Provincial Choice Tax Framework Act

An Act to amend the Excise Tax Act

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


Jim Flaherty  Conservative


This bill has received Royal Assent and is now law.


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

This enactment amends the Excise Tax Act (the “Act”) to implement, effective July 1, 2010, the new fully harmonized value-added tax framework in Ontario and British Columbia. It also facilitates the new framework to accommodate any province’s decision to have the provincial component of the harmonized value-added tax under the Act apply in that province by achieving a common understanding with Canada in respect of such a new framework, including the provision of rules and mechanisms to ensure

(a) the proper imposition of the provincial component of the harmonized value-added tax in respect of that province;

(b) the proper application of any element of provincial tax policy flexibility contemplated under the common understanding, including rate flexibility for the provincial component of the harmonized value-added tax, rebate flexibility in respect of the provincial component of the harmonized value-added tax and the temporary recapture of certain input tax credits in respect of the provincial component of the harmonized value-added tax;

(c) the proper functioning and application of the Act in all respects, including provisions flowing from the provincial tax policy flexibility contemplated under the common understanding and the addition of every province that chooses to join the new framework; and

(d) the proper administration and enforcement of, and compliance with, the Act.


All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.


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

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:15 a.m.
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Macleod Alberta


Ted Menzies ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I am pleased to begin second reading of the provincial choice tax framework act. I will keep my comments short and as succinct as possible because we have heard time and time again how important this is to the provinces that they be allowed to make their choice as to how they collect their taxes. They are asking us to facilitate this as quickly as possible.

As I have said in the House before, the provincial choice tax framework act is a very straightforward piece of legislation that simply confirms a fundamentally basic principle: provincial taxation is a provincial responsibility. As such, each province must have the independence to decide whatever form of taxation they deem best for their own jurisdiction's economy. The provincial choice tax framework act enshrines federal Parliament's belief that provincial taxation is indeed a matter of provincial autonomy. It facilitates maximum provincial choice on matters of provincial taxation, including the decision of a province to transition to harmonized value-added tax.

As a point of overview, I remind members that in the past provinces in Canada have been allowed the autonomy to adopt the model of provincial taxation they so desire. That has meant that various provinces in Canada have been permitted without restriction to adopt varied models including in relation to their sales tax. At present five have sales tax, four provinces have a value-added tax or a variation of a value-added tax and one province has neither. The key point to emphasize here is that each province has had complete autonomy in this decision, free of federal restriction, to implement the model they consider most appropriate for their economy: a sales tax, a value-added tax, or neither.

As I have mentioned previously in this chamber, our government fully supports provincial autonomy in matters of provincial taxation. What is more, we strongly believe provinces should all be treated in the same way with respect to making such a choice. Put another way, each province should have the same rights as other provinces when making choices regarding provincial taxation, including the ability to freely adopt a harmonized value-added tax.

A little over a decade ago, under the administration of the then Liberal government, I remind this chamber that we saw this concept in action. Nova Scotia, New Brunswick, Newfoundland and Labrador each made the decision to transform their model of provincial taxation. Accordingly, the then federal Liberal government facilitated those provincial decisions to harmonize their new value-added taxes with the federal value-added tax.

I note the newly elected NDP government in Nova Scotia has not publicly denounced or sought to repeal the province's harmonized value-added tax since forming government. We believe and have stated so consistently, since forming government in 2006, that the exact same treatment should be equally afforded to all provinces. Indeed, the provincial choice tax framework act will ensure that going forward all provinces will have that ability and have the freedom to make decisions on matters of provincial taxation with greater certainty.

As we are all well aware, two provinces have recently declared their intention to alter their model of provincial taxation. First, on March 26, 2009, the province of Ontario, through its minister of finance, Dwight Duncan, announced the following and I will quote at length to provide the full context of this provincial decision for the benefit of our colleagues in this House:

Ontarians have a great track record of success when we work together to build a better future for our children. Our goal is a better future powered by a stronger economy. The next step we must take to get there is tax reform.

