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.

Oral Questions

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I have a point of order arising out of question period where the Minister of State (Finance) erroneously asserted that the federal Conservative government had nothing to do with the HST.

I would like to give the minister an opportunity to correct the information by pointing out Bill C-62, which was introduced December 2009 and brought in the HST by this federal government.

Pensions

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Mr. Speaker, today I announced the tabling of Bill C-501 which will put pension plans at the front of the line when a company enters bankruptcy protection or undertakes restructuring.

Workers at AbitibiBowater and other forestry companies across Canada have waited too long for the government to assist their struggling sector or failing that, at least protect their pensions.

Now, we know the Conservative government can move quickly when it chooses to do so. After all, it banded together with the Liberal caucus in December to pass its federal HST bill, Bill C-62, in just four days.

I hope all members of this place will recognize the urgency of securing the pensions of hard-working Canadians and will commit to not just supporting, but fast-tracking the passage of Bill C-501 in the interests of all our constituents.

Provincial Choice Tax Framework Act

[Jim Flaherty, Conservative, Whitby—Oshawa, ON]

moved that Bill C-62, An Act to amend the Excise Tax Act, be read the third time and passed.

The House resumed consideration of Bill C-62, An Act to amend the Excise Tax Act, as reported (without amendment) from the committee, and of the motions in Group No. 1.

Standing Committee on Finance

[The Speaker, Peter Milliken]

I am dealing with this question of privilege at the moment. I do not think I need to hear more on the same point.

I would like to thank the hon. member for Outremont for his speech, but I would like to emphasize one thing. He raised more points than were included in the letter I received. Nevertheless, I will consider all of the points that he raised here in the House.

Let us begin with the question of privilege that he raised concerning the noise that he claims prevented the committee from doing its work. Yes, I was there last night and I heard the noise. What he says is true. First, I would note that the committee did not submit a complaint about the noise. It was not in the report presented in the House today. That being said, as the member stated, I went to the room and I know that the committee moved from that room to room 112-N, where it resumed its work.

I must also point out that someone told me the noise was being made by a political party that had organized a party in the corridor near where the committee was meeting. Obviously, the people who organized the party did not choose to have the committee meet in a room right next to where the party was being held. I do not know all the details, but the committee was supposed to have met elsewhere, as we found out later.

I will draw the attention of the House to the text of the motion, which states that:

not more than four hours following the adoption of the second reading motion, any proceedings before the committee to which the bill stands referred shall be interrupted

The special motion did not specify that the committee had to meet for four hours. It simply placed a limit on how long they could meet. They were allowed to meet for two, three or four hours. They were not allowed to meet for more than four hours, but they were allowed to meet for fewer than four hours if the members so desired.

I would now like to turn to the matter of the motion that was deemed out of order because it was beyond the scope of Bill C-62.

The member himself says that this is at heart a constitutional question, and he, I am sure, is aware that the Speaker does not decide such matters of law. The courts deal with those in due course, if and when those matters come before them.

Meanwhile, I would like to assure the hon. member with regard to the work of the official who responded to the motions he had submitted to the Journals Branch for consideration at report stage, I am entirely in agreement with the decisions taken there.

I should stress that in the interests of efficiency, our practice provides for the Speaker to delegate to his officials various responsibilities with regard to items within the rules for which the Speaker has authority, or is given authority or is said to be the person who makes those decisions. Members have the right to question the decisions, as the hon. member is doing, and I am going to respond to what he said.

Let me explain first that I think it is important to note that the bill seeks to amend the Excise Tax Act in order to implement the new harmonized value-added sales tax system. The amendment the hon. member submitted last night at the Journals Branch proposed a continuation of existing exemptions that were not provided for in the agreements on which the bill is based, and are not related to the provisions of the bill itself.

This represents a new concept, which, in the opinion of the chair, is beyond the scope of the bill. For that reason, the proposed amendment was rejected when it was submitted last evening.

Three other amendments that the hon. member proposed have been put to the House. I put them a short time ago. They are in order and they will be proceeded with.

As well, the former amendment sought to impose mandatory exemptions on participating provinces not contained in existing federal-provincial agreements. Again, I believe that is contrary to the principle of the bill.

Accordingly, for these reasons, the motion in my view was out of order and, consequently, pursuant to Standing Order 76.1(2), the amendment was returned to the member without having appeared in the notice paper. I believe it was entirely in accordance with our practice.

I know the hon. member stressed in his argument that the Speaker was the one who should make these decisions, not someone else; but I stress that in my 21 years here, I have never been aware of the Speaker ever making a decision in respect of those matters. They were dealt with by officials, unless the officials had a particular problem and were worried that the decision might not be correct, and they might then consult with the Speaker. Normally the decision is made by those officials. If members have objections, of course, they are raised as points of order in the House and the Speaker will make a final decision.

However, in this case, as I have indicated, I believe the decision was correct. Accordingly, I do not think the member's privileges have been breached in this case.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, I rise on a question of privilege for the first time, as you know. In accordance with our Standing Orders, I sent to you today, at 12:48 p.m., within the prescribed time, the following letter:

I hereby give notice that I intend to raise a question of privilege today at the end of routine proceedings. It is based on my belief that my right to freely perform my duties as a member of Parliament, in the Standing Committee on Finance, was impeded by the intentional conduct of certain members who were partying just outside the door of the parliamentary committee. I had the opportunity, as you know, to ask you to observe the situation when you came to see us in that regard in committee yesterday evening. In my opinion, Mr. Speaker, this is a prima facie case of contempt of this House and a breach of my privilege as a member. Should you concur, I am prepared to move a motion.

I will add some context for my intervention, Mr. Speaker. We are in the middle of closure and the government, together with the Liberal Party, is attempting to use time allocation to cut off a debate. Part of their strategy was to impose a limit of four hours yesterday for debate on an important bill to create a new and very important tax on all Canadians. Pursuant to an order of this House, this bill was to be studied for four hours.

Last night, at the request of the House, the Standing Committee on Finance met for clause by clause study of Bill C-62, An Act to amend the Excise Tax Act.

In the middle of our deliberations, one of the political parties in this House had organized a party in the corridor outside the meeting room. An interpreter with 40 years of experience told me that he had never seen such a thing. This was an unprecedented case of us not being able to do our job as parliamentarians. Our primary duty is to ensure that the standing orders are adhered to in the best interests of the public, so that we can carry out our duties as elected members of Parliament in this House. But last night, because there were loudspeakers literally right beside the door, our parliamentary committee chair—whom I would like to acknowledge, as he is someone who usually does a very good job—was forced—yes, you can applaud, because he does a good job—to rise and suspend the sitting because it was impossible for us to work.

The first issue here has to do with the four hours we were given. Mr. Speaker, you know this, since I brought it up when we saw each other. You came and saw it for yourself. We often hear the Speaker tell the House that he does not always hear what goes on in parliamentary committees, but last night your eyes and ears could see and hear the same thing as ours, that it had become impossible to do our job. You were kind enough to point out a room that we could use in the basement. The interpreters and the other officials from the Department of Finance followed us, but the main problem is that once we arrived, we had already lost more than half an hour of the four hours that had been allocated.

Mr. Speaker, there is a second point that is very important. For a few years now, the Supreme Court of Canada has been using preparatory work, especially for constitutional matters. In the past, Canadian courts were reluctant to use preparatory work, such as transcriptions of the debates in the House. However, for constitutional matters, for specific and for increasingly general matters, these are used to make assumptions about and to get a better understanding of the intentions of the legislator during the preparatory work. This is particularly important for matters related to aboriginal rights.

Yesterday evening, the government moved to adopt all of the clauses. We had already been informed by our chair that the amendment requested by the first nations, who wanted to add a schedule to the bill, could not come into play until the clauses had been adopted.

Once that was done, my first motion called for consideration of the schedule concerning aboriginal peoples. I immediately indicated that I would have to raise a point of order.

Mr. Speaker, I hope that I have your full attention, because the point I am raising concerns you personally.

There is a second element to this issue that has to do with aboriginal rights. This is a constitutional issue that will have a bearing on your decision. As I emphasized at the outset, there is no precedent for the matter before you. The second point will be raised not as a question of privilege like this one, but as a point of order. The issue is whether one of your closest aides, who claimed she was acting as Speaker, not as a representative of the Speaker but as Speaker in accordance with our standing orders, had the necessary authority to reject the schedule proposed by our party yesterday evening.

This is at the heart of a constitutional debate. Last night's committee proceedings are sure to end up in the Supreme Court of Canada. Aboriginal groups who were there indicated their intention to make sure of that. My colleague has already mentioned that these groups intend to very clearly express their opposition to this attempt to deny them their rights.

It is crucial that in your deliberations you recognize this as a unique situation. Yesterday evening, being deprived of the full four hours granted by order of this House, because of the matter I raise in my question of privilege, I was not heard. The chair interpreted the four hours as being four consecutive hours on the clock. We began at 5:53 p.m., and as far as he was concerned, at 9:53 p.m., the four hours were up, notwithstanding the fact that we had just lost more than 30 minutes of our meeting.

To help you in your deliberations, Mr. Speaker, allow me to suggest that you reflect on the following hypothesis. If, in a similar situation, the doors had been locked—not just because of the noise that made our work impossible and not just for 30 minutes, but for four hours—would you hesitate to say that the privileges of the hon. members of this House had been violated? I respectfully submit that the ruling would be obvious. You would have no choice but to rule that the privileges of the hon. members of this House had been violated.

The aboriginal groups that had asked us to propose an amendment by adding a schedule to the bill respecting their constitutional right to a point of sale exemption are now deprived of an amendment in their favour because it was impossible for us to do our work. We lost half an hour. I mention that because this is a unique and unfair situation.

As far as we are concerned, Mr. Speaker, your primary duty is to ensure the orderly conduct of the business in this House and to supervise the ability of the elected members to do their work. You are the guardian of our interests. You are the one we have chosen to safeguard our ability to act on behalf of the people who elect us to this place.

The Standing Orders are composed of a set of rules that we have given ourselves. When I saw the decision of the chair of the committee, who chose to ignore the fact that we did not get our four hours of deliberations as clearly mandated by this House, I drafted, as an amendment at report stage, an amendment that would add an 11th schedule to Bill C-62.

This schedule would have granted first nations the exemption they are calling for.

So imagine my surprise when, in spite of Standing Order 66(2) of the rules governing this House, not you, Mr. Speaker, but one of your closest aides, Ms. Labrecque-Riel, refused to consider this amendment.

To clearly understand why I am saying that the question of privilege and the point of order are cumulative rather than sequential, to put it simply, as a result of the refusal to grant us the four hours ordered by this House, that was the only means at our disposal to have the motion taken into consideration. I thought it was at least worth a try. However, I think it is worth reading Standing Order 76.1(2) in its entirety.

