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, Liberal, 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, Liberal, 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.