House of Commons Hansard #114 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was health.
Bob Speller Liberal Haldimand—Norfolk, ON
Mr. Speaker, it is interesting to note from the hon. member's comments that the Reform Party which supposedly calls for total debate on these issues put forward a motion to essentially cut off the debate.
Bob Speller Liberal Haldimand—Norfolk, ON
Reform put the motion forward and I think it is shameful.
On Bill C-70 and the hoist motion, it is important to understand what it means for a rural area such as mine. In my area there are a significant number of tobacco farmers. On this whole question of taxation and excise taxes their point of view should be heard, whether or not the Reform Party wants it heard.
Getting back to what I was saying about the importance of taxation, of the GST and the legislation, in my area $14 million goes to local governments. The whole tax question is important to the local economy. An enormous amount of work has been done by a group in this area. It breaks down specifically some of the percentages of the total effect on employment in the area and the impact of taxes such as these on a farming community like mine.
These farmers were encouraged by previous governments to come to my area of southwestern Ontario to grow tobacco and build communities such as Delhi, Tillsonburg and Aylmer. Throughout this area the tobacco farmers pay taxes. It is important to put their point of view forward here today.
In terms of the legislation the hon. member referred to, I do not think most farmers in my area will have a problem with that bill. Even though it addresses some questions in terms of dealing with how young people get access to tobacco, I do not think it is specifically directed at the tobacco industry. However a taxation bill, an excise tax by the Minister of Finance and the tax he put on tobacco companies will have a direct impact and I will explain how this relates to the House.
In 1994 when we put on the tax the major companies did not take that tax out of their profits. In fact, it came out of the pockets of the farmers in my area. The price the farmers got kept going down as a result of governments applying taxes. I am sure it will be similar in this case also.
Most Canadians, especially the people in my area of Haldimand-Norfolk do not like the idea of more government taxes. It is important for us as a government to put forward programs which do not require more taxation. I congratulate the Minister of Finance for not raising taxes in that regard. It is important for the government to show that it can live within its own means. If we are going to provide services in the country, they should be provided in such a way that they do not add to the debt or the deficit and that the cost does not come out of the pockets of Canadians. The Minister of Finance has done that very well over the last number of years.
We made a promise to Canadians to do something about the GST. Whether or not, as the opposition likes to say, we promised to scrap it or to reform it, one of the most important things we did in bringing in this tax was to ensure that Canadian small businesses were not hurt as they were when Mr. Mulroney and the Conservatives brought in the original tax. The Minister of Finance has made
over 100 changes which will help small businesses. Canadians especially in the eastern part of the country will be proud of that.
Hopefully one day Ontario will have a system which requires us to pay only one tax so that when people go to the till the tax will not be staring them in the face. That more than anything else will help to turn people's opinions around in terms of what they purchase. Harmonization will help all Canadians.
Paul Crête Bloc Kamouraska—Rivière-Du-Loup, QC
Mr. Speaker, I am pleased to address Bill C-70, which seeks to amend certain aspects of the GST. My initial reaction when I reviewed this legislation was: "Poor Canadian federalists. The more things change, the more they stay the same".
Over the years, all kinds of programs were created to try to buy peace in some part of Canada, and this is the case once again. Before talking about the unfair benefits and the special status being granted to the Atlantic provinces, we must first pass moral judgment on this government.
For three years now, the government has systematically done the opposite of what it promised. In the case of unemployment insurance, it implemented the reform that the Conservatives had in mind, but only after condemning it throughout the election campaign. As for the GST, it was supposed to disappear. Such was the position of the Liberals, and also one of their major commitments.
Today, three years later, the government comes up with a proposed amendment which, instead of eliminating the GST, makes it even worse. We never promised to kill the GST, because the principle of a tax on goods and services is not necessarily bad, but the Liberals did so when they formed the opposition. During the election campaign, they said the GST was bad and that they would make fundamental changes to it. The Liberals did not fulfil their commitment. This is how governments lose their credibility.
What really gets members from Quebec is this government's double standard. On the one hand, the Government of Quebec has harmonized its provincial sales tax with the GST for a number of years now, and it has done so without asking for compensation, because there was never any talk of any. Plans were made so that it would be done properly, it was and it works.
Suddenly, in the last year, we learned, when all was said and done, that the maritimes were going to be paid $1 billion to harmonize with the GST. There is no reference to this in the bill, not a trace. But the facts are there. There is the fact that, in a shameless display of window dressing, harmonization with the GST will cost $1 billion. Is this how the Liberal government is going to try to make Atlantic Canadians forget their anger over employment insurance reform? I do not think this is the way to go about it.
They had an opportunity to come up with a truly dynamic employment insurance reform that would allow a community to take responsibility for itself, to develop, but they preferred to base their reform on the following principle: "If there are no jobs where you live, you must move somewhere else", rather than the following principle: "The government has a responsibility to ensure that an area's resources are used in the manner most conducive to its development". This principle was ignored in the employment insurance reform and another substituted for it.
