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

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, if someone were to tell someone else on the street that there would be an 8% increase in the cost of a number of services not currently charged any tax, and then took a survey of all of those people, asking them if that were a good idea or how they felt about it, I can only assume that most of the people would say that they really did not want to pay any more tax on something, if it is not taxed already. That, indeed, has been the basis of the argument a number of people have made.

Interestingly enough, the conversations that members have had and the discussions and debate have been about income tax issues in the provinces of Ontario and British Columbia at this time. The conversations are not with regard to Bill C-62 specifically, the bill we are presently debating. It is the nature of this place that if a person can make a link to an issue, they can talk about pretty well whatever they want, because politically it may be more advantageous for them to say some things, but not everything.

That is unfortunate, because the constituents I have heard are not exactly sure what is happening and who is in charge of what. So I thought I would try to explain this to them, because most of us have received a lot of emails from people about a harmonized sales tax, and they are not exactly sure what all of the details are, because the bills that will lay out all of the details have not even been presented yet in the Province of Ontario or the Province of B.C. There are some preliminary pieces of information on the websites of those provinces, which their residents can look at.

The Conservative Government of Canada has entered into agreements with the provinces of Ontario and British Columbia to harmonize the federal and provincial taxes into one tax called an HST. Three other provinces have already done it. The fourth province, Quebec, has done a sort of harmonization; it is not complete and, indeed, there are still discussions going on about whether or not Quebec may be entitled to further compensation for having entered into a quasi-harmonization agreement. Now two provinces want to enter into such an agreement as well.

We have to ask ourselves, why would provinces want to do that? Why would they want to harmonize their taxes, knowing that the issue of taxation is not politically popular? They do not do it because they want to somehow agitate people. There must be a reason. Having done enough research and having looked at the economic analyses and to some of the people who have been involved historically in dealing with consumer taxes like GST or PST, the consensus among the analysts I have looked to, the people who appear regularly before the finance committee and, indeed, some other committees, has been that the provincial sales tax system is a very inefficient system.

It is inefficient because provincial sales tax is charged at each stage of the life of producing a product. That means when someone gets the raw materials, for instance, cutting down a tree, that business of cutting down trees and sending trees to the lumber mill is charged provincial sales tax. The lumber mill will have some other expenses and it will process and produce the trees into two by fours and other building materials.

Those are sold to wholesalers and there is a provincial tax added to them, the same provincial tax. Now the product has been hit three times along the way. Ultimately, it goes from there to where the individual consumer can purchase the wood needed for the project, which is again charged. The provincial sales tax has been charged more than once. It is charged all the way along the line. It is tax on tax on tax.

In fact, if we were to look at the analysis of the final selling price of a product that people purchase in the province of Ontario, we would find, notwithstanding that the provincial sales tax rate is currently 8% in Ontario, that the amount of provincial sales tax in the ultimate price we pay is far greater than that, because it has been applied several times and compounds. There is an enormous amount of tax.

Could anyone imagine if that provincial sales tax were treated the same way the GST is treated? The GST is only paid by the end consumer. It is charged at the first point of production, for instance, in the example that I used, but when the product is sold to the next person down the line, maybe the lumber mill, the seller gets back the taxes paid. The seller has just passed on the 7% and it keeps building up.

However, at the end of the day, the total amount of GST charged on the same product is currently 5%. That is the total amount that people would see in the final purchase price of that product compared with something now that is far in excess of the current provincial rate, simply because there are no input tax credits.

Most of the members here are very familiar with that, particularly the member for Hamilton Mountain. She is on the finance committee and we talk about a lot of these things. She and I know the mechanics of the system and know very well that if efficiencies in the tax system save businesses money, these are is not going to help the consumer very much if the businesses decide to hoard the money and keep it themselves rather than passing it on to consumers.

The only way to address that is to have a competitive economy. There has to be enough competition within the system so that if a competitor is going to pass on more or all of the savings from changes in tax policy, another competing business has no choice but to match those or else lose business to the competitor simply because of the economies of lower pricing.

Therefore, it does make some sense to make the provincial system more efficient and fairer, in fact. We are overtaxed at the provincial level.