Specifically, today we propose three significant tax changes. First, a single value-added sales tax for Ontario. Second, permanent personal tax relief and three direct payments to Ontarians as we transition to a single sales tax. Third, comprehensive corporate tax reforms to permanently and significantly reduce business taxes for large and small enterprises across the province.

More than 130 countries have adopted a value-added tax. Every other country in the Organisation for Economic Co-operation and Development (OECD), save the United States, has a value-added tax — as do four other Canadian provinces. It is the way modern, globally competitive jurisdictions do business.

The Ontario Chamber of Commerce, many experts, research groups and sector associations have called on us to reform our tax system and create a single provincial–federal sales tax.

Over the next 15 months, we are planning to implement a single provincial–federal sales tax of 13 per cent. The single sales tax would begin July 1, 2010.

That is a long quote, but it is all attributed to Dwight Duncan, the finance minister of Ontario.

Second, on July 23, the province of British Columbia announced the following, and I quote at length again from a news release of that day, to preserve the province's complete rationale for its decision:

British Columbia intends to harmonize its provincial sales tax with the federal Goods and Services Tax effective July 1, 2010, to boost new business investment, improve productivity, enhance economic growth, and create jobs.

And I quote here Premier Gordon Campbell:

This is the single biggest thing we can do to improve B.C.'s economy.

To continue on with the quote from the news release:

This is an essential step to make our businesses more competitive, encourage billions of dollars in new investment, lower costs on productivity and reduce administrative costs to B.C. taxpayers and businesses. Most importantly, this will create jobs and generate long-term economic growth that will in turn generate more revenue to sustain and improve crucial public services. The PST is an outdated, inefficient and costly tax, some of which is hidden in the price of goods and services and passed on to and paid by consumers.

That was a quote from the finance minister, Colin Hansen, specifically. It continues:

Evidence from the Atlantic provinces showed that the hidden tax is removed very quickly, with the majority of the savings passed through to consumers in the first year.

More than 130 countries, including 29 of the 30 OECD countries, along with four Canadian provinces, have adopted taxes similar to the HST, called value-added taxes...Implementation of a single sales tax in B.C. would immediately reduce costs and enhance the competitiveness of B.C. manufacturers and exporters both nationally and internationally and bring B.C. into line with what is viewed as the most efficient form of sales taxation in the world.

Once fully implemented, the single sales tax will make B.C. one of the most competitive jurisdictions in the industrialized world for new investments.

Once again that was a long quote.

Let me underscore, as both those lengthy statements from each province in question have clearly set out, these were very deliberate decisions; decisions both provincial governments deemed necessary for their very specific economic reasons.

What all members of this chamber need to acknowledge and appreciate, and what serves as the main objective behind the provincial choice tax framework act, is that provincial governments must be able to make the decisions they believe necessary regarding provincial taxation, and they should be able to do so without federal interference.

We are in the unique position in this Parliament of having former premiers of both British Columbia and Ontario as sitting members; albeit, on opposition benches. It is instructive to consider what they, as former premiers, have publicly declared on this matter.

Listen to the former premier of British Columbia and current Liberal member for Vancouver South. He said, “Ultimately it is the decision of the provincial government whether or not to do HST”.

Here is another quote from the former premier of Ontario and current Liberal member for Toronto Centre , who said, “It's up to provinces to decide whether they want to proceed with a harmonized tax. It's a decision for them, not for us”. I will quote and highlight again that last portion: “It's a decision for them, not for us”.

In that spirit, let me quote, for the benefit of the chamber, statements made by the premiers and finance ministers of both British Columbia and Ontario on the question of the right of provincial governments to make decisions about provincial taxation.

In the words of B.C. Premier Gordon Campbell:

This is a matter of provincial autonomy. It is simply saying that British Columbia and Ontario will get the same kind of opportunities they have had for Nova Scotia, New Brunswick, and Newfoundland and Labrador.

