House of Commons Hansard #112 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was harmonization.


Government Response To PetitionsRoutine Proceedings

10 a.m.

Fundy Royal New Brunswick


Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table in both official languages the government's response to two petitions.

Persons With DisabilitiesRoutine Proceedings

10 a.m.

Papineau—Saint-Michel Québec


Pierre Pettigrew LiberalMinister of Human Resources Development

Mr. Speaker, the measure of a society is based on how it includes all of its members in an active manner and how it allows them to participate as fully as possible in life.

Government, communities and individuals must recognize the important role they have to play in addressing the needs of Canadians with disabilities. The issues facing them are not theirs alone.

The Government of Canada has traditionally taken a leadership role in addressing the interests of persons with disabilities. My department offers an array of programs and services geared to providing the support necessary to allow persons with disabilities to live and work with dignity and as independently as possible.

We all have a shared responsibility, all levels of government, all political parties and all Canadians, for providing positive assistance to enable persons with disabilities to participate in the mainstream of society as full and equal citizens.

The contribution of persons with disabilities is a valuable one and as a government it is inherent upon us to do our utmost so that they are never excluded from our society. The loss to Canada would be too great.

Together, the federal, provincial and territorial governments, as well as communities, must look at how best to develop and deliver the programs and services that ensure voices of people with disabilities will always be heard.

Last Wednesday, I took part in the federal-provincial-territorial council on social policy renewal. It was a great day for all Canadians. For we witnessed a new spirit of collaboration between levels of government.

In that room, ministers and representatives from across our country identified Canadians with disabilities as one of our key priorities.

I assure members the ministerial council is seeking practical and concrete ways to meet their needs. Through this environment of trust, openness and mutual respect, we will be able to work in partnership to develop measures that will improve programs and services for persons with disabilities.

My federal, provincial and territorial colleagues are committed to working together to harmonize our approaches to better serve the needs of Canadians with disabilities. Federal, provincial and territorial working groups are looking at various options that we can bring back to first ministers in the coming months.

The task force on disability issues, chaired by the member for Fredericton-York-Sunbury, is another valuable contribution on which we can build. It provides the Government of Canada with some valuable information and direction for its activities as well as those it undertakes in partnership with other levels of government.

I am looking forward to developing some substantial measures in collaboration with my federal, provincial and territorial colleagues in response to the issues identified in the task force report.

I am continuing to discuss with my cabinet colleagues actions we can take in collaboration with provinces and the disability community to meet the needs of Canadians with disabilities. Progress is being made on a continuous basis.

Canada can play a leading role in the international community to ensure that the needs and aspirations of people with disabilities

will be met. We have made great strides in the past few years, but we all recognize that much more must be done.

Persons With DisabilitiesRoutine Proceedings

10:10 a.m.


Maurice Bernier Bloc Mégantic—Compton—Stanstead, QC

Mr. Speaker, I would like to take this opportunity, on this International Day of Disabled Persons and in what is known as the Week of Disabled Persons in Quebec, proclaimed for the first time this year, to pay tribute to disabled persons across the country who, faced daily with their disabilities, need tremendous courage not only to overcome these disabilities but also to overcome the barriers facing them in their personal and professional lives and in their social activities.

I also wish to pay tribute to the families who are responsible for their care. Families take on these responsibilities in sometimes difficult circumstances and in many cases have to face the same restrictions as the individuals for whose care they are responsible, which may be an emotionally draining experience.

Finally, I would also like to pay tribute to the volunteers who are active in all kinds of organizations to support and promote the rights of disabled persons so that our society will become more open in this respect, and who also provide better services at a time when most, if not all governments are reducing their involvement in this area.

When I heard the Minister of Human Resources Development make a speech which basically only paid lip service to a number of principles, I was disappointed, but I also consider this further proof of this government's contempt for the disabled.

Persons With DisabilitiesRoutine Proceedings

10:10 a.m.


Pierre Pettigrew Liberal Papineau—Saint-Michel, QC

Oh, come on!

Persons With DisabilitiesRoutine Proceedings

10:10 a.m.


Maurice Bernier Bloc Mégantic—Compton—Stanstead, QC

I suggest that the minister take a deep breath and listen to what I have to say. I have worked with disabled persons for many years, and I do not need any advice from a political upstart who does not do his homework and does not know what he is talking about.

To prove this, I have two documents that I suggest he read carefully. The first one is the report of the human rights committee, tabled in this House in 1995. The report was unanimous, in other words, it had the support of the members of this government and the members of the official opposition.

Mr. Speaker, I see the minister-

Persons With DisabilitiesRoutine Proceedings

10:10 a.m.


Yvan Bernier Bloc Gaspé, QC

Mr. Speaker, on a point of order.

I am sorry to interrupt my hon. colleague, but everyone here in this House saw the Minister of Human Resources Development give the finger to the member who was speaking. This kind of behaviour is entirely unacceptable, especially since the subject he is discussing, persons with disabilities, deserves all due respect.

I hope the minister will apologize and there will be no more incidents like this one when we are discussing such a serious topic.

Persons With DisabilitiesRoutine Proceedings

10:10 a.m.


Maurice Bernier Bloc Mégantic—Compton—Stanstead, QC

Mr. Speaker, I think the minister's gesture only discredits the minister and underscores the lack of substance in his message and his failure to act in this area.

I shall, if I may, get back to the subject of my speech. I said the minister should read the 1995 report of the human rights committee tabled in this House a year ago in December. This unanimous report was endorsed by the members of his party, the government party, by the members of the opposition and the members of the Reform Party. It provided a concrete response to the demands of persons with disabilities.

Almost a year later, his predecessor decided to use taxpayers' money to set up a partisan committee, which fortunately was joined by representatives of groups of people with disabilities from all across Canada. This committee tabled its report in October. Here is what the Liberal group, the minister's group, said in the first few pages of its report, which the minister has not read-as his comments clearly show. The report says: "While their arguments have been listened to at the political level and by governments, there has been a growing gap between saying and doing".

A little further along, the report states: "At the federal level", this is the Liberals talking, "responses to the report tabled by the human rights committee in 1995 have been equivocal and in some cases non-existent". The response to the framework document, the latest report of the Standing Committee on Human Rights and the Status of Persons with Disabilities intimated that the status quo was good enough. This is the government's response.

And what do they have to say? All puffed up today, the day of persons with disabilities, the minister offers us six or seven pages worth of his desire for governments, various provinces and various departments to co-operate. People with disabilities do not want co-operation, they want action, they want constructive action.

No one is expecting the minister to introduce measures during the election campaign or in version two of the red book; they want action now. However-and I will close on this-the minister's response appears on the first page. You have to read between the lines. On the first page, the minister says: "The measure of a society is based on how it includes all of its members in an active manner-". Fine lip service. The paragraph concludes: "The issues facing them", people with disabilities, "are not theirs alone". That is the government's response. In other words, line up and, when your turn comes along, maybe we will attend to you, if

we have the time. This is not how the official opposition sees things and this is not what we are going to defend in the weeks to come.

Persons With DisabilitiesRoutine Proceedings

10:15 a.m.


Sharon Hayes Reform Port Moody—Coquitlam, BC

Mr. Speaker, it is a privilege to speak today on behalf of my party, the Reform Party, on this international day to recognize persons with disabilities, particularly in Canada.

Many Canadians with disabilities face many unique challenges each day of their lives. Even in Canada where many external changes have been made to facilitate life for persons with disabilities it takes a level of courage for persons with disabilities to accomplish many of the tasks that other Canadians too often take for granted.

Today I pause as I talk about a faceless mask called persons with disabilities because, as is the case with all Canadians, each of these people with disabilities is unique, and each one has their own disability with its own individual challenges.

When developing public policy we typically talk only about a group of people called persons with disabilities. In that it is too easy to develop one program or one system which is supposed to help that faceless group which has been classified as disabled rather than recognizing the uniqueness of each person's circumstance.

Unfortunately this appears to be the way Ottawa has treated persons with disabilities for decades. It is hardly surprising that a recent report released by the federal task force on disability issues discovered a high level of frustration and some anger among persons with disabilities in Canada.

