Debates of Dec. 10th, 1996

Excise Tax Act

[The Deputy Speaker]

In my opinion the nays have it.

And more than five members having risen:

[The Deputy Speaker]

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

[The Deputy Speaker]

I declare the motion carried.

The House resumed from December 9 consideration of the motion that Bill C-70, an act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related acts, be read the second time and referred to a committee.

[George Baker, Liberal, Gander—Grand Falls, NL]

Mr. Speaker, I was not intending to speak but since you called my riding I certainly have a few words to say.

The question before the House is whether the Minister of Finance, who is probably one of the best finance ministers that Canada has ever seen, who has the best record of any finance minister Canada has ever seen-I had better be careful-with the exception of the gentleman who became the finance minister in the fall of 1977. The boss became finance minister at that point. There is one exception.

What we have is the rational legislation of the great Minister of Finance and the irrational logic of all the opposition parties. It is what separates Liberals from Reform and Tory and Bloc members. Imagine discussing a bill in this Chamber and having the official opposition advocate that the GST should be changed so that it includes food and prescription drugs. Just imagine that.

Reformers stand in this Chamber and say: "We do not like what the Liberals are doing. We would like to have the tax extended to include food and prescription drugs", as the representative for the Reform Party stated in the House with respect to this bill.

Imagine the transport critic for the second party in opposition, who is just like the Tories, advocating a tax on fuel to improve the roads. Imagine that. An increase in the excise tax is being recommended by the opposition parties.

The finance minister has the best record in Canadian history, with the small exception of the minister of finance in the fall of 1977; the boss. The finance minister is saying to the opposition parties: "No, we cannot afford to tax people more on fuel and on gasoline, as the opposition parties are suggesting".

Not only that, they are also advocating helping the rich out a bit more. They suggested that our first priority should be to remove the taxes on jewellery. That was their priority yesterday in this Chamber.

They want to do away with the Canada pension plan. The Reform Party is exactly like the Tory Party. At the Tory convention two months ago they said: "Let us get rid of the Canada pension plan totally".

One other thing distinguishes the Liberals from the Tories and the Reformers. The Tories' policy meeting passed a resolution to experiment with medicare. That is exactly the same policy as the Reform Party of Canada. The policy statement of the Reform Party, its budget, which I always keep here in my desk, but I am not allowed to show it-

[Jim Silye, Reform, Calgary Centre, AB]

Read us something. Be accurate.

[George Baker, Liberal, Gander—Grand Falls, NL]

The hon. member for Calgary Centre is saying: "Be accurate. Read something from it".

Here are some of the recommendations of the Reform Party. On December 3 the hon. member for Calgary Centre said: "Make it the broadest possible tax. Let us tax everything: groceries, prescription drugs". Tax everything.

[Jim Silye, Reform, Calgary Centre, AB]

Keep going, George. Keep going.

[George Baker, Liberal, Gander—Grand Falls, NL]

Mr. Speaker, I can certainly do that. I will quote from the medicare section. The Reform Party says: "The original medicare model is not only intolerably expensive, it is undesirable".

What do we have here? We have the opposition parties-and of course we cannot leave out the Bloc. The Bloc is on the record as supporting any tax forgiveness for wealthy people as long as they travel to the United States. It is on the record as being in favour of doing away with any double taxation on estate taxes. That only deals with people who make over $600,000 a year. That is the Bloc for you.

Here we have the opposition parties saying no to the Government of Canada. They say they want more taxes on ordinary people. They want to do away with medicare. They want to do away with the Canada pension plan. They say they have a better way.

What is their better way? The Tories and the Reform Party say they want to get there faster. Where? They want to eliminate the deficit faster. That is their policy. Where are we today under this Minister of Finance? Which country in the industrialized, democratic world has the best record for economic growth this year and next year according to the OECD and the IMF? It is Canada.

The most recent figures are out. Which nation of the G-7 has this year the best record with the deficit and the GDP ratio? This new statement is from the IMF and the OECD made up of 28 nations, economists that hold their meetings in Paris and decide on those macro economic questions. Is it Germany, Britain, Japan, Italy, the United States?

[Some hon. members]

No.

[George Baker, Liberal, Gander—Grand Falls, NL]

Is it Canada?

[Some hon. members]

Yes.

[George Baker, Liberal, Gander—Grand Falls, NL]

We now have the country with the best economic growth according to the OECD and the IMF of any of the industrialized democracies in the world. We now have, as well, Canada leading every other industrialized democracy in the world in the deficit to GDP ratio.

The IMF made an interesting statement the other day. It said that the best record for interest rates was guess which country? Canada.

These opposition parties that stand in this Chamber together with the Tories who try to hide, the Tories who have a policy to do away with medicare, do away with the Canada pension plan, to put taxes on groceries and prescription drugs, who want to put on additional taxes so they can build highways. They want to put toll gates on our roads to pay for them. Then they stand in the Chamber and say no to the great Liberal response to the problems in our economy. They stand and say no. We want to tax ordinary Canadians. We want to give tax breaks to the rich.

However, we want to reduce the deficit more, while at the same time have a government that has the best record of any industrialized, democratic economy in the world. That is why Canadians are going to say no to these opposition parties and yes to the Liberal government.

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

Mr. Speaker, I welcome this opportunity to speak at second reading of the bill about the GST.

First of all, I would like to say to the hon. member for Gander-Grand Falls, who so eloquently described his affection for the Minister of Finance, that I previously found him to be more objective in his analyses than he was a few minutes ago.

When we say the best Minister of Finance, I think we should qualify that statement. He just went with the flow. Even Mickey Mouse would be a better Minister of Finance than the one we have today, considering the economic climate. This is a Minister of Finance who maintains the tax loopholes for the rich.

