Bill C-62 (Historical)

Provincial Choice Tax Framework Act

An Act to amend the Excise Tax Act

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.

Provincial Choice Tax Framework Act

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I want to thank the member for being so clear about the effect on ordinary families.

One of the other effects this legislation will have in British Columbia is that it will end the exemptions that were improving environmental behaviours. Things like bicycles are now going to be taxed for the first time in 30 years in British Columbia, and things like insulation and energy star windows and doors and refrigerators.

How can we stand by when that kind of policy change is going to be possible because of this legislation?

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, it affects the environment and environmental legislation. It also affects community hockey. What could be worse than an attack on hockey in this country?

As many of the minor hockey associations are realizing, they are going to have to spend tens of thousands of dollars more to access ice time. Is that absurd or what, that in British Columbia and Ontario the Conservatives are even attacking hockey through this HST?

They simply have gone low beyond belief. They simply do not understand why this is such a hated tax, but they do understand it is hated and that is why they are invoking closure in the most fundamentally anti-democratic way. They are trying to ram the whole thing through this week and are hoping that British Columbians and Ontarians are going to forget.

We are not going to forget and Ontarians are not going to forget. By targeting hockey, environmental programs and everything else, they will suffer the consequences.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I will be sharing my time with my colleague from Vancouver Kingsway.

I rise to speak against the implementation of the HST by the Conservative government and the rush to push the HST legislation through with the help of the Liberal and Bloc opposition parties.

We should really be debating measures that would actually help people. While workers from Nortel watch their pensions evaporate at the same time as the executives of the company receive ludicrous bonuses, while foreign ownership wages attacks on the workers of the Canadian mining industry, and while pulp and paper producers reel from body blows inflicted by a government that refuses to stand up to unfair trade practices in the United States, we debate saddling the average consumer with a tax bill to replace the revenue lost to irresponsible corporate tax cuts.

It is obvious that the NDP is the only true opposition party in this place. We are the only party willing to stand up for Canadians on the issues that matter most to them. If some are wondering why we are opposing the HST and its fast-tracking, let me tell them why. It is because it is the wrong tax at the wrong time. It is because people continue to feel the impact of an economic downturn and do not need another burdensome tax.

Families, laid off workers, people on fixed incomes, students, pensioners and especially single women pensioners, who are some of the poorest people in Canada, will now have to dish out more of their limited incomes to buy basic necessities, or do without them.

While Ontarians and residents of B.C. receive a bigger tax hit on everything from haircuts to funerals, big corporations walk away with an additional $4 billion in tax cuts.

Do we really think that corporations like Scotiabank, which boasts a quarterly profit of $872 million and a CEO who is paid $7.5 million, should get additional tax cuts while people in northern Ontario will have to pay an average of $330 more for gas? Gas prices in places like Wawa, Manitouwadge, White River, Hornepayne, Elliot Lake, Blind River, Nairn Centre, Kapuskasing, Hearst and Smooth Rock Falls border on the insane and now will be 8% more.

There is no recognition from the government that the cost of living in northern Ontario is much higher than in the south, which means that the impact of this tax grab will be disproportionately larger among northerners. Does that seem fair or equitable? Another reason we are against the implementation of the HST is the shirking of Canada's statutory, contractual and common law obligations to consult with first nations.

First nations will be impacted greatly by the implementation of this blended tax. They are currently some of the most marginalized, vulnerable and poorest people in Canada. In Ontario, the point of sale has proven beneficial for them and their ability to better provide for their families while on very limited incomes. Having gone through years of this kind of treatment at the hands of the federal Liberals, first nations had hoped they would finally get a government that would address these inequities affecting first nations. This is certainly not the case.

Earlier today, I shared a message from Chief Franklin Paibomsai. For the record, I would like to add a few more of the names of those who sent me similar messages from Birch Island on beautiful Manitoulin Island, these being Kyle McGregor, Gabriel Paul and Valerie McGregor. As mentioned yesterday, Grand Council Chief Patrick "Wedaseh" Madahbee of the Anishinabek First Nation has written government officials to raise objections on behalf of the approximately 52,000 people within 42 first nations communities in Ontario and other first nations people in Ontario. They are outraged by the government's violation of statutory and contractual rights to consultation.