If, not later than the sitting day prior to the consideration of the report stage of a bill that has been read a second time, written notice is given of any motion to amend, delete, insert or restore any clause in a bill, it shall be printed on the notice paper. [That is fine, so far.] When the same amendment is put on notice by more than one member, that notice shall be printed once, under the name of each member who has submitted it.

That is the part that concerns us here today.

I would point out right away what you know better than anyone: this section is not talking about the Speaker's office, which could mean you or one of your close aides, but rather it refers to you specifically, the Speaker. It continues:

If the Speaker decides that an amendment is out of order, it shall be returned to the member without having appeared on the Notice Paper.

Just by reading the document—the first rule of interpretation is to read the document—it is very clear that this is an intuitu personae power. It is your responsibility and yours alone. Delegatus non potest delegare. This House gave you the authority to act on our behalf, and we trust you to act in our best interests, but we have never authorized anyone to act on your behalf. The person or body that gave you the power is the only one that can delegate it or allow it to be delegated. We can search all we like in the rules governing this House, but there is no indication that a power that you have been granted, Mr. Speaker, can be delegated to someone else; the power is intrinsic to one individual, namely, yourself.

Given that we are dealing with an exception to the general authority of this House to take action, to debate and to have the time to consult, and that an attempt is being made to circumvent the usual rules, I respectfully submit that your interpretation must be very restrictive. If one of your closest aides attempts to convince you that this restrictive interpretation means that you must further restrict the rights of members, allow me to suggest that your aides are misleading you. A restrictive interpretation is based on a clear rule of interpretation, one established long ago. When the objective is to restrict certain rights, the authority resulting from this capacity to restrict a right must be interpreted on a case-by-case basis as being restrictive, and each step must be followed.

Yesterday, we were ordered to spend only four hours studying a bill of vital importance to people across the country, especially those in Ontario and British Columbia.

This will also have a significant impact on aboriginal peoples whose representatives came before the committee yesterday. The aboriginal peoples were invited by the New Democratic Party that very day. They were able to organize themselves and give a short presentation yesterday evening.

However, because of the incidents mentioned in the letter I sent you yesterday, we did not have the full four hours. Given that the allocation of the four hours was an exception, the rules that apply to it must be given a restrictive interpretation. In addition, you must first protect the right of parliamentarians to be heard and to exercise their free will within the institutions of this Parliament.

I am not blaming any of our colleagues for having assigned the committee a meeting room adjacent to one where a party was being held. That is not my purpose. The issue is the fact that it was not possible to present the motion regarding the amendment to protect aboriginal rights.

The committee chair said that even though we had been given four hours, those 30 minutes were lost, and the amendment could no longer be moved. The chair made that decision, even though at the beginning of the meeting, he had said that we could move an amendment to add a schedule only after we passed the bill that was introduced by the government. I do not need to point out that schedules are found at the end of a bill.

I am asking you to consider these two things, not separately or one after the other, but together.

I ask you to consider that when we are talking about an exception to a general rule, we must be very restrictive, because any attempt to take away our usual rights is considered an exception, something that should not be taken lightly.

Second, since we did not have the four hours officially allocated by the House, I am suggesting that your first step should be to ensure that we have that time. That is why, in my letter, I urged you to refer this important question to the parliamentary committee that deals with these matters, the Standing Committee on Procedure and House Affairs.

That committee is the only one that will be able to rule on this issue. However, you are the primary guardian of the rights of members of this House. You are the one we trust to enforce the standing orders we have established to regulate our debates.

Let us forget the legal aspects. I promise that what I am going to say next will not be in Latin.

Imagine the rules of decorum that exist among neighbours. When we make a rule, for example, that one must not disturb a neighbour in an apartment building, we are building a foundation for our society.

When there are loudspeakers just outside the committee room door and one of the parties is trying to deny parliamentarians their right to debate the substance of an issue, it is your job to look at things from a legal perspective of course, but also from the perspective of good sense. I am very pleased that you were there last night and that you saw what was happening. I would like to thank you once again for finding us another room. I did indicate last night that I would be obliged to proceed this way if my request was not granted.

I would like to raise one last point to help you with your deliberations. This is something you can easily have your aides check.

When I attempted to present the amendment requested by the first nations, and the committee chair refused to let me do so, I tried to come up with a Solomon-style solution.

I said that since the amendment was just three lines long—it was provided in English, but obviously the committee would have both versions to look at—then if we were allowed to vote just on those three lines—this is important for you to hear—we would renounce our right to raise a question of privilege today.

What I am saying is critically important, because in your deliberations, you will be called upon to determine, among other things, whether other solutions were available. You will have to consider whether anything different or additional could have been done during the Standing Committee on Finance's meeting.

I would therefore urge the Speaker and his closest aides to consult the transcript of yesterday's proceedings in fine to see the offer I made. I think my offer should have been accepted. It was made in good faith and would have allowed us to overcome the impasse. We could then have presented our simple amendment. The amendment was just three lines long and would have added schedule 11 to the bill. I will read it:

“First Nations and Harmonized Sales Tax Agreement PVAT exemptions. To ensure conformity with the laws of Canada and further to section 8.3(1) of the Federal-Provincial Fiscal Arrangements Act, any provincial value-added taxes, PVATs, that have been exempted by a participating province shall be exempt under the Excise Tax Act”.

A very simple recorded division could have been taken on those three lines. Several votes were, in fact, held at the end of our parliamentary committee meeting yesterday evening. It would have been elegant and simple, and people would at least have had the opportunity to debate this issue. Instead, a decision was rendered that we cannot accept, because it is an affront to our rights.

That decision clearly states that, even though the House ruled that we had four hours to deliberate on this bill, we would have only three hours and 20 or 25 minutes.

I submit to you once again that if four hours of our deliberation time had been taken away, instead of 30 or 35 minutes, you would have intervened immediately. In the same way, you must intervene now on this question of privilege.

As for my point of order, it is important for you to realize that your aide did not even allow us to make a decision, given the time at which she made her decision.

I sent the amendment at 10:06 yesterday evening, when I made the other amendments that appear in our notice paper today. Three of my amendments were printed. The Standing Orders could not be clearer and do not allow any exceptions. At least, we could not find any.

Our institution is not an office that has a set of powers that can be exercised by a subordinate or a close aide of an office holder. When the Standing Orders state clearly and unequivocally that the office holder himself must exercise a power, no one else can do so in his place.

We are still surprised that we received the following letter from your aide, which is dated today, but in fact was sent yesterday evening:

You have sent the Journals Branch a motion to amend Bill C-62, An Act to amend the Excise Tax Act, for inclusion on the notice paper. The motion in question is beyond the scope of the bill it amends.

The 2009 second edition of House of Commons Procedure and Practice explains on page 781: “...the Speaker has ruled out of order a motion in amendment that exceeded the scope of the bill...”

Accordingly, I [first person singular; you are not the individual in question] regret to inform you that, pursuant to the provisions of Standing Order 76.1(2), this motion cannot be included on the notice paper.

You heard correctly. We have an expression where I come from: trying to be someone you're not. In this case, your aide is trying to be you. She is a close aide—no more, no less. She is not the Speaker.

The quotation she gave from page 781 of House of Commons Procedure and Practice is a vague reference to an imprecise situation. Yet this matter concerns a specific schedule and document that were proposed. This means that a ruling must be given on what was proposed and, above all, that it must be given by the only individual authorized to do so, and that is you.

This letter documents what happened, but nowhere does it state that you were the one who gave this ruling. On the contrary, by signing it and using the first person singular, she is clearly stating that it was her ruling.

So we must refer to the Standing Orders to see that no one other than you has that authority. I refer you once again to Standing Order 76.1(2), which clearly states that this power falls to you and you alone.

With all due respect to your closest aides, people with whom we work every day and without whom the work here could not be done, if you want the rules we have set for ourselves to change to make your life and role easier, I would be eager to review these matters with you and the other parties present in this House. However, that is neither here nor there. Currently, the Standing Orders leave no room for exception or ambiguity. You and you alone are charged with reviewing these questions. My rights have been doubly infringed upon, but so have the rights of the first nations. The amendment requested by the representatives of the first nations could not be considered last evening in committee because some of the time that had been allocated by this House was taken away. The amendment cannot even be considered in this House.

For all these reasons, I respectfully submit that it is your duty to rule, first, that this question of privilege is properly worded, that it reflects a prima facie violation of our rights as parliamentarians, and in particular the rights of those who sent you the letter today, and then to rule, in light of the specific situation we find ourselves in, that any ruling or interpretation should be based on context.

The context is constitutional. The context affects the rights of the first nations. A series of extremely important rulings by the Supreme Court of Canada make it mandatory to have real and substantial consultations with first nations on issues like this. As an aside, a lawyer colleague was there last night and she was doing her job quite well. She had to explain to us that she was not a lawyer from the Department of Justice. Only the Department of Justice can act on behalf of the government and present legal opinions. This lawyer was of the opinion that according to the Department of Finance, the rights in question were not covered by Supreme Court rulings. I asked whether there were any opinions, writings or doctrine on that. That was just an opinion given off the cuff last night. I am not questioning the good faith or the competence of the lawyer in question. I am just saying that she was not there to represent the Department of Justice and that is very important to note. Only that department can represent the government when it comes to the interpretation and application of legislation.

Thus, we find ourselves in a unique situation. As I mentioned at the outset, some people have been here longer than others and they are saying that they have never seen a parliamentary committee—as is said here, mistakenly—obliged—and I use that word on purpose, without fear that you will contradict me, since you were there—to stop its work because of the misconduct of a group that was just outside the room and made it impossible to work. By the way, the chair of our committee tried everything, as did the clerk of the Standing Committee on Finance. They met with those in charge from the political party in question and pleaded with them to respect our ability as members to work. To no avail. Finally, at your suggestion, we moved to another room in the basement. Once the microphones were installed and the interpreters in place, we were able to continue. You may verify my calculations, but I believe that we lost 35 minutes.

We never had the full amount of time allocated. We were unable to study the issue of aboriginal rights last night. In addition, because the proposed amendment was not presented, the very issue of aboriginal rights was not and will not be studied here, unless you, personally, rather than your aide, rule on the admissibility.

For all these reasons, I submit that there my privileges as a member of Parliament have been breached. I submit that you must reverse the decision made in your place by Ms. Labrecque-Riel or at least make the decision yourself.

I thank you for your attention and concern. I await a decision that will result in respect for our rights and the rights of aboriginal peoples.

Speaker's Ruling

[The Speaker, Peter Milliken]

There are three motions in amendment standing on the notice paper for the report stage of Bill C-62. Motions Nos. 1, 2 and 3 will be grouped for debate and voted upon according to the voting pattern available at the table.

I will now put Motions Nos. 1 to 3 to the House.

The House proceeded to the consideration of Bill C-62, An Act to amend the Excise Tax Act, as reported (without amendment) from the committee.

[Jean-Michel Laurin, Vice-President, Global Business Policy, Canadian Manufacturers & Exporters]

Thank you, Mr. Chairman.