Lately we have heard the needs of the disabled are being addressed as a priority in the deliberations of the federal-provincial-territorial council on social policy renewal. I believe the needs of disabled persons are far more likely to be met by provinces or levels closer to those individuals that can tailor those services more specifically to the needs of those citizens.

The direction for the solutions for the disabled should be in the hands of provinces or levels even lower than that. The control of and the decisions on these important issues should be made as close to the people as possible to avoid the duplication of bureaucratic costs, needless costs which we too often see in this place.

We need to empower communities. We need to empower families in order that they may address the uniqueness of the disability and of the individual.

Not so long ago in this House we voted on a private member's motion, Motion No. 30. That motion stated that the government should consider amending the Income Tax Act to provide a caregiver tax credit for those who provide care in the home for preschool children and the disabled. That motion looked to the specific needs of the disabled in order to empower the family looking after the disabled person, which in turn would empower that individual. Unfortunately, the front benches of the government rejected that motion outright. The government said that was not in its plans.

This government refuses to leave money in the hands of the people who can use it with the greatest wisdom. The government continues to believe that it has the solutions for the problems in the homes of this country and for the challenges which disabled people face. I disagree with the government, which feels that all solutions in this nation must come from Ottawa and all solutions must be determined by bureaucracy.

Typically, Ottawa is the source of well intentioned programs, in most cases, but it has the mindset that it is only the federal government which can solve problems. Typically the programs are pulled in a myriad of directions and at the end of the day most programs that are developed lack a substantive review to actually determine if they work. The purpose is too often fuzzy to start with, too influenced by short term demand, perhaps an election call, or perhaps it is a program which reflects the flavour of the month for social programs.

We saw that in the development of the Canada pension plan, which was originally designed to give security to Canadians. That plan has led to untold frustration for the disabled people who must apply for it. It has placed an expense on a public system, which was not originally intended. Again it is an example of a program that has not worked as originally intended. Perhaps governments did not think through the plan and address their real intention.

Government does not solve the problems. Individual Canadians must be allowed to address these problems with a level of support which is closest to their needs.

The report that was mentioned earlier was called "A Will to Act". My hon. colleague in the official opposition mentioned his frustration. I would like to mention my frustration that too often Ottawa acts without achieving the desired results. It is too willing to act without proper evaluation and the end result does not reflect the original intention.

What we need for all Canadians is the will to succeed. We must find the solutions. I believe those solutions are best found not in this place but in the decisions which are made by individual Canadians.

Committees Of The HouseRoutine Proceedings

10:20 a.m.

Fundy Royal New Brunswick


Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I have the honour to present, in both official languages, the 48th report of the Standing Committee on Procedure and House Affairs

regarding the associate membership of the Standing Committee on Health.

If the House gives its consent, I intend to move concurrence in the 48th report later this day.

Committees Of The HouseRoutine Proceedings

10:20 a.m.


Jim Jordan Liberal Leeds—Grenville, ON

Mr. Speaker, I have the honour to present, in both official languages, the fourth report of the Standing Committee on Transport with respect to Bill C-43, better known as the Railway Safety Act.

This fourth report on the bill represents a lengthy process of debate and hearings by members of the all-party Standing Committee on Transport which is chaired by my colleague from Winnipeg South.

It is rewarding to see this important bill take another step forward toward becoming law.

Canadian Wheat Board ActRoutine Proceedings

10:25 a.m.

Regina—Wascana Saskatchewan


Ralph Goodale LiberalMinister of Agriculture and Agri-Food

moved for leave to introduce Bill C-72, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other acts.

Mr. Speaker, I simply wish to inform the House that in accordance with Standing Order 73(1), it is the intention of the government that this bill be referred to a committee before second reading.

(Motions deemed adopted, bill read the first time and printed.)

Statistics ActRoutine Proceedings

10:25 a.m.


Chuck Strahl Reform Fraser Valley East, BC

moved for leave to introduce Bill C-358, an act to amend the Statistics Act.

Mr. Speaker, the national census requires Canadians to include their personal names and addresses on census documents in part so that if they make a wrong or an incomplete statement on the census form they can be prosecuted by the government.

I believe this requirement carries with it an unwarranted distrust of Canadians. Also, since census documents are not anonymous, many respondents are not completely forthcoming with all the information. They feel that if their name is attached to it someone is going to know their history, their income and everything about them that the census takes in as information.

I believe that the information gathered may not be as reliable as it would be in a non-traceable document. I believe there is no good reason for the government to have such detailed personal information about each individual Canadian. Therefore this private member's bill would amend the Statistics Act to ensure that Canadians would be able to participate anonymously in the national census. This would lead to both a less intrusive government and a more accurate census.

(Motions deemed adopted, bill read the first time and printed.)

Committees Of The HouseRoutine Proceedings

10:25 a.m.

Fundy Royal New Brunswick


Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I move that the 48th report of the Standing Committee on Procedure and House Affairs, presented to the House earlier this day, be concurred in.

(Motion agreed to.)

PetitionsRoutine Proceedings

10:25 a.m.


John Bryden Liberal Hamilton—Wentworth, ON

Mr. Speaker, I wish to present a petition from constituents in my riding, calling on the government to reconsider the Young Offenders Act and make such changes that will make sure young offenders are prosecuted according to the nature of the crime and to help deter the type of violent offences that occurred in my riding four months ago when a variety store clerk was shot during an attempted robbery and remains paralyzed from the waist down.

I have before me several petitions involving 22,000 names of people from my riding, ordinary Canadians, who are very concerned that something must be done to change the Young Offenders Act to make young people more accountable for their actions.

PetitionsRoutine Proceedings

10:25 a.m.


Bernard Deshaies Bloc Abitibi, QC

Mr. Speaker, pursuant to Standing Order 36, I have the honour to present a petition signed by 473 people in the riding of Abitibi.

The petitioners draw the attention of the House to the fact that the Senate consists of unelected members who are not accountable for their actions, that its annual operating budget is $43 million, and that it refuses to account for its expenditures to committees of the House of Commons. Moreover, the Senate does not fulfil its mandate to represent the regions and duplicates the work done by members of the House of Commons.

Therefore, the petitioners ask that Parliament take the necessary steps to abolish the Senate.

PetitionsRoutine Proceedings

10:30 a.m.


Randy White Reform Fraser Valley West, BC

Mr. Speaker, yet again I have two more large petitions from Nova Scotia from people who want to be in charge of their own destiny as far as the gas pipeline is concerned. The petitions read: "That in June 1996 the Prime Minister of Canada announced he would work toward diverting the Sable Island gas pipeline to Quebec City; that it is unacceptable for the Prime Minister to decide the destination of Nova Scotia natural gas without consulting Nova Scotians; that Nova Scotians assert their right to control the destination of Sable Island gas and demand that the federal government cease tampering in this issue".

Questions On The Order PaperRoutine Proceedings

10:30 a.m.

Fundy Royal New Brunswick


Paul Zed LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I ask that all questions be allowed to stand.

Questions On The Order PaperRoutine Proceedings

10:30 a.m.

The Deputy Speaker

Is that agreed?

Questions On The Order PaperRoutine Proceedings

10:30 a.m.

Some hon. members


Questions On The Order PaperRoutine Proceedings

10:30 a.m.

The Deputy Speaker

I should inform the House that because of the ministerial statement and replies, Government Orders will be extended by 19 minutes.

Excise Tax ActGovernment Orders

10:30 a.m.

Cardigan P.E.I.


Lawrence MacAulay Liberalfor Minister of Finance

moved 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.

Excise Tax ActGovernment Orders

10:30 a.m.

St. Paul's Ontario


Barry Campbell LiberalParliamentary Secretary to Minister of Finance

Mr. Speaker, I am pleased to lead off second reading of important and historic legislation, the introduction of a new harmonized sales tax, or HST, throughout most of Atlantic Canada. With the inauguration of the HST we have begun a process for replacing the GST and providing all Canadians with a better sales tax system.

Today's legislation will enable the federal government and the provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador to introduce a new harmonized tax effective April 1, 1997. But as the benefits of the HST become clear and concrete, benefits for consumers, for businesses and for the economy as a whole, I am confident that other provinces will put the interests of consumers first and sign on to the HST.

