Madam Speaker, I am pleased to speak to Bill C-70 which amends a number of acts but, most important, provides for the implementation of agreements between the federal government and the governments of Nova Scotia, New Brunswick and Newfoundland and Labrador to harmonize the federal and provincial sales taxes effective April 1, 1997.
This legislation is an important step in our election promise regarding the GST. Let me remind the House, especially members of the Reform Party, of our promise. The red book states: "A Liberal government will replace the GST with a system that generates equivalent revenues, is fair to consumers and to small business, minimizes disruption to small business and promotes federal-provincial co-operation and harmonization".
This is the promise that I made to the people of Guelph-Wellington in the fall of 1993 and it is a promise that I look forward to seeing to its completion right across Canada.
We promised to replace the GST with a system that generates equivalent revenues. At a time when the people of Guelph-Wellington are demanding fiscal responsibility and restraint from their federal government it is important not to overlook the $18 billion that is currently raised by the GST. Any realistic Canadian knows that we cannot continue to provide social programs, reduce the deficit and care for our people without revenue.
It is also important to note that all net revenue from the GST is deposited into the debt servicing and reduction account. This means that all moneys generated by the GST go to fight the deficit. We have had a clear picture from Canadians of what they want us to do with the deficit.
We promised to replace the GST with a system that is fair to consumers and to small business. The cry for tax fairness is loud and clear in Guelph-Wellington. My constituents do not mind paying their fair share, but they want a tax system which distributes the burden.
We know that the Standing Committee on Finance worked long and hard to find alternatives to the GST. I congratulate my colleagues on the committee for their work. As a relative newcomer to the committee, I appreciate the long hours that members faced in looking for an alternative to the GST. The result of this work was the national VAT, and its recommendations are seen in the agreements signed between the federal government and the governments of the three Atlantic provinces.
The recommendations of the committee received an important endorsement, one which I would like to remind the House of: "It is simply unacceptable that Canada remains the only country in the world with ten different sales tax regimes". This person went on to say: "We commend the government on its attempt to harmonize the tax with the provinces". That endorsement came from the Reform Party in June of 1994. I look forward to its support of this legislation.
We promised an alternative to the GST which would minimize disruption to small business. I polled small business in Guelph-Wellington in November of 1994 on this issue. Sixty-four per cent of respondents said they believed that a harmonized VAT would be simpler and more fair.
I asked business people in my riding because they are directly affected by changes to the GST. They know that a harmonized sales tax is good for business. Businesses must currently pay two separate taxes and deal with two separate bureaucracies.
The Canadian Institute of Chartered Accountants estimates that harmonization will save businesses between $400 million and $700 million annually.
The idea of harmonization received another important endorsement in June of 1994. Let me remind the House of what this person had to say: "I want something that works. And I'll tell you this, that if we had one VAT, one base, one bureaucracy to collect it, the manufacturers and the businesses of Ontario would save over a billion dollars by being able to deduct those costs that you cannot deduct today on the sales tax". This person went on to say: "It has been one of the areas of major competitive disadvantages that Ontario manufacturers have had and Ontario businesses have had, and I say stop the rhetoric, stop the politics, stop the finger pointing. Get on with harmonization and simplification of the GST, or whatever the new initials are, and the PST".
That endorsement comes from Mike Harris, then the leader of the third party in Ontario and now premier of the province. I look forward to his support for a harmonized sales tax in Ontario.
We promised an alternative to the GST that promotes federal-provincial co-operation and harmonization. I have said in this House before that my constituents are tired of governments that blame other levels of government. They want us to work together with all our partners for their betterment and to secure a better future for Canada.
They are proud of our Team Canada approach to international trade and they want to see that approach in solving all our problems. Bill C-70 is an important step in a Team Canada type effort in sales tax harmonization.
The efforts that have resulted in this legislation were not easy. It is important to remember that the Standing Committee on Finance reviewed suggestions and comments from over 1,200 individuals and representatives from various associations. They rejected many suggestions because they did not generate the revenue they needed or because they were simply unworkable.
I believe that the proposals that we are debating today go a long way in fulfilling our promise. Our country continues to face serious problems. It is simply irresponsible for this government to abandon its deficit reduction efforts by ignoring the revenues generated by the GST. Nor did we promise to do so.
Deficit reduction and our future remain our priority. In doing so, we are fulfilling another important promise, to generate and create opportunity and in doing so creating hope and growth for our country.
We made a promise to replace the GST. Reformers, on the other hand, promised to keep it as it is until the deficit was eliminated. We know that their deficit reduction target seems not to matter to them any more. Irresponsible tax cuts and more spending are election promises that Canadians will be hearing from Reformers. Deficit reduction, promise keeping and sound administration is what Canadians are seeing from this Liberal government.
This is important legislation. When it passes, Canadians living in New Brunswick, Nova Scotia, Newfoundland and Labrador will save time and energy for their businesses. They will have a tax that is better for consumers and they will have promoted federal and provincial co-operation.
The premier of Ontario, Mike Harris, said in opposition: "Stop the rhetoric, stop the politics, stop the finger pointing. Get on with harmonization and simplification".
We have taken his advice in Atlantic Canada at least. This legislation deserves our support.