I would like to remind the government that it is not only first nations people who will be impacted by the removal of the point of sale tax exemption. Ontario farmers, who are already facing a very difficult time, will also be impacted. Farmers currently present their farm organization card and sign for the exemption. Not under the HST. They will now have to fork out taxes ahead of time and hopefully will receive some of those back at tax time.

I just want to backtrack a little bit and talk about first nations again. I have a couple of letters I would like to read from some of my first nations communities.

The following letter is from Roger Boyer:

It is our hope that you are standing strong with your Anishinabek voters against this colonial HST. Remember us when you vote and the enormous impact it will have on your Anishinabek population and other individuals who will be impacted as well.

He signs it, “I.e. Disabled”, because he is disabled.

I have another one here from Peggy Domingue, the health care coordinator of the Chapleau Cree Health Services:

I just wanted to go on record to object to the proposed HST tax. I would also ask for your support in protecting our Aboriginal Treaty rights and for your vote against this tax.

Thanking you in advance for your assistance in this matter.

Peggy, you can be reassured that the NDP will be voting against this tax.

I have another one from Chief Irene Kells of the Zhiibaahaasing First Nation on beautiful Manitoulin Island:

On behalf of Zhiibaahaasing First Nation, I wish to express to you, as Chief of our community, our opposition to the Ontario-Canada proposed Harmonized Sales Tax (HST).

Our community, alongside with most other First Nations people in Ontario, have treaty and Aboriginal rights to tax exemption. The HST, as proposed, takes away that right. This new system does not provide for point of sale tax exemption for our people-which currently exists within the Ontario Retail Sales Tax system. All purchases made by First Nations people are potentially taxable especially if the purchased goods are not delivered to the reserve.

We have voiced our concerns to both the Province and Canada-calling on them to work with us in finding acceptable resolution to this; in essence to maintain the point of sale tax exemption.

But the reactions and/or inactions are extremely disconcerting to us on many levels.

First of all our communities were never consulted before Ontario and Canada entered into the agreement to negotiate the new system-Integrated Tax Co-ordination Agreement-CITCA.

Furthermore, the impacts of HST will hit our communities and citizens hard.

Many of our people live in poverty or close to it and with HST in place as proposed their struggle will be endured even more.

Impacts will be similar among non-First Nations people-especially those on fixed incomes-lower to middle class families. A single sales tax system will now see goods and services taxed, that weren't before, ie: gasoline, heating fuels, tobacco, taxi fares, fast foods, professional and personal care services-essentially what most people need or use every day.

Again, on behalf of Zhiibaahaasing First Nation, I express our opposition to the HST and we will do everything necessary to stand alongside our brothers and sisters province-wide in voicing our opposition-standing up for our rights.

Please find enclosed a Band Council Resolution which speaks of our community's unity against the interference of tax exemption rights for our people.

It is unfortunate that our people are yet again, forced to defend our rights against governments who chose to ignore them.

Chief Irene Kells can rest assured that the NDP is doing just that today.

The Conservatives would have people believe that they are the defenders of the tax. Let us look more closely at the NDP and Conservative records on sales taxes.

In 1990, the Conservatives, under Brian Mulroney, passed the GST in the House of Commons by a vote of 144 to 114. The NDP members voted against the GST.

In 1991, the Conservative federal government entered into an agreement with the Premier of Saskatchewan, Grant Devine, to harmonize the GST with the provincial sales tax.

When he was elected as premier of Saskatchewan, the first thing Roy Romanow did was announce that he was doing away with tax harmonization.

In 1996, the Conservatives backed the Liberal plan to harmonize the GST with the PST in Nova Scotia, New Brunswick and Newfoundland and Labrador.

The NDP voted against that harmonization.

By the way, the government responsible for the largest tax reduction in Canadian history is the NDP.

Under an NDP government, Saskatchewan's PST went from 9% to 5%, a 44% reduction. This is an even bigger reduction than Stephen Harper's two-point decrease in the GST, which amounts to a 29% reduction.