This is extensive legislation covering as it must changes to the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act and the Income Tax Act and related acts. In my remarks today I want to highlight the key elements of the HST and to remind this House why these are important and positive steps forward.

When the current government came to power we said: "A Liberal government will replace the GST with a system that generates equivalent revenues, is fairer to consumers and to small business, minimizes disruption to small business, and promotes federal-provincial co-operation and harmonization". These then were the principles that guided us as we examined all the options for replacing the GST: fairness; equivalent revenues; federal-provincial co-operation and harmonization; and simplification.

The new government followed through with its election promise. As members might recall, the process to replace the GST was initiated immediately following the election.

In fact, it is at that time that we asked the House Standing Committee on Finance to look into every possible alternative to replace the GST and to consult Canadians on the various options.

The committee heard close to 500 witnesses, namely tax experts, business people and consumers from across Canada, and received over 700 briefs.

After reviewing 20 different options, committee members came to the conclusion that a large majority favoured harmonization, that is replacing the current mosaic of federal and provincial sales taxes with a single value added tax.

The Standing Committee on Finance made four key recommendations. First, it came down in favour of a value added tax. Second, it recommended harmonizing the federal GST and provincial retail sales taxes without delay. Third, it recommended streamlining the tax. And last, it recognized the importance of including the tax in the price, so that the price consumers see on the shelf is what they pay at the cash.

The Standing Committee on Finance looked closely into the economic impact of the proposals it received as well as their acceptability to businesses and consumers across Canada. What is more, the committee's recommendations were entirely in keeping with the government's red book commitments.

That is why we are actively promoting the implementation of a new tax based on harmonization with the provinces as the best alternative to the GST.

To help smooth the way for harmonization and make the harmonized tax as simple and fair as possible, we put together a major package of streamlining initiatives. These initiatives will help to fulfil the recommendation of the finance committee and the commitment of the red book to a simpler sales tax system.

The streamlining package includes over 100 measures. Many of them are technical and sector specific. Quite a few have been recognized as major positive changes for the many sectors they will affect. The proposed changes include new and simpler rules for many areas of the GST, for example for charities and non-profit organizations, for employee benefits, health care and used goods.

Since the streamlining package was announced last April, the federal government also announced on October 23 a 100 per cent rebate for the GST or the federal portion of the HST on books purchased by a broad range of educational institutions and public sector bodies across Canada. This reflects this government's firm commitment to supporting literacy in as cost effective and fiscally responsible manner as possible.

In short the streamlining changes will help to make the harmonized tax a better tax and improve the operation of the GST in the non-participating provinces.

At the same time that we announced this package, we also announced that a memorandum of understanding on a harmonized sales tax had been reached with the three participating provinces. Taken together this signalled the inauguration of a process for harmonization, one under which provinces can come on board with the HST as they are ready. Subsequently on October 23, the governments of Canada, Nova Scotia, New Brunswick and Newfoundland and Labrador announced detailed agreements to replace the GST and the provincial retail sales taxes in the three Atlantic provinces with a harmonized sales tax.

The new HST will apply at a single rate of 15 per cent on the same base of goods and services as the current GST. The rules governing the operation of the HST will be set out in the Excise Tax Act and will generally be those rules on which the GST currently operates subject to the streamlining changes I have already mentioned.

Under the terms of the agreements which are before us now in legislative form, the HST will be administered initially by Revenue Canada and eventually by the proposed border and revenue agency. Businesses that are registered for the GST will automatically be registered for the HST and will continue to use the current GST return. There are no changes there.

The HST base will be the same as the GST base. Vendors will be required to price on a tax included basis to ensure that consumers are aware of the final price before they reach the cash register.

At the same time, because the HST is in large measure about federal-provincial co-operation, the specific situations and the specific priorities of participating provinces are fully reflected in the agreements. The participating provinces will for example provide point of sale rebates for book sales in those provinces. The rules governing rebates for housing and public sector bodies will reflect the particular circumstances of each province.

A further important reflection of the spirit of federal-provincial co-operation that gave rise to these agreements is the transitional assistance that the federal government will provide to help offset revenue shortfalls in participating provinces. Hon. members know that this government has never shied away from important structural change. It has always recognized the importance of providing transitional assistance to make such changes possible, be it with regard to removing subsidies from the agricultural sector or promoting important sales tax harmonization.

In adopting the HST, the Atlantic provinces have replaced a system that is cumbersome, costly and complicated with one that is simpler, cheaper and a lot more efficient. For consumers, businesses and taxpayers in the participating provinces, the result will be one sales tax not two, one tax base not two, one tax rate not two, one sales tax administration not two, and one price not two. These changes will add up to a simpler, fairer system and a stronger economy.

Consumers in participating provinces will benefit in a number of important ways. First among those will be the lower rate of tax. For Nova Scotia and New Brunswick the combined rate of 15 per cent will represent a decrease of nearly four percentage points in the effective sales tax rate. In Newfoundland and Labrador the rate decrease will be close to 5 per cent. Consumers will also benefit from the removal of provincial retail sales tax from business inputs and from lower compliance costs for businesses.

The overall impact of the tax from the perspective of consumers is that prices on most goods will be lower as will the overall sales tax burden.

Including the HST in the prices displayed gives consumers another important advantage. It puts an end to the surprise they get at the cash register, which is one of the most annoying features of the current system. However, the consumers will still know the amount of tax they are paying since the exact amount, or the tax rate, will be printed on receipts and bills.

This approach will reduce unfair competition between businesses that are located in participating provinces and those that are not. Furthermore, businesses will be able to continue using the cash

registers they have now and still comply with the requirement that the tax be included in the price.

Businesses, like consumers, will benefit from the lower combined tax rate. In addition they will now have to deal with only one set of tax forms, one set of operating rules and one tax administration. By thus reducing the paper burden and administrative hassle associated with a two tier system, the HST will reduce compliance costs for businesses.

The Canadian Institute of Chartered Accountants has estimated that if all non-harmonized provinces were to join in a national sales tax system, Canadian businesses would save between $400 million and $700 million in administrative costs alone. The benefits of lower compliance costs will be particularly advantageous for small businesses which bear disproportionately the costs of dealing with the current two systems.

A further benefit to businesses in the participating provinces will be the recovery of HST payable on their inputs. In fact, harmonization will eliminate over $700 million in hidden sales taxes on business inputs, taxes which have been passed on in the past to consumers. Harmonization will eliminate $280 million in hidden sales taxes in Nova Scotia, $265 million in New Brunswick and $180 million in Newfoundland and Labrador. The elimination of this hidden tax drag will promote the competitiveness of businesses in Atlantic Canada. It will also promote fairness between different kinds of businesses since the tax will not impact differently on businesses just because they are structured differently. The broadening of the tax base will also help ensure a level playing field between businesses that sell different kinds of products.

The proposed legislation also includes rules to ensure a level playing field for all businesses selling in participating provinces. Under the proposed approach, businesses across Canada that are registered for the GST will be required to collect and remit the HST on goods and services sold into a participating province or shipped to a consumer in that province.

I want to stress the fact that this is not a new tax on goods and services sold in the participating provinces. Interprovincial sales have always been subject to the sales tax. The new approach simply makes collecting and paying the tax easier.

Not only will the HST benefit consumers and be simpler and more equitable for businesses, it will also generate some overall economic advantages, especially because the provincial retail sales taxes will be abolished on all the business inputs I have just mentioned.

The elimination of provincial retail sales taxes on those business inputs is a benefit not only for the businesses directly affected. It is important to realize that this measure will reduce the overall cost of exports from participating provinces and eliminate the competitive advantage that is now unintentionally extended to imports.

Furthermore, because it will ensure fair competition among various types of products and business structures, the elimination of the tax on inputs will simplify the context for investment decision making.

All of this translates into more economic activity for Atlantic Canada and more jobs. Government administrative costs will also be reduced through the elimination of overlap and duplication in the administration of federal and provincial sales taxes.