But then, with an election looming, we are suddenly hit with the news of this wonderful $1 billion in compensation. Imagine what this does for competitiveness. It means that Quebecers will pay $250 million in taxes to help the maritime economy harmonize with the GST. It is completely unacceptable.
It is as though you suddenly decided to pay the heating costs for a third of the town by billing the rest of the inhabitants, but not supplying them with any heat, and using their wood in the bargain. This leads to major problems that are unacceptable.
Perhaps it is a political gift, so that the maritimes will be more receptive to UI reform, but I have to say that $1 billion in compensation to the maritimes over the next four years is a large amount.
Furthermore, in future, all Canadians will have to pay more in equalization payments to the maritimes. That is why I say that, the more Canadian federalism changes, the more it stays the same. Time and again, we see that it is an uncontrollable beast, which tries to balance things artificially rather than allowing the various components to evolve naturally.
Canada-wide harmonization is not for tomorrow. The proof lies in the way in which each province guards its jurisdiction, the responses from the west. We are facing a situation that will go on for several years. This compensation sets up a double standard in Canada. It is completely unacceptable.
The Liberal government, and particularly candidates in Quebec ridings, will have to answer about this in the next election. They will be asked why they gave $1 billion in compensation to the maritimes, but nothing to us, who did our work properly. How will they see that we are compensated? There will probably be a number of proposals on the table, but that will not deal with the fact that we have a double standard here.
The procedure being implemented is somewhat insulting to the maritimes, even if they are getting compensation. Ways could be found to improve the economy other than by giving them special
status in this respect, compared with other Canadians. This will make for unfair competition.
Part of my riding is right next door to New Brunswick. Consider the following: we have two regions, Madawaska in New Brunswick and Témiscouata in Quebec, and a decision by the federal government has changed the rules of the game. The same side has all the advantages. The next thing you know, some Quebec federalists will say it is up to the Government of Quebec to deal with the problem. The lack of fairness in federalism is one of the major drawbacks of our system. It may be egalitarian, but it is not fair. The Liberal government will pay the price in the next election.
During the few minutes I have left, I would like to emphasize the positive impact of the battle fought by members of the Bloc Quebecois in the last Parliament. I am referring to the members for Richelieu, Lac-Saint-Jean, Saint-Hubert, Longueuil, Hull-Aylmer, Rosemont, Shefford and Laurier-Sainte-Marie. They fought non-stop to remove the GST on books.
Today we see the results, although is a partial, not a complete success. The Bloc Quebecois always wanted the tax on books removed altogether and to have the whole book industry exempt from the GST because this has a major cultural impact. We have won at least half the battle.
We fought for this from the very beginning, and now all books purchased by institutions engaged in literacy training, schools and public libraries will be exempt from this tax. This is quite an achievement. Congratulations are in order for the members who worked unceasingly from the word go to obtain this exemption. The government could have gone further by accepting the Bloc's request that books not be taxed. Books are a jewel in the crown of our cultural industry.
This is how Quebecers and Canadians often have a chance to make a name for themselves. It is what gave Quebec and Canadian culture a chance to take its place in the North American market, the world market and the francophonie and do so in a way that is financially profitable.
The battle fought by Bloc members, and there were only eight at the time, has finally produced results. Since we formed the official opposition, we continued the struggle, and now we have won half the battle.
You may rest assured that we will continue our fight to have the tax on books removed altogether, which will have a real impact on the cultural industry, so that our authors will get the recognition they deserve and be proud of what we are doing.
This then, in short, is legislation that exempts certain books from taxation but that creates incredible inequity for Quebec and the regions bordering on Quebec, especially as far as the maritimes are concerned. For all these reasons, the Bloc Quebecois can never vote in support of this bill as it now stands. It creates two types of citizens, of taxpayers: those who live in the maritimes, who pay less sales tax thanks to the federal government's contribution, and the others. It in fact encourages governments to adopt a certain laissez-faire approach to managing their affairs. It encourages them to say: "We will be able to spend a little more; the federal government will compensate us for it". It is as if the government was trying to use a tax measure to reduce differences in income and in quality of life in Canada. This is not how to go about it.
The way to do it is to establish the principle that we will allow each region to develop its economy to the best of its ability, using its natural and human resources to the fullest, and that Canada's entire political and economic system will be based on that. No problem can be resolved by providing under the table compensation on sales tax. This creates an unnatural situation in the market, which goes against all current economic trends where the thrust is to emphasize the quality of our resources through ability and the possibility of competing on an equal footing.
Now, with the new law, there is no equal footing. The Atlantic provinces are told: "You will have a special advantage". Why do the people in the Atlantic provinces enjoy this advantage, when eastern Quebec, the Gaspé, the Lower St. Lawrence, the North Shore and the other regions of Quebec face the same economic difficulties as the maritimes? Why give Madawaska an advantage and not compensate Quebec in order to give Témiscouata the same advantage? This is unacceptable. This could in fact encourage Quebec consumers to go and buy in the maritimes. I think the federal government is once again not playing fair, to the advantage of the maritime provinces. In the past, it was to Ontario's advantage, particularly in research and development.