Is that what the best Minister of Finance is supposed to be like? The hon. member for Gander-Grand Falls usually comes down hard on giving preferential treatment to the wealthy. However, his government, for which he now seems to act as a yes-man, maintains the privileges of the wealthy. Is that what being the best Minister of Finance means? The best Minister of Finance after the one we had in 1977, who is now the Prime Minister?

Remember that the Minister of Finance we had in September 1977 ran up the first major federal deficit. Is that what the best Minister of Finance in 1977 was supposed to be doing? I am very disappointed in the hon. member for Gander-Grand Falls. He is usually a better analyst.

As for Canada's performance, I may remind him that the Canadian unemployment rate is around 10 per cent and that we will need more than 900,000 jobs in Canada to revert to the same labour market conditions we had before the recession. Is that Canada's best performance? We just received some statistics indicating an increase in the rate of child poverty. Is that Canada's best performance? We have one of the poorest records in the world in overcoming poverty, and all the while we maintain the privileges of the rich. It is awful to hear such things.

Is the best Minister of Finance the one who signed the political agreement with three maritime provinces that will cost us $1 billion? Is the best Minister of Finance the one who wasted $1 billion on an agreement that will not resolve the GST? If that is the case, it is time we woke up and it is time for the yes men on the other side to wake up as well. The arrangement is less and less justifiable before the voters, in my opinion. The farce has gone on long enough.

Canadians outside the maritimes are going to have to pay about $1 billion for an agreement that settles nothing and that scuttles a promise the Liberals made even before the last election campaign. They told everyone they would abolish the GST, the bloody GST. They lied to the people. It is a horrible thing to do. And the people believed them and voted for them.

What do we end up with today? A monumental farce, an agreement worth $1 billion to harmonize the GST with the taxes of three maritime provinces. It really takes the cake when they present it as an extraordinary accomplishment by the best Minister of Finance, who is second only to the 1977 Minister of Finance, who is now the Prime Minister. It is quite a show.

Canadians have not been fooled. They know very well they are going to have to pay for this agreement, which resolves nothing. It is nothing more than a local agreement with three maritime provinces. In Quebec, we will pay $250 million for this agreement. Worst of all in this story is the fact that Quebec harmonized its provincial sales tax with the GST at no cost whatsoever to the government. It did not cost a penny.

We did it because our intentions were good, because we wanted to improve trade and because we wanted transactions to take place as smoothly as possible. We did not want small business to be stuck with two completely different systems operating in parallel. We did all that. We even administer on behalf of the federal government the infamous goods and services tax. And we did not get a penny in compensation for it, not a single penny.

Now the government is presenting us with this agreement reached with the three Atlantic provinces. They are buying off the people in the maritimes for $961 million, that is nearly $1 billion.

It is a disgrace to present such a bill, and particularly to impose a gag order to limit debate on this bill.

They do not like to hear the truth, to hear that they have been deceiving the public. Their commitment was not to hide the GST nor to sign an agreement with three Atlantic provinces, hoping that it would be used as a model nation-wide. That is not was they promised in the election campaign; they ran on the promise of scrapping the GST.

We all witnessed the show the Deputy Prime Minister put on when she resigned and, half a million dollars later, made a triumphant comeback, having cleared her name. It is terrible to put on a show like that, and the people have had it. After spending $500,000 on this show, we are now spending nearly $1 billion on a historic agreement with the maritimes.

The worst part is the incredible lack of transparency in all this. After this historic agreement-historic mainly for its cost of nearly $1 billion-was signed, the provinces, not only Quebec, but also Ontario and British Columbia, asked the Minister of Finance what formula was used to work out this huge amount.

The Minister of Finance obstinately refused to make it public, knowing full well that this formula, if it exists-which is doubtful because this is a political agreement and political agreements do not require formulas-was not tailored to the specific situation of the three Atlantic provinces.

I am convinced that the federal mandarins who were present when the harmonization agreement was struck with Quebec, in 1991, must have thought: "We must be careful, because Quebec is the only province to have completed this harmonization process and it did not ask anything from the federal government". Quebec is so nice that it did not ask anything from the federal government. Therefore, once Quebec decided to go along with harmonization, these mandarins must have devised the formula so as to completely exclude the Quebec situation. But let them make it public. If they have the courage of their convictions, if their formula is so good, then let them make it public, so that we can see how the finance minister managed to find $1 billion in his pockets and generously give that money to the maritime provinces. One billion dollars.

Liberal members are boasting that books are exempt from the GST. This is great, and I want to congratulate Bloc Quebecois members, because they are the ones who, from the beginning, with the eight founding members of the Bloc Quebecois in this House, and out of all the members of all the parties in this House-and I see the hon. member for Longueuil-rose to ask that the GST not be imposed on books.

In Quebec, there is no provincial sales tax on books. This tax was eliminated. The finance minister tells us: "All the books that will be bought by educational institutions and organizations promoting literacy will be tax exempt". We say great, but the government must do more. Culture should not be taxed. All books should be exempt from the GST, as called for by the eight founding members of the Bloc Quebecois. I see my colleague, the member for Rosemont, who is also in the House and who used to rise almost every other week, because we did not have many opportunities to speak back then, to demand that the GST be taken off books.

Members of the Bloc Quebecois were the only ones to meet with representatives of the literary community, all of them. The Liberals refused. The Conservatives refused; I understand. We were the only ones to do so.

So I congratulate the minister for this small part of the bill, but I would like to see him go further, and heed the Bloc Quebecois's call to stop taxing culture and literacy.

[The Deputy Speaker]

Dear colleagues, before giving the floor to anyone else, I must tell you that we voted on the hon. member's amendment yesterday and that debate is now on the main motion.

As you know, the hon. member for Saint-Hyacinthe-Bagot addressed the motion at length yesterday, for 50 minutes I believe. This is the fault of the Chair, which should not have given the floor to the hon. member. I ask my colleagues not to speak twice on the same motion in future.