As I said earlier, these changes will add up to a simpler, fairer system and a stronger economy. They clearly meet the criteria set out in the red book and in the recommendations of the finance committee for replacing the GST. Equally important, they represent the significant first stage in a process by which I am confident other provinces will come on board. They will do that sooner or later because harmonization offers significant benefits. The more provinces that join in, the greater those benefits because most existing provincial sales tax systems are inefficient and distorting and the provinces know that.

In provinces across Canada, existing retail sales taxes are killing businesses and jobs. Personally I believe the provincial governments recognize this just as they recognize that taxes on business inputs are taxes that are hidden and are currently being passed on to consumers.

The legislation before us improves the operation of the GST across Canada. For the participating Atlantic provinces it provides an even better system, a system that will benefit consumers with lower tax rates and on many goods, lower prices. They will also know the full price of goods before they get to the cash register.

It is a system that will benefit businesses because they will deal with only one tax, one rate, one base, one set of forms, one administration. That system will benefit the economy of Atlantic Canada by making its exports more competitive. It is a system and a bill that deserves the unqualified support of every member of the House.

Excise Tax ActGovernment Orders

10:45 a.m.


Yvan Loubier Bloc Saint-Hyacinthe—Bagot, QC

Mr. Speaker, contrary to my habit, I am not pleased to speak to this bill, since the government has acquired the unfortunate habit of "tossing"-I think this is the exact term-a bill of over 350 pages on the table about 16 hours before the debate in this House.

On an issue as important as this one, it was inappropriate for the government to table this document yesterday afternoon, as we were forced to work in the evening and all night to do our job as official opposition and find in what ways the government is misleading the people.

Although this is inappropriate, the government has acquired this habit in the last few weeks. I hope this is simply an administrative problem, which I seriously doubt, given the nature of the subject.

You know the GST is a sensitive issue. In the minds of Quebecers and Canadians, the GST is the current Liberal government's worst failure, in that it really betrayed its promise to abolish the GST.

I think this is a rather hypocritical way of ensuring that the debate is quick, succinct and also lends itself to quick analysis and implementation. This is not the way things work in a democracy. I thought that, in a democracy, the government ought to have the courage of its convictions, of the measures announced to the people and give the official opposition time to analyze, criticize and also propose ways to improve bills, because it is our role to make constructive recommendations. I see this is not the case and it is the first thing for which I blame the government.

Bill C-70 is aimed at harmonizing the GST with sales taxes in the three maritime provinces and at providing a federal tax exemption for books that are bought by literacy centres, schools, colleges and so on, without eliminating the GST on books bought by the general public.

This bill is the embodiment of untruthfulness, of the show the Liberals have been putting on for us since the last election. I remind you of the solemn promise the Liberals made with one hand on their heart while looking at the Canadian flag: "That damn GST, we will abolish it when we come to office".

Very interesting quotations were made by Liberals in the last three or four years, including the Deputy Prime Minister and member for Hamilton East who said on March 11, 1996:

"I have already said personally and very directly that if the GST is not abolished I will resign". She resigned, but only for a few weeks. She resigned, but for show, and this show cost Canadians more than half a million dollars for her re-election.

The Deputy Prime Minister had said she would resign if the GST was not abolished. Normally, people who have convictions and are loyal to their beliefs and to the public as well do not resign for show as the Deputy Prime Minister did. They resign and go home, because it looks like the public was deceived.

The Deputy Prime Minister was away for a few weeks and came back with a smile, saying: "The people of Canada have forgiven me; the people of Hamilton East have forgiven me". The Canadian electorate will not forgive the government for breaking such an important promise, one the Liberals used to score political points while in opposition, during the election campaign and, in a different way, with Bill C-70. It is not right to keep deliberately deceiving the public in that way.

I will refer our listeners and our constituents to an article published in Le Soleil on Wednesday, June 19. I would say this editorial by Gilbert Lavoie summarizes quite well what the Deputy Prime Minister has put us through by first resigning and then coming back for show.

Let me read you some excerpts from this excellent editorial written by Gilbert Lavoie. The original text has been slightly modified to avoid using the name of the Deputy Prime Minister. It says the following: "Her victory in the Hamilton East by-election on Monday did not prove a thing, except perhaps the cynicism and arrogance of a certain political class. She had promised to resign if the government did not abolish the GST as promised. She did resign, but only to get immediately re-elected in a by-election, standing for the same party, the same government, the same GST. The cost of this operation, amounting to $500,000, was borne by Canadian taxpayers". Half a million dollars so she could pretend to try to clear her name and that of her government.

I read on, because this is too interesting an editorial not to take full advantage of it: "In politics, anyone who resigns on a question of principle is expected to leave the party to go and sit as an independent member or to found a new party as Lucien Bouchard did. It is, however, difficult to understand how the Deputy Prime Minister, who explained when she resigned that she could no longer look voters in the eye, can now feel comfortable about resuming her functions within the Liberal government. During the by-election campaign, the member for Hamilton East explained her attitude as follows: `The GST ranks eighth among public concerns, far behind jobs and the preservation of social services. Its importance should therefore not-and I am still quoting the Deputy Prime Minister-be overestimated"'.

I will stop quoting the article for a moment to point out that the importance of the GST issue is due to the Liberals themselves, who overreacted at the time, under the Tory government. For a few weeks, they put up a bitter fight over the GST, tearing at their shirts, shouting themselves hoarse, and demanding the GST be scrapped, the hated GST as they then referred to it. You certainly remember that time, Mr. Speaker.

They are now saying that the importance of the GST must not be exaggerated, but they were elected partly under false pretences, saying they would abolish the GST. They are now telling us not to exaggerate the importance of the GST. This is incredible. No wonder politicians are at the very bottom of the credibility list. When people are deceived in this way by a certain cynical and arrogant political class, it is perfectly normal to find that class at the bottom of the list.

Let me quote Gilbert Lavoie's article again, as it is very interesting and informative: "But her fake resignation from government-from the Liberal Party-is nonetheless sad buffoonery from someone whose presence in politics has always been based on public morality. She has in turn contributed to Canadians' increasingly cynical view of their politicians".

As a Montrealer, Émile Boudreau summed it up very well in a letter to the editor of Le Devoir, which reflects public opinion: "You resign, you shed a tear before the cameras, and the very same day you run as a candidate and you are re-elected. You resurface clean, clean, clean. The Liberal Party goes up one notch in the public's opinion, and life could not better be".

Mr. Lavoie's article and Mr. Boudreau's letter reflect a profound public discontent toward politicians. They also reflect the reason politicians feel increasingly criticized by the public, and deservedly so.

When you see an attitude such as the one displayed regarding the GST issue, when you see the Deputy Prime Minister's attitude, when you see the secretary of state introduce a measure like this one as if it included incredible improvements, you realize why people are fed up and why my constituents in the riding of Saint-Hyacinthe-Bagot are also fed up with the federal government and the "frame-up" that is really starting to get on their nerves.

The Deputy Prime Minister was not the only one, with her spectacular resignation, to reflect the whole GST issue. The current Prime Minister had also said, before, during and even after the election campaign, that the GST had to be abolished.

However, there is no mention of abolishing the GST in this bill. This measure is a result of a political agreement signed with three maritime provinces, an agreement which will cost Canadians $1 billion in political compensation, just to give the impression that the government has done something about the GST.

The Liberals did not promise, during the campaign, to sign an agreement with the maritime provinces and then waste $1 billion to buy the maritimes' approval regarding the GST. They promised to abolish the GST. The Prime Minister said it over and over again. During the 1993 election campaign, he said: "We will scrap the GST". To "scrap" means to tear up, to throw out, to get rid of the current GST system and to replace it.

On May 2, 1994, after his election, the Prime Minister said, and I quote: "We hate the GST and we will kill it". But the GST is still there. The only change is that the tax is included in the price. It is now a hidden tax. In the maritimes, people do not realize that the federal government is charging them a 15 per cent tax on goods and services.

I listened to the secretary of state who said the government had extensive consultations with tax experts and the public, in an attempt to justify the government's lack or action on the GST. The Liberals also consulted tax experts and other people before introducing their election platform and telling the public they would abolish the GST, either that or they were saying just about anything during the election campaign.