For all these reasons, the Bloc Quebecois will vote against this bill and will put the following question to all federal Liberal candidates in Quebec in the election campaign: "Do you think it is fair to give the maritimes $1 billion in compensation for the GST?"
Randy White Reform Fraser Valley West, BC
Mr. Speaker, it is a pleasure to be speaking to this bill today on the harmonization of the-
Excise Tax ActGovernment Orders
The Deputy Speaker
Order. Actually we are supposed to alternate across the floor. It should be the turn of the hon. member for Lambton-Middlesex. Would the member for Fraser Valley West wait 10 minutes to give his intervention?
Jim Silye Reform Calgary Centre, AB
A point of order, Mr. Speaker. If the hon. members from the government side are not ready and prepared when they should be, why should we be allowing them to speak? They should wait for us for 10 minutes.
Excise Tax ActGovernment Orders
The Deputy Speaker
The hon. member is quite right. I did see the hon. member for Fraser Valley West, but in fairness it was also known to all of us that it should go by rotation an my zeal at seeing the hon. member for Fraser Valley West caused me to recognize him instead of remembering that very important principle of alternates. The hon. member for London-Middlesex.
Rose-Marie Ur Liberal Lambton—Middlesex, ON
Mr. Speaker, I know it is hard to have peripheral vision but I too was standing when my hon. colleague was standing, and I thank the hon. member for letting me speak.
I do not want to take up valuable House time with further justification of restructured, harmonized federal-provincial sales tax. The facts have been clearly and convincingly addressed by my colleagues regarding Bill C-70.
The HST will eliminate hidden taxes that inflate prices and hurt exports. It is a simpler, more transparent system for consumers and business. An integrated approach makes possible a lower overall sales tax rate.
What I want to focus on today is an aspect of this legislation that has too often been attacked by those who place partisan politics and narrow regionalisms ahead of clear objective thought.
This issue is a decision by the government to provide a formula for short term adjustment assistance to provinces when they face significant structural costs to participate in the new system. Under this system adjustment assistance becomes available to the provinces that experience a revenue shortfall in excess of 5 per cent of their current retail sales tax receipts because they moved to a single harmonized sales tax system.
For qualifying provinces, in this case Newfoundland, New Brunswick and Nova Scotia, the formula means that the federal government will provide full compensation for the revenue shortfall. That is the shortfall over 5 per cent of the current retail sales tax in one year, the same full compensation for the shortfalls in year two, half the amount of the shortfalls in year three, and 25 per cent of the provincial revenue shortfalls in year four.
This is a short term measure designed for the period of significant transition these provinces will be going through. It will end after four years, providing the provinces with sufficient time to adjust to the harmonized system.
It is important to note this is truly a joint program, not a one way gift. Under this formula there is near equal sharing between the federal government and qualifying provinces of the adjustment costs harmonization will entail over the four years.
Over the four year period the total adjustment assistance under the harmonization agreement with the three Atlantic provinces will be $960 million. I remind the House of what the finance minister has emphasized. This spending has been incorporated into our financial planning and will not jeopardize the federal deficit targets we have set out.
Some Canadians have asked why provinces cannot phase in full harmonization over several years, thereby eliminating the need for assistance. This approach has been tried in Quebec over the last six years. Unfortunately the result runs counter to making the new simpler for business. While it allows the provinces greater fiscal flexibility, the business community, especially small business, has made it clear that it prefers a one step approach to harmonization rather than the approach taken by Quebec.
The Quebec approach resulted in significant complexity and compliance costs for business. It meant adjusting to a new system and new rates in each of the transaction years. This greatly reduced the economic benefits of harmonization for the province as a whole. Because of Quebec's experience the three participating provinces have chosen to move to a single tax system all at once on April 1, 1997.
I am disappointed that some Canadians have attacked the entire concept of this adjustment assistance for a harmonized sales tax. They have a mindset that ignores history, misreads the present and lacks vision for the future.
Canadian history makes clear that government has played an essential role in our economic evolution and adjustments. Some examples of this role are tax and land grant support for the national railway system, negotiation of our Autopact, development of the St. Lawrence Seaway, megaprojects from Lloydminster to Hibernia, special tax conditions for oil and gas, research and development and small businesses. The list is long and honourable.
Many of these government actions and investments respond to opportunities but there is also a long and proud list of federal assistance for sectors and regions that face economic difficulties and dislocations or that must confront core structural change.
Equalization payments are an essential part of our constitutional framework. They recognize that all of Canada is stronger as a society and as a marketplace when we help less affluent provinces provide a basic level of public support and service.
In 1972 when the federal government instituted the income tax reform, every single province received adjustment assistance which totalled more than $2.7 billion over a seven year period. More recently the federal government has provided assistance to
farmers following the collapse of world grain prices. It is now providing compensation for the elimination of the Crow rate.
