Debates of June 21st, 1994

Goods And Services Tax

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, we have not made any proposal to the provinces yet. So it is a

little premature for the hon. member to conclude that they will reject our proposals. We had a committee which considered several proposals over a six-month period.

At least on the Liberal side, they had the wisdom to offer us four or five options, unlike Bloc Quebecois and Reform Party members who took the easy way out by washing their hands of the whole thing. After asking us for so long to establish committees before making decision, when we gave them that chance, they ran away because they were afraid of taking responsibilities.

We, however, are not afraid of doing our job. We will meet with provincial governments and make them proposals that we hope they will find helpful, that will eliminate duplication-one of the Bloc Quebecois's favourite words. We will try to simplify the system and trust that eventually good judgment and common sense will prevail on this side and in the provinces, but certainly not in the Bloc Quebecois.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, the Bloc Quebecois's solution is simple: the Prime Minister should keep his word and abolish the GST.

Given the general indignation of the people, who feel deceived by the Liberal government, and the flat rejection by several provinces of this centralizing takeover, does the Prime Minister still intend to negotiate with the provinces on the basis of the Liberal report of the Standing Committee on Finance?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, we are going to study this report and see with the provinces how we could proceed to find a better solution for all Canadians.

We intend to be very honest with the people and with them, unlike the hon. member for Gaspé who, on June 9, asked the Speaker of the House to help them hide their true political option by asking the Speaker to the use of the word "separatist" in this House, which is the true option of the members. They are ashamed of their choice.

The Economy

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, my question is for the Prime Minister.

The stock market index is down by 2 per cent as of noon today. At two o'clock the bank rate was raised to over 7 per cent and the long term bond rate is now almost 3 percentage points above that assumed in the budget documents.

This implies that lenders and investors continue to lose confidence in the government's ability to meet its deficit cutting projections.

Does the Prime Minister now not agree with his finance minister that further spending reductions beyond those contained in the budget are necessary to meet the government's deficit reduction targets?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, there is no disagreement between the Minister of Finance and me.

The Minister of Finance was so prudent in his projections that he predicted 3 per cent growth and apparently we will have much more than that. The Minister of National Revenue is telling us that the revenues coming into the coffers are better than predicted.

Of course we have to pay more for interest rates. That is a fact. I recognize that. I hope the people of Quebec, when they have occasion to vote in the next few months in the election, will recognize that these people in front of us and the Parti Quebecois are trying to destroy the country. There is a price to pay for that.

If Mr. Johnston were to win the election, interest rates would go down. If Mr. Parizeau were to win the election, unfortunately we would have to pay a bigger price for the irresponsibility of the Parti Quebecois and the Bloc Quebecois.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the money markets say there are two sources of uncertainty with respect to Canada. One is of course the constitutional question, but the other is the overspending and deficit of the government, the one that the government can do something about.

An interest rate on government bonds of 2 per cent above the rate assumed in the budget implies a deficit increase of $3.4 billion in the first year and $5 billion in the second year according to the government's own projections. There is nothing wrong with changing a battle plan that is not working. Will the Prime Minister now order a mini budget containing deeper spending cuts and that it be brought down before the fiscal situation gets worse?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, this party has clearly made a commitment to the Canadian people that we will try to reduce the deficit in relation to the GNP to 3 per cent by the end of the third year. We are reviewing that on a constant basis. We will do what is needed to achieve this goal.

This is not the time to panic. We have more people working in Canada, there is revenue coming in and growth will be higher. We have a problem with the level of interest rates, but as I said in two, three or four months from now the problem will be easily solved if the people of Quebec decide not to vote for the Parti Quebecois.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, defending the status quo, whether it is federalism or the fiscal situation, will not reduce the deficit. If the government intends to meet its deficit targets it has one of two choices. Either it cuts spending more deeply or it increases revenue through tax increases.

I ask the Prime Minister if he is clearly prepared to make additional spending reductions to control the deficit and does this mean that the government is considering additional tax increases as the only other way of meeting those targets?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, we said that we will do everything that is needed to meet our goal of 3 per cent of GDP by the end of the third year.

At this moment I will not take the advice of the leader of the Reform Party to start talking about the Constitution. It is not the way to bring stability to the land. What will resolve the problem in this country is for people to realize that we live in a very good country and that we can be prosperous. We are still the envy of the world. A month ago the United Nations said that Canada was number one. Why is the hon. member complaining?

Goods And Services Tax

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, in its report, the Liberal majority on the finance committee recommended full integration of provincial sales taxes with the Liberals' hidden GST, in order to have just one national tax from coast to coast. This proposal would oblige the provinces to comply with federal legislation that would determine administrative procedures and the range of goods subject to GST.

My question is directed to the Minister of Finance. Does he support the approach recommended by the report, which bodes ill for the autonomy of the provinces since fiscal policy would, from now on, be dictated by Ottawa, thus relegating the provinces and Quebec, at best, to the role of branch manager for the federal government?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, from what we have heard publicly from the vast majority of Quebecers, including consumers and the business community, it is clear that they want a harmonized tax. For instance, the Metropolitan Montreal Chamber of Commerce and also the Quebec Chamber of Commerce have already come out in favour of the harmonized tax, as has the Conseil du patronat. My question is this: Why is the Bloc

Quebecois so hostile to the interests of Quebecers and the business community?

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, would the Minister of Finance agree that the Liberals' hidden GST would oblige Quebec to relinquish control over the $5.7 billion it raises in retail sales tax and that consequently, this is a direct attack on the fiscal autonomy of the provinces, as was stated by the Quebec Minister of Finance?

