Mr. Speaker, I will be sharing my time with the member for Halifax.
I am pleased to have the opportunity to speak on Bill C-70 respecting the harmonized sales tax agreement. I have listened closely to the debate today and some of the criticisms that members from parties opposite have raised.
Let me take a moment and read a number of quotes from national organizations regarding the need to move on to a harmonized tax system. In June 1994 the president of the Retail Council of Canada stated in an interview: "Harmonization is abundantly desirable. The provinces cannot ignore forever the pressures that are on us as a nation to get our House in order and getting the sales tax right is an important element of that".
In the same month the president of the Canadian Chamber of Commerce said: "They," meaning businesses "could create more jobs if the PST and the GST were integrated by doing more business more efficiently and more effectively".
Even the members of the third party, and we heard that from debate here, supported harmonization in the minority report on replacement of the GST. In that report they said: "It is simply unacceptable that Canada remains the only country in the world with 10 different sales tax regimes. We commend the government on its attempt to harmonize the tax with the provinces". That is exactly what the government is working toward.
As the House is aware, on October 23 three provinces, Nova Scotia, New Brunswick and Newfoundland and Labrador, signed a harmonization deal with the federal government, In doing so, these provinces have taken a bold step forward. It is a step that will help the three Atlantic provinces to become more competitive, more self-sufficient and more attractive for businesses.
In signing this deal, the province of Nova Scotia and its two partners are leading the way to what I believe will be an eventual agreement among the provinces and territories. Let us look at the facts. Over its lifetime the GST has taken an additional $3 billion out of the Atlantic region, a bigger increase in federal sales tax payments than in any other part of Canada. In signing this agreement these three provinces will receive adjustment assistance close to $1 billion over four years.
I have heard the criticisms from members opposite on this element of the deal. I would like to remind my colleagues, however, that this decision is consistent with Canada's long standing principle of providing adjustment assistance to provinces and individuals when they need help adjusting to major policy changes initiated by the federal government.
I want to emphasize quite clearly what the agreement will mean to Nova Scotia. In Nova Scotia the harmonized sales tax agreement will improve its economy and its competitive position vis-à-vis other provinces. The agreement will ensure that $100 million more will be left in the pockets of Nova Scotians. This extra money in the economy will mean a permanent increase in Nova Scotia's gross domestic product of .8 per cent. Over the next few years that will translate into approximately 3,000 new jobs.
A central component of the sales tax reform is that the new system must be both fair and simple to use. The HST meets both of these criteria. Consumers and business people will operate in a marketplace where the rules are clear and where there is less paperwork.
For consumers, all Nova Scotians will benefit from a tax rate that is almost four points lower than the current combined rate. The new system will mean lower prices on most goods, not only because the combined rate will be lower, but also because hidden provincial sales taxes will be eliminated.
As well, businesses in Nova Scotia will experience many competitive advantages under this new system. With full input tax credits, operating costs on everything from phone bills to computers will come down. Many other business expenses will also be lower, including hotel and meeting costs. This will provide an opportunity for local businesses to expand and to grow, and that is what this is all about. It also gives businesses an excellent reason to locate in my province of Nova Scotia.
For businesses the HST will mean they will only have to administer one tax instead of two; one collector, one auditor. Businesses have campaigned for a simpler administration system for many years. As of April 1 next year, we will be able to deliver.
I would like to turn for a moment to a number of specific sectors.
Let us look at the issue of tax rebates on books. During the summer months I heard from many businesses and individuals in my constituency of Annapolis Valley-Hants. They were calling for an exemption on the taxation of books. The message I heard was that the continued taxation on books was in effect an impediment to promoting and improving literacy in Canada. This is a view that I brought forward to the Minister of Finance in early August on numerous occasions. I was pleased therefore when the minister responded positively to these concerns.
Under the HST there will be 100 per cent GST rebate on all books purchased by public libraries, schools, universities, colleges, municipalities and qualifying charities and non-profit orga-
nizations. That clearly is the way to go. This rebate will support the important role played by these front line organizations in helping individuals acquire the tools they need to learn to read or to improve their reading ability.
During this time of limited resources the best way to ensure the biggest impact for every dollar spent is to target assistance which will have the most impact on literacy. This decision will have a positive impact in supporting literacy in Nova Scotia.
I also want to speak for a moment about how this agreement will positively affect the housing industry. After all, a strong component in any economy is a strong housing industry. While provincial sales tax does not apply directly to the sales or rental of residential property, a substantial amount of provincial retail tax is still embedded in housing prices. Consumers are paying for unrecoverable tax on materials such as lumber, paint and appliances. As well, contractors pay provincial sales tax on building equipment and other capital goods.
Under the HST, builders will be entitled to input tax credits on inputs used in the building of a home. That is important. In addition to that, in Nova Scotia under the HST there will be a housing rebate for all buyers of new homes to a maximum of $2,250. Coupled with decreased building material costs this will ensure that new homes cost the same or less once the new agreement is in place.
Let us turn to the tourism industry for a moment. In Nova Scotia, as I am sure everyone is well aware, tourism is a billion dollar a year industry. In my riding of Annapolis Valley-Hants, tourism is a growing area and one in which jobs can and will be created.
Under this agreement visitors from outside Canada will get their tax back on hotels, conventions, bed and breakfasts and on the gifts they take home to their families. Even visitors from other provinces will face a lower tax rate for meals and for accommodations. Clearly this agreement will make our tourism sector even more competitive and more successful.
As any government whether federal, provincial or municipal can say, tax reform is never an easy process. Any attempt to change and improve the tax system will inevitably lead to criticism and calls to leave things as they are. But I believe the agreement our government has reached with the three Atlantic provinces will improve the economy of Nova Scotia and will free up more money for Nova Scotian families and businesses.
This package will help create jobs and it will help the economy grow over the long term. For those provinces that have taken the lead and signed on to this agreement, they will become more competitive both nationally and globally.