We have provided bottom line support for the maritime fishers who were confronted with the tragedy of the decimation of fish stocks. We shared equally in the cost of solving the tobacco smuggling problem in Ontario and Quebec.
These actions were neither charity nor partisan politics. These were actions of fairness, equality and the principles this country was built on. They are an essential reflection of the contract Canadians have struck with themselves, a nation building contract that says a critical role for government is to help when help is truly needed and where it can be truly effective. That takes me to the present.
Today we have to manage the commitment to assistance with more vigour, innovation and insight than ever before.
The world of global competition for trade, for investment, business opportunities and jobs demands that government remain constant and conscientious of the bottom line. A government that squanders resources imposed on the nation, the cost of high deficit, high taxes and high interests, these are job killers, future killers, hope destroyers.
It is this same challenging competitive environment that demands government continue to play a role in helping citizens, sectors and regions to meet their global challenge. It has to be a role in applying methods that work with today's resources in ways that will deliver effective, efficient advantage for future success and economic benefit. That is exactly what the government is doing with adjustment assistance for sales tax harmonization.
As a member from the province of Ontario, I believe it is a shame that the Harris government at Queen's Park has missed this opportunity to get onboard with Canada's harmonized sales tax. Let us not forget that on June 7, 1995 during Ontario's election campaign, Premier Harris said he was prepared to work with the Prime Minister and the Minister of Finance toward a simpler unified tax, that it seems ludicrous to have two different taxes, two bureaucracies to collect it and more paperwork.
Regrettably the Ontario Tories are now arguing that harmonization would shift taxes from businesses to consumers. They have also claimed that adjustment assistance is a bribe to other provinces. As I have just shown, it is nothing of that sort, and indeed Ontario regularly benefits from adjustment assistance of various kinds paid to Ontario such as stabilization payments each year.
The door is still open for Ontario to join this new harmonized federal-provincial sales tax. The advantages for business would be tremendous. Ontario is Canada's major manufacturer and exporter and since harmonization means improved competitiveness that means more jobs. I am convinced that no province would benefit more from harmonization than Ontario. The longer Ontario waits to harmonize, the more business and consumer loss will be.
If we work together through the format in the approach our government has set, the result will be a tax system that makes it stronger, that helps deliver more jobs and is fairer to all of us. I support the compensation formula this legislation provides and that is why I urge all hon. members to put aside political grandstanding and join the government in supporting this legislation.
Excise Tax ActGovernment Orders
The Deputy Speaker
The hon. member for Fraser Valley West, with apologies to him.
Randy White Reform Fraser Valley West, BC
Mr. Speaker, I recall a couple of weeks ago when a similar thing happen to me. The Chair at the time did not afford me the opportunity to speak, but I thought I would not do the same to my Liberal colleague.
Before we get farther down the road on the harmonization of the tax, several comments were made here earlier with regard to Bill C-71 and how that debate was cut off. The fact is my colleague from Macleod basically introduced a motion that the question be put. The intent was that we could be debating one motion and not have an introduction of numerous amendments. It was the Speaker's responsibility at that time to decide whether the debate was to be cut off and go to the question, not the responsibility of my hon. colleague.
The member for Haldimand-Norfolk, who has been complaining about not having representation here in the House because the Reform Party did something, should look toward the Chair for the guidance in future occasions. Far be it from any Liberal here in this House to complain that they have not had the opportunity to speak when, after all, they invoke closure in this House so many times one can hardly recall if it is the race between the Conservatives or the Liberals for cutting off debate in the House of Commons. I think the hon. member should look at that and consider where his own party stands on cutting off debate in this House.
With regard to the GST and the harmonization of the GST in the Atlantic provinces, having spent some time there this year the GST in many cases is really not a concern to many people because there is such an underground economy there, as there is in other places across this country. It is really a moot point at times.
In reading through the papers from Halifax in particular and reading editorials, I found some very realistic comments. I would like to give a few. Nova Scotia finance minister Bill Gillis had no business signing the deal of BST, the blended sales tax. The public
did not see the details and the MLAs did not debate it. Just like that, it was done overnight behind closed doors.
This is kind of typical. I know the folks in Nova Scotia want the Liberals out and the Conservatives out but they do not know who to bring in because the Conservatives and Liberals in that province have not really served them well, much like the Conservatives and Liberals federally in this country have not served Canadians all that well. If they had we would not have situations like an enormous debt of $600 million and trying to service that debt with $47 billion a year, crime that is not being addressed, the situation in the House of Commons where we feel democratic principles are really amiss and even to a large extent not here.
We have to look at the whole issue of taxation, why we are here, how we got here, who got us here and why all of a sudden we are talking about three provinces out of this whole federation which made a deal to blend or to harmonize the GST with the provincial sales taxes.