[Paul Martin, Liberal, Minister of Finance and Minister responsible for the Federal Office of Regional Development-Quebec]

Mr. Speaker, I would just like to quote what was said by a Quebecer who testified when the hon. member was sitting on the committee: "The GST should be harmonized with provincial sales tax. The Association manufacturière du Québec is ready to work with the finance committee to identify the potential measures which could lead to greater harmonization. Once those measures are identified, we will be willing to make the necessary representations to the Government of Quebec". This was said by Richard Le Hir, ex-president of the association and now PQ MNA for Iberville.

[Some hon. members]

Hear, hear!

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, my question is to the Deputy Prime Minister. Yesterday the Deputy Prime Minister confirmed that her government would kill the GST and that the Prime Minister would live up to this promise. On October 18, 1993 the Deputy Prime Minister in a CBC town hall stated that if the GST was not abolished under a Liberal government she would resign.

If during the next year Canadians deem that the national value added tax, that very awful tax, the new GST, is just the son of the old GST under a new name and therefore not really abolished, will she still agree to resign?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, we will use all the means necessary to keep the Deputy Prime Minister in the House of Commons. Otherwise the spirit of this House would disappear.

I am very surprised to have a question from a party that some months before the election was strongly opposed to the GST and then made a fabulous flip-flop before the campaign to support it. Don't complain. We won't satisfy you, we won't keep it.

[Jim Silye, Reform, Calgary Centre, AB]

Mr. Speaker, I will complain. I want to know if the Deputy Prime Minister would resign. Why does the Prime Minister stand up on her behalf? She should answer the question.

Mr. Speaker, listen to these quick quotes: "I would abolish the GST", the finance minister, 1990. "I hate it and I will kill it", the Prime Minister, 1994. "The tax should hit the whole works, from food to pharmaceuticals", the Minister for International Trade, 1989.

Does the Deputy Prime Minister think that Canadians will be that gullible as to believe this new GST really kills and abolishes the old GST? If she would not mind, would she answer the first question as well?

[Sheila Copps, Liberal, Deputy Prime Minister and Minister of the Environment]

Mr. Speaker, I can answer one question. When I made the statement on the CBC that I would resign if ever we did not live up to our promises, I made that statement in the full confidence that there is one person in this House who will not go back on his word and that is the Prime Minister of Canada.

Military Intervention In Rwanda

[Maud Debien, Bloc, Laval East, QC]

Mr. Speaker, my question is for the Minister of Foreign Affairs. The United Nations Security Council is meeting again today to discuss France's proposal for military intervention in Rwanda.

Through this initiative, France hopes to stop the massacre this week, before the arrival of additional UN peacekeepers. In fact, Canada is preparing to send more soldiers to Rwanda.

Since the situation in Rwanda continues to deteriorate, can the minister tell us when the Canadian contingent of 350 soldiers will be in Rwanda? Also, does the government intend to move quickly to increase its humanitarian assistance efforts in Rwanda?

[André Ouellet, Liberal, Minister of Foreign Affairs]

Mr. Speaker, I am pleased to confirm that Cabinet this morning consented to a request from the Secretary General of the United Nations to send a communications unit of 350 Canadian soldiers to join a United Nations peacekeeping force in Rwanda as quickly as possible.

Obviously, we hope the Secretary General will be able to put together a fairly large force of 3,000, 4,000 or even 5,000 troops in order to restore peace in Rwanda. I can also assure the member that Canada, which has already provided over $4 million in humanitarian assistance, is poised, along with other countries, to increase its humanitarian assistance to Rwanda as quickly as possible after a ceasefire takes hold.

[Maud Debien, Bloc, Laval East, QC]

Mr. Speaker, a supplementary question. Before the Canadian peacekeeping contingent and humanitarian assistance get to Rwanda, can the minister tell us

whether Canada supports the French proposal, currently being debated by the UN Security Council, to send a military strike force to Rwanda?

[André Ouellet, Liberal, Minister of Foreign Affairs]

Mr. Speaker, Canada's position on this issue is well known. We believe that we must participate as part of the United Nations peacekeeping forces. Consequently, we are more inclined to answer the United Nations' call for peacekeepers than to participate in a military operation.

Cigarette Packaging

[Grant Hill, Reform, Macleod, AB]

Mr. Speaker, the Standing Committee on Health advised the health minister to wait for studies before she proceeded on plain packaging of cigarettes. Her reaction? A marketing study to design the plain package. Can the health minister explain to all Canadians what a $300,000 plain package will look like? After all, plain is plain.

[Diane Marleau, Liberal, Minister of Health]

Mr. Speaker, I thank the hon. member for his question because I think it is very important that Canadians realize just what a groundbreaking exercise we have entered in our study of plain packaging.

The in-depth market research project which I asked my department to commission has appointed an independent panel of experts who will look into the effects of packaging on tobacco sales, especially tobacco sales to young people. They will then design a plain package, looking at many issues in terms of looking at the contraband problem, ensuring that the package is not easily reproduced or copied. The same panel will then test market the product to see just how effective this will be.

It is very sad to see a group of people who joke and who laugh when thousands of Canadians every year, 40,000, die as a direct result of smoking. We are committed to doing everything that we can to ensure that as many people as possible do not take up the habit, especially our young people.

[Grant Hill, Reform, Macleod, AB]

Nice plain answer.

New statistics show that for the first time in 30 years tobacco use is on the rise in Ontario. Among women aged 18 and older smoking soared to 25 per cent this year from 19 per cent in 1993. Will the health minister admit that her all embracing anti-smoking campaign is an abysmal failure?