Ladies and gentlemen, good evening.

Good evening. Thank you for inviting me to appear before the committee this evening on behalf of Canadian Manufacturers & Exporters to discuss sales tax harmonization. This is a very important measure that would help Ontario and British Columbia improve their tax competitiveness and make the exports coming from these two provinces more competitive as well.

Before I begin, I would like to say a few words about our association. Canadian Manufacturers & Exporters is the voice of manufacturing and global business in Canada. As such, we represent more than 10,000 leading companies nationwide. More than 85% of our members are small and medium-sized companies. Our members represent industrial sectors and every export sector you can imagine in the economy. We have members in every province and happen to have very active divisions in British Columbia and Ontario.

I am pleased to be here tonight to discuss Bill C-62. Sometimes, especially when we face some significant economic challenges, as is the case today, governments have to do the right thing, even in the face of political opposition. That's what leadership is all about, and it's what B.C. and Ontario are trying to do right now with their initiatives to harmonize their provincial sales taxes with the GST. It's the right thing to do for their economies, and it's the right thing to do for Ontarians and British Columbians.

One of the most important things we've learned from this recession that has battered the Canadian economy over the past year is that you have to create real value in order to sustain employment and generate income growth. The financial market crash has shown that no one can create lasting wealth simply by spinning other people's money around and around. Eventually that money needs to be producing goods and services that people want to buy. Otherwise it leads to financial bubbles and major trouble for our economy.

Another lesson we've learned from the recession is that whether we like it or not, our economy is affected by global economic conditions. We must compete around the world for customers and suppliers, for skills and intellectual property, for credit and for investment dollars. Our companies have to be world class, and the business environment they operate in also has to be world class.

Competitive pressures have only become more acute as a result of the recession. In that context, we should be aware that the way we perceive taxes has a significant impact on investment, innovation, job creation, and all the elements needed to sustain a healthy economy. These lessons are becoming more obvious as the economy begins to recover. Business as usual is not an option for governments or for the enterprises upon whose success the economic recovery ultimately depends.

Sales tax harmonization is exactly the kind of forward-looking policy reform that will be critical in strengthening provincial economies, speeding along recovery, and creating job opportunities in the future. Harmonization will save businesses money, lowering the cost of investments in innovation and new technologies, productivity, and environmental performance, and in the development of new markets, all of which are extremely important in rebooting the economy, securing jobs for the future, and helping businesses make the changes they require to compete and grow in global markets.

Businesses in British Columbia and Ontario currently pay $6.9 billion every year in provincial sales taxes when they purchase inputs such as construction materials, office supplies, energy, legal services, furniture, business vehicles, and equipment--all goods they need to produce goods and services that they will sell to their clients. That $6.9 billion will be saved under a harmonized sales tax system. There will also be additional savings for businesses, as well as for governments, as a result of lowering the cost of tax administration.

Tax experts—and I understand you might be hearing from some of them later on—agree about the benefits of the HST. The introduction of an HST in Ontario and British Columbia will make these provinces' tax systems more competitive in attracting business investments to their provinces. That's extremely important for companies that are competing right now to attract and retain the investments these provinces need to develop an economy based on advanced manufacturing and on knowledge and value creation.

But it is the citizens of these two provinces who ultimately stand to benefit from tax harmonization. Business savings will be redirected to supporting employment in more competitive industries as well as reducing consumer prices.

To conclude, I want to stress that sales tax harmonization will help build a more competitive private sector in B.C. and Ontario that is capable of creating jobs in the future, because it's investing today in new products, new technologies, new skills, and new markets. By doing the right thing today, we will help our economies recover faster from the recession. We will be in a stronger position to pay off the debts we incurred before and during the recession. Above all, we will continue to generate the job and income growth that is so important to maintaining the quality of life Ontarians and British Columbians enjoy, both today and in the future.

Thank you.

[The Chair, Conservative, James Rajotte]

I call the 70th meeting of the Standing Committee on Finance to order. The orders of the day are pursuant to the subject matter of Bill C-62, An Act to amend the Excise Tax Act.

Colleagues, as you know, we do have an order from the House. I will not read it in full but will explain that the report from the committee has to be done by 11 o'clock tonight. We have four hours from the time of the vote. The vote was called at 5:43 p.m., so we have until 9:43 p.m. At that time, if the committee is still debating the bill, I have to put every question necessary at that point without further debate or amendment, so essentially we have four hours here tonight to debate the bill.

We have five witnesses here before us who wish to present on the bill. I'm proposing that after that we have perhaps an hour with the witnesses, and then we proceed to clause-by-clause. We do have officials from the Department of Finance in the room who will be available for comments from members.

We have with us here today five witnesses. I'm recommending that we have between five and ten minutes per witness for an opening statement, and then we will have questions from members. My understanding in terms of presentation order is that Chief Angus Toulouse will be first; Chief Randy Phillips will be second; Chief Keith Matthew will be third; fourth will be Shirley-Ann George from the Canadian Chamber of Commerce; and fifth will be Jean-Michel Laurin from the Canadian Manufacturers and Exporters.

You have between five and ten minutes for an opening statement.

We'll start with Chief Toulouse, please. Thank you, and welcome to the committee.

Provincial Choice Tax Framework Act

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I will be splitting my time, if there is any left, with the member for Western Arctic.

It has been interesting to listen to the debate in this House, because what we have heard is a radical attempt by the Conservatives to distance themselves from this tax. Part of the challenge with this is that if there is no role for the federal government, why are we debating Bill C-62 in this House?

In addition, we have an agreement here entitled “Memorandum of Agreement Concerning a Canada-British Columbia Comprehensive Integrated Tax Co-ordination Agreement”. Throughout its text, this agreement defines the parties as the Government of Canada and the Government of British Columbia, so we have two parties involved in this agreement, and we need to have this debate in this House because Canada is party to this agreement. To say there is no federal role is simply false.

I want to touch on a couple of points here.

This one is still relevant, even though it occurred back on September 19, 2009. The Globe and Mail ran an article on the tax reform and HST. The headline in this article was:

HST's price tag revealed: consumers hit hardest. While businesses will save $6.9 billion, consumers will pay higher prices on wide range of goods and services, report shows

This was a report done by the TD Bank. They are hardly left-wing, anti-tax folks. The article says:

The TD report adds fresh fuel to accusations...that harmonization is little more than a tax grab aimed at benefiting businesses at the expense of consumers.

They go on to say:

Businesses will reap huge savings because they will be able to claim rebates. But consumers will end up paying the new tax on goods and services that are currently exempt from any tax.

It is no wonder that in the province of British Columbia, the sentiment is the same as in Ontario. Ipsos Reid's poll for Canwest and Global National last week indicated that 82% of British Columbians oppose the harmonized tax, and 56% of B.C. respondents said that they think the HST will hurt the provincial economy. We know that there has been an attempt to sell this as a job creation effort, yet 56% of British Columbians simply feel that it will impact on the provincial economy and on their jobs.

We fundamentally disagree with the idea that there is no federal role in this, and I want to point to the issue around first nations. First nations, both in Ontario and British Columbia, are opposed to the HST. That is clearly within the federal jurisdiction. In fact, an article by the Canadian Press in The Chronicle Journal in Thunder Bay on December 4 says that the Ontario aboriginal affairs minister stated that “the province supports demands for a point-of-sale exemption for first nations and is urging Ottawa to get behind the move. Premier Dalton McGuinty has written to Prime Minister Stephen Harper to ask him to grant the exemptions”.

We heard in this House previously that the province needs to look after it, but in fact what we have is the Ontario provincial government writing to the federal government, writing to the Prime Minister, to ask why they are not honouring this point-of-sale exemption that is in place in Ontario, and in British Columbia the first nations are saying the federal government has a duty to consult when it is looking at any additional taxes for first nations.

I want to turn to the jobs front for a moment. There have been a number of reports, and this is one that came out in the Victoria Times Colonist. It says:

The implementation of a 12 per cent harmonized sales tax in B.C. will cost the tourism industry as many as 5,174 jobs and see visitor spending drop by as much as $545 million annually...

This was done by the Council of Tourism Associations of British Columbia. I know people like Bob Wright from the Oak Bay Marine Group in Victoria have been loudly speaking out in opposition to this tax, which they see as directly impacting on the tourism business in British Columbia.

School districts have been calling. In British Columbia we already know that school districts have been particularly hard hit in these tough financial and economic times, and this is probably true in Ontario. What we have seen in British Columbia is that the school districts are looking at their budgets and recognizing that having to pay this additional tax, this HST, is going to impact on their ability to deliver education to students, which is the whole goal of a school board.

They are asking that the provincial government provide the same HST rebate that is available to municipalities so they can continue to provide quality education.

The Canadian Food and Restaurant Association ran some articles saying that it estimates that British Columbians would pay an additional $694 million on restaurant meals alone if the HST is introduced. It estimates that in 1991 its members lost 9.5% of their business when the GST was introduced.

The B.C. Care Providers Association wrote a letter to the B.C. members of Parliament. The care providers are very concerned about their ability to provide seniors' care. The letter states:

--It is estimated the HST will result in a negative economic impact on B.C. seniors' care providers of over $10 million/year. Furthermore, it will penalize care providers that have rightfully been encouraged by our provincial government to contract out certain services to maximize direct patient care dollars.

The bottom line is that without HST mitigation, care providers will be forced to lay-off staff and reduce service....

However, it is our strong belief that the Government of Canada should also play a more direct role in mitigating the negative impacts of the HST on seniors' care in BC - and Ontario....

More specifically, we are asking the federal government to include all providers of publically funded and regulated long term care services in the same HST rebate category as hospitals.

That is another role for the federal government.

I have received emails, phone calls, faxes and letters from my constituents and other people in British Colombia. As I noted earlier, overwhelmingly people in British Columbia are opposed to the HST. I have referred to it in the past as the hated sales tax, the HST.

This email came in from a concerned citizen:

The Government and Liberal position that the HST matter is totally the responsibility of the provinces is fallacious because the VOTERS in the two provinces have not had the opportunity to vote on the matter, therefore it is being imposed without the support of 82 percent of the provincial electors. The federal government is effectively conniving with the provincial governments to pass this without public support.

This is not democracy in action. It is equivalent to the proroguing of Parliament affair--underhand and manipulative....

Inga from Gabriola said, “I am on assisted income and I have no money”. We have heard from many of our constituents that those on fixed incomes and pensions will be adversely impacted by, as my colleague from Vancouver Kingsway pointed out, this regressive tax. Laura from Duncan said, “As an abandoned mother, I am barely getting by now, and I cannot afford a 7% tax hike. Thank you for opposing the harmonized sales tax”. Another constituent said, “It is outrageous that the Liberal and Conservative governments are again hitting the poor Canadians. Hopefully Canadians will be hit so severely that we will all protest. Keep fighting for all Canadians”.

