Mr. Speaker, I would like to follow up on my colleague's comments and start out by asking what is a promise. A promise is an assurance that one will or will not undertake a certain action. A promise is a statement of integrity, a statement made with integrity. It is a commitment that is not to be broken. When we talk about keeping promises we talk about building trust.
On the campaign trail the Prime Minister said: "There is not one promise that I have made that I will not keep". That has now become a joke. This government has broken more promises in the past three years than it has kept.
Regarding the GST, the Liberals promised to scrap, abolish, kill, eliminate, get rid of GST. This is a promise they took from door to door. This was a major cornerstone of the Liberals election campaign.
On October 29, 1990 the current Prime Minister said: "I am opposed to the GST. I have always been opposed to it and I will always be opposed to it". The current Minister of Finance stood in the House of Commons on November 28, 1989 and said: "The goods and services tax is a stupid, inept and incompetent tax". On April 4, 1990 he said: "I would abolish the GST". On November 6, 1991 the current Deputy Prime Minister asked the Tory government why it was pursuing a GST policy that "kills Canadian jobs and puts a heavy burden on our tourist industry". On March 24, 1994 the current revenue minister stated: "As Liberals we were elected to change the tax, abolish the tax, scrap it".
The Deputy Prime Minister campaigned that she would resign if the GST were not abolished under a Liberal government. Rather than resign, she stepped down and ran a second election in her riding which cost Canadian taxpayers $.5 million.
Last March Reform put forward a motion to abolish the GST. One hundred and thirty Liberals, including the Prime Minister and Deputy Prime Minister, all voted to keep the GST. Their vote against the motion proves that they have absolutely no intention of keeping their election promise.
Clearly, killing the GST promise is just another broken promise in a long string of broken promises. The Liberals claim to have fulfilled 75 per cent of their 1993 campaign promises. We checked. We found that they have fulfilled only 22 per cent of their promises. Some record. That is a record of shame.
The red book says there is little room to raise taxes and that long term goals should be tax relief. The Liberals also claim they have not raised taxes. In fact, the Liberals have increased taxes 30 times in the past three budgets as well as instituting higher sales taxes for Atlantic Canadians.
The government made many campaign promises to scrap the GST. During the campaign Canadians did not hear anything about harmonizing the tax with the provinces. Rather than scrap the GST, the Liberal government is in the process of harmonizing the GST with the provinces to create a new sales tax, a harmonized sales tax, HST. Instead of removing the GST, the Liberals are now trying to hide the GST by including new harmonized taxes in the price of goods.
I cannot wait until the next election when Canadians will show the Liberals what they think of this broken promise, the same as the Canadians did with the Conservatives regarding the GST. Three Atlantic provinces have signed on to this deal, this harmonization deal. GST harmonization in Atlantic Canada merges provincial sales tax with the 7 per cent GST to create a single tax of 15 per cent to be implemented on April 1. It is odd that it should be coming on April Fool's Day.
The provinces that have signed on are Newfoundland, Nova Scotia and New Brunswick. The harmonized tax, the HST, is nothing more than a super tax grab on consumer spending. It is simply another tax grab.
From the last 13 years of Liberal and Tory rule, on average Canadian taxpayers now pay an extra $1,126 a year simply in
increased sales and excise taxes. The HST if applied right across the country will raise these taxes even higher.
In addition, the harmonized sales tax will apply to more goods than are currently taxed on retail sales. Consumers in the Atlantic provinces that signed on to the deal will pay higher taxes on children's clothing, gasoline, books, funerals, new homes, heating oil, haircuts, used goods and even postage stamps. This simply means higher taxes for Atlantic Canadians.
For example the HST will push the price of a new house up by 5.5 per cent. Some deal. Higher operating costs for landlords will mean that renters will pay higher rents.
There are also concerns that the tax included pricing will cause chaos not only in the Atlantic provinces but in the rest of Canada. According to the Retail Council of Canada, national retailers will be forced to change computerized inventory systems and separately price goods bound for the Atlantic region. This alone will cost $100 million.
With harmonization, Canadians will have one tax included price in Atlantic Canada while the rest of the country will function with prices that do not include GST or sales tax on the label. There will be two separate systems.
The harmonized sales tax is not only unfair to Atlantic Canadians who will pay higher taxes on many items, it is also unfair to the rest of Canada which will be paying $1 billion in compensation to the Atlantic provinces for lost tax revenue. Once again the west is financing the east with a $1 billion transfer of wealth to Atlantic Canada.
The combined sales taxes in Nova Scotia and New Brunswick are currently 18 per cent. In Newfoundland the combined rate is 20 per cent. A 15 per cent combined rate is a deal for Atlantic Canada. The rate will be reduced. That is the reason for the $1 billion transfer.
There are no advantages to provinces that pay a combined sales tax which is less. For example, Alberta has no provincial sales tax and only has the 7 per cent GST. Why would it want to enter into harmonization and go from the 7 per cent GST and no provincial tax to a 15 per cent tax? Try to sell that in Alberta. Tax systems across the country should be equitable, yet this deal is hardly equitable for Canadians outside the Atlantic provinces.
Furthermore there are concerns that revenue shortfalls as a result of lowering the tax rates may be made up by changes in equalization formulas. Canadians could see an increased redistribution of wealth from western Canadian taxpayers to the maritime provinces for nothing more than what are purely political reasons. Because the GST promise was not fulfilled, the government is now going to the HST. The result is that a transfer of wealth is going right across the country to fix the deal. It is strictly political and it is absolutely wrong.
Harmonization will not work in central and western Canada because as I stated earlier, at present the combined rates are less than 15 per cent.
Furthermore it does not make any sense for Ottawa to adopt a policy that calls on all Canadians to pay the same taxation rates regardless of where they live. Provincial taxation rates are based on provincial needs. There is no reason for a national tax rate right across the country.
All provinces simply will not come onside with this agreement. Some provinces have no sales tax, such as Alberta. Other provinces have a provincial rate that is less than 8 per cent, so the combined rate of 15 per cent simply does not make any economic sense for those provinces to buy on. Alberta, Ontario and B.C. are simply not willing to discuss the federal proposal. Support is very weak in Saskatchewan, Manitoba and P.E.I. The HST simply does not work and it will not work.
It is my understanding that in the beginning the government was going to call this the blended sales tax. Perhaps it should have done that. Now it is the harmonized sales tax, the HST. Of course a blended sales tax would be a BST. Many Canadians are seeing that a BST is very much what this bill is creating.
When will the government understand that tax increases mean job losses? If the Liberals are serious about getting our economy back on track and creating jobs, then they must start by giving business incentives to create employment. That means lowering taxes, not raising them, as they are doing with the HST.