If they say just about anything during the campaign and could not care less about people, when the next election comes, the people of Quebec and Canada should remember that every time a member of the Liberal Party opens his or her mouth it is to say things that will not withstand close scrutiny, to make promises they will not keep and say any old thing to lie to people.

I think people are beginning to understand what is going on with this government and also that members of the Liberal Party: Liberal MPs and the Liberal candidates in the next election are people who show considerable cynicism and unequalled arrogance. When the next election comes, their cynicism and their arrogance will cost them dearly.

Talking about the government's arrogance, cynicism and total disregard for the public, we must remember there was also a time when the Liberals were the official opposition. There was a time when the Liberals were sitting on these benches. At that time, also, the Liberals were saying just about anything. They made promises they are not keeping today. I would like to recall what the Liberal majority wrote in the finance committee report in 1994: "It would just not be appropriate to hide the GST in the sales price". Yet, the agreement signed with the three maritime provinces includes a provision that will in fact hide the GST in the sales price.

When they were in opposition, the Liberals, in 1989, stated in the dissenting report they tabled that, if the GST were hidden in the sales price, it would make it that much easier for the government to raise it later on. They were condemning the fact that the government wanted to hide the goods and services tax in the sales price. Now, there is no problem. In 1989, they were adamantly against hiding the GST in the sales price, stating that it was a ploy used by the government to be able to raise the tax rate later on without the taxpayer noticing it. And, now, in Bill C-70, in the agreement between the federal government and the maritimes, they are saying there is no problem. It has been hidden in the price. The Liberals tore their hair out, played holier than thou for months and even

years under the Conservative government, but now there is no problem.

How can we trust this government? Every time eminent members of the government party rise in this House and say: "We are going to do this and that", how can we believe them, when they keep saying just about anything that comes to mind, as they have done with the GST, reneging on their promises and forgetting all about their commitments? The people have to realize that the government could not care less about them.

Let us talk about patronage. The agreement reached with the three maritime provinces is akin to patronage. Given the pressure exerted by Canadians, who wanted the government to keep its promise to get rid of the GST, the finance minister thought it would be better to do something, to pretend once again that he was solving the problem. And that is when he signed the deal with the three maritime provinces.

This agreement came with a price, a compensation of around $1 billion handed out to the three maritime provinces. The finance minister bought the three provinces with $1 billion in compensation. He told the maritimes: "I need you to grandstand, to act as if the Canadian government is doing something about the GST, is trying to harmonize it". First, the tax was supposed to be abolished, now it was going to be harmonized.

The maritimes replied: "Minister, if you want to, we will go along with you, but there will be a price to pay". And the finance minister, known for his generosity and his wise management of the public funds, agreed to put $1 billion on the table. Is it enough? This is $1 billion the finance minister took out of his pocket, meaning out of our pockets. This is the money that Revenue Canada takes out of taxpayers' pockets year after year.

Given his generosity and his tendency to waste our money, the finance minister has taken out $1 billion to give it to the maritime provinces. This is $1 billion that Quebecers and Canadians outside the maritime provinces will have to pay. They will have to pay for this generous gift by the finance minister.

The provinces and especially Quebec are angry about this, but not the three maritime provinces, which will receive $1 billion. No, those provinces are not upset. But, outside the maritime provinces, people are very angry, particularly in Quebec. Quebec will have to take $250 million out of its own pocket to pay the three maritime provinces, to pay for the finance minister's patronage.

Quebecers are even more upset, since Quebec has already harmonized its provincial sales tax with the GST. I have been saying and repeating it for a long time because, if there is an example of true harmonization as well as true harmony between the federal government and Quebec, it is the GST.

The Quebec government has acted in good faith. We harmonized the tax. We even agreed to administer it on behalf of the federal government. We are nice in Quebec, but we did not get one penny for all our efforts. The federal government did not compensate us despite giving $1 billion to the maritime provinces.

The Quebec government is entitled to some kind of compensation, since it has harmonized its tax. To give $1 billion to the maritime provinces is unfair to Quebec and to the other provinces, which could come on board with the HST but oppose any preferential treatment. If the maritime provinces get to keep the $1 billion, they want to be compensated as well.

On behalf of the Government of Quebec, the Deputy Premier and finance minister of Quebec, Bernard Landry, repeatedly asked the federal government and the federal finance minister to provide him with the formula used to work out this famous $1 billion compensation for the maritimes. We have asked for it day after day, we have asked the minister to make the formula used to come up with this $1 billion public.

By stubbornly refusing to reveal the formula, the government showed that this agreement was a political one, that the agreement providing for the payment of $1 billion to the maritimes was concluded for the sole purpose of buying the maritimes off. And we can assume that, in the discussions with the finance minister, the maritimes set a very high price for accepting the political "frame-up" that this minister offered them.

The people will also remember this waste of public funds. It is all very well for the finance minister to say to everyone that he is responsible for today's economic situation, but we know he only coasted along with the growth in the economy, he only took advantage of an overall economic climate that was favourable to him, and he only took advantage of extremely low interest rates.

Do you know why interest rates are extremely low? There are three main reasons. First, it is because of the state of the U.S. economy. Second, it is because of the domestic economic climate, that is the chronic lack of jobs for 800,000 Canadians. Eight hundred thousand unemployed means that there are also 800,000 fewer consumers. If there are fewer consumers, prices are lower, so inflation is less likely to increase. And when inflation is low, and even too low-that is close to 1 per cent as it is now-interest rates also go down.

The finance minister is only taking advantage of this situation. If he had been here in 1990 and 1984, the finance minister would have received quite a beating. I will remind you of certain facts that make you smile. You will remember that during those two periods it was not easy to be the Canadian Minister of Finance because

economic conditions were very unfavourable for a flamboyant character in that office.

But the present minister takes advantage of the situation. However, people will remember that he is wasting public funds. He has no right to waste $1 billion as he is doing right now on the GST to hide the inertia of his government and its inability to fulfil its promises.

One billion dollars will be paid out, and the Minister of Finance tells us that this is only the beginning. Quebecers and Canadians will have to pay this $1 billion in political compensation to the maritimes for many years to come. Do you know why? I will give you a technical but very short and, I hope, not too tedious explanation.

The finance minister offered to replace the provincial sales taxes in the maritimes and the GST with a single 15 per cent sales tax. In the maritime provinces, the total of both the PST and the GST averages 19 per cent. The finance minister said: "I will replace those taxes totalling 19 per cent with a unique 15 per cent sales tax". Therefore, the sales tax dropped by 4 per cent in the maritimes. But who is going to pay for that? Who will compensate for lost revenues in the maritime provinces? We, the people from the other provinces, will. And do you know why? Because of something called the equalization formula.

Few people, even on the government benches, understand this formula, but it can be understood if one takes the time to study it carefully. This formula is used when a province, for example one of Canada's poorest provinces, needs help because it is difficult for that province to collect enough taxes from its population to provide public services equivalent to what is provided elsewhere across Canada. That is where this formula comes in.

When a province's tax base-that is its ability to collect taxes-is reduced, the federal government uses the equalization formula to compensate.

In the case of the maritimes, once again, the finance minister, generous as he is with taxpayers' money, told the Atlantic provinces that he would reduce the general sales tax and that the federal government would compensate them for the missing 4 per cent, year after year, until the end of time.

The equalization formula is used automatically when the tax base is reduced. The Minister of Finance has reduced the tax base. Therefore, we, as Quebecers and Canadians, will always be paying for that. As a Quebecer, I am not so sure of that because, one day, we will get out of that system. However, starting next year, Quebecers and Canadians will be paying for the loss of revenues from provincial sales taxes in the maritimes.

So on top of the $1 billion that the finance minister is wasting shamelessly for purely political reasons, which is already too much, Quebecers and Canadians will have to pay hundreds of millions more each year to the maritime provinces to compensate for this political decision. This is getting to be very expensive for mere window dressing.