I know my time is just about up. I do have a lot of other letters that I will read, but I am sure I will have time to read them during questions and comments.

[The Deputy Speaker, Conservative, Andrew Scheer]

I will just remind the hon. member not to use proper names but titles or riding names when referring to members in the House. I believe I heard the proper name of the Prime Minister. I know the member will try to avoid that in the future.

[Jeff Watson, Conservative, Essex, ON]

Mr. Speaker, I listened intently to the member's speech. She talked about the insane price of gasoline in the northwest part of Ontario.

Today Bill C-311 passed out of the environment committee and went back to the House. That is the NDP's climate change bill. Experts told us that would peg gas at about $2.50 a litre, about triple the price of gas in Ottawa today.

I wonder if the member is as concerned with that and if she has been as honest with the same people on fixed incomes about what the NDP's climate change bill will do as she has been about what she thinks the effects of the HST will be.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I am glad that the climate change bill is finally coming back to the House because the government has not done anything to move it forward. It is coming back to the House but it is not going to be passed in time for the Copenhagen conference.

Again the member is trying to mislead the public with regard to the price of gas. We are not misleading the public because we see what is going on. Let me read a couple more letters:

I'm writing to express my opposition to Bill 218, Ontario Tax Plan for More Jobs and Growth Act, 2009. Homebuyers and sellers will pay 8% more on legal fees, appraisals, real estate commissions, home inspection fees, moving costs, gasoline, personal and professional services, plane tickets, vitamins and cellphone charges. It will impact my family's quality of life in a negative way by taking more of our hard-earned money to fund government initiatives.

That is from Carol Rott, who is a real estate agent. She is concerned because this will affect her income.

I will wait for the next question before I read another letter.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Speaker, I would like to thank the hon. member for her very thoughtful presentation, particularly on behalf of the first nations of Canada.

I would like to bring to the attention of the House, if members did not pay attention to the latest Auditor General's report, a series of reports by the Commissioner of the Environment and Sustainable Development. The commissioner identified a serious lack of attention by the federal government in addressing potential impacts to first nations water sources due to the lack of attention to waste management. The Commissioner of the Environment and Sustainable Development and the Department of Indian Affairs have identified serious problems with the lack of legislation to protect aboriginal safe drinking water.

I wonder if the member would speak to the fact that if we actually provide the opportunity to the people of Canada to discuss this proposal, including the first nations people, perhaps they would like to provide us with their advice on how we could better spend this $8 billion. Perhaps it would be by providing safe drinking water to all Canadians.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, certainly there is a better way to spend those dollars that are being advanced to the provinces to implement the HST.

There are many communities, especially first nations communities in northern Ontario, that do not have schools. Some of them still are having some difficulties with their water systems. All of them are in need of affordable housing that would house one or two families instead of three or four families.

Let me quickly read another letter.

A definite “NO” to Harper's Conservative HST July 1--

[The Deputy Speaker, Conservative, Andrew Scheer]

Order. I will just remind the hon. member that we cannot do indirectly what we cannot do directly, even when we are reading a quote.

I will take this opportunity to try to get one more question in. The hon. member for Scarborough Centre.

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, the member for Algoma—Manitoulin—Kapuskasing read letters and then talked about no consultation and what is going to happen with the first nations people, and she is right.

I am not here to defend the current government, but for the sake of transparency and democracy, the question is, why is she not asking her provincial counterparts to do the consultations, to do the town hall meetings, to do all that is needed to consult people? After all, for another time, it is up to the province to decide whether it wants to implement this tax. The Conservative government is simply making a proposal to Ontario and British Columbia. They can say no if they wish to.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, Bill C-62 makes this very clear. We are debating this bill in the House today because it is the responsibility of the federal government at this point to move this forward.

The Liberals are the ones to talk because over and over they failed to consult properly with first nations; otherwise, we would not be in this situation.

I just want to finish this letter:

A definite “NO” to [the Prime Minister's] Conservative HST July 1, 2010 tax. Canadians and pensioners are paying too high taxes. No more.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, it is truly an honour to stand in the House and speak against what I think is one of the most regressive pieces of legislation that has been put forward in Parliament this year. The reason it is a real honour is that only occasionally in politics can one discern when a measure that has been proposed by government is roundly disliked and opposed by the population that we come here to represent.