I am certain that my colleague shares my opinion that we may not speak twice on the same motion. This is the Chair's fault, and I take responsibility for this error.

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

Mr. Speaker, I have a small question. Yesterday, the debate was on the amendment I proposed. Today, it is on the bill as such at second reading. It should be possible to speak twice in two days, because the debate is a different one. I am asking for your opinion on this.

[The Deputy Speaker]

It seems that we are now debating the main motion. The hon. member for Saint-Hyacinthe-Bagot spoke for almost one hour yesterday on the main motion. He proposed an amendment at the end of his speech. He perhaps thought he had spoken on the amendment yesterday, but the hon. member spoke twice on the same motion.

I am sure he will not do this again in future. I am counting on my colleague not to speak twice in future. It is an error.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, it is a pleasure to speak once again to Bill C-70.

First I must decry the fact that the government has moved time allocation, a form of closure, on this piece of legislation. I need to point out that since the fall session began, the government has pushed through precisely nine bills and here we are ramming

through important pieces of legislation in the last week. That is completely unacceptable.

I have to speak to some of the accusations made by the member for Gander-Grand Falls. I would simply say that if he was not completely misleading the Canadian public, he certainly was quoting hon. members out of context and I must set the record straight.

The hon. member from Gander was saying that the Reform Party wanted to raise taxes. Let me make it very clear that our party will provide the average family of four in this country with a $2,000 tax break by the year 2000, $15 billion in tax relief for Canadians. That is part of our fresh start platform.

The hon. member also spoke about the government's record of low interest rates. I have to address that. The reason we have low interest rates is that this country's economy has been so soft. That is why we have had low interest rates.

Noticeably the member did not speak about unemployment. I would think someone from Newfoundland must address unemployment. In 1995 the G-7 said that Canada had the worst record when it came to unemployment in the G-7. Out of all seven nations Canada had the worst. Why would a member from Newfoundland not address something like unemployment? That is ridiculous. Obviously the government's record is so bad that the hon. member could not bear to raise the issue of unemployment.

By the way, the Reform plan would take 1.2 million low income Canadians completely off the tax roles. I want to make that clear. Somehow the member for Gander-Grand Falls left people with the impression that we were going to tax low income Canadians more. We are going to take 1.2 million low income Canadians off the tax rolls. These are people whom the Liberals are currently taxing, including the member for Gander-Grand Falls who has voted in favour of every budget the government has brought in.

The member for Gander-Grand Falls apparently is no friend of the unemployed. He is no friend of working Canadians who are being taxed to the hilt. I think the member for Gander-Grand Falls has a lot of explaining to do to his constituents.

Specifically on Bill C-70, we need to remind people that this bill came about because of a broken promise, a very sorry beginning for this legislation. Going back to before the last election, members on that side of the House said: "The GST is completely unacceptable. It is terrible. We will rip it out if we become government".

The member from Gander spoke of the finance minister. The finance minister when he was in opposition said that the GST was terrible and that they did not want to have anything to do with it. The Prime Minister has been in this place on and off since 1963, 33 years. You do not even get that much for murder in this country but he has been here that long. He sat here knowing very well that there was a possibility the Liberals could form the government and he said: "We do not want to have anything to do with the GST".

What happened on October 18, 1993? The current Deputy Prime Minister said on national television in a CBC town hall meeting that if the GST was not gone, she would resign. She led everyone to believe that the Liberal government would get rid of the GST. We know that individual MPs campaigned on the promise to get rid of the GST.

What did the Liberals do? Did they get rid of the GST? The record is very clear. The government did not get rid of the GST. Instead because it had no takers for its harmonization proposal, and it was desperate to come up with a reason or a justification for breaking its promise, it ran out to the Atlantic premiers with $1 billion and said: "Please come on board so we can say that we fulfilled our promise in some way, shape or form".

A billion dollars. And what was the result? Now a tax regime is being established in Atlantic Canada that is going to visit all kinds of sorrows on the people of Atlantic Canada. Beyond that, it creates all kinds of other problems. It is extremely divisive. When one area of the country is rewarded with a $1 billion compensation package but other areas are told that they are on their own, what happens? We get division.

We get problems with national unity obviously. That is the government's whole approach to the issue of unity: divide and conquer, split people apart. The government has done it from day one and continues to do it. Lately it is talking about distinct society again. I cannot believe it, but it is part of its whole approach.

What does this harmonized sales tax do specifically in Atlantic Canada? The government claims it will create jobs but the facts simply do not bear that out. We know already that stores are closing in Atlantic Canada because they cannot afford to implement all the necessary changes associated with bringing the harmonized sales tax to Atlantic Canada.

Greenberg stores is based in Quebec but has stores throughout Atlantic Canada. It is closing stores because it cannot bear the start-up cost of this new harmonized sales tax. Seventy-nine jobs are already disappearing in New Brunswick. It just escapes me that we are not hearing from New Brunswick MPs. They are not standing up and saying: "We have to do something to protect these jobs". Somehow the members from New Brunswick are strangely

silent. Where are they? Why are they not standing up for their constituents?

If something like that were happening in my riding or anywhere in Alberta where all those Reform MPs are, or in British Columbia or any Reform constituency I would like to think that those Reformers would stand up even to their own leader and government and say: "This is unacceptable. We will not put up with this. We have received clear direction from our constituents and they do not want us to vote in favour of this legislation". But the Liberals are like sheep. They are completely quiet. They have been cowed by the Prime Minister and the power of that office, which is ridiculous. It is absolutely counter to democracy.