Another constituent said, “As a business owner, I am disappointed to hear it will help us and ease our paper burden. In my case, two businesses we have do not have PST, so it will increase our taxes, no change to our paperwork and yet again, no increase in my bottom line income”.

Another constituent said, “This HST tax on middle and lower class earners is outrageous and a crime. Our standard of living is disappearing fast”. Another constituent said, “I never realized just how tight a fixed income could be, where every cent counts”. Another constituent said, “I do not see how increasing taxes during difficult economic times can help. There is more money in circulation when people feel confident and I bet they have more spare dollars to spend”.

There are more letters that I could read into the record. The bottom line is that they are all on one theme: this is the wrong tax at the wrong time. This is not a time, when Canadians are already struggling to make ends meet, when people are worried about their jobs and seniors and pensioners are worried about being able to make their payments on their rent, on their medications, on their food. This is just the wrong time to pass on an additional cost to them. This is simply a tax shift from businesses, but not from all businesses. We have heard that this will not help the service sector out at all. However, there is an overall tax shift from the business sector to consumers. This is not the time to pass on those costs to consumers in British Columbia and Ontario.

Mr. Speaker, I urge members of the House to reconsider their position, to vote against the HST, the hated sales tax, and oppose Bill C-62.

[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.

[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.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, throughout the debate, members have been calling for consultations with the public. If they look at Bill C-62, which is an enabling legislation amending the Excise Tax Act, they will see that there are no clauses to do with the HST, at least none that I could see. There are a number of changes on issues such as the provisions for direct sellers and some other consequential amendments, but there is nothing in here that the public would actually be able to comment on, unless the member is aware of any clause in Bill C-62 that has something to do with what he was talking about.

I suggest to the member that the consultation process with the public has to do with the legislation of the Province of Ontario and the Province of B.C., which are harmonizing their provincial taxes with an existing federal tax. The body that will deal with that legislation in fact is a provincial legislature.

Therefore, I would like the member to explain what exactly would happen with the public at our finance committee meetings, if they came before us on Bill C-62. What exactly would they be discussing, other than saying, “We don't want you to pass this bill so that the Province of Ontario can't pass its bill”?

If that is the point, then say so.

The House resumed consideration of the motion that Bill C-62, An Act to amend the Excise Tax Act, be read the second time and referred to a committee.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, I thought it was interesting when I heard one of the member's last comments about getting some input on how we could ease the imposition and make some changes on the impacts of the tax on people.

Bill C-62 has nothing to do with that. The legislation that is coming before Ontario and B.C. does. He has contradicted himself and I want to know whether he is aware of anything in Bill C-62, the bill we are debating right now, which would assist solving the question that he has raised, or is he in fact simply going to admit that what he is asking for is what should be handled in the provincial legislatures?

[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.

[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.

[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, 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.

[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.

[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—

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

Madam Speaker, I listened carefully to the member's speech. He indicated that he liked Bill C-62 because it respected provincial jurisdiction, yet another Bloc member indicated that there is nothing in Bill C-62 for Quebec. The member must be hoping by supporting this legislation that the federal government will be in a good mood when it comes to negotiating with Quebec.

The member for Windsor West just pointed out that it made more sense to him that the Bloc would be voting with us against the legislation. In fact, we moved an amendment yesterday, which the Bloc did not support, to have committee hearings and have witnesses appear before the committee. Having watched the Bloc for the last year, I thought that would be something the Bloc members would be supporting. I wonder why the member did not do that.

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

Mr. Speaker, in supporting Bill C-62, does the Bloc hope that Ottawa will reciprocate and be more favourable to an agreement to compensate Quebec in the future?

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Speaker, I would like to begin by stating that Bloc Québécois members support Bill C-62, which is before us today. Yesterday, some people were wondering whether we opposed the time allocation motion for this bill, given that we did not even see the bill until after the motion was moved. That was completely unacceptable. But now that the motion has been adopted, we agree with the House's decision.

We support this bill, but not for the same reasons as other members, be they Conservative or Liberal. We respect Ontario and British Columbia's decision to harmonize their provincial sales taxes with the GST, because that is what Quebec has been doing for many years now.

We would like to reiterate the request made by Quebec's National Assembly last spring in a unanimous resolution: Quebec must receive fair compensation for having harmonized its sales tax with the federal tax beginning in 1992.

The Bloc Québécois is calling for fair and equal treatment for Quebec in all matters. The federal government changed the rules of the harmonization game. When it compensated the maritime provinces—New Brunswick, Newfoundland and Labrador, and Nova Scotia—it said that Ontario, British Columbia and Quebec would not be eligible for compensation because they stood to lose less than 5% of their tax revenue.

As we have seen, the federal government changed the rules for Ontario and British Columbia. Its latest budget included funds for compensating those two provinces. The Government of Quebec, naturally, passed a unanimous resolution telling the federal government that it makes no sense to change the rules and that it must take into account what Quebec has done in previous years. I will come back to that.

We intend to continue putting pressure on the federal government to resolve this contentious issue that has been around for many years. This is a matter of equality.

I want to put this into context. We know that the Government of Quebec harmonized its sales tax with the federal tax in the early 1990s. At that time, the federal government agreed to allow Quebec to manage the GST within its own jurisdiction.

In 1997, the federal government offered compensation to three provinces—New Brunswick, Newfoundland and Labrador, and Nova Scotia—to harmonize their sales taxes with the federal tax.

Unlike the situation in Quebec, the federal government would manage the federal part as well as the provincial part of the new harmonized tax. As compensation for the loss of revenue caused by harmonization, the federal government paid nearly $1 billion to those three provinces.

Since then, the Government of Quebec has been asking Ottawa for compensation for harmonizing its sales taxes, which it had done five years earlier. However, even though it recognized the Government of Quebec's full harmonization of sales taxes, the federal government refused to compensate Quebec, claiming that the Quebec government's loss of revenue caused by the harmonization was not enough to justify such compensation.

At that time, in order to receive compensation, the loss of revenue caused by the harmonization of the provincial portion of the sales tax had to exceed 5% of the total amount of the provincial tax. At the same time, the federal government said that Ontario and British Columbia were not entitled to this compensation.

But the government is now going back on its word on this lost revenue rule and it has reached an agreement with Ontario and British Columbia. This agreement included significant compensation, to the tune of $4.3 billion for Ontario and $1.6 billion for British Columbia. One might say that, by rejecting the 5% criterion, the federal government has now opened the door for Quebec to qualify for compensation. The rules of the game have been changed for two provinces, so why not change them for Quebec as well and ensure that it, too, is eligible for compensation.

Instead of naturally and fairly compensating Quebec for having harmonized its tax five years earlier, in other words in 1992—or 17 years ago now—the Conservatives, using their legendary bad faith, have started coming up with new excuses not to give Quebec the $2.6 billion it is owed.

In response to their claim, which surprised Quebec's finance minister, Ms. Jérôme-Forget, that the Government of Quebec had not in fact completely harmonized its sales tax with the federal government, Quebec committed to doing one thing right away. There were certain inputs for big companies that were still not exempt from QST. The finance minister announced that the Government of Quebec would proceed with those adjustments. Then, and we heard it here in this House, the Conservatives found new reasons not to compensate Quebec. They said that Quebec should stop charging tax on tax. Through its finance minister, the Government of Quebec promised to so do.

What did the federal government do? It came up with another excuse. From now on, only provinces whose federal and provincial sales taxes are collected by the federal government will be compensated. An agreement was made in 1992 whereby the Government of Quebec would collect the tax on behalf of the federal government. This is just another fine example of the predatory federalism practised by the Conservative government.

As I said earlier, when the two sales taxes were harmonized in 1991, the Government of Quebec entered into an agreement with the federal government whereby the Government of Quebec would collect the tax on behalf of both governments and then pay Ottawa its share. For Quebec, it was and still is a question of autonomy. In exchange, the federal government would pay Quebec $130 million annually. This was not compensation, but payment for services rendered.

The Bloc Québécois respects the decision by Ontario and British Columbia to have the federal government collect their sales taxes. That is their choice and their business. But the Bloc Québécois will support the Government of Quebec in its fight against the federal government, which is trying to take away Quebec's power to collect the GST in Quebec on Ottawa's behalf.

Those are the main reasons why, although we are in favour of the bill, we are still certain that until this dispute between Quebec City and Ottawa is resolved, there will still be an injustice. We are going to work hard to put an end to this injustice and ensure that the federal government provides Quebec with compensation pro-rated to its population and the amount of sales tax collected in Quebec, as it is planning to do for Ontario and British Columbia. Quebec must be compensated fairly for what it has been doing for many years under the sales tax harmonization agreement.

In closing, I would like to say that we will certainly not let this dispute continue. We are not going to let the current government keep on acting unfairly and denying what the Government of Quebec has already done to harmonize its sales tax and even make adjustments. When adjustments have been needed, they have been made quickly.

We are certain that, because of this bill, the provinces will be somewhat more able to create or enter into agreements with the federal government more easily. That is the upside of this bill and that is why we will vote for it.

[Paul Szabo, Liberal, Mississauga South, ON]

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

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

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

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

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

[Vic Toews, Conservative, Provencher, MB]

moved that Bill C-62, An Act to amend the Excise Tax Act, be read the second time and referred to a committee.

Disposition of an act to amend the Excise Tax Act

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, Bill C-62 is the HST bill. My colleague from Trinity—Spadina has called it the hobbling sales tax or the hated sales tax. There are so many names for it. Sometime in the next 24 hours, it will be presented in the House of Commons. If passed, the federal government will give permission to the governments in B.C. and Ontario to proceed with merging the GST and PST into the HST in July 2010.

A bill normally takes months to pass through Parliament and the Senate. Instead, the Liberals and Conservatives are trying to do this in two days. Two days does not allow for debate on such an important subject. This is why we need to talk about this issue at this point. In this economic downturn, this is the wrong tax in the wrong hands at the wrong time. It is an unfair tax grab.

It continues the pattern, under successive federal Conservative and Liberal governments, of pursuing policies that boost returns to a privileged corporate elite on the flimsy excuse that they will use those returns to benefit the rest of us. Three decades of growing income inequality in the country proves those promises are false.

However, what is the HST? I am getting a lot of calls from my constituents. They know it is going to cost them more, but they really and truly do not understand what it is all about. The HST is blending the provincial sales tax with the federal GST. It applies to a much broader range of goods and services than provincial sales tax normally covers. The provinces are permitted to exclude certain items from the tax. We have heard that Ontario is going to be excluding coffee and donuts, but not home heating fuel.

As I said, the provinces are allowed to exclude these from the tax, but exemptions cannot exceed 5% of the tax base. What will be taxed? The goods and services I am about to outline were not taxed under the provincial sales tax, known as the retail sales tax in Ontario, but will be subject to the HST, making them 8% more expensive.

I need to clear my throat, because there is quite a list here. Included are gasoline and utilities, so heating, hydro and natural gas. In my great riding of Sudbury, throughout northern Ontario and right across our great country, many people have to heat their homes. Their costs are going up, especially in Ontario and B.C., where we are proposing this.