However, why now? Many of the members have raised the issue of it being good policy but bad timing.

I do not think anybody is going to dispute the fact that the Province of Ontario is in some very serious difficulty in terms of its economic fundamentals. Its projected deficit is some $24 billion. The unemployment rate in most regions is much higher than the national rate.

The Conservative government has boasted about a stimulus plan that it has committed to but has not actually issued cheques for. It is a matter of, “Here is what we have promised to do and we have promised to do it so many times over and over again”. Eventually projects might get the money. However, before we know it, things are going to lapse and the government is going to say that the project did not get done or that it did not manage to get the money out, and it is just going to lapse.

I am sure this is going to happen. Much of the money that should have been spent and the cheques that should have gone out to approved projects are going to lapse. It will never happen and we will never get the benefit of the job creation that was supposed to happen.

Members will know that, because it also happened in the last fiscal year with the infrastructure funding. I think it was somewhere around $3 billion of approved infrastructure funding that lapsed and never got out. It was approved and ready to go and the government just did not issue the cheques. This is one of the reasons that members have to hold the government accountable on things.

It is easy to use this place and to say that the Province of Ontario has decided that it wants to enter into an agreement with the Government of Canada, which they did. There is a copy of it. It is about four pages long and includes a number of details. This was an initiative by the Province of Ontario directly related to what it can do to create jobs and investments in Ontario to deal with the economic crisis in the province.

We have a system of taxation under our Excise Tax Act that permits the harmonization of taxes. As I indicated, we do have three provinces that have formally harmonized their sales taxes, including all of the maritime provinces. Now two other provinces have decided they want to make their system more efficient and do some other things in conjunction with that, as part of their program for economic recovery in their provinces.

As members would know if they looked at Bill C-62, it does not talk about the tax rate we are going to charge on haircuts, etc. That would be in a bill that would appear in the legislatures of Ontario and B.C. Our bill actually has amendments to the Excise Tax Act, and we would have to have the Excise Tax Act sitting beside us to know what some of these clauses mean.

I went through the clauses that were of interest to me last night, and I think I understand the bill a little bit better. However, I am pretty sure that most members have no idea what is in this bill and what it means, what it means for direct sellers for instance, or what it means in terms of non-taxable items and how the system will deal with those to make sure that things do not slip through the cracks.

The bottom line is that this bill is an enabling piece of legislation. What it does is that it makes the necessary amendments to the Excise Tax Act, so that the agreements the Government of Canada has entered into with Ontario and B.C. can be formalized and those provinces will be able to pass the necessary legislation to conform to the agreed framework in the memorandum of agreement and the Excise Tax Act, as amended by this.

I thought it was interesting that most members wanted to debate closure on Motion No. 8, another instrument that prescribed how we are going to deal with Bill C-62. It basically said that we were not going to allow the normal process to take place; in fact we were going to deal with this whole bill in a day. Is that not outrageous?

We have a situation here where the HST memorandum of agreement—

[The Acting Speaker, NDP, Denise Savoie]

Order, please. I would like to ask the members at the back of the House to take their discussions outside of the House if they wish to continue.

The hon. member for Mississauga South.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, we have a situation now where the governments of two provinces have committed to harmonizing their taxes effective July 1, 2010.

The Province of Ontario, in conjunction with the legislation it is bringing in to harmonize the sales tax, is also concurrently going to bring in income tax cuts and other credits for residents of Ontario. These cuts are going to be effective on January 1, 2010, six months before the HST in that province would take effect.

For the Ontario government to be able to make that effective January 1, its plans are to pass its legislation on the HST with the other permanent income tax cuts before Christmas. It cannot do that unless Bill C-62 makes the necessary changes to the Excise Tax Act so that Ontario's bill conforms with the laws of Canada.

I wish the finance minister would simply get up in the House and announce to everybody that the government made a deal with the Province of Ontario, which faces a great deal of difficulty in terms of its economy and wants to move forward with these tax cuts and the harmonization. On a projected basis, these tax cuts and the harmonization would create over 500,000 new jobs, create $47 billion in increased capital investment and increase annual incomes by up to 8.8% or some $29.4 billion.