The hon. member for Gander-Grand Falls spoke about democracy. He is a member who has spoken out in the past and has been relegated to the very end of the row, almost out the door. He can stand up and try to revive his flagging career all he wants knowing that the minister of fisheries may not be long for cabinet. However at some point he apparently wronged the Prime Minister in some way and now he has been relegated to being almost out the door and probably has no chance of getting anywhere which is unfortunate. That is how this government deals with people who do not toe the line.

Let me speak about some things that will happen in Atlantic Canada as a result of Bill C-70. We have received letters from the Retail Council of Canada, as have hon. members across the way. It has warned about the tax in pricing aspect of Bill C-70, about how it will hurt many large retailers. It has talked about the millions of dollars it will cost. In a very up front manner it said that those costs will be passed on to the consumers in Atlantic Canada.

Consumers will bear the cost of the deal that is being implemented in Atlantic Canada because the government was so desperate to come up with some kind of rationalization for not fulfilling its GST promise. Atlantic Canada has to pay for the government's broken promise. Atlantic Canadians have to pay literally out of their own pockets for this broken promise. But that is not all. Right now we are only talking about the large chains. What about the small businesses?

Greenberg stores is not a large company and it is laying off 79 people with another 71 possibly going. The other day I heard a story about a Halifax businessman who sells magazines. Approximately 8,500 journals come into his store on a weekly or monthly basis. Because of this legislation he will have to change the price on every one of those magazines. I do not care how hard a person works, that cannot possibly be done every week.

Does the government care about all these common sense objections to this deal? Again the government members are strangely silent. Where are the members from Atlantic Canada? Where is the member for Halifax who sits in this place and so often speaks up? She is strangely silent. Not a word. Why are they not standing up for their constituents? Why are they not standing up when they know it will cost jobs, when it means higher costs for consumers? I would think that is a basic responsibility of any member of Parliament.

What about the defence minister? He represents a riding in which one of the Greenberg stores closed. Should he not be on his feet as a cabinet minister? Should he not be defending his own people?

I cannot believe they are allowing this to be pushed through on closure without so much as saying this is wrong, we have to at least fix some of the details. They are silent.

Other bodies have spoken of the problems this will cause in Atlantic Canada as well. The Real Estate Association of Canada talks about a $4,000 increase in the cost of a new house in Atlantic Canada. What is the government doing?

There has been no initiative from the government coming forward and saying "we are going to deal with that, we will fix it". It is going to let the people of Atlantic Canada bear a $4,000 increase in the cost of a new House simply because it had to rush through that deal to try to save the Deputy Prime Minister. That is unacceptable.

If you make a mistake, as the government, if you break a promise, why do you not acknowledge that you have broken a promise, throw yourself at the mercy of the electorate and take your medicine? To try to somehow cover it up and then make people in Atlantic Canada, the most vulnerable economy in the country, pay for it is cruel. I do not know how else to put it.

As we near the end of this debate, sadly the government has pushed through closure. I urge hon. members across the way to somehow screw up the courage to stand and defend their own constituents. Sixteen thousand people in New Brunswick alone have signed one petition in opposition to this legislation.

If hon. members across the way will not listen to me and my colleagues in the Reform Party, perhaps they can somehow find it in their hearts to listen to their own constituents. That is the least the people of Atlantic Canada can expect from their MPs.

[Diane Ablonczy, Reform, Calgary North, AB]

Mr. Speaker, today we are debating a bill that has come up very suddenly. It is a bill that, as of last week, was not even on the government agenda, the so-called GST harmonization bill, really the GST hiding bill that the government is trying to now push through as quickly as possible while people in the country are busy getting ready for Christmas and have their minds on other things. It is very typical of this government.

There are four main concerns that Reform has about this bill. One is that this new form of the GST will kill jobs. It is bad for business, it will kill jobs. This is in a part of the country that can least afford to have this kind of action taken against its economy.

Second, this new form of GST that the Liberals are ramming through the House is bad for consumers because it will substantially raise the cost of many goods.

We know our economy is driven 60 per cent by consumer spending. Now we will have even more difficulty, even more of a burden placed on the backs of consumers who are trying to provide the necessities for themselves and their families.

Third, this new form of GST that the Liberals are pushing through in Atlantic Canada is bad for taxpayers because it means that taxes will be increased.

The fourth thing is that this new form of GST being put forward by the Liberals is breaking a Liberal election promise, a strong, unequivocal, firm, clear commitment by this Liberal government to scrap, kill and abolish the GST.

These broken promises continue to disconnect Canadians from the electoral process, increasing the level of cynicism and increasing the level of distrust and disrespect for elected people and for the institutions of government. This is a very worrisome and sad situation in this country.

This bill was put forward and then closure was immediately voted through the House. The government is sneaking this bill through. Invoking closure yet again, as I said the last time I spoke on a closure bill, this seems to be a weekly if not almost daily occurrence by this government. It is disrespecting the democratic checks and balances of our system to simply push its agenda through with as little opposition and as little opportunity for examination as possible. This is not democracy as it was meant to be.

I will not repeat some of the concerns that I raised in my last speech in this House on this issue except to say that Canadians who are watching the proceedings of the House on a daily or occasional basis need to take note of how this government is arrogantly and undemocratically flouting the conventions and the democratic checks and balances that have been put into place. I believe we are going to be paying a heavy price for this increasing erosion of the democratic process in our country.

In 1990 a member of Parliament who is sitting on the government side and also sitting in cabinet said: "The goods and services tax is a regressive tax. It has to be scrapped and we will scrap it". The minister of defence now has a different tune to sing just five or six years later. He had the chance to keep strongly made promises, to act on the outrage that he and many of his colleagues expressed about the Conservative government GST and now he is totally backtracking and not to be heard from in this debate. The present minister of defence did not say: "It must be harmonized and we will harmonize it". No, he said: "It has to be scrapped and we will scrap it".