Half a million dollars for the Deputy Prime Minister's election, a billion in political compensation to the maritimes and now the equalization formula that will be there forever, or until the day the decision is made to do away with it within the federal system, or until the day, coming soon, when we decide to withdraw totally from this system, which has nothing going for it. So that is bill C-70, concerning the agreement with the maritimes.

There are two other points I would like to speak to, in order to clarify things for the public. The first concerns the famous national revenue commission. The Minister of Finance has presented us with this agreement with the maritime provinces as a model of harmonization, a blueprint for the rest of Canada.

First of all, if it is a model, it is a very poor one, a very costly one. Second, if it is an augur for the future in the rest of Canada, that is extremely worrisome. It is a deliberate attack on provincial autonomy in collecting taxes. The Minister of Finance has established a national revenue commission which will replace all of the government bodies in the maritime provinces which used to collect taxes on goods and services.

This commission was announced in the government's throne speech, and the government is holding stubbornly on to it. Its intent, using the GST and the maritimes as an example, is to have the federal government one day become the only body within the Canadian federation to collect income tax, and other taxes, from Quebecers and Canadians. Quite a neat trick, especially where Quebec is concerned.

I am very familiar with Quebec taxation history, even what went on in meetings in the time of Messrs. Pearson and Lesage. They started off discussing the exchange of tax points at a time when the idea was to restore the provinces' taxation autonomy, of which they had been deprived during the first world war. Income tax, and other things, were borrowed.

Given this background, the numerous constitutional conferences, the meetings of finance ministers over thirty or so years, I am convinced that, if this is what the federal government has in mind, it will run into a brick wall in Quebec, where they are fed up with the federal government's designs on its taxation autonomy.

Quebecers wanted to have their own taxation system and autonomous institutions in areas like education and others. They would see it as an attack on their own history and their identity if the federal government considered the possibility of introducing a bill allowing a Canada revenue commission to replace Revenu Québec.

I cannot understand the political logic behind such a measure, unless the federal government is looking for a fight with Quebec. I believe this is what we are heading for. Let us harmonize, no problem. Quebec will receive no compensation while the maritime provinces received a billion dollars. And now this government wants to create a Canada revenue commission. What is it looking for? Sometimes I have a feeling that the federal government is looking for trouble.

Once it has created problems, it pulls out and puts the blame on the separatists of Quebec, on sovereignists who are allegedly against any agreement with the federal government. This is, to a certain extent, the game the Liberals have been playing since they came to power three years ago.

Quebec has some news for the Liberal government if it thinks it will be able to create a national revenue commission and sideline Quebec. We will be ready for them and we will have the official opposition on our side.

I wish to end on a more positive note about the bill. We always keep dessert for the end. There is one small positive aspect to Bill C-70 which is due to the official opposition and it has to do with the partial removal of the tax on books.

In the bill, the government suggests that books purchased by literacy and educational organizations not be taxed. Not just in the maritimes, but throughout Canada. This is good news, but it is not enough.

Most of the books bought in Quebec and in Canada are not bought by educational and literacy organizations. If the government wanted to do something, it should remove the tax on all books sold, because it is just taxing ignorance. We have all heard the slogans about GST on books chanted by those concerned with literacy and the transmission of culture.

I would like to take this opportunity to point out two things. The first is that there is no provincial sales tax on books in Quebec. Zero PST. Culture is important.

The second thing is that, even before the Bloc Quebecois became an official party, back when there were only seven members, with Lucien Bouchard as their leader, those seven members took every opportunity that came their way to rise in their places and criticize GST on books.

They fought against it outside the House too, because back then their time in the House was limited. Those whose decision it was to limit the time available to the Bloc Quebecois must be regretting it bitterly today. They must remember it. We certainly do.

The seven Bloc Quebecois members, including the eminent members for Rosemont and Richelieu whom I can see today, worked very hard to keep the GST off books. When I see a timid little measure, which is a step in the right direction, but not big enough, I cannot help but praise the seven founding members of the Bloc Quebecois for their determined efforts.

Politics is a drawn out process sometimes, but eventually one gets results. And in this case, the result is a watered down one, but it is still a result. I would now like to urge the government, and I think I speak for all my colleagues in the Bloc Quebecois, to remove the tax on all books sold in Quebec and in Canada.

The two founding nations have a duty to promote cultural awareness. They have a duty to see that people read Quebec and Canadian authors. The government has a duty to make sure that our authors can sell their works at competitive prices. The Minister of Finance says public finances are quite healthy, so perhaps he should do something to help culture, to ensure its survival.

That concludes my remarks on Bill C-70. I would like to table an amendment. I move, seconded by my colleague, the member for Trois-Rivières:

That the motion be amended by deleting all the words after the word "That" and substituting the following:

"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 not now read a second time but that it be read a second time this day six months hence."

Excise Tax ActGovernment Orders

11:25 a.m.

The Deputy Speaker

The motion moved by the member for Saint-Hyacinthe-Bagot is in order.

Excise Tax ActGovernment Orders

11:25 a.m.


Monte Solberg Reform Medicine Hat, AB

Mr. Speaker, it is a pleasure to speak to 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. Really what this has to do with is the harmonization of the GST in Atlantic Canada.

Before I speak specifically about Atlantic Canada it is important to go back and discuss the chronology of events which led us to this point.

It is accurate to say that this legislation was born of very dubious parentage. We had a promise born of a loose lipped government member and we had a father who could only be called political opportunism. How sad that this young harmonized GST had to be raised in such a dysfunctional home, or should I say house?

Since 1990 it has become very clear that the government was being very opportunistic in discussing the GST and in suggesting to Canadians that when it came to power somehow the GST would magically disappear.

Just to remind hon. members across the way what exactly their record is on this, let me refer to some quotes that came from government members over the last several years with respect to the GST to remind them how far they have gone astray from their original promise.

Let us go back to government members when they were in opposition, in the wake of the GST coming into place under the Conservative government. Let me start by quoting some members who now hold prominent positions in the cabinet of the Liberal government.

First, let us go to a quote which came from the current Liberal House leader back in the days following the GST coming into place under the Conservative government.

The current Liberal House leader said: "Not only do the Liberals oppose the GST now, that opposition will continue even if the bill is passed. We are not interested in tinkering with the GST. We do not want it at all".

Meanwhile, the current finance minister said: "I would abolish the GST". The Prime Minister said: "I want the tax dead". One of the quotes that came from the Toronto Star back then was: `The Liberals will scrap the goods and services tax if they win the next general election, the leader of the party said. He said:I am opposed to the GST. I have always been opposed to it and I will be opposed to it always'''.

We saw the climax of the quotes that came from all the various members in October 1993 on the eve of the election when the current Deputy Prime Minister, on national television-that image will be frozen forever in my mind and probably in the minds of Canadians everywhere-said: "If the GST is not abolished under a Liberal government I will resign".

We all know that Liberal MPs campaigned in many ridings on the promise to abolish the GST. I know members will say that the red book stated it would be replaced. However, I need to point out that the government did not find the courage to bring the red book out until about a month before the election. They only produced about 70,000 copies. They did not talk about their promise with respect to the GST. Instead, they allowed people to think that they were going to still do what they said they would do early on which is to get rid of the GST altogether, scrap, axe and abolish the GST. However, that is not what they did.

All of this, of course, led up to the event last spring when the government was under great pressure to fulfil the promise made by the Deputy Prime Minister on national television. First the finance minister said that perhaps they had made a mistake. However, a lot of Canadians felt that he was pressured into that position and it was not coming from his heart.

Ultimately the Deputy Prime Minister was forced to resign. She went to great lengths to make it look like she was doing the honourable thing, but we know she polled her constituents first to find out whether she still had enough credibility to win the election in Hamilton East. Then of course she announced that she had been at the bank machine and could not look anybody in the eye and felt she had to resign. Well, $500,000 later she was back in the House of Commons.

The whole incident was a black mark on the history of parliamentary promises. There have been a lot of broken promises over the years but none more blatant than that broken GST promise of this Liberal government. I do not think that the government has yet paid the full price for it.

I want to set those incidents aside for a moment and talk about some of the aspects of the bill, the harmonized GST. First I would argue that the harmonized GST is extremely divisive the way the government has brought it in.

