Okay, I need clarification on that but I know there was something different. I do not want to put words in his mouth but I would like to know what it is he recommended at that time. I do know that he was against the GST.
In his speech the minister indicated that this was an improvement over the GST. How is it an improvement when the GST has not changed? All the inherent problems are still there. In fact that party during the election campaign promised to scrap, to kill, to abolish the GST and then tried to weasel its way out of that. But let us say to even replace the GST with something which is revenue neutral, the Liberals have failed on both counts.
On the first count, the Liberals did not scrap or replace the GST. In fact they have entrenched the GST into our lives forever because now they have harmonized it with a provincial sales tax and there will be no future provincial government that will ever want to give up that source of revenue, especially at the high rate of 15 per cent. All the inherent problems of the GST will still exist. Exempt or not exempt, zero rated, all these different rules will still be there and will still cause problems.
Second, during his speech the minister said that the new harmonized tax will not increase revenues for the government. We all know it decreases revenues for the provincial governments because of the drop in their PST. In their red book the Liberals promised they would replace the GST with something that was revenue neutral.
If what he said in his speech is true, that this is revenue neutral, no more revenue to the government, which means no less revenue to the federal government, it is going to cost the federal government $961 million as a payment to the three participating Atlantic provinces. It means that this new tax is not revenue neutral, it is revenue deficient and therefore it is going to cost the taxpayers money.
Finally, I find this to be somewhat like the minister of myth. The finance minister likes to brag about the ads on the Atlantic advantage. How can the provincial premiers say there is no sales tax when there is a GST which represents the goods and services tax of 15 per cent?