On May 2, 1994 the Prime Minister said with regard to the GST: "We hate it and we will kill it". Now he is saying "we really like it and we will bring it back in a form that will gouge even more money out of taxpayers and citizens in the Atlantic provinces".

When the government fails to carry out these clear election promises, these clear representations to Canadians who place their faith, trust and confidence in this government and in government members, Canadians feel increased cynicism with their government and their country. This is something that is very disturbing and it is going to be a very difficult situation to deal with as time goes on.

I would like to spend a few minutes talking about an aspect of this new replacement GST of the Liberals called a notional input tax credit. At present when a good or service is introduced into economy the GST is paid on those goods. When the goods go through the economy again in the form of used goods, the GST does not have to be paid on that good because it was already paid the first time it came into the economy. That was in the past.

The Liberals have seen a golden opportunity to vacuum even more money out of the economy to fund its waste and its spending and its inefficient, bloated government. Now when a consumer buys a used product he will end up paying the GST yet again even though the GST has already been paid. In fact, that GST will be paid over and over every time there is a transaction involving those goods. This is something called tax cascading, which is kind of a nice term. Canadians would probably call it stacking the taxes, a tax on tax on tax. In fact, the taxpayer will have to pay tax twice, three times, four times and maybe more on the same goods.

This is nothing more than another Liberal tax grab. It is also sneaky because the Liberals have not introduced this increased tax take. The honest way is to put the tax bill before the House and have it properly debated. It simply changed the definition of what the GST will apply to. The GST will be paid over and over.

This will have a very negative effect on any business dealing with used goods. It will kill jobs, raise consumer prices and suck more tax dollars from the pockets of Canadians. There is very little profit in many of these businesses already.

We know and the Liberals have acknowledged time and time again that taxes kill jobs. For example, the Liberals said that taxes on employment income, taxes such as UI premiums, make it more difficult for businesses to operate at a profit, to expand their

economic activities and for the economy to grow and to create business and employment opportunities for Canadians.

Yet we see that taxes are something that the Liberals simply cannot do without. There have been over 35 tax increases in one way or another from this government in its years in office. Its total tax take has grown by $28 billion over its term in office; $28 billion that the government is taking out of the pockets of Canadians, out of the hands of business people, job creators and entrepreneurs and investors, workers and consumers, and putting it into the hands of politicians and bureaucrats. It is no wonder we continue to have an abysmally high rate of unemployment in the country. It is no wonder that Canadians have to work harder and harder and find less and less discretionary disposable income and find it more difficult to make ends meet.

The standard of living of all Canadians is being lowered. The Liberal government is making a big show, a big production out of caring about the rate of poverty and the children in our country who are living in poverty. At the same time, it is pushing through measures such as this which contribute to the increasing poverty of members of our society, taking more taxes from the most vulnerable members of our society by this type of tax increase and doing it in a very hurried way to make sure that people do not see what is going on.

There is a lot of misinformation, a lot of distortion by members opposite when they get up to speak, trying to cover up what is really happening. However, we need to get the message out to Canadians that this is not the way to attack child poverty in this country. It is not a way to give the poorest and most vulnerable members of our society a leg up. It is only a way to get more money into the pockets of the government.

The harmonization is a red herring, a feeble attempt to convince taxpayers that the Liberals have kept their GST promise. Other provinces have been clever enough to see through this and have rejected this scheme. I urge the House to reject this scheme and to protect the people in the Atlantic provinces from this kind of tax grab on the backs of Atlantic Canadians.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, I wish to tell Quebecers and Canadians that there are three good reasons why Bill C-70 ought not to be passed by the House of Commons.

The first, and perhaps the most serious, is that it sends a very ambiguous message to Canadians and Quebecers about what this government's word is worth. During the last campaign, they were saying that they were going to scrap the GST, that it would no longer exist, that they would make it disappear. Once in power, they began to hum and haw and to mark time, but in the end they did not respect their contract with the voters.

Running for office is like signing a contract with each voter, stating what one commits to doing, what one commits to defending, and, if elected, one will respect that contract. There is a very ambiguous, and very negative, message being sent to all those who might think of getting into politics: this government says one thing while campaigning to get elected, and does another once in power. It did the same thing with job creation and unemployment insurance. This is totally unacceptable, and very bad for democracy.

In the next election campaign, when the Liberal candidates come knocking on the doors of Quebecers, voters will be entitled to ask whether what is set out in their platform is true, if their actions will match their words, if all their commitments are merely a smoke screen to win votes so they can do as they please as soon as the election is over. The Liberals will have a real problem relating to this question of a systematic lack of respect for the promises they have made on major issues.

The second element, and this is particularly true for Quebecers, is the frustration that is felt when we see one billion dollars in compensation-no one on the other side of the House has questioned the accuracy of this figure-given to three Maritime provinces for harmonizing the GST.

Harmonization is all very well, but I think we should realize that this is a repeat of an age-old practice of Canadian federalism, which is to try and cure the ills of one region in Canada at the expense of the other regions, in an attempt to buy political peace. After introducing employment insurance reform that penalizes the maritimes and eastern Quebec to a considerable degree, a form of compensation has been found, a kind of pacifier for the people of the maritimes. They are offered compensation for harmonizing the GST.

However, Quebec, which proceeded with this harmonization several years ago, did not receive any compensation at all. Quebec did its job and made the system work. All public servants who administer the GST are with the Department of Revenue in Quebec City, and they remit the amounts to Ottawa. It all works without any compensation. Here again, we see the double standard we have seen so often in the history of Canadian federalism.

This has some major economic impacts. We use this, for instance, in the new riding of Kamouraska-Rivière-du-Loup-Témiscouata-Les Basques, where the Témiscouata area borders on New Brunswick. This is one of many measures we are evaluating to find out how federal monies get to New Brunswick and how they get to Quebec, and whether these two parts of Canada are being treated equally. The study we are doing now focuses on all grants and assistance programs currently available.