The consequences of this legislation to Ontario are enormous. We have to ask whether the Parliament of Canada feels that it should not pass Bill C-62, thus effectively stopping the Province of Ontario from carrying out its decisions to address its economic crisis and therefore being able to make a contribution towards remedying the economic crisis facing our country as a whole. That is really the big question.

The provinces have a choice about whether or not to do this. I could make a case, as others have, by indicating that a haircut would cost 8% more, but that is not exactly true because the hair salon or the barber shop also incurs provincial sales tax on all the other supplies and services related to its business and they all cascade down. Once we convert, their costs of doing business will go down in a perfect flow-through fashion in a competitive economy. In fact, their prices will go down. Even though the 8% tax will be added for the additional provincial tax component, the overall price really should not change. In fact, it theoretically should go down because of the built-in taxes in the underlying costs of doing business.

Canadians are going to hear a lot of stories, but the best thing they can do is to ask for all of the information on what a harmonized sales tax is and visit the provincial websites to see what the plans are. They will also see a copy of the agreement that outlines all of the details.

In Ontario, for instance, notwithstanding that the harmonization of the tax would affect only about 17% of the goods and services that we purchase, there is going to be a very substantial reduction in personal income taxes for all Ontarians. In the first year, families are going to get a $1,000 transitional credit. There will also be a sales tax credit increase to reflect the fact that the harmonized sales tax has both levels of government tax included in it.

These are offsets. Canadians should know that to the extent that some exemptions will no longer be there, that is pursuant to the agreement. The agreement limited the exemptions to 5% of all of the goods and services that are being offered. Therefore there had to be some streamlining of the benefits. However, to take that into account, some things may be taxed now that were not previously taxed, but there is going to be a permanent offset through income taxes as well as through tax credits and the one-time transitional credit of $1,000 for a family.

There is more for people to know about. In Ontario, for instance, I know some of the members are saying this is a tax grab and asking how we feel about it. In fact, after implementation the provincial sales tax revenues to the Province of Ontario will actually decline. It is not a tax grab. In fact the revenues are decreasing.

If we look at the implications for Ontario, there is the possibility of getting the job creation activity that it drastically needs, as well as business investment. Businesses should be able to pass on the savings to them by investing further through creating jobs. We cannot ignore the job creation issue. It is critical in the economy of Ontario.

The Government of Ontario has made this decision. I am hopeful that Canadians will take the opportunity to inform themselves instead of listening to linear arguments.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, I would like to ask my colleague a question with regard to the philosophy that he is embracing that automatic savings are going to be passed on.

Most recently we heard the same argument regarding gas prices. There was the argument that when we lowered the GST, gas price savings would be passed on to consumers. We all know that did not take place. In fact the profits are still up. Canadians actually have less tax revenue, and the companies did not pass the savings on to consumers.

How is the member going to guarantee that this ideological assumption is actually going to take place?

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, the price of gas is affected not just by the level of taxes. The taxes have not been changing up and down. The commodity prices certainly have. Therefore, I do not accept the member's argument.

However, I can say that we have examples. For instance, when the GST was cut, the savings that should have been passed on to people were not. Therefore we know the Conservatives have not followed through on the GST. An example would be, and most Canadians would understand, the price of a theatre ticket to go to a show, to watch a movie. That price did not go down. They still charge the same price arguing that they had additional costs so that despite whatever reduction there was in the GST, they increased their own costs and therefore the price is the same.

It does take some discipline, but in a competitive economy where the costs cascading at least from the provincial sales tax level are not passed on, if they are not invested in investments in that business or passed on that means the bottom line of the business has gone up. It means that it has decided to pocket those.

That is why we need a competitive economy. That is what the issue is. It is all about competition. Businesses that are not going to be competitively priced will lose business and will no longer be able to participate. Everyone does it at their own peril.

However, the member raises an interesting point about the need for consumers to be vigilant and governments to be vigilant when there are changes and businesses are not treating the consumer in a fair fashion.

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

Madam Speaker, I would like to touch again on aboriginals and the HST.