One has to only look at the type of governments those three provinces have. Surprisingly, if anyone can believe this, they are all Liberal governments. For those at home listening, from British Columbia and other provinces, I truly wonder what my home province would have been sitting on today had that province been Liberal. We should think about that because if that is the kind of provincial representation we get in this country, that we make a deal with the senior party of the Liberals, regardless of the cost to the people in that province, then something is terribly wrong in this land.
I would suggest that the harmonization of the GST is not the problem but a symptom of the problem. It is a deal made at the cost of the people in those provinces because there is an affiliation between the provincial Liberals and federal Liberals that is so strong that it overrides the good of the people. That is wrong.
So they are going to take a combined rate of 18.77 per cent and apply it on a different basis; now the 15 per cent overall tax. They say it is good because it has gone down three percentage points. However, what they did not bother to tell people is that they will be paying it on things that they have never paid it on before.
I know parts of my family in Nova Scotia and parts of my family in Newfoundland are waking up to the same realities. None have a lot of money but they have the same realities that many people in this land are waking up with. It is just another disgusting tax by a government that really does not care. It is cash starved and it is going to get it any way it can.
BST, blended sales tax, HST, harmonized sales tax, GST, PST, ST, S, whatever we want to call these things, the taxpayer is sick and tired and fed up. If there is one thing I can forecast in this country it is that the Liberal government will fall on its inability to understand that people are sick and tired of taxes for the sake of money going to the wrong places in this country.
The real effects of blending the provincial tax and the GST will put people in Atlantic Canada through the blender. That is the problem. They do not seem to understand. That is all right. We will make a change.
The Metropolitan Halifax Chamber of Commerce does not support this without changes.
It is interesting when members opposite say "it is supported, we talked to all kinds of people". I do not recall anybody in my family ever being asked about it. I know for a fact that the provincial government in Nova Scotia did not even debate it. That is kind of sad.
I think of issues like child poverty, which this government expounds on time after time without thinking that if we have child poverty, how did we get there. I will tell the House why we have child poverty in Canada today, poverty of any kind. We got there because of governments' inability to understand that the more they borrow, the more they owe. Over the last 25 years both the federal Conservatives and the federal Liberals have borrowed well beyond their means and ability to pay back. That is why we have poverty in this country.
That is why, rather than looking at cutting back on the GST, they are looking at irresponsible and ridiculous ways to hide it. They are not getting rid of it. Out of sight, out of mind; that is their idea. There is no courage to cut it back.
For all those listening, I sincerely hope they will remember that this is the government which started borrowing. This is the government which is trying to hide the GST. The other government, which is no longer a party, is the government that brought in the GST. Think about that when walking up to the ballot box.
It is time for a big change in this land. The Achilles' heel is here in the GST and in the government's inability to understand that more taxes will mean further debt and less ability to pay.
Roy Cullen Liberal Etobicoke North, ON
Mr. Speaker, I am pleased to speak on Bill C-70.
The hon. member for Fraser Valley West conveniently forgot about the fact that the Atlantic premiers right now are going across Canada telling Canadians that because of the harmonized sales tax they have created a competitive advantage for companies which are located in Atlantic Canada. The harmonized sales tax will reduce or eliminate the embedded provincial sales tax which is already part of the cost structure of companies in provinces other than those which have harmonized their sales tax.
It is curious that the hon. member for Fraser Valley West also ignored that Canadians are saying they want the tax included when
they go to the cash register. They want it included because they are tired of going to the cash register, having the tax added and not knowing what price they are going to pay. Again the Reform Party is just not listening.
Until now the GST has had a bewildering array of complicated and sometimes contradictory rules for complying with the federal sales tax system in this country. Bill C-70, with its 130 or more amendments to the federal GST, goes a long way toward sorting out the confusion and easing the compliance burden. This bill responds to the views of Canadians across the country. Their message is very simple: Keep it simple and make the rules clear. I am very pleased to support the bill in the House today.
We have already heard why a value added tax is needed in Canada. Again the Atlantic provinces are taking full advantage of harmonizing their sales tax. It is creating a competitive disadvantage for companies in provinces like Ontario and other provinces which have higher costs. Over the medium and long run, companies in provinces that have not harmonized their sales tax will be competitively disadvantaged. I too have some concerns that the GST creates some anxiety for consumers, but in the medium and long run we will be more competitive if we harmonize our tax.
Others have spoken about the efforts made to implement the value added tax to make its rules more fair and simple. I would like to take this a step further by emphasizing some of the specific steps we have taken to clarify the more confusing aspects of the federal sales tax system in Canada. In many respects clarity is the source of simplicity and fairness. Once the rules, procedures and rationale are clear, Canadians will have a better understanding of both how and when the value added tax system applies to them. In the short history of the GST this has not always been the case.
We have heard how confusing the current tax legislation is regarding municipal services, with some services being exempt but similar services being taxable, depending on the circumstances. This situation has led to confusion and a perception of unfairness. By making most municipal services tax exempt, the government will clarify the situation and create a more level playing field. The compliance burden will be eased since municipalities and their appointed bodies will no longer be confused about when and if a service is taxable.
