They are still working, unfortunately.
But here's what the Tax Executives Institute had to say:
Harmonization of Federal and Provincial Tax Bases and Administrative Systems
The federal government has undertaken several initiatives to encourage the provinces...
—and I want to underline it's “to encourage the provinces”. It's not forcing the provinces to do anything; it's “encouraging the provinces”, and that's what this act is about, right, John?
...to adopt tax policies that promote Canada's competitiveness and to approve the administrative efficiency of the provincial systems.
They don't say “of the federal system” but “of the provincial systems”. That applies to all provinces, including Quebec.
We commend the government for providing financial incentives to the provinces to eliminate their capital taxes.... We urge the Standing Committee to consider additional incentives to the provinces in order to accelerate elimination of...provincial capital taxes and to promote additional investment in Canada.
They are clear in their submission—and I'm going to read a little more of it—that the role of government isn't to pick winners and losers, but to have a tax structure system to make us more competitive from a tax perspective compared to not only our internal competitors from province to province but internationally. And I think that's really where their focus was: to make sure that we can be the areas with the lowest taxes in North America, to encourage investment to come into Canada, not to go out of Canada, and to allow us to be competitive on a much more global stage.
As we know, there are other markets--including India or China, which the Prime Minister recently visited--that can be a double-edged sword if we're not ready for them. So from a tax perspective, we need to have our companies in a position to be competitive with those marketplaces so that we can take advantage of that new and growing middle class that's happening in both of those marketplaces and so that we can be competitive.
Now, we can't be competitive on everything, but the value that Canada can add in terms of the quality of companies that we have here and the types of services and products we provide, whether financial services or other types of development, health care and all those other areas, will be in high demand in those jurisdictions, and we need to be ready for those.
We also commend the federal agreement with Ontario whereby Ontario will conform its corporate income tax base to the federal corporate tax base and the federal government will assume administration of Ontario's corporate income tax system.
So they're saying in this that it's not just about sales tax—and I'll get there in a second—but it's also about the corporate tax system that we have been advocating for and improving. They're thanking us, but we should be thanking the provinces, which have moved to improve their corporate income tax system to try to be as competitive as possible.
Similar moves by other provinces would improve the overall efficiency of Canada's business tax structure.
We also recommend that the Standing Committee encourage the provincial governments to...review...their corporate income and sales tax policies and [effect] rate reductions and tax base changes to [enhance Canada's tax] competitiveness.
Mr. Chair, this is exactly what I was referring to earlier. When they talk about encouraging the province to review their sales tax policies and effect rate reductions, that is why I think we should be encouraging, through this bill that we have in front of us, and allowing provinces to amalgamate, absolutely, but, in addition to that, we should look at the results and the benefits that have happened in the Atlantic provinces. I like to use Newfoundland as an example, where they have made some changes to their rates on the sales tax side, which has made a difference.
I was at an annual meeting, as I said earlier, this past weekend. The speaker—