The member talks about how this is going to be better and it is the responsibility of the provinces. Yet we are debating this in the House of Commons. Therefore we have a responsibility.

I want to read something from one of my first nations chiefs. It states, “I am opposed to the harmonization of the Ontario retail sales tax and GST. As proposed an HST will impose additional tax burdens on Ontario residents during a severe economic downturn. I also hope and expect that your government respects first nations' rights, that tax exemption that is entrenched under law and in the treaties. The point of sale exemption for first nations should be maintained and should apply to both portions of the proposed harmonized tax and be reflected in the comprehensive tax implementation agreement. The imposition of a harmonized tax structure will impact and potentially perpetuate poverty. Your government has statutory contractual and common law obligations to consult with first nations and must engage their communities prior to implementing the harmonized sales tax”.

This is from Chief Franklin Paibomsai from Whitefish River First Nation.

Again, given the fact that the Liberals, when they were in power, and now the Conservatives continue to overlook the rights of first nations, does the member not feel that the first nations should be consulted prior to moving forward with any type of tax hikes?

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, I have spent a fair bit of time on aboriginal and first nations issues, particularly matrimonial and property rights, which are still with us.

There is nothing in Bill C-62 that affects aboriginal legislation. However, it is kind of interesting to note that if we were to have consultations today with aboriginals with regard to Bill C-62, the only choice would be to defeat it or not, because there is no clause in here that we can even talk about concerning aboriginals.

The consultation for aboriginal persons is with the Province of Ontario, in the legislature of Ontario, with regard to Ontario legislation. That is where the hearings and the representations have to be made. The only representations that would be made here would be if there were amendments proposed to the rules related to the taxation of first nations people.

It is easy to say, but quite frankly, what the member is suggesting is that we should make the decision here as to whether or not we want to allow a province to harmonize its tax. That is not in the best interests of Canadians.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, what my hon. colleague seems to want to ignore is that he and his party, along with the government, are making the decision along with the provinces. The $6 billion bribe fund is set up explicitly for this. Both provinces, Ontario and British Columbia, have said that without the $6 billion coming from Parliament, with the support of the member, his party and the government, this would not be happening at all. We would not be having this conversation.

In terms of first nations' right to consult, that sits in the Constitution and is constantly ignored. It was ignored by his government when it was in office. It is being ignored again, because this is an effect of Parliament having a direct impact on first nations in Canada, period. The Constitution explicitly states that we then must consult and accommodate first nations. Every court decision that has come down has said so.

Does Bill C-62 have an effect on the lives and the quality of life of first nations in Canada? Yes. Does the federal government have a duty to consult? Yes. Is it consulting? Absolutely not, and that is what is wrong. This will very likely end up in a court, and he should know that if he has been paying any attention to first nations history, law and practice in the last 85 years.

The fact of the matter is that he is helping enable the HST to come in. If he thought it was such a great idea, then certainly he would have campaigned on it in the last election, but not having been in Mississauga, I am going to take a guess. I am going to guess that he did not mention this. It was not in his flyers. It was not a promise. They have no mandate to do this, and this is why the people of Mississauga and all across Ontario and British Columbia are upset with him, his party, and the Conservative Party as well. They feel that these politicians have no mandate to do this.

The mandate is $6 billion. That could be used for other things. He wants to talk about first nations. He should intimately know then that the housing on first nations reserves across this country is in desperate need of help. It is stuck at 1982 funding levels. Surely the $6 billion would be better applied to something like affordable housing in this country.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, there are no changes in federal legislation as it relates to first nations, pursuant to the agreement between Ontario and the Government of Canada or between B.C. and the Government of Canada. There are no changes there, so I do not know exactly what the member is suggesting we discuss here. If there were changes, certainly they would be discussed.

Regarding the $6 billion, the member is referring to the compensation that the federal government is paying to Ontario and B.C. with regard to all of the things involved with taking two systems of taxation and putting them together. There are obviously a lot of costs involved and they were negotiated with the provinces individually, as were the other three when they came in, and as the province of Quebec negotiated its deal.