Specifically the situation regarding recyclable products will be cleared up. Under existing legislation there is confusion about the appropriate tax treatment for collecting these products. Are they garbage and therefore tax exempt, or are they not? Bill C-70 clarifies that the collection of recyclable materials and their delivery to a recycling facility is included in the exempting provision for garbage collection.
The treatment of public utilities has also been a source of befuddlement. Under current rules, services provided by a utility to a municipal government are tax exempt if the utility is owned by the government but taxable if it is not. This no longer will be the case.
Bill C-70 stipulates that the sale of gas, electricity, steam or telecommunications services by a public utility will always be taxable, even if the municipality receiving the service owns or controls the utility. This consistency across the board will make complying easier for municipalities. It may not please everybody, but on balance I think it is fair. Those municipalities that have their own utilities hopefully will be provided a transition period so they can provide for these costs in their budgeting procedures in advance.
In telecommunications services, this sector will also benefit from the measures we have taken to clarify the sales tax legislation as it applies to this sector. We will remove the confusion by defining more clearly what a telecommunications service is and when this service is defined as being performed in Canada.
This ease of compliance is reflected in other steps we have taken, steps that apply to the business community as a whole in Canada. We have heard about new rules that simplify the treatment of used goods and employee and shareholder benefits. These rules will benefit consumers and businesses alike.
Businesses will also find it easier to comply due to changes in the way GST registrants report and pay GST on some purchases of real property. Starting in 1997, registrants who have to self assess GST on a taxable purchase of real property that is primarily for commercial use will not have to complete a separate return to report the GST on that transaction. Instead they will report the GST on their normal GST returns. Anything we can do to reduce the paper burden and reduce the complexity for businesses is a very positive step forward.
Similarly this bill will clarify the rules for export services by Canadian services. As the current legislation is structured, Canadian businesses have a hard time determining if services they provide to non-residents qualify for zero rating. This is because the general zero rating provision includes a test that is often difficult to apply. That test asks the question: Where is the service primarily consumed, used or employed?
For example, what is the answer for a collection agency that provides services to a non-resident client? Where are the agent's services being used or consumed by the client? Or training services provided by Canadian businesses to employees in Canada of non-resident businesses. Where are these services consumed or used, inside Canada or outside when the employee returns to work at home? By clarifying when these services qualify for a zero
rating, we will make it easier for Canadian businesses to comply with the rules for export services.
The amendments we are proposing will also make business in Canada more competitive in both domestic and international markets. I touched on that earlier. While the current legislation does provide a favourable environment for domestic suppliers of goods and services, there is room for improvement.
We propose to make improvements in a number of ways. First services provided by Canadian sales and purchasing representatives through non-resident or foreign businesses will be zero rated. Second, a rebate will be provided for GST charged on installation services supplied in some non-resident businesses. Third, a broader range of goods and services relating to international transportation will be zero rated. Fourth, a zero rating provision for goods delivered abroad will be expanded.
These and other provisions will make Canadian business suppliers more competitive with non-resident suppliers who do not pay GST on their business inputs. These provisions are complemented by the steps we have taken to make Canada a better and more attractive place to do business. For example, we have extended the visitors' GST rebate beyond tourists to include non-resident businesses with employees who travel to Canada. These businesses will now be able to claim a rebate for GST they paid on short term accommodations. While these changes may not ease compliance for businesses directly, they will make the tax easier to bear.
We have taken steps with charities that will simplify the situation for them and also ease the weight of compliance. This is especially true for the smaller registered charities that only have basic accounting systems. For those organizations the current requirement that they apportion inputs between taxable and exempt supplies has proven onerous. It forces them to review all the rules and determine whether each of their activities is taxable or exempt. In some cases the judgment is purely arbitrary. Bill C-70 introduces a new streamlined method for charities to collect and remit tax on their taxable supplies.
We have heard from my hon. colleague about the amendments that apply to education. These changes too are designed to ensure that the GST is clear and less complicated in this area. The changes address inconsistencies in the eligibility criteria that apply to schools, universities and public colleges for claiming rebates. They make the definition of vocational schools more specific to exclude those institutions which do not primarily offer educational training.
It is fair to say that the amendments we are proposing to the value added sales tax system in Canada will make it easier for everyone to comply with their GST obligations. This lack of clarity in the current legislation has been among the biggest complaints from those Canadian citizens who honestly are trying to meet their sales tax obligations. We have heard these complaints and we have responded by introducing the amendments I have mentioned along with scores of others.
We have designed a sales tax system that is more user friendly, if I may use that term. It is a system that is easier to comply with and at the same time increases compliance and much needed revenues.
Pierre De Savoye Bloc Portneuf, QC
Mr. Speaker, I will speak to Bill C-70, as my colleagues have, but I would like to start by drawing the attention of the House to a number of little problems.
For instance, we find it regrettable that the Minister of Finance tabled these documents less than 24 hours ago. We are talking of a 300-page document. You will understand that, given the importance of the subject, such a document cannot be flipped through any old way.