I can tell the House, as a member of Parliament from British Columbia, one of the two provinces that is about to have this HST imposed on them at the hand of the Conservatives with the help of the Liberal Party of Canada, the province that I represent, British Columbia, is absolutely overwhelmingly opposed to this measure.

The other thing is that in a democracy, the people are always right. In this particular case the people are not only right, in that a vast overwhelming majority of people are opposed to it, but they actually understand very well the reasons why this tax is bad policy and is bad for them. I am going to go through some of those reasons.

The number one reason this tax is bad is that it will hurt consumers. Context is everything. Think of the timing. Right now we are in the middle or perhaps the late stages of a recession, when our economy is operating at approximately two-thirds of its effectiveness. Many people are unemployed. Many people are worried about their paycheques. They are worried about their jobs. They are worried about their pensions. Businesses are having trouble as well. What happens? We bring in a tax that is going to shift the tax burden of this country from corporations on to consumers.

Putting aside political rhetoric in the House, which is always a difficult thing to do, I have heard members on the other side of the House say that they are the party that champions tax cuts. They say that we are the party that is always in favour of tax increases.

Let us tell the truth about this tax. This tax is a tax increase. The HST represents the addition of a tax on the people of British Columbia. I will tell the House why. While harmonizing the GST with the provincial PST, as that is being implemented by the government , that combined tax is now going to apply to many goods and services that previously were not subject to the PST. That means many dozens and dozens of goods and services in British Columbia that are not subject to the PST will in fact be subject to the PST after July 1, 2010.

I am going to list some of them: restaurant meals and catered foods, snack foods, prepared foods and heated foods, school supplies, taxi fares, movie and theatre tickets, accounting services, veterinary care, classes for yoga, dance, cooking and martial arts, membership fees for clubs and gyms, acupuncture and alternative medicine, haircuts, repairs to home appliances, laundry and drycleaning, carpet and upholstery cleaning, janitorial services, car washes, local residential phone service, basic cable TV service, new homes over $400,000, vitamins, dietary supplements, even the cost of a funeral.

Here is the truth. The truth is that the HST represents a tax increase of 7% on British Columbians on all of those goods and services. My friends opposite do not want to acknowledge that. They just want to ignore that fact and use political rhetoric, but that is the truth.

We have to ask ourselves, at a time when Canada is in a recession, when middle and working class families across the country, particularly in British Colombia are struggling to stay ahead, is this the time that we should be making a comprehensive list of goods and services, like the one I just read out, more expensive? I do not think so.

Number two, this tax is going to hurt business. It is not just me who is saying this. I have gone to public fora in British Columbia and I have heard representatives from organizations as diverse as the British Columbia Restaurant and Foodservices Association, the British Columbia Real Estate Association and representatives of small business associations of every type. They have made it very clear that the HST is bad for their business. It is bad for small business. Why? They know that the consumers that they count on to patronize their businesses and keep them healthy will not be able to do so in the future to the same degree that they are doing now.

The government has talked about how the HST will reduce paperwork. Yes, it may in fact do that. It may reduce certain inputs. Yes it may in fact do that. However, the very best measure one can take for a business and what businesses depend on is having customers. Measures that actually attack a customer base, and these are the types of retail businesses that count on healthy customer bases, will suffer as a result of the HST. That is a bad thing for our country.

Number three, this tax represents an unfair tax shift.

Again, if we put all politics aside and just tell the truth about tax policy in this country over the last 20 years, the numbers are absolutely clear. There has been a complete tax shift from corporations on to individuals. That is a fact.

Members in this House who want to dispute that should bring forward their numbers and let us have a debate on that. But that is the truth. It represents a philosophy that I say is outmoded, that began in the early 1980s with Ronald Reagan and Margaret Thatcher. It is trickle down economics, where if the tax burden on large corporations is reduced, then what they will do is magically cut their prices and those benefits will flow right down to the consumer.

