I don't want to give away everything in my written brief. I'm having a highly reputable outside reader go through it right now. But our thinking is fairly simple, that simpler is better when it comes to the design of a tax system, and right now we do have a patchwork quilt of sales tax regimes across the country, both in terms of rates and in terms of coverage.
We've seen three of the four Atlantic provinces—it's three out of four, but not P.E.I.—sign up for the harmonized sales tax and come up with one tax collector, one auditor. Clearly that's going to save money for businesses of every size at every stage along the way, and for the taxpayer, because we really have made a very simple administrative system. Quebec has done the same thing. The collections are different, but basically it's a harmonized system.
But if you look at other large provinces, the two most prominent are B.C. and Ontario of course. There is an element of misalignment. Their coverage is different. Maybe the most punitive thing is that businesses who buy business inputs don't get the benefit of a cascading value-added tax system, so they have to pay the sales tax on goods that are covered by the provincial sales tax.
I've had the privilege of giving advice to many ministers of finance, so we've met with Minister Duncan in Ontario and talked about this. I think he's a bit intrigued. I think as a philosophical matter he understands there are benefits, but he's also worried about the revenue impact for his own budget, because if you were to harmonize, he would probably be looking for some sort of bridge. As you know, Mr. Menzies, there is a bigger debate about Ontario's place in the federation when it comes to transfers and having a level playing field. I would suspect that as that dialogue goes forward we're going to have to put a lot of those issues into the pot.
But clearly, I would argue that almost every Ontario business would benefit from having a single sales tax regime that is built on value-added taxation, where they don't have to pay taxes on business inputs that they then often can't even pass on to their customers.
Then there's another level of benefit, of course, in terms of administration and efficiency. That's the argument I make with Mr. Duncan directly, and therefore I'm quite happy to make it to you today.