Also included are Internet bills, adult footwear under $30, admissions under $4 to the pools, veterinary care, personal services like haircuts and massage, professional services like legal services, accountants and mutual fund fees and membership fees to the gym. We are trying to promote a healthier lifestyle across our country and now we are going to tax people to go to the gym.

Also included are new homes over $400,000 and real estate commissions, especially if people sell homes over $400,000. They will taxed on that commission. Also included are commercial property rentals, landscaping, vitamins, postal stamps and courier fees. This is my favourite, labour costs related to home renovation are also included. Here is a home renovation tax credit. A person can save $1,350, but guess what? They are going to be taxed on it with this new HST in Ontario and British Columbia.

Dry cleaning, carpet cleaning, funeral costs, motor vehicle service, including towing and car washing and ice rink rentals are also included. Hockey, our national game, will be taxed more. The tax on overnight summer camps is rising from 3% to 8%. Kids going to summer camp will be taxed. Campgrounds and domestic air, rail and commercial bus tickets are also included. I could sit here for the 10 minutes I am allotted just outlining all the things that are going to be increasing.

Finally, unlike the PST, businesses get a refund of their HST payments through the HST tax credit, administered by the federal government. This leaves business inputs free of tax, greatly reducing the corporate tax burden. Businesses add the HST to their sales and revenue. Canada collects the resulting revenue.

Last week, the Conservative government began the first step toward allowing provincial governments to adopt the harmonized sales tax, or the hated sales tax, or the hobbling sales tax. The government has taken the unusual step of declaring this is not a confidence matter.

In March the federal government signed agreements with British Columbia and Ontario to harmonize their provincial sales tax with the federal GST. The Ontario government introduced legislation last week. British Columbia has yet to do so. Therefore, there still is hope.

Federal legislation would also be necessary in order to transfer $4.3 billion to Ontario and roughly $1.6 billion to B.C. to cover transitional costs, as was promised by the federal government in the agreements. What would happen if these two amounts, the $4.3 billion and the $1.6 billion, were not there? We would not even be having this debate, because they would not be moving forward with the HST in these two provinces.

This massive tax shift from corporations to families is unfair. The tax is inherently regressive. It hits those who have no choice but to spend all, or a large part, of their income. It favours those with income to save, but taxes their savings if they are investing in mutual funds or RRSPs. This is doubly true in a recession where less than 50% of the unemployed qualify for EI, where social assistant rates are well below the poverty line and the cost of essentials loom all the larger.

We have heard a few times now that there is going to be a 16% personal income tax break. For most families I know that are struggling to get by, I do not know how a single mother could look to her children at the kitchen table and say that she was sorry she did not have enough money to buy milk this time because her costs were increasing everywhere else, but in May, when she received her tax return, she would have a little more dollars then. It is just not making sense.

The HST extends the sales tax to essentials previously uncovered by the PST and apart from those items exempted, and those differ from province to province, those with the lowest income have no choice but to pay it and sacrifice consumption elsewhere. The HST is hitting those who can least afford it harder than anyone else. The tax is quite simply unfair.

Without significant compensating measures, like the rebate, or significant exemptions of our essential goods and services for low and moderate-income families, the tax remains unfair. Our experience with social support programs does not reassure us. Governments that have demonstrated a callous disregard for the plight of low and moderate-income households cannot be trusted to apply the HST fairly.

If, as argued, a sales tax is bad for investment, compared with a tax on profits, then why is the removal of sales from inputs not matched by an increase in corporate income taxes? In fact, the opposite is true. The HST is accompanied by corporate income tax cuts at both the federal and provincial levels. In other words, the HST is part of a general and indiscriminate shift in the tax burden from corporations to individuals and families without adequate compensation.

Progressive economists argue that if we want to use the tax system to encourage investment, across-the-board cuts are an inefficient way to proceed.

With the economy operating at a two-third capacity, increasing profits by lowering taxes through the HST is not as likely to foster new investment as it might when the economy is booming. The timing of this tax is again wrong.

New Democrats are calling on Liberal and Conservative MPs from Ontario and B.C. to stand up for their constituents.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Madam Speaker, I will be addressing all my points to Motion No. 8, which is before the House at this time. Motion No. 8 drastically and undemocratically reduces the ability of members of the House to deal with a very important issue contained in Bill C-62. We are faced with a motion that is rarely used in the House, rightfully so and quite frankly should not be used this evening and for the next couple of days.

Madam Speaker, I am splitting my time with my colleague, the hon. member for Sudbury.

The motion is rarely used. It is rarely used and it should not be used at all because it is so Draconian. This is what it is going to do. At the end of the day today, at eight o'clock this evening or around that time, we are going to have a vote on two matters before the House: an amendment to Motion No. 8 and Motion No. 8 itself.

If Motion No. 8 passes, we are in effect going to be limited to the entire legislative process in this House over the next two days. After second reading, we are going to have a maximum of four hours of committee deliberations on a bill that is some 32 pages long. It is quite complex. It is a tax bill. We are supposed to digest that as members of Parliament. We are supposed to somehow communicate to our constituents what is in the bill and the details of it, and do that in four hours in committee. Then it comes back to the House for one more day which will be a short day because it will be Wednesday and then it is over. We have a final vote at report stage and third reading, and it is done.

If we add up the hours, there are very few hours for what is a very important bill in terms of the consequences. It is a bill that huge swaths of Ontario and B.C., where it will apply, are overwhelmingly opposed to it. In the last two opinion polls 80% were opposed to it in British Columbia and 75% plus in Ontario were opposed to it.

There is a simple question that we ask. Why is the government doing this and why is it being supported by the Liberal Party? Those percentage numbers in the polls tell us why. We are getting close to the end of the year, to the break, and this is clearly designed to limit the debate so that the Canadians do no get any opportunity to express their opposition.

We, doing our job, as elected representatives are being denied any ability of any realistic kind to represent them in the overwhelming opposition to the bill.

My colleague, the member for Vancouver East, earlier today moved an amendment. That amendment would in fact allow us to put the bill over to the new year and by no later than the end of February we would have hearings that would allow those Canadians, and I would say this, I keep an open mind on this bill, who both are opposed, as we already know in overwhelming numbers, and those in support to come before the finance committee of the House of Commons and tell us what their positions are. Educate us perhaps, as opposed to having to take from the government verbatim what it wants to do.

Who would we expect to hear from? I will tell the House who I would like to hear from. I would like to hear from the first nations. We saw again today the finance minister standing just before question period and there was this big debate over who was responsible as to whether the first nations were entitled to exemptions from this legislation on the HST. He pointed the finger at the provinces. At the end of last week ministers in both B.C. and Ontario were pointing the finger at the federal government.

I would like to hear from the first nations on what their position is. I would like to hear what kind of consultations went on because we are hearing none. What I would like then to do is get some experts in to tell us, as members of Parliament, who is right. Who is supposed to deal with this issue for the first nations? They are one group I would like to hear from.

I would like to hear from retired persons because they are on fixed incomes and because of this legislation they are going to take one of the biggest hits.

I would like to hear from that lady in northern Ontario who wrote to one of my colleagues about the impact the HST is going to have on her home heating bill. She does not have other revenue coming in that would offset the $200 a year it is going to cost her just for her home heating fuel. Members of Parliament should hear from her.

I would like to hear from athletic groups in the country and other associations that are going to be negatively impacted by this tax. How many teams are we going to lose because they will not be able to afford playing any more? We need to hear about that.

I would like to hear from the tourism industry, which has been quite vocal up to this point in an organized way about its opposition to this tax. The industry knows the difficult economic situation it will face. Members of the House should hear what an additional 8% tax on its services would do to the industry. We are not going to hear from this industry in any kind of meaningful way with only four hours of hearings probably late in the afternoon tomorrow or early evening, if this motion goes through.

I would like to hear from those groups in our society that are economically vulnerable because they, like retired persons on fixed incomes, are going to take the biggest hit as far as we can see at this point.

I would like to hear from labour groups. A number of interesting positions have been taken by various federations of labour in terms of the impact this tax would have on their individual economic sectors. They are taking a significantly different position on the impact of the HST than the business community. We need to hear from both of these communities as to how this tax would impact them. If we are going to do our job as parliamentarians, if we are going to make an informed decision, then we need to hear from these groups.

I would like to hear from economists. We are hearing all sorts of things. The member for Mississauga South and members on the government side are touting the same thing, about how this is going to impact the economy, of the savings the business community would get.

We are hearing a different story from other economists. We heard from one business group that this tax would cost Ontario alone 50,000 to 60,000 to as many as 100,000 jobs. This tax would not make jobs. People would lose jobs.

We need to hear all of that information so we can make an informed decision.

When I hear some of the economic arguments, I think back to when the GST was originally brought in by the Conservatives in the Mulroney period. I remember it being a net revenue source for the government. The old manufacturers tax would be replaced with the GST and it would balance itself out. The manufacturing side would give us all those savings. That did not happen. We had a net revenue of about the same amount on the GST side. Within the first two years of the GST, several billion dollars more came in from manufacturers and it has just grown exponentially.

I would like to hear from economists who could give us an analysis, bring us up to date as to what happened when the GST came in, and what is likely to happen if the HST is brought in, in both Ontario and British Columbia.

We are not going to get any of that. We are back to the question: Why are we dealing with this motion? Why are we going to be denied the ability to do our job, the ability to make informed decisions? It is as simple as this. Both the Conservatives and the Liberals are running from the electorate. They are so afraid of what the impact is going to be if the electorate gets even more information on how negative the tax is going to be that they want to bury it as quickly as possible. That is a shame. It is not the way this Parliament or any Parliament should function.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Madam Speaker, what I do know is that we are debating the bill before the House of Commons. Every penny of the $6 billion federal dollars comes from the federal income tax. It is a transfer of federal dollars to the provincial government. If there is no transfer of this $6 billion, the HST would not be happening. If we did not have Bill C-62 before us, the HST would not go through in Ontario or B.C.

So stop hiding behind the provincial governments. The Conservatives should stand up for what they believe in and justify why they are ramming this tax grab into the people of Ontario and British Columbia.,

Disposition of an Act to amend the Excise Tax Act

[Olivia Chow, NDP, Trinity—Spadina, ON]

Madam Speaker, tomorrow morning at 10 o'clock or thereabouts, the House of Commons will be debating Bill C-62, the harmonized sales tax bill. If it is passed, the federal government will give permission to the British Columbia and Ontario governments to proceed with the HST starting in July 2010. It would also permit the $6 billion transfer.

Normally, a closure motion comes after many days, weeks or months of debate on an issue or a bill. What is odd and absurd about the situation before us is there has been no debate on the HST bill, none, because the debate has not even started yet. There has been no debate on the HST bill, because it does not start until tomorrow.

Madam Speaker, I also want to say that I am splitting my time with my colleague, the member for Welland.