This is part of the process that it goes through, but the bottom line, and I do not want to be coy with any of it, is that there is no question that if we were to defeat Bill C-62 and these amendments never passed, then there would be no harmonized sales tax in Ontario or B.C. That is true, but are the members saying that we do not want the provinces to have the tools they need to deal with the economic recovery in their provinces, to create jobs, to create investment?

Those are the fundamentals. The member says that the $6 billion would be better spent on affordable housing. Six billion dollars pales in comparison to the creation of 500,000 to 600,000 jobs in the province of Ontario.

[Thomas Mulcair, NDP, Outremont, QC]

Madam Speaker, it is my turn to speak to Bill C-62, An Act to amend the Excise Tax Act. This bill is the culmination of an operation that the Conservatives began four years ago that has brought about the largest shift in Canadian history of taxes from the corporate sector on to the backs of ordinary hard-working Canadians. That is what the Liberals are supporting. That is what this bill is about.

To understand the scam, it has often been said that for a swindle to work, it requires two dishonest people, the person who is putting the scam together and a dishonest person on the other side who thinks he or she will actually gain from it. That is what we have here. The swindle put together by the Conservatives is the ideological continuation of what they have been doing for the past four years. The dupes in the Liberal Party are supporting them of course, and the numbskull premiers of British Columbia and Ontario think that somehow they are going to be putting money in their pockets, whereas in fact they are just further damaging the economies that have already been undermined by the Conservatives' actions.

Let us look at the genesis of this problem and how it began with the arrival of the Conservatives, shall we? Their ideology is that governments should play no role in the economy, that there is a pristine marketplace that makes all of the right choices, that anyone who thinks that governments or the state has a role in this is trying to pick winners. Let us look at it for what it is.

The Conservatives have decided there is one winner in the Canadian economy and it is the oil sector in Alberta. That is what has been destabilizing an erstwhile balanced economy that was built up in this country since the second world war. Successive governments always understood that to give value to the second largest country in the world with a minor population, today just in the order of 30 million, we required vision. We required the government to play a role in ensuring that we could develop our primary sector, forestry in particular and mining, that we could have a strong manufacturing sector as well, and that we could develop as modern times have allowed us to do, a tertiary sector, the service sector.

A lot of people look at the unemployment created since the fall of 2008 when the current recession began, but what we saw was that as a direct result of the Conservatives' choices, because governing is a reflection of one's choices and one's priorities, as a result of the Conservatives' choices backed every step of the way by their henchmen in the Liberal Party, they have reduced corporate taxes by $60 billion. The effect of that has been to provide that fiscal space of $60 billion to the most profitable corporations. I say the most profitable corporations because it should be obvious, but for some people it is not, that by definition if a company had not made a profit, if it was breaking even or losing money, it did not get any of the money from those tax reductions. Who did? Mostly the very profitable oil sector. Companies like EnCana saw windfall profits of hundreds of millions of dollars, which was totally unexpected and certainly unnecessary for it in terms of its operations, as did Canada's major chartered banks.

Who suffered? The manufacturing sector and the forestry sector centred in Ontario and Quebec for the manufacturing and the forestry sector which included a lot of lost jobs in British Columbia and in New Brunswick on top of those mostly in Ontario and in Quebec. That was a choice. Before the current recession hit, we had already bled off hundreds of thousands of jobs in the manufacturing and forestry sectors in Ontario and Quebec.

One of the primary reasons for that was the high Canadian dollar which was being stoked by the petrodollars coming into Alberta that does not even internalize the environmental and social costs of the exploitation of the tar sands. There are three basic principles of sustainable development that have to apply to any exploitation of that nature. They are internalization of costs, polluter pay and user pay. Of course the Conservatives apply none of it. The Liberals are ill-placed to even discuss the subject. They signed Kyoto, and as Eddie Goldenberg, the former chief of staff for Jean Chrétien correctly pointed out, the only reason they signed it is for public relations purposes. That is why under the Liberals for 13 years Canada had the worst record in the world in terms of greenhouse gas reduction and that has simply become worse under the Conservatives.