Let us look at the evidence. Over the last 25 years in North America, and Canada in particular, the inequality gap between the wealthy and the poor has grown dramatically. The proposed so-called benefits of giving tax breaks to the wealthy and large corporations because that will trickle down to all of us has not materialized. In fact, it has been the exact opposite, just as New Democrats said would happen in the early 1980s, and we say it again in 2009.

Number four, this tax is a regressive tax.

What is a regressive tax? A regressive tax is applied to someone regardless of the person's income. On July 2, 2010, a poor, single mother will walk into a store in British Columbia and she will pay the same 12% tax on a good that a billionaire walking into that store will pay. That is unfair. It is bad economic policy, but most of all, it is unjust. That 12% to a person making $22,000 a year represents a much larger percentage of the person's income than that 12% does for someone making $300,000 a year.

The Conservative government, of course, carrying on the tradition started by the previous Liberal government, has presided over the flattening of our tax system, the regressing of our tax system over the last 25 years. It has made Canada a much more unfair and a much more unequal place today.

We cannot sit and ignore the reality that people make less in real dollars today. Middle-class earners or working-class earners make less money in 2009 than they did in 1999. That is not progress. However, I can say that large corporations and the wealthy make disproportionately more money today than they did in 1999. That is a tragedy for our country. It is going in the wrong direction.

The fifth reason that this tax is a bad idea is that it is born of dishonesty.

I was in British Columbia in May 2009 when journalists asked Premier Gordon Campbell directly, “Are you considering bringing in an HST?” I was in British Columbia when the minister of finance in British Columbia, a member of the Liberal Party, was asked whether the party was considering bringing in an HST. What did they say? They said, “No”. That is an act of political dishonesty. If it is such a good idea to bring in an HST, if there are arguments that they think will convince the majority of the population that it is a good policy and should be brought in, why did they not have the guts to talk about it?

That dishonesty has been compounded by the federal government. I sit in this House every day and watch as the Minister of Finance stands and says that this is just a provincial issue, that it is not the federal government.

I have a copy of the memorandum of agreement signed between the federal government and the Province of B.C. It says:

...both parties will make substantial investments into implementing the BCVAT....both parties commit to using their best efforts to negotiate a new Canada-British Columbia Comprehensive Integrated Tax Co-ordination Agreement.

It says:

Subject to both Parties having signed the Canada-British Columbia CITCA...will work toward the imposition of the proposed BCVAT....

...Canada will make payments totalling $1,599 million to British Columbia conditional on the execution and ratification of the Canada-British Columbia CITCA by British Columbia.

It is an act of political dishonesty for that side of the House to stand and say that this is just a provincial decision. This is a decision made by the Conservative government and it goes back to 2006 when the Minister of Finance 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--

[The Deputy Speaker, Conservative, Andrew Scheer]

Order. Questions and comments. The hon. member for Saskatoon—Wanuskewin.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Mr. Speaker, I listened with great interest to my colleague and to the previous speeches by other members of his party. It appears that many of them have a great passion for provincial issues and are fairly knowledgeable, I would concede, as well. I know the member has not been long in the House, but he may want to take his speeches and some of the issues he shared to the provincial realm and make that argument before the public there, the good citizens of British Columbia.

The member would also be aware that if it so chooses, the Province of British Columbia will have discussions in terms of exemptions or a zero rate on certain things. He listed a number of things; it is a possibility, within the latitude they have, to actually eliminate or to have an exemption for some of the things the member listed.

Because the member has great concern and knowledge and understanding of provincial issues and of the impact, and because this is primarily a provincial issue, I want to know if he will tender his resignation in this place to go to pursue provincial politics before Christmas, or when the House resumes in February?

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Speaker, the main supposition of that question is totally false, and in fact it is ridiculous. The hon. member says he listened to my speech but, with respect, I question that, because I have gone through a number of points that make the facts clear, and this is not just a provincial issue. The HST is the product of an agreement between two parties, the federal government and the Government of British Columbia.

I have another quote from the Minister of Finance: “We are 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”. That is the finance minister, Jim Flaherty, in a speech to the C.D. Howe Institute on April 10, 2008.