Here we are, debating a motion to limit the second and third readings and committee study. This bill is normally something that would take three, four or five months to pass through Parliament and the Senate. We are debating a motion that would stop the debate in two days, meaning that all of that work will be done in two days. It is unbelievable.

There will be no time for much study, no time to exchange points of view and no time for hearing from Canadians and small businesses. The Conservatives and Liberals will try to rush through this HST bill by this Thursday night so they can start their winter holidays.

We have a motion for hearings. We have an amendment. I am curious how many Liberals from the Greater Toronto Area will vote against hearing from the public, because I know that many of the people, not just in Trinity—Spadina and Toronto, but also in the greater Toronto region, are very much against this tax.

I find this mad rush to ram this bill through very anti-democratic. It is unacceptable and outrageous. We are supposed to be a House of Commons. When the commons, i.e., ordinary Canadians, are not allowed to be heard, then how can we call ourselves a democratic country?

The HST could actually stand for hated sales tax, horrific sales tax, hobbling sales tax or horrible sales tax. Since we are not going to hear much from my constituents in Trinity—Spadina, I thought I would read some of the comments they have sent to me by mail, email and telephone.

First, Matthew said:

No more taxes please, life is hard enough already.

Genevieve said:

I am particularly angry that his additional 8% tax will be applied to my natural gas bill for heating and hot water. Heating our homes is a must in Canada - not discretionary. Landlords will pass on this additional expense to their tenants rents. Furthermore, if this tax is implemented, it will be there forever, long after any rebates or income tax reductions are finished. I also don't expect small businesses to pass on their savings in the form of lower prices to consumers. They will simply keep the savings esp. if their business is struggling.

Liz wrote in to say:

I am retired on an investment income which has been severely reduced by the drops in the market. I don't know how I will be able to afford the 8% on utilities.

Cynthia said:

With 10% unemployment in ON, how can people manage to pay an 8% tax increase. People are suffering and no one seems to care.

Halina said:

I barely get by now as a daycare worker and no work pension to depend on. Help.

Darren, a student, said:

I'm a toronto citizen returning to university so that I can attain a new job. With tuition and now the proposed HST I am going to have more difficulty than ever before to support myself.

Lolito said:

HST will not only hurt the travellers that will visit Ontario and expecting a rebate, for me this is a plain discouragement for all the visitors who plans to come here. Definitely it will only hurt our tourism within our own province and it is indeed not a good thing to do....

Another constituent said:

This.... tax grab is not only going to hurt travellers... it 's also going to hurt tourism....

Luz said:

I am opposed to... (HST) being used as a solution to the current government's deficit. As a self-employed business owner, the HST will cost me more than I will save. The government's implementation of the HST during this time of economic recession recovery is completely irresponsible. Many sectors of our economy have just begun to feel the effects of the recession--this is the case for my business. Not only will the HST have a negative effect to small business owners, the cost to implement the HST does not make financial sense.

Bob said:

Unless I'm missing something, I do not understand the need for the HST. If eliminating the PST on intermediate inputs is going to have such wonderful impact on business and employment why does the PST have to be extended to goods and services that are currently exempt?

Another constituent said:

Something which most people aren't realizing is the HST is going to really hurt self-employed people like me. As a musician with a GST number, come April 2011 I will have to remit 13% of my income to the government instead of 5%.

This is really going to hurt self-employed people all over the map. What can be done to stop this bill!? Are all the Liberal MPs going to vote for it, or can some cross the party lines to vote against it?

We will see what will happen later on.

A senior said:

I will incur a higher tax on hydro, and many more things that are necessary for me and my son, like HOUSING, car insurance etc..... in this country when it's very cold in the winter, i can't afford to live without hot water and electricity.

Josefina said:

Please stop this HST tax. How much more can we be taxed!!!

Another senior, Larry, a CARP member, said:

As a Senior I am totally against the proposed HST. I cannot see how this will benefit anyone let alone Seniors. I would like you and all MP's to vote this proposal down [please]. Thank you!

Agnes said—and this is interesting—

For families struggling with the recession a new 8 per cent tax on everything from home heating to Christmas trees is kicking them when they're down.

It is not just Christmas trees and home heating fees, but it is new bikes and vitamins. It is when one takes a pet to the vet, when one surfs the net and when someone tries try to manage or buy mutual funds, or when one buys a house and real estate fees go up. Sports fees, gym memberships, even funerals, all are going to cost 8% more. It is also going to affect our seniors.

The Ontario Long Term Care Association said some 360 seniors' homes, affecting 40,000 seniors, are going to take a big hit. As a result, these homes are going to have to lay off a large number of staff. That means seniors will have less care and will have to wait longer for a bath or to eat a meal.

This is the kind of negative impact that we will see because of the harmonized sales tax.

Last, the reason for such a rush to adopt this bill is obvious: people hate this tax. The Liberals and the Conservatives are worried that if people go to the website, www.blockthehst.ca, they will use the calculators there to find out how much more they will have to pay and what kind of impact this tax grab will have, and they will fight hard.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Madam Speaker, I want to thank the member for Algoma—Manitoulin—Kapuskasing for that good question and her very good work on the point of sale tax exemption for first nations in Ontario. That is an absolutely critical issue and a treaty right.

I heard the members opposite yelling that this is provincial jurisdiction. I still say that if it is provincial jurisdiction, why are we debating it in the House of Commons? Why is Bill C-62 before the House? If the federal government has no role in this, we would not be having this debate.

When it comes to small business, we know from the Butchart Gardens study that a lot of labour-intensive businesses will not have the same kinds of throughputs that other industries have. They are very concerned about the impact on their businesses.

Hairdressers say that most people go in for haircuts every six weeks and they are expecting people to start putting them off for eight weeks because people in British Columbia cannot afford that extra 7% and in Ontario that 8%. That is an additional 7% or 8% on these services. For many small businesses, their profit margins are very narrow, so they simply cannot afford this additional tax.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Mr. Speaker, I will be splitting my time with the member for Timmins—James Bay.

There are a couple of issues I want to raise in the course of this debate. First of all, we are debating right now a motion on time allocation. Earlier today we saw a shameful vote in this House on closure, which has actually shut off our ability to have a fulsome discussion on this particular piece of legislation, Bill C-62. Once the procedural motion is voted on this evening, we will be forced into a very limited debate on Bill C-62.

Even though this only applies in Ontario and British Columbia at this time, there are British Columbians and Ontarians who live and travel across this country, and what we are consistently hearing from them is that they do not like this HST. In fact, one of my constituents called it the “hated sales tax”.

What we do know is that in the normal course of events, we would have an opportunity at committee to call witnesses from across this country and be able to give people an opportunity to have their say on what they see as both the benefits and problems of the sales tax. Of course, that discussion is now excluded. We are not going to be able to hear from Canadians because we only have four hours at committee, and that is it.

What we have also heard in this House, of course, is that this is a provincial matter. If this is solely a provincial matter, why are we debating it in the House, as the member for Burnaby—Douglas rightly pointed out? Why are we going to be debating Bill C-62 tomorrow or the day after in this House?

The other matter of course has to do with first nations. Clearly the federal government has a responsibility in first nations jurisdictions, because of its fiduciary responsibility. There is an honour of the Crown responsibility that is acknowledged here.

The member for Algoma—Manitoulin—Kapuskasing has talked a number of times about the point of sales tax exemption in Ontario. In British Columbia, the Union of British Columbia Indian Chiefs wrote a letter to the minister on December 2, which states:

HST affects First Nations' ability to earn a moderate livelihood, and it adversely affects our Aboriginal economic rights.... Vague assurances and tax bulletins are insufficient to accommodate.

Your actions to date are not honourable and represent a failure to treat First Nations as equals in a Government-to-Government relationship. We demand a distinct process; public tax bulletins will be a failure to consult and accommodate.

I do not think I could have said it any better. First nations in British Columbia have clearly outlined the fact that they expect to be consulted when we are talking about taxation. There are other pieces of government legislation that give first nations the ability to tax or to be tax exempt, and we would expect the federal government to honour its fiduciary and honour of the Crown responsibilities in that context.

Now I want to talk about British Columbia. In British Columbia, as a number of members have noted, the Ipsos Reid poll for the Canwest News Service and Global National last week indicated that 82% of British Columbians oppose the harmonized sales tax, and 56% of B.C. respondents say they think the HST will hurt the provincial economy.

In case members think it is just New Democrats who are talking about this, I want to turn to a couple of the associations that represent businesses in British Columbia.

Butchart Gardens has put together a study on the impact of the HST on tourism, and I just want to quote a couple of their primary concerns. They clearly lay out in their study the benefits to British Columbia from tourism. They acknowledge that in Canada, tourism is the fourth largest economic driver. One would think that an economic driver of that significance would be consulted when a sales tax is put together. The Butchart Gardens study says that:

Implementing a large new tax on a significant portion of B.C.'s economy will impact consumer confidence and spending levels, and therefore hurts businesses at the end of the supply chain who are labour-based or do not have enough input tax credits to off-set the new tax burden.

This negative 'new tax' effect is greatly amplified due to current economic conditions....

....price elasticity calculations indicate that passing the tax on to our battered consumers will decrease business revenues and thereby reduce government tax revenues generated by impacted sectors....

Considering current economic conditions, what is the cost and scope of risk as measured against predicted HST benefit? Where is this data? Where is this study?

Again, this is what could have been brought up at committee. However, people like The Butchart Gardens, a large tourism attraction in Victoria, have been shut out of any avenue to have their voices heard on the impact on their and other tourism-related businesses.

The Canadian Restaurant and Foodservices Association, in an open letter, talks about a recent survey of members in British Columbia. It states that 91% of its members said that a harmonized sales tax will have a negative impact on their businesses; 90% of respondents said their customers will cut back on spending; and 71% said they will have to cut back on staff or staff hours. Those are the restaurants, another key economic driver in British Columbia.

Because we do not have an opportunity to hear from Canadians other than in this very short debate, I want to read some of the emails I have been getting. I have been getting tons of emails on the impact of this harmonized sales tax.

In a letter to the editor of the Nanaimo News Bulletin, Rosina Schmidt wrote:

The HST will have a negative impact on rental housing quality and affordability, especially in Nanaimo.

It will increase most rental housing industry costs, such as property management, repairs and maintenance contracts by seven per cent next year.

The overall costs to operate rental buildings will increase by up to three per cent as a result. That's about $300 per rental unit per year.

We know that many people in rental units are already being squeezed, as are the property owners.

I received an email from Gabriola Island that says:

Please on behalf of the restaurant industry and my own family restaurant... do what you can to prevent the HST from happening. Such an increase in tax will stop a hesitant clientele from coming out to eat in this economically difficult time, especially on a ferry dependent island.