I would not raise this question, I can assure you, if this were an isolated case. A few weeks ago, however, during the firearms debate, I recall that the minister provided journalists, at noon on the dot, with documents I received only at a quarter to three, and the press conferences took place after question period.
You will understand that, in the public interest, the opposition must be given enough time to read documents in advance so they can react in an informed manner, in order to enrich the debate and to lead to better decision making.
I would also point out that, in connection with the tobacco legislation, the Minister of Health called a press conference last week in the press gallery, and it was only once I was there that I was able to examine the documents the minister was just about to discuss. We are not talking about 24 hours here, or even 2 hours, we are talking about 15 or 20 minutes notice.
One might say that the government has acquired the bad habit of sidestepping debate. Again today, through procedural manoeuvring, a worthwhile discussion was cut short. There are times, mind you, when I wonder what is the use of having a debate in this House. Anyway, I am told this is the best system around. Perhaps, but when this system fails as it did today, it acts as a muzzle and no longer serves public interest, as if that was not already difficult enough.
That is why I felt the need to start my remarks by submitting to you and to this House that acting this way is not in the public interest, and that the official opposition, with all the good will in the world, can only make as useful a contribution as the government will allow it to make by distributing documents in a timely manner. We have to rely on them for that.
That said, Bill C-70 is about the GST, the sacrosanct GST, which, while it was supposed to be abolished, not only still exists, but will now be harmonized. Will it be harmonized harmoniously? That is the question.
The most challenging problem facing us is the fact that the government agreed to pay approximately $1 billion in compensation to the maritimes if they harmonized their sales taxes. Naturally, this enables them to cut their taxes from 19 to 15 per cent. If I lived in the maritimes, I would probably think this is a great idea. The problem is that, for the time being, Canada includes not only the maritimes, but also Quebec.
And Quebec's contribution to this effort amounts to about $250 million. A few minutes ago, I heard the Liberal member say that this will give a competitive edge to businesses in the maritimes. It undoubtedly will. But when he said this, he was saying to Quebecers, not to mention Ontarians, that they are taking a loss so people in the maritimes can benefit.
If it were possible to use Quebec and Ontario resources to help other provinces, it would be fine. But Quebec is having financial problems.
Are you asking me to conclude now? Then I will have a few minutes to speak at three o'clock.
Excise Tax ActGovernment Orders
The Speaker
Certainly, dear colleague, you will have three or four additional minutes after Oral Question Period. The House will now proceed to Statements by Members.
Ronald J. Duhamel Liberal St. Boniface, MB
Mr. Speaker, I received a letter recently from two Manitobans who are concerned that Canadians no longer value the military. Like myself, they think that this must not be allowed to continue. As a result of this they have begun the invisible ribbon campaign.
The ribbons, one of which members see me wear, are made out of plastic wrap. This is symbolic of the invisible uniform warn by the partners, spouses and children of military personnel. They are as committed to the military way of life as the personnel who wear the uniform. So too their morale is affected by negative media attention and public opinion.
I urge all members to join me in wearing an invisible ribbon to demonstrate that Canadians do appreciate military personnel and their families.
This campaign will help reaffirm pride in the military and let military personnel and their families know that Canadians recognize and support their vital contribution to Canada.
Please join with me in urging people across Canada to wear the invisible ribbon. Let's have a visual thumbs up for the military.
Please join me in wearing this ribbon.
Philip Mayfield Reform Cariboo—Chilcotin, BC
Mr. Speaker, the Liberals promised Canadians jobs, jobs, jobs, but what Canadians have received are pink slips, pink slips, pink slips.
Nowhere has this been made more clear than in the chaos created by the Liberal government when it signed the softwood lumber agreement with the United States. This agreement is killing jobs and destroying job security across Canada.
The softwood lumber agreement is problematic for another reason. It replaces an open lumber market with the problems of a marketing board. Already I am hearing stories of lumber quotas being for sale to the highest bidder, while mills are being shut down and employees are being laid off because of a lack of lumber quota.
Will this Liberal government stop micro-managing the lumber industry and do something for the people of one of Canada's largest industries? I challenge the Liberal government to defend the jobs of Canadians against U.S. interests by referring the softwood lumber issue to the World Trade Organization.
People are hurting-
Softwood LumberStatements By Members
The Speaker
The hon. member for The Battlefords-Meadow Lake.
Len Taylor NDP The Battlefords—Meadow Lake, SK
Mr. Speaker, we are offended by yesterday's decision by the Minister of Labour to force a vote of CAW members at Canadian Airlines. This is an unprecedented and shocking attack on workers' rights.
At the same time we recognize the minister's attempts to use the Canada Labour Code to protect the bungling of the Minister of Transport, who seems not to understand the real crisis facing Canadian Airlines or has chosen to ignore it.
New Democrats recognize that the real issue is the stability of the industry which it has demonstrated cannot regulate itself.