We have here a clear example of a situation that may lead to unfair competition between two regions. One government will receive funding to harmonize the tax, while the other did not. There will necessarily be additional costs for the Quebec government. Products from New Brunswick will be more attractive because of the federal government's compensation, which was not given to the Government of Quebec. There is an injustice here that warrants our criticism.

In its concern for tarting up the transformation of the GST, the federal government was prepared to pay any price for peace. The people of the maritimes won the jackpot. The people of Quebec, however, did not come begging, saw no need for compensation and harmonized the taxes at no cost to the government. Western Canada did not harmonize.

The situation has therefore created several Canadas. It does not work. It proves that, when the federal system is allowed to run on its own, this is the sort of monster we end up with. There will be two different types of taxation in two bordering provinces: in the maritimes, the taxation system is subsidized by the federal government; in Quebec, the federal government did not subsidize harmonization. Double standards are still unacceptable.

I would like to take the few minutes I have left to point out that this bill represents what I would call a partial win for the Bloc Quebecois. Those members who represented the Bloc Quebecois before the 1993 election had systematically made representations to ensure that the GST would not apply to books.

After all the representations that have been made, the bill before us today provides that books bought by groups involved in literacy programs, libraries and similar organizations will be tax free. Because of the major cultural impact books have on our society, the Bloc Quebecois feels that all books should be free of tax.

I think we should keep up the fight because, as we can see, this would benefit not only Quebec but all of Canada. English Canadian culture certainly needs help in holding its own against American culture. Because markets are permeable and the fact that the same language is used in English Canada and in the U.S., books are among the main tools used to spread culture. This would have been an opportunity to give books published in Canada an edge, by not subjecting them to tax. Any way you look at it, the propagation of knowledge benefits society as a whole. But this is not reflected in the bill.

I think the government could show its good will by making all books tax-free. I think all Quebecers and Canadians would gain from it. This is a measure that will probably be discussed in the next election campaign. At that time, we will have to make sure that each party will honour its commitments.

This Liberal government will certainly have a major credibility problem during the election campaign, primarily because of issues such as the GST, employment insurance and the promise to create jobs. The current unemployment rate, which remains above 10 per cent, is the highest in a number of years. This figure includes people who are actually looking for work, but not those who have given up because they were unable to find jobs.

There is a shameless waste of human resources in our society. Changing this situation must be our governments' top priority. We have no idea what kind of commitments this government will make the next time. What is more important though is whether or not it will fulfil these commitments.

If the past is any indication of the future, it is not encouraging for Canadian voters, because each time they will have to decide whether or not to believe in a Liberal government commitment, they will remember that the Liberals did not do what they had pledged to do with the GST, and with employment insurance, as they simply implemented the reform prepared by the Conservatives.

As for employment itself, again the commitments made were not fulfilled. The morning after the election, the Liberal government set out to tackle the deficit. This was fine, but in the process it overlooked another obligation, which is to ensure that our society's human potential is being used. In this sense, the bill before us is disappointing. It perpetuates an inequity in the Canadian federal system, which is the fact that different parts of the country are treated differently.

In western Canada, the government is subsidizing an airline company that has trouble making profits because of a major management problem, while in Atlantic Canada it gives a compensation of $1 billion to harmonize the GST. In the middle, there is Quebec, which made real efforts to harmonize its tax, but which is not getting the benefits that other provinces are receiving.

When will fairness prevail? I do not believe the solution to this problem lies in the current federal system. In any case, I am asking Quebec and Canadian voters to be very demanding, during the next election campaign, regarding the commitments that will be made by Liberal candidates.

The evidence is before us: This government had pledged to eliminate the GST, but instead it comes up with cosmetic changes. The GST is still here and the commitment made during the election campaign was not fulfilled. This is why I feel the House should reject this bill.

[Werner Schmidt, Reform, Okanagan Centre, BC]

Mr. Speaker, Bill C-70 is the harmonization of the sales tax.

I could not help but think about the word harmonize. It comes from the word harmony. Harmony means to create agreement, concord, to create an apt or aesthetic arrangement of parts. It is a progression of chords, to use a musical definition, to produce a pleasing effect. To harmonize then would be to make a form that is pleasing and to provide a consistent whole, to add notes to a melody to produce harmony and to bring into being or to create harmony.

I thought to myself, I have heard a lot about this sales tax and it seems that none of those definitions really apply to this particular development. I looked up the antonym of harmonize. The antonym of harmonize is discord. Discord means to have disagreement, strife, to disagree or to quarrel, to be different or to be inconsistent.

I thought to myself, which of those two words best describes the harmonized sales tax? Harmony, a consistent aesthetically pleasing whole where the parts agree with one another or discord, where there is disagreement, strife and division. I came to the conclusion that this tax has the wrong name. It should be called the discord tax or government by discord, not harmony. It is creating the opposite.

Does it provide a beautiful, harmonious sound of working together in a melody of taxation? I do not think so. I am reminded of the member for Mississauga West. What did she say? She said that the people hate, they do not just dislike the GST, they hate it. Most people that I know like harmony and hate discord. It strikes me that is probably the situation.

The other word that comes up and is a source with regard to harmony says it creates peace. There is all kinds of evidence that this has done anything but create peace. It looks like it does not even have the potential of creating accord.

This is a tax of discord. It has created conflict among provinces. It has created conflicts between provinces and Ottawa. It has created conflicts among citizens. It has created conflicts between government and business. It has created conflicts between consumers and retailers. How many more conflicts do we want? And they call that harmonization. It is the exact opposite of harmonization.