Listen to his finance minister, Colin Hansen:

The question MPs have to ask themselves is not whether they like or don't like the HST, it's whether or not they will honour a request from the provinces of B.C. and Ontario.

Here is a quote from Premier Dalton McGuinty:

--I am very confident that the government of Canada will honour the wishes of the people of Ontario, as expressed by their duly elected Parliament, their Legislature and their government....I expect that the result will be respected by the people of Canada, as expressed through the government of Canada....I think members of Parliament in the House of Commons understand that Ontario in particular has suffered greatly. Our families and communities have suffered greatly as a result of this global economic downturn. They know that we need to take strong action. They know that we need to be rather dramatic in terms of the reforms that we put in place. They know that we've given long and hard thought to what needs to be done, so I'm confident that we'll have their support, as I say, to create those 600,000 jobs for the people of Ontario.

As Ontario's finance minister, Dwight Duncan, succinctly remarked:

I fully expect and hope the Parliament of Canada will honour the wishes of the duly elected governments of Ontario and British Columbia.

Essentially, what British Columbia and Ontario are asking for is not complicated. It is simply respect, that we respect provincial taxation and modifications to it that provincial governments may deem necessary, which are ultimately their responsibility, equally and without restriction.

Through the provincial choice tax framework act, we respect that principle and confirm the autonomy in this matter, specifically the move to a fully harmonized value-added tax. The provincial choice tax framework act will ensure that, through amendments to the Excise Tax Act, the transition to a harmonized value-added tax for provinces that choose such a course of action is done in an equal and consistent manner.

This technical tax legislation will enshrine a provincial choice tax framework that will be equally available to all provinces. The provincial choice tax framework act specifically includes: first, the imposition of the provincial component of the harmonized value-added tax in respect of that province; second, the application of any element of provincial tax policy flexibilities, including rate flexibility for the provincial component of the harmonized value-added tax; and finally, the proper administration and enforcement of and compliance with the act.

This technical tax legislation requires timely parliamentary approval to provide certainty to businesses and individuals. I note that both the governments of and the businesses and consumers in British Columbia and Ontario have already committed significant resources toward and planned for this key economic reorganization.

For instance, BCE has already publicly announced its intention to accelerate its investment in Ontario for 2010, based on the Ontario government's implementation of a harmonized value-added tax.

To quote George Cope, President and CEO of BCE:

As has been the experience in other provinces in which Bell operates, savings from a single sales tax structure will accelerate our investment in Ontario. Fewer dollars going toward taxes in 2010 mean more dollars that Bell will reinvest in our networks and service in the province next year.

We cannot delay and allow uncertainty to creep in, as it would be hugely unfair to business, unfair to provincial governments and their employees, unacceptable to consumers and unhelpful to Canada's international competitiveness.

To repeat, this is not a difficult decision. Either Parliament supports the right of provincial autonomy regarding provincial taxation and provincial freedom to move to a harmonized value added tax, such as occurred in Nova Scotia, New Brunswick and Newfoundland and Labrador before; or it advocates unequal treatment and federal interference in provincial jurisdiction.

The provincial choice tax framework act would allow Parliament to make that decision. A timely decision would avoid major uncertainty for businesses, consumers and provincial economies.

I strongly urge this chamber to ensure that all provinces have the autonomy to choose the model of taxation they deem necessary and do so on an equal basis going forward under the framework laid out in this bill.

This is not complicated. I urge the House to decide in a timely manner.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:35 a.m.
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Brian Masse NDP Windsor West, ON

Mr. Speaker, the speech by the parliamentary secretary was very interesting and reminded me of a couple of things. It reminded me of the Bart Simpson “I didn't do it” skit and the movie Naked Gun, where Leslie Nielsen is standing in front of a fireworks factory he has blown up and all of the fireworks are going off and he says, “There is nothing to see here”.

