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

[Fin Donnelly, NDP, New Westminster—Coquitlam, BC]

Mr. Speaker, this is a concern to all Canadians when decisions are made about harmonizing our tax and tax system. This question was brought up to me when I knocked on doors in New Westminster—Coquitlam and Port Moody. Where will this tax go and how will it help Canadians? I think all Canadians across the country need to ask that question. Will this tax go to help with social programs, programs that help working families, students and seniors? When they look at that question, the answer is clearly a “no”. It will go to help big business and corporations in our country and that is not what my constituents hope to see done with the tax that will be generated.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I want to begin by thanking the member for New Westminster—Coquitlam for his initial speech in the House. He may inadvertently have a bigger effect on the House than he realizes at this point.

The member had a resounding win in the byelection, with the NDP taking 50% of the vote. We had never done this before in that seat. The major issue in that byelection was the HST.

All of a sudden the government turned itself into panic mode and developed the mess that we see in front of us today. I think the government sees some bad omens, particularly after the responses we have received from the public on this issue, as well as the recent poll I mentioned that came out yesterday, which showed that a whopping 83% of people in B.C. were opposed to this legislation.

In a way, the member for New Westminster—Coquitlam sort of rode the wave. He was the first to identify the HST as a big issue.

The government put its axis of taxes in line with the Liberals and Bloc and proceeded to come in with its closure motion and time allocation procedures to force the bill through before the Christmas holidays, when nobody pays attention, in an effort to save its skin.

The reality is the Conservatives could have saved themselves a lot of grief by simply dealing with the bill in the proper fashion and not draw special attention to it. The bill could have been brought in earlier. They knew months ago they were going to do this. The Conservatives could have gone through the normal process so committee hearings could be held across the country on the issue and still made its deadline of the end of January for implementation on July 1, 2010.

I really believe it was the byelection that short-circuited all of that and then drove the Conservatives into the panic mode we see them in right now. They are attempting to pull one over on the public. The point is the tax would take effect on July 1 and citizens will be even more outraged.

Members here have been around long enough to know the history of the GST and other tax measures taken by governments in Ottawa over the years. We know the public can react in a big way on taxes. They have a tiger by the tail here, the Liberals and the Conservatives, with the enablers being the Liberals. If it was not for the Liberal dupes, the Conservatives could not be doing what they are doing right now. It takes two to tango in this place, and we can see who the dance partners are.

The only part I do not understand is the Bloc. Those members have simply waffled back and forth on this issue. My guess is there is probably some sort of an understanding, that if the Bloc supports the bill, the government will look more favourably on its negotiations with the Government of Quebec, and Quebec will get the money it feels it should get, which I believe is in the area of $2.6 billion.

I want to get into some of the history of the tax.

Our critic from Hamilton Mountain has certainly spelled it out. In addition to using the phrase axis of taxes, she pointed out that this is the wrong tax in the wrong hands at the wrong time. Nothing could be more correct than that statement.

The pattern of pursuing policies that boost returns to privileged corporate elite on the flimsy excuse that they will use those returns to benefit the rest of us continues under successive federal Conservative and Liberal governments.

This whole policy has been written and dictated by Bay Street. The Liberals recognize that if they do not do what their Bay Street commanders demand, they will lose potential support and it will bleed to the Conservatives. The Liberal Party is stuck in the middle and, as usual, it tends to fall in behind what Bay Street and the corporate community want.

Even though the government had brought in restrictions on the elimination of union donations and corporate donations, one would think those parties would be freed from their loyalty to the corporations. It seems they remain very slavish to the corporate agenda.

By the way, we had speeches yesterday from some of my colleagues who have been here longer than I. They pointed out in detail how sad it was that the Reform Party was actually dead across the way and how Preston Manning would be, and must be, totally embarrassed to see how this group operated.

He favoured public participation and referendums on taxes and a lot of things. Those members used to support that approach. To have them now sit here and drive this through in the middle of the night, through time allocation and closure, has to be a big embarrassment to him and all that he fought for all those years. That party has come full circle and is basically nothing more than a mature government that has lost most if not all of its ideals.

Saskatchewan PCs, under Grant Devine, were the ones who brought in the first harmonized sales tax shortly after the GST was introduced in 1991. We should remember back to those days when Brian Mulroney brought in the GST legislation. At the time, his argument was that it would be revenue neutral. It was to get rid of the existing manufacturers' sales tax, which was a tax hidden from the public, but a tax on manufacturers.

It was at a period of time after Ireland, New Zealand and other countries in the world had developed VAT taxes and lowered the manufacturers' sales tax. The idea behind it is to lower the price of one's exports and make them more competitive. When we were growing up, most of us did not know what a kiwi was, but now there are kiwis all over the place in the stores.

When New Zealand got rid of its export taxes, it made the products cheaper to export. That produced some more jobs. Then it put a heavy VAT tax on the public, which could not escape. That was the whole ideology behind it.