The Liberals did nothing, the Conservatives do not want to do anything and the Bloc cannot do anything. It is a good thing that our leader, the leader of the NDP, is heading to Copenhagen. That at least offers some hope. I am told that this very morning, Bill C-311, which scandalously the Liberals have been holding up in committee, was finally allowed to go through, so there is a ray of hope on the horizon being provided by the New Democratic Party.

The $60 billion of tax reductions was only possible by creating a similar fiscal space. How was that fiscal space created? It was created by pillaging $57 billion in the employment insurance account and turning it into general revenues of the government. Again, it was with the culpable complicity of the spineless Liberals who have no principles and no beliefs. They backed the Conservatives every step of the way.

It should be remembered, as one of my colleagues said earlier, that the Bloc Québécois also voted for the first two Conservative budgets. That is something the New Democratic Party of Canada has never done. We have always stood up against the Conservative vision for the economy. We have always resolutely voted against the Conservative budgets and we are very proud of that record.

Some people have said that they may be taking $57 billion from the EI account, but it is a notional amount. They are turning it into general revenue, so who really cares, because it does not change anything; it is all still government money. There is a huge mistake in that analysis. Every single company in Canada, whether it was making money, breaking even or losing money, had to pay into that employment insurance account for every single one of its employees.

That money was paid in by employers and employees for a dedicated purpose, to take care of the cyclical nature of our economy for a day like today in the middle of a recession when there are dramatic job losses. The fund would be there. That is what it was put in for. To add insult to injury, $19 billion is calculated to be missing from the account now, because they have frozen contributions as part of the recession.

That means that the very same companies that were losing money in forestry or manufacturing and had made their compulsory contributions for every single employee into that fund saw that fund turned into a fiscal space that was given in the form of tax reductions for the most profitable corporations in Canada, stimulating even more rapidly the Canadian economy, with regard to the oil sector, at least, and pushing the Canadian dollar higher as those petrodollars came in.

The result, in the clearest possible terms, is that companies that were already losing money in the forestry and manufacturing sectors were directly subsidizing the very petroleum sector that was causing the high dollar and making their exports even more difficult because of the very high Canadian dollar. It is similar to one being asked to pay one's executioner. That is exactly what happened here with regard to the Canadian economy.

That is the Conservatives' way of doing business. That is what they wanted to do. That is what they set out to do. They set out to destroy the manufacturing and forestry sectors at the altar of the expediency of the rapid exploitation of the tar sands. As if that were not enough, projects like Keystone, one of the many pipeline projects that the Conservatives have put in place in the west since they arrived in government, are exporting the rawest form of the production of the tar sands straight to the United States.

We are exporting jobs. Keystone alone represents 18,000 lost jobs for Canada. We are not only stupid enough to send all of this south without any added value here, but we are sending it so fast that we are not even holding on to anything. We are not even internalizing the costs to the environment today and the costs for future generations.

The internalization of costs is a principle that Canadians all understand. When we buy tires for our car, the province adds a $3 fee to take care of the recycling of the tires. That is the environmental cost of the tires being paid by the person who is buying the tires. That is only fair. If people take the metro or the bus to work, or they take their bike or walk and they do not own a car, why should they pay for that recycling out of their general tax obligations? Why should they be paying to recycle their neighbour's tires? Everybody gets that.

It should be the same thing with the tar sands. It is an important resource, but it is not immune from the application of general principles of sustainable development. What one does is internalize the cost on a barrel of petroleum produced out of the tar sands. That would be the equivalent of approximately $3 to $4 a barrel. The internalization of the cost of sequestration of the greenhouse gases or their reduction and the treatment of all the pollution that is now being held back is going to be a problem that we are shovelling forward for future generations.

It is wonderful to watch the Conservatives, those great moralizers, wagging their index fingers under our collective noses, always telling us how to be and allowing the worst pollution on the planet to take place here in Canada in the Athabasca tar sands. Right now, the dykes at the tar ponds are the longest dams in the world. They are holding back what is not seeping right into the underground water. This is the greatest source of pollution right now in Canada.

We are destroying ecosystems. We are destroying groundwater. We are causing cancers that are exceptional, that can only be traced back to the chemical products being produced in the tar sands. At the very least, we should be internalizing the cost of that, instead of sending the bill to future generations.