This is a remarkable implementation of a tax on Canadian citizens that can only be facilitated by this chamber. The parliamentary secretary should understand that we are going to have to borrow Canadians' own money to put this tax back onto them.

I had the Parliamentary library do some research and it estimated that the $5.9 billion payout or buyout that we are providing British Columbia and Ontario over 10 years to do this will actually cost us $9.9 billion over those 10 years at the annual borrowing rate of the Government of Canada. That estimate comes from the Parliamentary research service.

Therefore, we are borrowing Canadians' own money to bring in a new tax on top of them. This is only being facilitated by the actions of the government here today.

We heard testimony yesterday at that industry committee from the tourism sector. There has been no sector study done on the effect of this tax. If one looks at Ontario and British Columbia, we already have a declining rate of tourism right now. The parliamentary secretary noted that other nations in the world have this tax, but not United States, which is our number one source of tourists. The tourism industry is predicting right now that the tax will result in a loss from that market, and has done its own independent studies showing that.

Why is the government not studying the industries that will be affected by this new tax, which only it is capable of bringing in?

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:35 a.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, it is a pleasure to hear the NDP stop laughing and giggling, which they did all through my presentation. When we are dealing with such an important issue, it is pretty sad that the NDP stands up and ask questions, feigns indignation, and then its members sit down and laugh and giggle among themselves. This is not a laughing matter.

We have been asked by the provinces of Ontario and British Columbia, in all seriousness, to pass this quickly. It is very simple legislation. I know the NDP does not quite have the financial capacity to understand what we are doing, but I would encourage those members to stop laughing and giggling about such a serious matter.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:35 a.m.
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Paul Szabo Liberal Mississauga South, ON

Mr. Speaker, I have two questions for the parliamentary secretary.

The first has to do with the memorandum of agreement with the Province of Ontario. Near the end of the agreement there is reference to the appointment of a panel that would be put together to deal with potential changes. One of those is a potential change to the revenue allocation framework, such as replacement by a system that would provide distribution of revenue based on actual sales of goods and services.

I wonder if the member could explain to the House why that has not been included in the enabling legislation.

The second question has to do with the question of the haste with which this bill has been dealt with. The parliamentary secretary will know that the Province of Ontario has announced that, as part of its implementation of a harmonized tax, it wants to pass its legislation by Christmas so it can implement a personal income tax cut by January 1. None of that can happen unless this legislation is passed, as I understand it.

Is it part of the deal with the Province of Ontario that the Government of Canada pass Bill C-62 before it rises for Christmas break?

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:35 a.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, as I have said all along, there is urgency to this. In my speech, I referred to three components that were announced by the finance minister of Ontario, those being the personal tax cuts the hon. member has mentioned.

January 1 is the date. We are fast approaching that date and it is important that we move forward with this. There was a formula set out for the process of reimbursing those provinces that wish to move forward with their own harmonized value-added tax. We are following through on that same formula.

The provinces, within their own jurisdiction, have certain latitudes as to how they apply it, but they cannot apply it until we pass it through the House. Therefore, I would urge expeditious passage of this.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:40 a.m.
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Maurice Vellacott Conservative Saskatoon—Wanuskewin, SK

Mr. Speaker, I think members around the House are fairly aware of the rich tradition and heritage of this particular party with respect to acknowledging and recognizing provincial jurisdiction. The member, who has been involved in public life for a number of years, is obviously leading the charge with respect to financial issues.

With respect to this matter, he is basically affirming the right of provinces. That is basically what it is. It is not about taking the initiative as much as allowing them that prerogative within their own jurisdiction. I think the member could probably speak to us, having had business interests over the years, about what happens in business when there is uncertainty out there. Certainly, in respect to this, when there is uncertainty about a harmonized value added tax, there is an unfairness to business and provincial governments and their employees that is harmful to jobs and unhelpful to Canada's international competitiveness.