Brian Mulroney probably would have been more successful if he had done what previous Liberal governments had done, and that was to make it a hidden tax. However, for some reason, he decided he wanted to make it visible. At the end of the day, that was his undoing.

Nevertheless, the GST was brought in. It was a visible tax. The manufacturers' sales tax disappeared. At the end of the day, I do not think it was revenue neutral. That was the claim at the time, but I think it was proven afterward that this was an untruth spoken.

We recall the Liberals saying that they were going to eliminate the GST. In 1993 Jean Chrétien's red book outlined all those famous promises that he made to get rid of the GST and never kept. The Liberals being Liberals, when they were re-elected in 1993, they proceeded to give up on practically every promise in the red book they used so successfully to win election.

The point is we have a history in our country of both of those parties being involved together in the whole business of getting the GST implemented originally. As I said, the Saskatchewan PCs brought in the harmonization tax in 1991. Roy Romanow of the NDP won the general election before it could be implemented and did not—

[The Deputy Speaker, Conservative, Andrew Scheer]

Order. Questions and comments, the hon. member for Northumberland—Quinte West.

[Rick Norlock, Conservative, Northumberland—Quinte West, ON]

Mr. Speaker, I have been listening to shall we just say a revisionist and selective way of looking at the history of taxation.

The hon. member does not talk about the fact that since coming to office in 2006 we have proposed over some 100 tax reduction measures in our various budgets and removed 950,000 low-income Canadians completely from the tax rolls. We reduced the overall tax burden on Canadians to its lowest level in 50 years.

The member also conveniently does not tell this House and Canadians what his leader says. His leader is quoted in the Sudbury Star as saying:

Further income tax cuts we do not believe are wise at this point or affordable, given the investment priorities. The GST proposal is one we think is wrong-headed.

Then the leader went on to say according to the Victoria Times-Colonist:

I've never campaigned on tax cuts and I've never promised not to raise taxes if it needed to be raised. I don't see taxpaying as a sin.

These are quotes from reputable newspapers about their leader.

I would say no tax is a good tax but some taxes are necessary because we have to pay for things like health care and the various things that the federal government is responsible for.

The members are heckling and asking for that, so I answered them. I have many more quotes that if they wish I could bring out. I wonder if he could respond to this--

[The Deputy Speaker, Conservative, Andrew Scheer]

Order. The hon. member for Elmwood—Transcona.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, I am going to deal with Bill C-62 and the issue of the Conservatives sneaking around with the Liberals to drive through in an unfair way a new tax on hundreds of items that people were not paying tax on before.

The Conservatives have made a big deal of their renovation tax credit that they see as a big success. We all know they are going to be announcing its extension next year.

Yet, on July 1 next year these two provincial governments, B.C. and Ontario, are basically going to be taking away the benefits that they would have received by participating in this program.

Whatever good effects their program has in the short-term is going to be taken away because starting July 1 next year people are going to be paying tax on all of these renovations.

This is an expansion of the tax. The government is trying to pretend that it is not involved and it is not the guilty party. However, we have read out time and time again how in its own 2006 budget the finance minister in black and white was pleading with the provincial governments to get on board.

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

Mr. Speaker, I know my colleague must be very proud of the government of his home province, the NDP government in Manitoba, for the stand that it has taken on this whole issue of tax harmonization. He knows what was in the throne speech on November 30 in Manitoba where the Manitoba government said in that speech from the throne:

Manitoba is rejecting an invitation from the federal government to introduce a Harmonized Sales Tax. As proposed, the HST would impose more than 400 million dollars in new sales tax costs on Manitoba families at a time of economic uncertainty.

Clearly, there is an NDP government that is willing to stand up to this nonsense. I wonder if he could comment on that.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, actually we should be doing the math because Manitoba has just slightly over a million people. What the throne speech of November 30 in Manitoba says is that HST would have imposed more than $400 million in new sales tax costs on Manitoba families.

That is with one million people. If we multiply that by eight million people or more that has to be in the $4 billion or $5 billion range. We can do the math, but it is a huge number. That is what Manitoba is giving up by not going along with this system.

The member from Edmonton pointed out that Manitoba residents, my constituents, will actually be subsidizing this process. The federal government is basically bribing the provinces with $4.3 billion for Ontario--

[The Deputy Speaker, Conservative, Andrew Scheer]

Resuming debate, the hon. member for Churchill.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I will be splitting my time with my colleague from Burnaby—New Westminster.

People watching, people listening, may be wondering why an MP from Manitoba would be getting up to participate in a debate that is so very much focused on two of our provinces. It is with a real concern and it is in solidarity with my colleagues from B.C. and Ontario that I stand to point out that not only is the process by which the government is ramming through and silencing any opportunity for debate a problem but it is really the substance of the harmonized sales tax that is a real problem.

It is a real problem not just for the people in these two provinces and the provinces that have already had this tax imposed on them but also for provinces like Manitoba, which is the one that has stood up and said no, it is not going to put up with this new tax.