Contrary to their theoretical position on all these matters, what we are doing with the Conservatives is enjoying ourselves today, taking everything we can for ourselves and letting the future generations of tomorrow fend for themselves. At the very least, a fund could be put aside out of those important revenues.

Both the internalization of costs and the setting aside of that fund would reduce the pressure on the Canadian dollar. This would make it possible to go back to a more balanced economy like the one we had built up since the second world war. It would be easier to export than it is right now with the high Canadian dollar. We could at the same time put in place an infrastructure of green renewables, hydrogen, wind, hydro and others that can be developed in this great country of ours.

However, there is a singular lack of vision among the government benches on this issue. The Conservatives do not care about future generations. They love to pose with future generations. There is nothing easier than to get a Conservative to pose at a hockey rink on a Saturday with a bunch of kids. What about the day when we will no longer be able to play hockey outdoors in Canada because of global warming and because of their incompetence and their negligence? That is the issue that has to be discussed.

We in Canada are in a unique position in the world. We have extraordinary resources that we can and should be developing, but we should be doing it cleanly.

The Conservatives are so much at the beck and call of our American neighbours. They are in such a hurry to get everything through the National Energy Board. They are in such a hurry to get all their approvals for these pipelines straight south, the raw agreement, to export not only our wealth but also jobs. That is the scandal of the Conservative approach. There is $60 billion in tax decreases for the richest corporations. Some $57 billion has been pillaged from the employment insurance account. Businesses that have already subsidized the oil patch are going to be asked to re-contribute in the order of $19 billion.

Right now, the government is saying, “We have a plan. We are going to look at the premiers of Ontario and British Columbia, the provinces which were the hardest hit by our previous plan to destroy the manufacturing and forestry sectors. Now, we are going to bring them to the table. It has been part of the plan since day one”.

The current finance minister said four years ago in his first budget:

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

Do not try to convince anyone who has looked at the file that this is not the responsibility of the Conservative government. It is the Conservatives' plan. This has been laid out for the past four years. Without the Liberals, it would not be possible. That is the real problem.

In Ontario and British Columbia, the pusillanimous Liberals, because they have allowed the Conservatives every step of the way to destroy their manufacturing base, to destroy their primary resources, mostly in forestry, are now saying, “We are too broke. We have to give in to their plan”.

A regressive tax is one that hits the poorest hardest. By definition, this HST is a regressive tax. People have no choice. A retired couple living on a modest fixed income in northern Ontario or B.C. who have to buy home heating oil is going to be spending 8% more for that heating oil. That is what the Conservatives are doing.

It has nothing to do with one's revenue. It is not like an income tax, which is progressive: the more one earns, the higher the percentage; that has been accepted and understood in our country for a long time. This is a direct hit on the people who can least afford it.

What is interesting is it is not just those of us who work every day with people and with communities and groups who are saying this. I have a letter that was sent to me by the Canadian Federation of Independent Business. It is really worth noting that it is as opposed as we are to this new HST. This used to be the bailiwick of the Conservatives.

The CFIB says this, and it is worth reading:

While governments did not consult with small firms in either Ontario or British Columbia, I should note that our members continue to have a mixed reaction to sales tax harmonization. Certainly, the expansion of input tax credits to the provincial portion of sales tax administration is a considerable improvement over the current tax-on-tax system we now have...[however, we have] a lack of trust that tax reforms will, in fact, lower the overall tax burden. We have heard many comments from members in Ontario and British Columbia that suggest concern that sales tax harmonization will not end up as revenue neutral or a tax reduction, but lead to an overall increase in the tax burden on Canadians.

What is interesting is it is bringing up one of the points that everyone has raised, and that is what is happening here today. The government has the temerity to use closure without ever holding any consultation or debate on this tax. It is our irresponsible Minister of Finance who said, “It's not me, it's the Liberals in B.C. and Ontario”.

Let us look at what the Canadian Federation of Independent Business says, which is that we have to do five things that are not being done now. It has to be a win for consumers through a lower combined rate.