We care about the jobs of Canadian Airlines. We care about the future of the industry. However, we are concerned that by focusing only on the concessions being demanded of working people that the job and industrial security we all desire will be lost in the long term.
If the federal government wants to be involved in Canadian Airlines restructuring, it should leave collective bargaining to the affected parties and go to the table with a real package that addresses the real problems of the industry.
[Translation]
Jean Landry Bloc Lotbinière, QC
Mr. Speaker, last week, a NAFTA panel ruled that the Canada's supply system for dairy products, eggs and poultry did not violate the rules of that treaty, nor those of the World Trade Organization. This decision is an important victory for Canada over American claims.
However, we should have no illusion about the spirit that drives our neighbours to the south. Just last week, U.S. farmers asked their government to amend NAFTA if the panel did not rule in their favour.
It is very likely that this lobby will continue to put pressure on the American administration to get the changes it wants. Consequently, the Minister for International Trade must remain firm on this issue.
The Bloc Quebecois remembers very well the mess created by this minister regarding the softwood lumber issue. We hope that, this time, the minister will show determination and will protect our fellow citizens.
Sarkis Assadourian Liberal Don Valley North, ON
Mr. Speaker, I rise in the House today to recognize the eighth anniversary of the tragic Armenian earthquake on December 7, 1988. On that day over 25,000 lives were lost and hundreds of thousands of people were left homeless and injured.
The Armenian people will always remember the response of the Canadian government to this horrible tragedy. Over $6 million in aid was provided by the government to the people of Armenia and an additional $2.5 million in humanitarian relief was raised by Canadians.
On Sunday I will join Canadians of Armenian origin and Armenians everywhere in church services to mourn the loss of family members and friends. I urge my fellow members to reflect on this horrible tragedy and join with me in this commemoration.
George Proud Liberal Hillsborough, PE
Mr. Speaker, if you ask Canadians what they associate with Prince Edward Island, many will say Anne of Green Gables. Some might say amazing golf courses and others will say that it is a small, wonderful place to visit.
If I were to be asked the same question I might say call centres. Yes, that is right, I said call centres. We have a highly advanced telephone network.
Listing a few companies that have already set up shop on the island are Cows, Island Tel, the GST Centre, HookUp Communications and Watts Communications.
In fact we foresee such a growth in the industry that Holland College has set up a call centre and customer service excellence program to train call centre workers. The program will be the benchmark for high level training standards in the industry.
The call centre industry will provide year round full time jobs for Islanders. It is an excellent niche that has great potential for employment opportunities. Islanders are taking full advantage of their strength in carving out specialty niches, and eventually they will break the seasonality of the island economy.
Bonnie Hickey Liberal St. John's East, NL
Mr. Speaker, a 1995 Environics poll estimated that one in seven households in Canada own air guns that shoot BBs or pellets or both. These weapons can penetrate flesh and thin bone at just 348 feet per second.
More than 25 people have been killed by air guns in North America since 1980. Canadian hospitals report a growing number of non-fatal accidents involving such weapons. For example, Amanda Noseworthy of St. John's lost an eye when shot by a young boy who was playing with his rifle in a friend's home. Amanda is now losing the vision in her good eye and may become totally blind.
I have spoken to the federal justice minister on behalf of Amanda and her family and told him I support the inclusion of air guns as a real firearm under the Criminal Code of Canada, and therefore, should be subject to the same controls and safeguards.
Air guns are not toys. They are dangerous weapons that can kill. They must be regulated for the protection and safety of our children.
Monique Guay Bloc Laurentides, QC
Mr. Speaker, last week, the heritage minister was wondering why RDI did not cover an event in which she participated, and which was sponsored by the Fédération des communautés francophones et acadienne du Canada.
The Deputy Prime Minister suggested that RDI did not provide adequate coverage of issues concerning francophones outside Quebec. However, the fact is that RDI gives them long periods of coverage every day. Could it be that the heritage minister does not watch RDI?
The problem with RDI is not that it does not talk about francophones outside Quebec. The problem is that hundreds of French speaking households in English Canada do not get that channel, because the government agreed to make it an optional service for cable operators.
The question is: Does this government truly care about francophones outside Quebec, considering it did not deem appropriate to give them real access to RDI?
Ed Harper Reform Simcoe Centre, ON
Mr. Speaker, my fall householder survey is generating hundreds of responses, with 787 so far. I will share the results with the House.
The first question dealt with the Liberal plan for harmonizing the GST with provincial sales taxes. When asked if they would support this in Ontario, 64 per cent said no while only 24 per cent said yes.
When asked if tobacco products should be placed under the Hazardous Products Act to give the government increased power over advertising and chemical contents, 72 per cent of Simcoe Centre voters said yes while 21 per cent said no. When asked if the federal government is justified in spending $20 million a year on the Canada Information Office, a whopping 90 per cent said no and only 8 per cent said yes.
The message is clear. The government needs to deal seriously with the tobacco issue, forget about a GST harmonization tax grab and stop wasting money on propaganda. When are the Liberals going to get the message? They just don't get it.