It is about recognizing that Manitoba and other provinces might be, down the line, subjected to even greater pressure if Ontario and B.C. are to accept this tax. It is about joining our voices to say how many ways the process, the substance of this whole harmonized sales tax debate, is flawed.

Many of my colleagues have stood in the House, the vast majority of us, time and time again to talk about how this is the wrong tax at the wrong time, something that has great resonance where I come from. Certainly, it is a regressive tax, as we know. Really, it places the burden on consumers at one of the worst times in recent history to bring in a new tax, a new tax that increases taxes on consumable items, items that people cannot go without: food, basic goods, basic services and transactions that average Canadians must make in their daily lives.

Instead of looking at taxing corporations and private companies that benefit from the labour and the resources in our country, this tax goes after the people who are suffering the most as a result of this recession.

This tax also has a very disproportionate impact on certain parts of our population, and I would like to speak in particular in terms of two areas: students and young people, and aboriginal people.

When we talk about students and young people, I am the critic for youth and also post-secondary education. This House has a pretty pathetic record in terms of talking about the challenges that young people face in general, but nowhere is this more the case than the imposition of the HST.

Young people, as we know in the case of this recession, have suffered much but in a very different way than many other generations. While we hear of the great job losses inflicted upon middle aged income earners, it is young people who have not gotten the jobs because they do not exist anymore. It is young people who are the first to be laid off. It is young people who have to put up with increased temporary, part-time, contract work, more than any other generation.

To have young consumers take on a tax at a time when they are making even less, when they are living in a much more insecure situation and looking at a very insecure job market, is extremely unfair.

If we look at the situation of students, I have had the opportunity to rise in this House on behalf of my party, the NDP, whose members are the only ones talking about the challenges that students are facing. We are seeing tuition fees increase at historic rates in Canada. Ontario, one of the provinces that is--

[The Deputy Speaker, Conservative, Andrew Scheer]

Order. The hon. member for Selkirk--Interlake is rising on a point of order.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, I wanted to raise the rule of relevance and ask my friend from Manitoba from the NDP to actually get to the point. We are talking about a tax measure here and she is going on and on about things that are completely non-related to this specific bill.

[The Deputy Speaker, Conservative, Andrew Scheer]

I appreciate the hon. member's intervention. I would just remind the hon. member for Churchill to keep her remarks relevant to the second reading motion of this bill.

[Niki Ashton, NDP, Churchill, MB]

Yes, Mr. Speaker, talking about relevance, why do we not talk to some of the students in our region and find out the costs that they will incur with this new tax and then we can talk about relevance.

I am familiar with the region my hon. colleague represents and I am going to get to aboriginal people which has extreme relevance to this debate, so stay tuned and hopefully he can pay attention.

When we are talking about students not only are we facing increased tuition fees and some of the highest rates of student debt but we are asking them to pay more money when it comes to textbooks and the food they need. We are seeing an increase of food banks at universities. Now we are going to impose a tax to make it more difficult for students who are already going into debt to achieve an education and contribute to our country. We are making it more difficult for them as a result of the HST.

The other group of individuals who have been so sorely missed in this entire debate by the federal government is first nations. I am proud to have stood with many of my colleagues in the House from the NDP to talk about the utter disgrace in the way that the federal government, which has a fiduciary obligation to first nations and a treaty obligation to first nations, has excluded them from any consultation and any debate.

It is shameful that first nations, which under the treaty are guaranteed the right to tax exemption in the case of the GST, will no longer have that right in terms of point of sale. It is absolutely horrendous that we are not only seeing a tax being imposed that would wipe away that treaty right, but we are seeing a complete and utter lack of consultation.

Have we learned nothing, from the way we work with first nations, regarding the most basic practice of the duty to consult? Chief's organizations in Ontario have been extremely vocal in this area. I had the opportunity to speak with chiefs that I have the honour of representing at the Assembly of First Nations congress yesterday. Many of them were also recognizing that this is a dangerous precedent. I am shocked to hear members of the federal government talk about this matter being up to the provinces when we know that federally it is obligated to work with first nations, obligated to respect treaty rights of which tax exemption at the federal level is most definitely one of them.

The challenge is that the substance of the tax does not work, the imposition on many vulnerable people, people who are already struggling to make it through, struggling even more as a result of the recession. We have a situation without consultation.

Before I finish I would like to note how proud I am to come from a province like Manitoba where we have an NDP provincial government that has stated clearly why it does not support a harmonized sales tax. It recognizes that it is unfair to the average Manitoban and notes the benefit that it does not provide to people who are struggling to make it by.

I would hope that across the country we could benefit from voices that are standing just as we are in the House to say no, no to a tax that does not work for Canadians, no to a process that excludes Canadians, and no to something that is going to put us further behind as we try as a country to move forward.

[Brent Rathgeber, Conservative, Edmonton—St. Albert, AB]

Mr. Speaker, I appreciate that the member comes from a province that has a sales tax but is not harmonized. If she respects her own provincial legislature's decision not to harmonize the taxes, why will she not respect Ontario's and British Columbia's legislatures and their decision to harmonize the taxes?