Members will recall that the government, to get Newfoundland, New Brunswick and Nova Scotia on side, had to go to them with an offer of $1 billion if they would come on board. It had to try and save face with $1 billion because although there was always the opportunity for any province to come on board and say that they were very interested in the new harmonized GST, there were no takers. The government was under great pressure at that point. Therefore, the only thing the government could think to do to bring governments on board was to offer up a billion dollars. It went to the Atlantic premiers and said if they came on board it had a cool $1 billion in hush money for them. That is insulting and causes great divisions in the country. It encourages dependency. It encourages the provinces to be under the thumb of the federal government. That is not acceptable as we approach the 21st century.

Some provinces are becoming very responsible. They have certainly shown more responsibility in dealing with their finances than the federal government has. They have taken leadership roles in all kinds of other areas. For the government to say it is going to pay $1 billion for those provinces to come on board if they are kind of quiet about things and just go along with it is insulting.

I want to talk about how divisive that is. I and my friends in the Reform Party, and Liberals if they are honest about it, probably have had constituents come to them and ask why are they are paying more taxes so the government can come up with $1 billion to give to three Atlantic premiers? It is very divisive.

I received a fax not too long ago from Lorne Taylor, the MLA for Medicine Hat-Cyprus in Alberta. He pointed out that the Alberta treasury had produced a document that said the effect of giving $1 billion to Atlantic Canada, except for P.E.I., was to lower the GST in those provinces to 5.5 per cent for the first two years of the deal. In speaking up for his constituents, which is the right thing to do, he asked why Alberta did not get that deal.

Ontario asked why in the world did it not get the same kind of deal. If Ontario were to harmonize, it would cost about $3 billion. The finance minister in Ontario, speaking for the people of his province, said $3 billion is what Ontario would require of this so-called adjustment money if Ontario was to come on board.

If I remember correctly, Manitoba and Saskatchewan came up with figures too. They were asking for money as well. I do not blame them. They were simply asking for what the premiers in Atlantic Canada got.

What did the government do? The government said no way, they are not getting any money, it is for those three provinces alone. It is divisive when one or three provinces are treated in a special way and the others are not treated the same way.

This has always been the way of the Liberal Party. It has made a career out of creating these types of divisions. Obviously it has served them well but it has not served the interests of Canadians as a whole. That is one very important reason why Reform is speaking against Bill C-70.

Another concern I have with this legislation is that it raises taxes. I know the government will say that all it is doing is broadening the base in Atlantic Canada and it will be a wash. It just is not so. It is not true.

This is a huge bill with many different aspects to it. It addresses all kinds of different things. One of the most pernicious aspects of the bill is the removal of the notional input tax credit. That was done back in April. I remember when it was announced. A lot of people did not know what it meant. An accounting firm in Winnipeg picked up on it right away. It said that it could amount to as much as $1 billion a year tax grab for the government.

The government had removed the input credit on used goods thereby ensuring that every time a used good changed hands the tax would cascade. In other words, if that good was bought after someone else had owned it and someone before that had owned it and someone before that had owned it, pretty soon there would be tax on tax on tax paid. There is no input credit going to the person who sold it. Pretty soon the value of that item would be inflated way out of proportion because of tax on tax on tax.

The result is that the government will reap all kinds of new revenue. Of course, a lot of the higher costs would be passed on to consumers. Potentially the government reaps a billion dollars more a year in new revenue.

It is a hidden tax grab, one that was never really debated. We raised it many times in the House. We received responses from RV and car dealers who were concerned and upset about it. To this date, the government has not given an adequate answer on how it can go ahead with it. People need to be made aware of it and that is why I am raising it right now.

That is not the only way the bill raises taxes. On April 1, when the bill comes into law, as undoubtedly it will, capital taxes will go up in New Brunswick and Nova Scotia. That is one provision of the bill. It allows the provinces to implement capital taxes. That is precisely what two provinces are going to do. The provinces will be given a new lever to raise taxes.

The Nova Scotia finance minister and the Halifax Chamber of Commerce have pointed out that one of the consequences of this bill will be that property taxes in Nova Scotia are going to go up. That is another aspect of the bill that leads to higher taxes.

I want to move on to a related area. This bill will not only raise taxes it will entrench higher taxes. Something which has not been discussed enough is the fact that changes to the provincial portion of the tax are going to be quite complicated, in fact, almost impossible, if governments want to lower the tax, but much easier if they want to raise the tax.

I do not know if members realize that it will require unanimity of all the provinces, should sales taxes be harmonized across the country, to lower the provincial portion of the tax. The provinces are being asked to do what they have probably almost never done before, and that is for the 10 of them agree on one thing at one time, to lower taxes. But they only need a simple majority if they want to raise taxes.

Obviously this gives the governments of the provinces a powerful new tool to go about raising taxes if the government gets its wish and the GST is harmonized across the country.

There is an ongoing debate in the country about taxes and tax increases. However, the debate is not about how high they should be raised, it is about how low they should go. The government has put in a provision to raises taxes, not to lower them. That is ridiculous. Reform cannot support that. Canadians will be outraged when they discover that one aspect of Bill C-70, the act to implement the harmonized GST in Atlantic Canada.

It is important to point out that it is not only the Reform Party that has raised this concern. Back in 1990 when the current finance minister was running for the leadership, and a lot of people would argue that he has never quit running for it, he pointed out that he thought he would scrap the GST. Not only that, he made special reference to the fact that once a harmonized GST is in place across the country, it could not be removed. Taxes could not be lowered.

If he felt so strongly about it then, what happened between 1990 and now? When did the conversion of Paul on the road to Damascus take place? What precisely influenced him to think that

now all of a sudden the provinces are going to fall into line, all 10 at once, and agree to decrease the provincial portion of the GST? It simply will not happen. It is simply not going to happen; 10 provinces agreeing to cut the tax. The finance minister was right in 1990 when he said that it is not going to happen. I think it is right today that it simply will not happen. At a time when we are having a debate about taxes in this country we should be finding ways to lower taxes, not to increase them.

I want to say another word about entrenched taxes and about why harmonization is a bad idea. One of the great benefits of not harmonizing is that it encourages a competition between different jurisdictions to keep taxes low.

We all know about competition in the marketplace but I think competition in government is just as important. That is why for instance in my native province of Alberta, where we have no sales tax, we have low income taxes, we have the great Alberta advantage and people in our province have paid a price to have that advantage. We have had to cut back on our spending so that we could afford to keep those taxes nice and low. Now that we have got to that point, we want to benefit from that advantage. We want to attract business from all over the world. In fact, we are.

The very fact that Alberta has those low tax rates is, believe it or not, a great benefit to the rest of the country not only because the rest of the country gets spin-off benefits from what happens in Alberta and Alberta sends a lot of money into equalization payments, but because it puts a pressure on the province next to it, and the province next to it, and the province next to it to get their taxes into line.

I know many people in the business community have spoken in favour of a harmonized GST. They have made the argument that it would be simpler. The paper work would not be as onerous and all that kind of thing. But that is a minor benefit compared to the benefit of having competition between different jurisdictions to keep taxes low.

I do not understand how that was missed by so many groups when they talked about harmonizing the GST. To me it just does not make any sense.

I would encourage people to look at some of the examples not only in Canada where we have Alberta with the low tax rates but in North America and around the world. When we have low tax rates, when we have competition between jurisdictions ultimately it leads to lower taxes across the board which means that people have more money in their pockets. It means that they have more opportunity and they can create their own prosperity for themselves. They are not dependent on a government.

If there is one thing we have to get rid of in this country it is this dependency mentality that governments tend to breed. They tend to

breed it and ultimately it is to the detriment of the entire country and to all of society. We have seen it over and over again, and not just limited to Liberal governments. Tory governments have done it over and over again as well. They should be ashamed especially now that they can see the fruits of their actions of the past where we have entire economies becoming dependent on government programs.

This is a very important aspect that the legislation does not address and ignores, the fact that we need some competition between different jurisdictions.

The fifth point I want to make is that this bill will mean, at least in the short run, and I think members have to acknowledge this across the way, higher costs for business in Nova Scotia, New Brunswick and Newfoundland.

