the Minister of Finance. There was a consensus. I would not say that all parties voted in favour of the measure, but the majority of them did.
I take this opportunity to underline a pending problem. The Federal Court made a decision on the application of the GST to school transportation. Many municipalities in Quebec and Ontario won their case at that time. Unless I am mistaken, about $12 million was to be paid back to municipalities. As far as we know, it is the only court decision that has been overruled by legislation. The former government had decided to tax the school boards retroactively.
I introduced a motion in the Standing Committee on Finance asking it to recommend to the Conservative government that it not impose the GST on school transportation since the Federal Court had ruled in favour of Ontario and Quebec school boards. It is not all school boards that are affected, but some of them. We also hope that the Minister of Finance will make a positive decision in his budget.
As the hon. member said, it is money that comes from the taxpayers' pockets and that should be used for education. There is something illogical about paying taxes to school boards if they must send that money to the federal government.
Christian Ouellet Bloc Brome—Missisquoi, QC
Mr. Speaker, I too want to congratulate my colleague from Joliette on succeeding in making such a brilliant presentation on such a technical bill, as he mentioned earlier.
I want to go back to a point he raised at the very beginning of his speech when he talked about the tax rebate to foreigners who visit our country.
In my riding, some tourists get their tax rebate just before crossing the border.They always spend the money right then and there, often buying regional and even local products. So there is a multiplying effect. Our riding benefits a lot more economically than if that money was not reimbursed.
I want to ask my colleague if this multiplying effect is real and if he believes that the same phenomenon could happen in places other than at the border, for example in airports or in hotels—I do not really know. Could this happen elsewhere?
Pierre Paquette Bloc Joliette, QC
Mr. Speaker, I thank the hon. member for his question. I think he is absolutely right. In fact, the Standing Committee on Finance heard witnesses regarding the government's intention to abolish the GST visitor rebate program. This is what we were told, not only at the border, where there are often private counters that give refunds. Indeed, one third of the program is administered by private firms that collect a certain percentage for their services. These facilities are often located in shopping malls, so that tourists who find themselves with cash in their pockets will use it to buy products in the surrounding stores.
This does have a snowball effect, not only for shops located at the borders—such as duty free shops for example—but also in all the shopping malls that have such counters. Let us not forget that we are talking about $80 million here. I should point out that the federal government has revenues totalling close to $2.350 billion. I think there is a disproportion here, and it costs about $8 million to administer the program. We are told that it is not being used enough. Then, let us integrate it into a strategy to promote tourism.
As I mentioned, it is unacceptable that this measure would come at a time when the value of the Canadian dollar has increased significantly in recent years, and at a time when authorities want Canadians who travel by land to the United States, and people who come into Canada from the United States, to carry a passport. It seems to me that the Conservative government should act responsibly and not add yet another hurdle for our industry, not to mention the cuts affecting Canada's tourism strategy. For all these reasons, common sense should again make the government reconsider its decision, or else propose a more effective plan to consolidate the tourism industry, which really needs it.
Robert Bouchard Bloc Chicoutimi—Le Fjord, QC
Mr. Speaker, I too would like to congratulate the member for Joliette for his explanation and presentation on Bill C-40. I will not speak directly to the bill, but rather will deal with the GST.
The Bloc Québécois has intervened on this subject in the House on many occasions. When the Conservative government was in opposition, it was in agreement with us that the GST related to school transportation should be refunded to school boards.
In Quebec, this matter concerns 26 school boards, and in my region the Lac-Saint-Jean school board would be able to look forward to receiving about $300,000 if the GST were refunded.
I would like to know what is the justification and motive behind the government’s position in refusing to apply a judgment rendered by the court that orders the government to refund GST to school boards in Quebec and in Ontario.