One way or other, this needs to be clarified. That is the nature of the framework. Our government likes to be consistent with respect to equalization and harmonization so there is consistency and not these one-offs with provinces along the way.

If the member could respond to the whole matter of uncertainty in business climates and what that does, that would probably be helpful to our discussion.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:40 a.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, that is a very relevant question. Canada is caught up in this global recession. We have tried to prepare Canadians and Canadian businesses for it by reducing their taxes. We need to be able to provide an environment where our Canadian companies can be competitive.

Some provinces have simplified their tax systems and given assurances to the industries that operate in those provinces. Now we have seen two provinces come to us to ask that we facilitate that equal treatment for them. As I reflected in my speech, the intent is to give businesses the assurance that they will have a simplified tax system so they do not have to fill out two sets of forms, as they have done before.

Those forms have accounted for a lot of excess labour in those companies, labour that can be better used for other topics in their businesses. We need to help companies to be able to compete and help bring us out of this recession.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:40 a.m.
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Nathan Cullen NDP Skeena—Bulkley Valley, BC

Mr. Speaker, the parliamentary secretary is fond of quotations, so I will quote a couple back to him. The member for Bruce—Grey—Owen Sound, from his own party, said:

First, I want to make it clear that this was a change initiated by the Province of Ontario and was not a decision made by the federal government in any way.

Yet in 2006, the finance minister, his boss, said:

The Government invites all provinces that have not yet done so to engage in discussions on the harmonization of their provincial retail sales taxes....

Later, in 2008, the same finance minister said:

....we're also calling on the remaining provinces that have not harmonized their PST with the GST to work with us to accomplish that goal....

He and his party cannot have it both ways. When they are back home, they say it was not their idea, but a provincial one. However, when they are out speaking to the business community and talking to the provinces, they are not only inviting them, as the finance minister did time and time again, to get into discussions with the feds, but are also putting up $6 billion to make it happen.

The provincial governments have said this would not happen without the $6 billion allotted by the federal government. In fact, as my colleague from Windsor said, they are borrowing money from future Canadians to bribe provinces to raise the provincial tax rates and raise taxes on Canadians.

On one side, he is putting two forms of paperwork and filing versus hosing consumers on the other side. How is it possible for them to somehow see this as a grand economic vision for the—

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:40 a.m.
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Ted Menzies Conservative Macleod, AB

Mr. Speaker, I am sure I have said this before in the House, that I will take no lectures from the NDP about reducing taxes. We have tried and tried in this House of Commons to reduce taxes for Canadians, and NDP members have repeatedly said, “No, we want to raise taxes”. I have trouble understanding why they are now questioning provincial jurisdiction when all they want to do is raise taxes on Canadians.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:45 a.m.
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John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, I can be relatively brief and concise today because I think we have gone through these matters a number of times and the situation is really very simple, that is to say, it is a matter of provincial jurisdiction. I could just sit down at this point because it is that simple, but I will speak for a little bit longer.

The bill creates the framework for Ontario and B.C. to harmonize their provincial sales taxes with the GST. Beyond that it will create a framework for any other provinces that wish to harmonize their taxes to do so as well.

There is a simple principle contained in the bill, the idea that provinces have the right to choose how they tax their citizens. Specifically, the bill creates a framework for Ontario and B.C. to harmonize their provincial sales taxes with the GST, as they have chosen to do. I do not understand why this simple point is so difficult for the NDP to understand.

This is within provincial jurisdiction. It is up to the provinces to decide how they will tax. This is not about whether or not we like the tax; it is a matter of provincial jurisdictions.

It will also create a framework for any other provinces that choose to harmonize their sales tax to do so. As we know, several Canadian provinces have already harmonized their sales tax with that of the federal government, and none of these provinces that have harmonized have ever chosen to reverse their course and de-harmonize the tax.