I am not going to ask members to take my word for it. I am going to ask them to listen to the words of the Retail Council of Canada. The Retail Council of Canada is in favour of harmonization. It is in favour of it but what it is against is the government's bringing harmonization into three provinces and leaving the rest of the country unharmonized. They are saying to themselves: "Why are we pushing ahead with tax in pricing in particular when the government knows full well that it is going to hurt business in Atlantic Canada and if it hurts business it is going to hurt the Atlantic Canada economy?" Of course there is no economy in the country that needs help more than Atlantic Canada.

Why out of a sort of perverse need to try to fulfil a wonky election promise is the government pushing ahead with this when it knows it is going to hurt Atlantic Canada?

I am not going to ask members to accept my word for it. I am going to quote from a letter written on November 29 by the Retail Council of Canada which was sent to the current finance minister. This letter is rather lengthy so I ask for members' indulgence because the points raised are very important: "Retail council provided you with early estimates of the cost attached to tax in pricing in July of this year. At about the same time, seven national retailers also prepared a paper which explained how tax in pricing harmed their operations and provided estimates of the costs they faced.

"Since then, retail council members have worked to get a clearer understanding of the cost impacts. Ten members accounting for roughly 30 per cent of Canadian retail sales have given us in confidence their detailed estimates of the impacts for their firms.

"As the attached chart shows, these companies alone will incur annual ongoing costs of almost $34 million. This is only slightly

offset by input tax credit and other savings of $6 million, leaving these firms with a continuing annual net cost of $28 million".

This is for firms that represent only 30 per cent of the retail sector in the three provinces which have recently agreed to harmonization. It continues:

"Other RCC members have indicated that they will provide similar information on their costs to you directly. Nor are these costs incurred only by national firms. The expert distribution, warehousing and logistics costs incurred by the suppliers to independent and small chain retailers will almost certainly be passed on given the relatively weak negotiating position of smaller firms.

"Second, many of their suppliers are located in provinces that are not harmonizing so they will not benefit from any ITCs"-input tax credits-"in respect to provincial taxes.

"Third, small firms that receive prepriced merchandise will incur the same reticketing costs as larger regional and national retailers. Retailers operating only in the harmonized provinces will face one time costs to reprogram their computer systems but will not face the same continuing system integration costs that come with operating in harmonized and non-harmonized provinces.

"As part of the harmonization agreement, the federal government facilitated the imposition of capital and payroll taxes. Nova Scotia and New Brunswick have taken this opportunity to introduce new corporate capital taxes as of April 1, 1997, further increasing the costs attached to harmonization".

The letter goes on and on but I will not read any more in the interest of time. It is fairly clear this is a group that is arguing harmonization is a good idea. It wants harmonization but it is saying that the government should not go ahead in three provinces while it leaves the rest of the country without the harmonized tax. The group points out is will cost millions of dollars.

It will not cost the businesses millions of dollars ultimately. They will pass the costs on. So who pays for it? Consumers. Consumers pay through the nose for a broken Liberal government promise.

It would be bad enough if Canadians in general paid for that promise, but it is the people of Atlantic Canada. It is the economy that can least afford to take a tax hit of any region in the entire country. But the government did not care. It was so desperate to save the Deputy Prime Minister's skin that it went ahead and pushed through this ridiculous measure and it did not care that it cost people in Atlantic Canada jobs. It meant more money out of their pockets. It did not care for a moment.

The government does not care that it is divisive to the country. At a time when we are trying to hold the country together, the government gives Canadians one more reason to be cynical about its desire to treat everybody equally.

I must ask a question that I am dying to know the answer to. Where are the members from Atlantic Canada? Why are they not standing up for their constituents? We know there is a grassroots revolt in Atlantic Canada against the harmonized GST. Recently Greenberg Stores Ltd. announced it was closing a number of stores in New Brunswick. It was closing stores in different ridings. It was closing stores in Beauséjour, Restigouche-Chaleur, Acadie-Bathurst, Fundy-Royal, Moncton and also in Saint John. When stores close as a result of government action and 79 people in Atlantic Canada are thrown out of work, the MPs from those ridings should be on their feet. Where is the defence minister? He should be standing up for his constituents. Where is the junior minister of agriculture? Why is that minister not standing up for his constituents? What about the Conservative member for Saint John? We know that they are lock, stock and tomahawk in favour of harmonization and they are not standing up for their constituents.

That lays out how important it is for us to reform this place so that MPs have the power to stand up for their constituents. My goodness, if that had happened in my province, I would like to think that my colleagues would have jumped to their feet and said: "This is unacceptable. I do not care if it is my leader who is bringing it in. My constituents say it is wrong and I am going to stand up for them and vote against it".

Where are they? Where are the Liberal members from Atlantic Canada? There are 16,000 names on a petition against this. Where are the MPs from Atlantic Canada? Where are those Liberal MPs? Why are they not standing up for their people?

Their silence speaks eloquently of the need to reform this place. It speaks eloquently of the government's insensitivity to Atlantic Canada. It speaks volumes about its approach to treating provinces differently, as opposed to treating them equally, something the Reform Party truly stands for.

I am going to conclude my remarks by saying that our party does not believe in this approach. It is wrong. The government should have fulfilled its promise. It made a promise. It said it would get rid of the GST. Its members went door to door and promised it would be gone if they were elected. They were elected in spades; 177 seats and still the GST sits there as a permanent reminder that governments cannot be trusted. People cannot be trusted to come through with their promises when they make them on the doorsteps during an election campaign. The government should have followed through and gotten rid of the GST. That was its commitment to voters. The Deputy Prime Minister said so on national television. It was said over and over again.

I do not think the government has listened closely enough and, frankly, I do not think a lot of people have listened closely enough to the argument that there has to be competition between jurisdictions. If we do not, we are entrenching higher taxes. The finance minister said it in 1990. That is a very compelling reason to vote against a harmonized GST. We have to have competition. If we do we can all enjoy lower taxes in this country. However, under the current formula, which requires unanimity to lower the provincial portion of the GST, that will never happen, as hon. members know.

Canadians want lower taxes, not different taxes. We are having a massive debate in the House about how we are going to change taxes. When I go around to doorsteps, when I have my town hall meetings in Manyberries, Alberta or in Taber, Brooks or Medicine Hat, Suffield or Empress, or wherever, people do not say: "Boy, I wish the taxes were different". They do say: "I wish the taxes were lower. I wish I could keep more money in my pocket. The government gets its share". It gets 46 per cent of the average person's income. "Then I have to go out and provide my food, shelter and clothing for me and my family. There is not much left". There is hardly anything left, which is why we have record high levels of personal debt in this country. It is why we have record bankruptcies in this country.

Instead of debating how we are going to change taxes, why not have a debate in here about how we can lower taxes? I think Canadians have had it with the government having its own agenda which simply does not reflect at all what the agenda of Canadians is. This bill does nothing to address the overriding concern of Canadians that too much of their money is being spent and wasted in many cases by the government. They want that money left in their pockets.

In conclusion, I urge hon. members not only to listen to my arguments, I ask them to listen to the arguments of people in the provinces where this tax is being harmonized. Opposition parties are raising Cain in the various provincial legislatures saying they are against it. The Retail Council of Canada, the Canadian Real Estate Association, the Halifax Chamber of Commerce and many others are pointing out that the way this tax is being introduced is going to kill jobs in Atlantic Canada. I cannot believe a government that ran on the promise of jobs, jobs, jobs is going to push through with this even though it is going to kill jobs in Atlantic Canada. This is contrary to common sense.

If Liberal MPs in Atlantic Canada will not listen, I ask all members to listen to this. Why will they not listen to the people who have made it clear that they do not want this tax? There were 16,000 names on one petition alone. There may be other petitions out there but I am only aware of one. There are 16,000 people who are opposed to the harmonized GST in Atlantic Canada.

If the Liberals will not listen to me and my colleagues in the Reform Party, then I urge them, especially the Atlantic Canadian MPs, to at least listen to their own constituents and vote against this bill and to forever forget the idea of introducing a harmonized GST across the country.