How is it possible that all these kinds of conflicts could occur? How does that happen? First of all it costs more. Can you imagine, Mr. Speaker, that three major retailers in Atlantic Canada have stated that their net annual deficit will total $27 million once harmonization is implemented? Are you aware that the Retail Council of Canada has said that by forcing stores to bury the new tax prices, the harmonization tax regime will cost retailers at least $100 million a year? That is the implementation of the tax. That is not revenue for the government.

Why? Because there will be a duplication of information systems and the rewriting of software, the repricing of prepriced goods, the duplication of advertising costs as it goes from the various catalogues and the various brochures that have gone out to the various consumers, the warehousing and distribution costs. That is no small cost.

Then a study was done by Ernst & Young. This very reputable national accounting firm said that a midsize national chain with 50 stores in the Atlantic provinces would pay up to $3 million in one-time costs. Those 50 stores would pay $3 million in start-up costs. After that they would pay $1.1 million per year to comply with the regional tax in price sales system, which we know means that the total price includes the tax. The amount of tax paid is hidden in the price on an article when it is taken to the cashier.

The Canadian Real Estate Association says that harmonization will increase the cost of a new house by $4,000 in Nova Scotia and Newfoundland and by $3,374 in New Brunswick. All the nice young families will just love having to pay an extra $4,000, will they not? The answer is no they will not.

Consumers will pay more for funeral services, for their children's clothing, for auto repairs, electricity, gasoline and home heating fuel to mention only a few of the things that will cost more.

The more severe problem is that it does not abolish the GST.

The member for York South-Weston said it best. He said it quickly and concisely as he is able to do. He said: "Scrapping and harmonization are not synonyms. Harmonization is a red herring". How accurate he was and how clearly he described exactly what is going on.

It also makes a lie out of statements such as when in 1990 the current Minister of Finance said: "I would abolish the GST. The manufacturers sales tax is a bad tax and there is no excuse to repeat one bad thing by bringing in another one". That was six years ago.

In 1994, four years later, after the Liberal Party formed the Government of Canada, the Prime Minister said: "We hate it and we will kill it".

In 1995, a year later, a Liberal backbencher, the hon. member for Mississauga West, said: "I think the GST is going to become a hot point. I think if we do not do something about it our credibility is gone. People in my riding hate the GST. It is not one of those mild `we do not like it', they hate it. If the GST is merged with provincial sales taxes voters will not be satisfied unless the overall tax take is simultaneously reduced".

It is already clear that all of those statements have been proven to be false.

I want to move to the next rather significant development which took place in August 1995. Going back to the Minister of Finance

who in 1990 said that it was a bad tax, he said in August 1995: "I think it is very clear that what small business wants and what consumers want is a harmonized tax". Was he listening to the people?

Is the minister listening to New Brunswick and Nova Scotia now? Is he listening to the people of Alberta? Is he listening to the people of Ontario? Is he listening to the people of British Columbia? If he were, there is no way he could make that statement and say that he is telling the truth. I do not know to whom he is talking. He is talking to somebody, but it is clearly somebody other than the people to whom I have just referred. It cannot be an honest statement. Either he has been listening to different people or he is deliberately misrepresenting what he heard the people to say.

We need to go beyond that. This harmonized tax violates good government. It violates good management practices like the province of Alberta has put into place. In that province there is no provincial sales tax. Why? Because Alberta was able to balance its budget without a sales tax. That is a lesson not only this government should learn, but every provincial government should learn as well. The harmonization tax does not permit and reward good government and good practice.

After all that, we also have to conclude that this tax is a bad deal. The Atlantic provinces were bribed with a $1 billion infusion of borrowed money which future taxpayers will have to pay for.

Alberta, Ontario and British Columbia refuse to get involved. They are not even willing to talk about harmonization. The support is weak in Saskatchewan and in Prince Edward Island. That is harmonization? That is harmony? That is accord? That is creating peace? It is the exact opposite. It is divisive. It is conflicting. It is strife engendering. That is what it is. It is a bad deal.

The Ontario Minister of Finance said that the blended sales tax using the GST base would cost Ontarians over $3 billion in extra taxes. He has put the kibosh on any harmonization talk and scheme in this province. That is the issue which is at stake here in this bill.

It was done to give the government the appearance that somehow it has dealt with the GST and that somehow it would make people think the GST has been abolished. How ignorant, how stupid does the government think the people of Canada are? The people of Canada are anything but stupid and neither are they unable to understand what is going on in this issue. It is very significant.

One more thing. How did the Liberals do it? They made it incomprehensible. I draw attention to Bill C-70, 335 pages of what the harmonization tax is about. It is not to say anything about the income tax act which is over 2,000 pages long.

[Leon Benoit, Reform, Vegreville, AB]

Madam Speaker, in the little time I have allocated to me today I would like to talk about the so-called harmonization of the GST from two different points of view. I will talk about the deal itself and the fact that it is a bad deal, that it will hurt business and kill jobs in Atlantic Canada and across the country. Also, I will talk about the lack of integrity in government. The more important part of my presentation today will be to point out that this government has completely lacked integrity on this and a lot of other issues and Canadians should find this unacceptable.

First, about the deal itself, it is clearly a bad deal for business. The premiers of the Atlantic provinces had to be bribed with a billion dollars just to accept this deal. Of course Prince Edward Island has not accepted it. The Liberal Government of Prince Edward Island was defeated recently partly because of the consideration of this deal. Alberta, Ontario and British Columbia have completely refused to talk about the issue, while Saskatchewan, Manitoba and Prince Edward Island really have been less than positive about the deal.

To accurately call this harmonization of sales taxes, it would have to apply right across the country. What we have is a deal only for three Atlantic Canadian provinces. That hardly makes for harmonization of the GST. Let us not call it harmonization. Let us talk about it for what it really is.