The CFIB explains, in an interesting manner, how it was able to back the harmonization in the Maritimes and be against this one in B.C. and Ontario. It explains that what was done in the Maritimes actually produced a lower combined rate. What we have here is a tax grab on the backs of those who can least afford it. That is what the Conservatives have concocted this time, with the culpable complicity of the Liberals in both B.C. and Ontario and, of course, their squid in the House.

The validity of the tax and associated revenue stream has to also be one of the important principles, ongoing vendor compensation and introduction of a fairness code. This was said by Dan Kelly, senior vice-president, legislative affairs of the Canadian Federation of Independent Business.

This is the result of choices. The bleeding off of hundreds of thousands of jobs in the manufacturing and forestry sectors is a direct result of what the Conservative government chose to do. We are leaving a debt to future generations in terms of the current deficit structure that we are putting in place, which will be one that we will not be able to get away from for decades. At the very least, we should be leaving something that future generations can use. We should be bequeathing them something in terms of clean renewables. We should be moving to an economy less based on carbon.

As George Monbiot pointed out last week in the Guardian newspaper in the United Kingdom, and has been pointed out in a lot of other countries since then, the once diversified economy of Canada is being destroyed actively by the Conservative government. It is the same mistake that people have already seen.

There have been lots of treatises and papers written about this around the world. What Holland went through after the second world war in a similar petroleum bubble, which killed its manufacturing sector, Canada has not had the wisdom to avoid.

We have always understood in our country that it took a balanced approach to building the economy across our huge country. The Conservatives simply do not believe in Canada. They simply do not believe in the importance of maintaining jobs in diverse sectors like manufacturing and forestry. They think by pumping in petrol dollars from the United States that somehow we will be able to maintain the economy that we have had in the past.

In the time I have left, I would like to express my surprise at the Bloc Québécois' support for Bill C-62.

The bill is available on line for anyone who wants to double-check what I am saying. It includes a schedule that lists the participating provinces, and Quebec is not even mentioned. The whole bill is silent on the subject of reimbursing Quebec for harmonizing its tax. Quebec has been owed $2.6 billion for over 15 years now. Monique Jérôme-Forget deserves to be congratulated for having once again raised the issue in debate. Quebec's decision to harmonize its taxes was historic. The minister was twice mistaken when he referred in the House to Quebec's harmonization.

Those of us on this side are against an unfair tax that will hurt the poor. We strongly condemn the Bloc's decision to support this bill.

[Brian Jean, Conservative, Parliamentary Secretary to the Minister of Transport]

Madam Speaker, I have listened to my friend attentively and I have a couple of questions for him.

First, he has obviously never been up to Athabasca oil sands because his assumptions are clearly dead wrong. I would invite him to come up there to see first hand what is going on, because it is quite remarkable what environmental steps have been taken to be good stewards of the land in that area.

The two questions I do have are this.

First, there is so much balderdash and BS coming out of his mouth. Has he ever thought about going into writing children's fairy-tale books full time? It seems it would be more appropriate for his skill set.

Second, since I want to hear something intelligent from him, could he spell the word “plenarius”, which he used in his comments about Liberals? I have not used that word before, and it was quite interesting to hear it. Could he say something intelligent and spell that word?

[Thomas Mulcair, NDP, Outremont, QC]

Madam Speaker, I think all Canadians who just listened to that intervention now understand the level that the government is at and how we wind up with the problems we have in Canada.

I have the good fortune of coming from a family with 10 children. I have brothers and sisters across Canada, including in Calgary and in Edmonton. I have been there many times. I do know what I am talking about.

Yesterday an important study was produced by people who have no stake in this, from the universities. They say that the pollution and the toxic chemicals from the oil sand exploitation is 10 times worse than anything the industry has ever admitted to to date.

Those great givers of lessons, those wonderful preachers, those people who wag their index finger continually under other people's noses, should simply take note of this. They are harming their children, they are harming future generations—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

My children actually live there, how about yours?

[Ed Fast]

Hogwash.

[Thomas Mulcair, NDP, Outremont, QC]

—they are causing great economic harm to all of Canada because of their inability to understand what all governments before them have understood, that we require a balanced approach—