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.