Nova Scotia chose to harmonize its sales tax, and the federal government allowed it to do so. At the time, the provincial NDP Party vowed that if it were ever elected to government, it would scrap the HST. Believe it or not today the NDP is the governing party in Nova Scotia, and I have not heard NDP Premier Darrell Dexter indicate in any way that his government will de-harmonize its HST. In fact, the Nova Scotia NDP wants to retain Nova Scotia's harmonized sales tax. That is the choice of the Nova Scotia NDP government and we, as federal politicians, should respect the provincial NDP's choice in this area.

This year, as we know, Ontario and British Columbia have indicated their intention to harmonize their respective sales taxes, just as other provincial governments had done during the 1990s.

Today it falls to us, as federal legislators, to decide if we will allow Ontario and British Columbia to harmonize their taxes, the same way that past Parliaments have allowed other provinces to do so. I am talking about provinces like New Brunswick where a Liberal government currently maintains an HST, like Newfoundland and Labrador where a Conservative government maintains an HST, and like Nova Scotia where an NDP government maintains an HST.

The 35th Parliament allowed these provinces to harmonize when they asked to do so. Should we, today, change course and tell other provinces that might wish to follow their lead that it is too late? Should we tell them that they cannot have an HST if they want one?

I would say the obvious answer to that question is no. We must allow them to make their own decisions, and that is why I will be supporting this legislation that allows these provinces, and other provinces in the future, to make a choice regarding what is fundamentally a matter that is inside their own jurisdiction.

Let me give a very brief description of what this bill does. The bill will add B.C. and Ontario, the two provinces that are seeking to harmonize taxes, to schedule VIII of the Excise Tax Act and will set B.C.'s portion of the HST at a rate of 7% and Ontario's at 8%. It is important to note that this is a fundamental shift from the 1990s vision of a single rate across the country, which assumed that all provinces would share an identical rate.

One important shortcoming of this legislation is that first nations in Ontario will be denied the tax exemption they currently enjoy. I have written to the finance minister on this topic, and I have asked him to negotiate a fairer arrangement with the Government of Ontario on this matter.

It is also important to note that some input tax credits will initially be denied under this bill. This denial will apply to large businesses with over $100 million in sales. The input tax credit denials will be phased out over the next five years as the HST becomes a full value-added tax.

To those Canadians who are on the opposition's side of the HST, it should be abundantly obvious that the federal Conservatives have their fingerprints all over this legislation. It was the Prime Minister and his finance minister who encouraged Ontario and British Columbia to harmonize their sales tax.

It was the federal Conservatives who noticed that the two provinces were both facing deficits due to this Canada-wide Conservative recession and who offered them billions of dollars to make the tax change. If they had not done so, perhaps Ontario and B.C. would not have decided to harmonize.

That possibility is of course strictly hypothetical, because the hard reality is that both Ontario and B.C. have in fact decided to harmonize their sales taxes and regardless of their reasons have struck and signed deals with the federal government. That is why, as I said earlier, this legislation is about whether Ottawa feels that provinces have the right to determine how they tax within their own areas of jurisdiction.

I appreciate that some in this House may not like the HST, but I would suggest that if they want to begin prohibiting provinces from working in areas of their own jurisdiction, they should resign from this House and they should run for their provincial legislatures. Otherwise, they should support this bill and its very simple principle that should not be beyond the NDP's capacity to understand, that principle being that provinces have a right to decide whether or not to have a harmonized sales tax.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:50 a.m.
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James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, I certainly welcome the thrust of my colleague's speech. He is absolutely right. This is framework legislation that needs to be in place. Three Atlantic provinces back in the 1990s under the Liberal government harmonized their sales tax and there are two provinces today.

This change to federal legislation is needed to ensure that provinces have the full right to choose whether to harmonize their tax system. I want to compliment him on that aspect of the speech.