The Ontario finance minister said that this deal will cost Ontarians over $3 billion. That is a lot of money. I am sure the people of Ontario who elected many of the Liberal MPs on their promise of abolishing the GST must be very upset about what has happened here. Not only has the promise to abolish, scrap, kill the GST been broken, but in an attempt to cover up this broken promise according to the finance minister of Ontario, it will cost the people of Ontario $3 billion just for the deal with the Atlantic provinces. The people of Ontario cannot possibly be very happy about this.

This policy demonstrates what has already been demonstrated by this government many times before: the lack of a broad vision, the lack of well thought out comprehensive policy on issues. Too often we have had piecemeal legislation, which is the case again here. This legislation applies to only three provinces out of the ten. It is called harmonization but clearly it is not.

What will this legislation do for businesses and jobs? This is the most important issue to consider in terms of this deal. It will be a big job killer. Several people who are involved and who will be affected by this deal have made that clear.

The three major retailers in Atlantic Canada have stated that the annual retail deficit will total $27 million once harmonization is implemented. One private sector retailer in Atlantic Canada was

contemplating opening two more stores in 1997 but has scrapped that plan because of this deal. That means jobs lost.

Both privately owned and publicly traded stores are reluctant to explain the problems they face as a result of harmonization so as not to jeopardize customer confidence and the value of their stock. They must be careful in even talking about the effects of this deal.

However, the Retail Council of Canada has said that in forcing stores to bury the new so-called harmonized tax, the harmonized tax regime will cost retailers $100 million a year. Not only is this so-called harmonization which affects only three Atlantic provinces going to cost the other Canadian provinces $1 billion over the next three years, but it will also cost Atlantic Canada retailers $100 million. That will mean job losses. Business people will have to work even more hours which will mean more time away from their families. That is unacceptable.

An article in the December 4 Globe and Mail discussed the so-called harmonization and some of its impacts. It stated that the major increases will be on items such as home heating fuel and clothing which will be taxed at 15 per cent instead of the 7 per cent GST that is now applied. The tax will increase on essential items that nobody can avoid buying, such as heating fuel and clothing, and this will drive the prices up substantially.

In the Globe and Mail article the Retail Council of Canada said that businesses will have to spend $28 million to get their pricing systems ready by April 7. This is a huge blow to Atlantic retailers'', said Peter Woolford, senior vice-president of the council.Retail profits average about 2 per cent of sales'', he said, and this is going to cut even further into those narrow margins.

Mr. O'Brien, Atlantic director for the Canadian Federation of Independent Business, said that in the case of one magazine store in Halifax, the owner will have to change the prices on as many as 8,500 journals a week. We are not talking about some megabusiness but about one small business owner who will have to change the prices on 8,500 journals a week. His comment is that he will have to work another seven hours a week when he is already working 70 hours a week. This is completely unacceptable.

It is completely unacceptable to make changes that will make for more totally non-productive work for business owners and that will extend the hours of already overworked business owners, operators and workers in this country. We need less government interference. These people need more time to spend with their families. Clearly this bill will mean just the opposite in Atlantic Canada.

Of course it has an impact across the country. A billion dollar increase in costs will mean more taxes for Canadians in other provinces. That means more working hours and less time to spend with families. This will damage the already strained situation of families.

I would like to close by talking about lack of integrity in government. I want to begin with some quotes from the Prime Minister and the finance minister in 1990, when they were getting into full gear for the election campaign.

The Prime Minister said in the Toronto Star in 1990: `The Liberals will scrap the goods and services tax if they win the next general election, leader Jean Chrétien says.I am opposed to the GST, I have always been opposed to it and I will be opposed to it always'''.

From the finance minister: "I would abolish the GST", April 4, 1990.

Then in 1992 as we got into the heat of the election campaign the Liberal leader was quoted in the Toronto Star , December 21, 1992: ``With the federal election only months away Liberal leader Jean Chrétien faces two questions that are being posed with increasing urgency. Does he stand by his word to scrap the goods and services tax? The answer was given by the Prime Minister's communications director, Peter Donalo when he said that the leader is committed to doing away with the thing and to tell Canadians before the election where he would make up the money''. Of course, that has not happened. It is totally unacceptable that has not happened. A promise was made and clearly the promise has been broken.

In closing I would like to quote a comment from the member for Kingston and the Islands at a meeting here in Ottawa. When the member for Kingston and the Islands was asked about the GST and the fact that a promise had been broken, his comments was: "We changed our minds". I do not think Canadians will view it with that levity.

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Madam Speaker, before I get into any remarks that I would call GST specific, I would like to comment on something that is happening here today, which is the use of time allocation again by the Liberal government on this debate. That makes 26 times that this heavy handed throttling of Parliament has been practised by this government.

It is a rather curious phenomenon that is taking place. It actually started in the Trudeau years. His was the first government in Canadian history that opposed free speech in Parliament. It was the first government that began to routinely use time allocation and closure. Prior to the election of Mr. Trudeau, these two means of throttling debate had been used only 23 times in the entire history since Confederation. I think it was first used by Sir Robert Borden during the first world war.

Then Mr. Trudeau came along and what did we get? Forty-four uses of time allocation or closure in 15 years. That is a bit of an escalation. Then in the Mulroney years they were used 63 times in

eight years and nine months, a new record, a new champion on the block.

But what is happening under the current Liberal government? It has only been in office for a short time, three years and one month. Already it has used time allocation or closure 31 times. This is unprecedented. It is contemptible that any government would treat any parliament in this manner.

Today the Liberals are showing their contempt for Parliament in two ways. One is through time allocation. The other is contempt for their fellow members in that only one of them has even bothered to come in and listen to this debate. I refuse to blow air into an empty room. I request a quorum count.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Please ring the bells.

And the bells having rung:

[The Acting Speaker (Mrs. Ringuette-Maltais)]

We have quorum. The hon. member may continue with debate.