From Nanaimo, Bridget said:

I find myself struggling to make ends meet as the cost of housing, food and transportation has skyrocketed in BC over the past ten years while my wage has stagnated. I have a degree and a “middle class” job and still spend 75% of my income on taxes, rent, utility bills, medical expenses and transportation. Half of my co-workers were laid off recently. I'm trying to save a bit of money to have some financial security in case my job disappears too. I'm worried the HST will push my shoestring budget into the red.

Sean writes that:

My family, that is my Wife and our yet unborn child... will suffer if this tax goes through. We both work, but as the minimum wage is so low...we're having trouble getting by.

The ever-widening margin between wealthy and poor is appalling.

Carol states:

I am a resident on Gabriola Island, a realtor, and a landlord....

Please voice your opposition to the HST legislation, and halt the implementation....

The HST will have a negative impact on rental housing quality and affordability.

Susan says:

....in Nanaimo, I am concerned that the HST will increase most rental housing industry costs such as repairs and maintenance by approximately 7% next year.

Again, we see that a $300 increase in costs per rental unit will have an impact on the affordability of rental units.

Bruce, from Victoria, states:

The introduction of the HST will hit the poor hardest and benefit only big business. It has been said that the savings to business will be passed on to the consumers. If you believe that, I have some property I'd like to sell you in the Florida Everglades.

Peter, from Duncan, comments:

Please know as a senior on a fixed income that I am vehemently opposed to the Harmonised sales tax. It is another erosion of my small income that makes life very difficult.

Harriet remarks that:

my income is less than $11,000.00 per year, not enough to pay taxes....

this province has the second lowest minimum wage in canada with one of the highest costs of living....

....the cost of food has greatly increased....

the number of people using our local foodbank has increased 30% in the past year....

healthcare will become even more unavailable because therapists will increase their fees...over the counter medications will cost more....

education will be farther from my grasp because all aspects of getting to classes...

both the tourism and real estate business are speaking against this tax because their are very aware of the negative impact of an additional 7% on their transactions....

...the ...government said it would not increase taxes. the general public is not so gullible as all these politicians believe, we know the hst is just another cash grab at the expense of those that can least afford it.

Deanna, from Ladysmith, writes:

I am against harmonization of the federal and provincial sales taxes. Please, vote against it.

Deanna, do not worry. I will.

Pat, from Nanaimo, says:

Having been retired for 15 years now, pensions are being eroded daily and many of the 'few' extras we now enjoy will be further out of reach with the implimentation of the HST. Further, we are now finding we can no longer afford to stay in the home we worked so hard to build for retirement....

....consider the plight of many in this province who just cannot afford yet another increase in tax load.

Doug, from British Columbia, says:

What is the logic of introducing a new tax in mid recession? How will it help economic recovery when it will discourage consumer spending?

I work in the restaurant industry which claims the tax will cause a loss of up to $750 Million in business and a loss of up to 10,000 jobs in B.C.

Robert, from Nanaimo, states:

I strongly oppose this tax on the basis that... it is being unfairly implemented in BC, and will place too great a burden on consumers struggling to cope with a recession.

From Karen, we have the following:

As a person on disability I cannot afford a tax hike of any amount. Also my adult children can't feed and clothe themselves as it is!

Another constituent wrote:

I feel bad about it... as I am a senior I can't afford all my prescriptions or my needs. I feel we need to get [the premier of British Columbia] out.... I know you will do your best.

Someone else wrote:

I was outraged and still am outraged. If a party can say anything to get elected then integrity, honesty and our democratic process have all been bypassed.

Of course, what the person was referring to there was the fact that in British Columbia, the provincial Liberals indicated in the provincial election that they would not put in a harmonized sales tax or HST, and as soon as the election was over, they announced a harmonized sales tax. Of course, we are hearing from many of our constituents who are not only enraged about what is happening in the federal House, but also about what is happening in the Victoria legislature as well.

Grace said:

I live in a leaky condo situation—have to pay double unit entitlement on top of that for all new construction done which is very unfair. This tax will certainly cut down my spending!!

Anybody from British Columbia knows full well that people with leaky condominiums have been fighting a long, hard fight to get some justice. Now there will be an additional 7% tax on any construction they need to do to repair their leaky condos. This is a group that is already reeling under the impact of the leaky condo situation.

Another writer says:

This tax hurts the lower income the most!

Another person writes:

Please do your best and make the HST disappear. It'll destroy us.

I have letter after letter, phone call after phone call, telling us this is the wrong tax at the wrong time. If this is such a great opportunity, why will the Conservatives not allow us to hold full committee hearings, so we can hear from the public and business owners and can understand the impact on both consumers and businesses? This tax shift is simply unfair.

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

Mr. Speaker, I am pleased to have the opportunity to participate in this debate this afternoon on Motion No. 8, which is one of the most heinous kinds of motions that a government can bring before a Parliament.

There is no doubt that these kinds of time allocation motions do serve to limit the democratic process and limit the ability of members of Parliament and Canadians to participate in debate on legislation that comes before the House of Commons. When that is combined with the closure motion that the government brought forward this morning, it makes it all the worse.

It is unbelievable that the Conservative House leader, the member for Prince George—Peace River, stood in this place this morning and moved closure on debate on this time allocation motion. He has forced this debate to come to a close today with a vote this evening. His closure motion limits the ability of members of Parliament to challenge the government's process on the HST legislation. It is particularly galling that a member from British Columbia would do that when he knows how unpopular this measure is with British Columbians.

I have a feeling that the people of Prince George—Peace River will have a thing or two to say to the House leader of the Conservative Party for bringing forward this kind of limitation on the ability of Parliament to discuss and debate an important piece of legislation, a tax measure no less.

I am sure that had this been several years ago when that member was in opposition, his head would be spinning at the thought of limiting debate on a tax measure before the House of Commons. It is absolutely incredible. People in Prince George will not be happy with the undertaking that the member moved today.

Limiting time on debate may be justified in certain situations. It may be justified if the government's ability to move its agenda forward is completely blocked or bogged down. In that situation an argument might be made for this kind of time allocation motion.

I say might because I do not believe that is generally the case. It is absolutely not the case in this circumstance. There is no evidence whatsoever that the government has been at all impeded in proceeding on this measure. I would like to believe that we could stop this measure, but the time allocation motion had not been brought before the House before the government moved to limit the time spent debating this measure. There is absolutely no evidence that the government's ability to move this through, to advance its program, was impeded.

Advancing the government's program is how the House of Commons manual on procedures refers to the kind of circumstance where time allocation might be engaged, but in this case there is no evidence whatsoever that is the case.

An argument might be made if there were an emergency that required this kind of time allocation, that required the government to advance everything about the legislative process to get something through the House.

What is the emergency in this case? There is no emergency surrounding the HST. There certainly is no emergency around it in British Columbia. The provincial legislature is not even planning on debating this issue until March or April of next year. The Conservatives, even if they get the go-ahead from the provinces and the House of Commons, are not planning on implementing this legislation until July 1 of next year. There is absolutely no emergency related to this bill.

There is absolutely no excuse for advancing the agenda using time allocation and closure, two of the most draconian measures available to a government, when there is no emergency.

Granted, the Conservatives have a very serious political problem on their hands. I am sure they would love the HST issue to be behind them so that they could enjoy their Christmas vacation, so that they could go on their holidays in the new year, so that they could come back to this place at the end of January knowing that it was not going to be around to bother them. We in the NDP and the people of British Columbia are going to make sure that it is still around to bother them.

There is no excuse for the government having moved on this just because it has a political problem and its provincial government friends in British Columbia have a political problem on their hands. Eighty-three percent of British Columbians oppose the HST. We saw that in polls today done by Ipsos Reid and Canwest and Global National. That is an incredibly high figure. The Conservatives have a huge political problem.

I have noted that the Conservative Party members from British Columbia have been very slow to jump to their feet to defend these measures today in the House of Commons. They have been very slow to say anything in this debate whatsoever about what is going on with this and why. Where is the emergency that means we have to proceed on all of this so quickly? It is a very serious issue.

A tax measure deserves a full debate in the House of Commons. Perhaps a tax measure especially deserves a full debate. In the development of our democracy, we have often seen the call of no taxation without representation. Surely, that is what the government has put to the House today with Motion No. 8. For some reason, we have to limit the debate so severely that it really amounts to taxation without representation.

We have made it impossible for the Standing Committee on Finance to hold hearings on this measure. We have made it impossible for them to travel to British Columbia to hear from people and organizations in British Columbia about the HST. They are ramming it through in four hours of committee work. Four hours of committee work is miraculous progress for almost any piece of legislation that would come before the House of Commons. It is certainly miraculous and unheard of in this situation, where we have a tax measure that is resoundingly unpopular with the people on whom it is being imposed.

We need to make sure that the House of Commons and its members are able to do due diligence. Motion No. 8, which we are debating today, does not allow for that kind of diligence to happen in the consideration of this new tax measure. I am glad that the member for Vancouver East moved and that I was able to second an amendment to Motion No. 8 that calls for hearings in British Columbia and Ontario and that calls for a reasonable timeframe for this legislation, which would allow British Columbians and the people of Ontario to have their voices heard about this legislation.

I hope that members will consider that amendment, although given that the Conservatives and their Liberal friends have moved to squelch debate on this issue, I doubt that the amendment has much of a chance in this place. I think it is particularly outrageous that British Columbians do not get a chance to have their voices heard.

There was a time when Conservatives claimed that they were the big defenders of the voices of western Canadians. They said that they came here to Ottawa to make sure the voices of the west would be heard. The west wanted in. Here we are in a case where the west is firmly opposed to something that the Conservatives are bringing forward and they are not even allowing those people to have their voices heard or to have their say on this legislation.

There will be no hearings in British Columbia. There will be no public consultations in British Columbia. The debate has been severely limited here in the House of Commons. None of that would have been acceptable to those people who came to this place saying that the west wanted in. The government has turned out to be just as distant and just as uncaring as those governments it railed against time and time again when it was in opposition. It is amazing how quickly it forgets its roots when it comes to this kind of issue and a taxation issue nonetheless.

I think it is very important that the government also take responsibility for its actions. We hear it stand time and time again, saying that this is a provincial issue and that it has nothing to do with it. If that is the case, why are we standing here having this debate today? Why is it having to bring in these draconian closure and time allocation measures? Why is there a piece of legislation called Bill C-62, amendments to the Excise Tax Act, on the agenda of the House of Commons if it has nothing to do with federal jurisdiction?

It does have something to do with federal jurisdiction. It requires the action of the House and it requires the action of that government to go forward. It should own up to the responsibility for the actions it is taking and own up to the consequences of those actions. British Columbians are going to be paying more in taxation. Every British Columbian is going to be faced with a higher tax bill in the coming weeks and months.

There is no emergency. There is no problem with advancing the government's agenda. There is a severe problem with the idea of no taxation without representation. It is a very sad day when the Conservatives turn their back on their own constituents in British Columbia and their own history of being a populist party that supports letting the western voices be heard here in the House of Commons.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, this gives me a chance to answer the member's question, because I think all members of Parliament have received communications from their constituents on the harmonized sales tax question, which has a number of elements to it.