I want to ask him a question in a very friendly manner. He is fond of quoting Don Drummond, a good friend of both of ours, with respect to the economy. He talked about the recession made in Canada by the Conservative government. I want to allow him a chance to correct that and say that it was a global synchronized recession that Canada entered into later and in fact was much less affected by than were other countries.

In terms of his speech, I certainly welcome his comments that this legislation is needed to allow provinces to make their own decisions as to whether they want to harmonize with the federal sales tax or not.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:50 a.m.
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John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, let me say that my colleague over there is an excellent chair of the finance committee. As a member, like me, of the 2000 cohort, he is a member of a very select and brilliant group of parliamentarians from both sides of the House who were first elected in the year 2000.

I can hardly hold against him the fact that he made a mistake. I never said a made in Canada recession. My precise words were a Canada-wide Conservative recession. It was certainly Canada-wide. My colleague would understand that. It was certainly a Conservative recession, because last time I looked, the Government of Canada was a Conservative government.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:50 a.m.
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Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, Conservative and Liberal MPs in the House can run on this issue but they ultimately cannot hide, because they are going to have to face the voters' wrath next July 1. To make the argument that somehow the provinces are knocking down their doors to sign into this deal is totally wrong.

The fact of the matter is that in the federal finance minister's budget of May 2, 2006, it said:

The Government invites all provinces that have not yet done so to engage in discussions on the harmonization of their provincial retail sales tax with the federal GST.

There it is in black and white.

As well, in a speech to the C.D. Howe Institute on April 10, 2008, the finance minister said, “we're also calling on the remaining provinces that have not harmonized their PST with the GST to work with us to accomplish that goal of harmonization”.

In fact, in Manitoba there was just a rejection of the overtures that have been made, pressuring the province over the last year.

I would like the member to come clean and just admit that these two parties are getting together over the Christmas holidays, essentially, to sneak this whole deal through the back door with closure and the whole works. We are getting the whole nine yards here.

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:55 a.m.
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John McCallum Liberal Markham—Unionville, ON

Mr. Speaker, the member confuses two totally distinct points.

I said in my speech that the fingerprints of the Prime Minister and the finance minister are all over this legislation. The quotes that he cites are consistent with the fact that the government has, so to speak, been bribing provinces to adopt the HST. They certainly share the responsibility, and I agree with that point.

However, the second and totally different point is that whether it is a good thing or a bad thing, the provincial governments have now come to an agreement with the federal government and have asked Parliament to allow them to have the HST. I do not understand the logic of the NDP denying the requests of legitimately elected provincial governments to allow them to have a tax that other provinces are allowed to have.

The NDP is essentially saying that Nova Scotia, New Brunswick, and Newfoundland and Labrador can keep the HST, but for Ontario and British Columbia, it is too late, and they cannot have it. It is not the role of the federal Parliament to make a judgment as to whether the provinces were right or wrong in formulating this tax policy.

My double point is that yes, this measure was aided and abetted very clearly by the Conservative government, but at the same time, once the provincial governments, duly elected legitimate governments, asked the federal Parliament to allow them to do something in their own jurisdiction—

Provincial Choice Tax Framework ActGovernment Orders

December 8th, 2009 / 10:55 a.m.
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Dominic LeBlanc Liberal Beauséjour, NB

Mr. Speaker, I want to thank my colleague from Markham for his incisive comments on the issue of tax harmonization.

This bill before the House of Commons is a tax measure. The Conservatives spend a great deal of time talking about taxes, pretending that they are interested only in lowering taxes when in fact we have seen in recent times, in recent examples rather massive payroll tax increases in the form of projected hikes to EI premiums.

I am wondering if my colleague, who served as a senior private sector economist, as the chief economist of the Royal Bank of Canada, and who was a distinguished academic before he ran, as he noted, in 2000, to serve in the House of Commons, could perhaps tell us briefly about the negative consequences of potential tax increases and in particular about the Conservatives' payroll tax increase they are planning to impose on Canadians in the form of EI premium increases.