The member who just spoke is quite right. What the Conservative government is doing now is putting closure on the whole process of dealing with this bill. That is reflected in Motion No. 8, the matter that was first raised here, for which the member has now tabled her amendment.

I do not have the amendment. However, if one of the pages could get me a copy of the amendment that was tabled, it would be helpful.

My constituents have been trying to understand what exactly is the role of the federal government here and I have been trying to provide them with some detail. However, I thought it would be helpful for others if there were at least some recognition of what is happening here in the chamber and what is going to happen as we move forward with this bill.

The government has in fact tabled Bill C-62 in the House, the bill that would amend the Excise Tax Act and make all of the necessary changes to permit Ontario and B.C. to pursue harmonization of their sales taxes.

That bill is not before us yet. It has been tabled and printed and is here and members can look at it. They had better have a copy of the Excise Tax Act, because it will be very difficult for members to understand what this means without putting it in the context of the Excise Tax Act itself.

There has also now been an amendment made to change the process. However, the process before the House is such that we will only have one day to debate Bill C-62, when it is finally called. That will be before the end of second reading stage, and 15 minutes before expiry of the time provided for government orders on the day on which this bill is going to be called, we will have votes. We will vote on this bill at second reading, which is basically to provide approval in principle.

Normally, what we would do is to refer it to committee for committee hearings. However, Motion No. 8 goes on to say that the committee is only going to have four hours. This is where the previous speaker decided to move an amendment. What it says in paragraph 2 is that:

not more than four hours following the adoption of the second reading motion, any proceedings before the Committee to which the bill stands referred shall be interrupted....

Hence, it basically says that the committee is going to have four hours.

I can tell members that there are a number of constituencies that are impacted by the potential imposition of an HST, but the discussion in committee will be four hours. It says that the committee has to report the bill back to the House by 11 o'clock that night.

The next part of Motion No. 8 has to do with report stage motions. I raised this earlier as question for a member who spoke. As a matter of fact, it was a question to the finance minister this morning, saying that members of Parliament who were not on the finance committee could attend and listen to a committee meeting, but without the unanimous consent of the members of the committee, they would not get a chance to ask any questions or speak.

Therefore, what is going to happen is that they are going to do their work and at the end of four hours, they are going to have to vote and send it back to the House. The next morning, what is going to happen is that any member who wants to make a report stage motion, i.e., to propose a change to that legislation, he or she will have to submit it by 3 a.m. There are some rules surrounding report stage motions, one of which is that if a matter has been disposed of or considered and negated in committee, it cannot be raised at report stage.

The question I raised with the minister was that it did not seem that members were going to have much of an opportunity to determine whether or not any other amendments would be admissible, simply from the standpoint that they would have to be advised first of exactly what was dealt with in committee. Theoretically, I guess 308 members would have to attend the finance committee meeting to determine what amendments they might be able to make.

Obviously, that is ludicrous. It is not going to happen, unless the meetings are held in West Block and members are provided at least some water while they do their work.

The deadline for getting to the report stage motion is 3 a.m. The bill is then going to proceed on the next sitting day at report stage, if there are any amendments. I suspect there may not be, but if there are, no more than one sitting day is going to be allowed for both report stage and third reading. I am not sure there is going to be a report stage motion. There may be some ingenious way of getting the amendments through, but it is very unlikely we will have an opportunity to debate them in a normal fashion.

My comment to the minister was that we are basically going through a charade. I really do not appreciate it, because the committee ought to be relied upon to carry out due diligence on a bill and to report to the House that it has looked at it and there are no problems.

There are also some stakeholders who may want to appear before the committee and they are not going to have the chance. In a four-hour meeting, after the presentations by the Finance officials on the various aspects of the bill, explaining why they are there and answering questions from members, et cetera, it is very unlikely there are going to be any witnesses.

Quite frankly, we are going through a process wherein we are really not going to be able to do much to change Bill C-62 as presented to us now. The motion before us pretty well shuts down all venues that members normally have to advocate for certain changes.

If we get to a point where the bill is not read a third time and passed by this coming Friday, the House will adjourn on Friday and reconvene on Saturday and we would here then to dispose of the remaining business related to third reading.

I know that many of the members do not like the idea of closure. It is another reason to oppose the bill for those who have a profound disagreement with the introduction of the harmonized sales tax in their province, whether it be B.C. or Ontario, or maybe another province that may ultimately decide to go forward with that.

I and a number of other people met with a provincial minister of revenue on this just to try to understand it a little better. One of the things I really had to understand was the agreement the Province of Ontario entered into with the Government of Canada. It is my province. I have not read the memorandum of agreement between B.C. and the federal government, but I took the opportunity to print it and look at it. There certainly is a lot of ministry involvement.

The memorandum of agreement is referred to in the debate as the MOA. We will also hear about the Canada-Ontario Comprehensive Integrated Tax Co-ordination Agreement, referred to as the CITCA. There is also the Canada Revenue Agency and a lot of people will talk about the CRA, as well as the Canada Border Services Agency, the CBSA, which will administer the Ontario value added tax, the OVAT. If people are not confused yet, they will get confused unless they have a glossary of terms and acronyms.

For this agreement negotiated by the Conservative Government of Canada with Ontario and B.C., the necessary legislative process and the signing of appropriate agreements have to take place before March 31, 2010, except where otherwise authorized by the MOA. Canada also undertakes to seek approval of the Governor in Council to enter into the agreement.

As for the implementation date, Canadians will probably know that the proposed date for the harmonization of sales taxes in the two additional provinces to be effective is Canada Day, July 1, 2010.

The transitional provisions are important. There is a provision under the provincial tax policy flexibility that, subject to reasonable notice, the province, in this case Ontario, could increase or decrease its value added tax rate two years after the date of implementation. So there is actually a freeze on this, and there is not going to be a change before the two years are up.

It is important that people understand in regard to the implementation of a value added tax and a harmonized sales tax that when taxation systems get too many exceptions and too many details, they become very cumbersome to administer and, certainly, to apply, which causes an awful lot of difficulty. Therefore, the agreement stipulates that there will be a designated, limited number of OVAT point of sale rebates, that is, for the Ontario value added sales tax, not to exceed 5% of the aggregate. It means there will be a limit in place in the agreement on how many items can be exempted from the harmonized sales tax, and that is why there are a number of items that members have already noted do not currently attract a provincial sales tax. I think there is provincial sales tax on shoes of over $30 in value, but not those under $30. Now shoes are not even going to be exempt at all. It is not easy to say that we will now implement an 8% tax increase on shoes under $30. A lot of these kinds of examples will come up, but we have to remain focused on what this chamber has been asked to do.

There are some other provisions with regard to input tax credits. I do not believe they have agreed yet, but there is an undertaking to agree on the rebate rates and thresholds for the MUSH sector. Members may recall the discussions with regard to municipalities, universities, schools, colleges and hospitals; and charities and qualifying housing NPOs. I am sure there will be significant discussions with those sectors because, currently under the GST, they do get some extra assistance with regard to rebates or input tax credits, for which they are eligible.

This whole agreement is based on a common tax base, and I should indicate that all of this information is available on the Ontario government website. There is no questions that if one took the GST collection system and the provincial system and combined them into one, then one would have a whole administration for collecting the taxes, processing the documents, doing investigations, fixing errors, et cetera. It is a tremendous cost. As a matter of fact, there are some provisions in the agreement whereby it is mutually agreed that the provincial tax policy flexibility provisions will be collected and administered at mutually agreed upon service and compliance levels by the Canada Revenue Agency and the Canada Border Services Agency at no cost or charge to Ontario.

In addition, Canada will be solely responsible for all the revenue agency and border services agency start-up and ongoing costs, including their development and systems costs, so there is a substantial savings in terms of eliminating costs at the provincial level. These costs will in fact be billed to the province on the basis of usage in terms of the processing involved with the provincial taxation component.

The agreement says, “Canada agrees to pay Ontario its revenue entitlements on a daily basis. For greater clarity, the allocation for a tax entitlement year will be paid to Ontario in estimated daily amounts determined using the revenue allocation framework beginning July 1, 2010”.

There are some provisions with regard to the exchange of information agreement with regard to human resources. There are some other changes. During the transitional period, though, the province will be able to continue to operate the system so that a transitioning happens when things get sorted out. Whenever we have a change, there are always things that are going to come up, so they have made some transitional provisions.

I was not aware of this, but there is going to be an appointment of a panel. Both the Government of Canada and the Government of Ontario have agreed to appoint a panel or an individual within six months following the implementation to review and make recommendations on possible improvements to the administrative and policy information available; the revenue allocation framework, such as replacement by a system that would provide distribution of revenue to Ontario, and harmonized sales tax provinces, based on actual sales of goods and services in such provinces; and finally the governance and organization structures of the various committees under the Canada-Ontario agreement.

Therefore it is anticipated that there will be ongoing fine tuning with regard to the agreement.

I encourage members to consider looking at the agreement. I understand that once we get through this procedural phase, it would appear there is not going to be much chance of amending Bill C-62. It is going to be presented to the House on probably the fastest track one can ever imagine.

What members probably should consider is the fact that Ontario and B.C. have made a judgment: in their judgment, this policy of harmonizing the taxes makes sense for their economies.

Having met with the Ontario Minister of Revenue last week and having seen the presentation on how this would work, I could see clearly that the Province of Ontario is hurting badly; in fact, its projected deficit for the current year is about $24 billion. The job loss in Ontario is extraordinary.

Faced with the prospect of having this implemented now, people were saying it might make good policy sense, but the timing is not good because everything is so bad in the economy. However, both B.C. and Ontario have been arguing that it makes sense because it is going to provide an additional stimulus in their provinces to create jobs. In fact, about 591,000 jobs will be created in Ontario, according to Jack Mintz .

We might wonder where this money is coming from. Earlier I had an opportunity to pose a point to a member and ask for his comment. It had to do with the difference between this tax and what happens when GST is charged on a product.

As most Canadians know, GST is only paid once, and that is by the end user or consumer. For any GST paid by a wholesaler there is an input tax credit, so in the case of the GST only the 5% is ultimately paid.

The provincial sale tax is different. At every level of motion through the economy until it gets to the consumer, provincial sales tax is charged; then it is added to the input costs of the next buyer, and then it is charged again, and it cascades. That cascading of the provincial sales tax is really where it is coming out.

Canadians in Ontario can look forward to tax cuts on their personal income tax effective January 1, 2010, as well as a credit of up to $1,000 to help with the transitioning. I hope they will have an opportunity to be well informed about the implications of this bill on the economy of Ontario.

Provincial Choice Tax Framework Act

[Jay Hill, Conservative, Prince George—Peace River, BC]

moved for leave to introduce Bill C-62, An Act to amend the Excise Tax Act.

(Motions deemed adopted, bill read the first time and printed)