Debates of Dec. 5th, 1996

Excise Tax Act

[The Acting Speaker (Mr. Milliken)]

Order. The hon. member knows it is improper to reflect on decisions of the House or on decisions of the Speaker once rendered. I would caution him in his remarks to avoid such references. I think he has other matters he will want to discuss in relation to the bill before the House and I invite him to approach the subject in that vein.

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, I was endeavouring to clear up a misunderstanding, not cast negative aspersions on anyone, let alone on the Chair of the House. I think it is incumbent on all of us as members of Parliament who are trying to represent our constituents to clear up any potential for a misunderstanding.

It certainly was not the intent of the Reform Party of Canada to limit debate. That was not the intent of the motion and the motion indeed did not do that. I want to make it very clear for the people out there who are watching that the motion in no way limited debate on Bill C-71, the tobacco bill.

I make reference to that because of the chain of events which did take place which prevented some members from speaking. The

member for Haldimand-Norfolk made an intervention in that regard. I can sympathize with that because a number of members had intended to speak to the legislation and had important points to bring forward on behalf of their constituents. Certainly the member for Haldimand-Norfolk was one of those individuals, as he indicated, who wanted to make some strong points and represent the people in his riding. The Reform Party certainly did not limit or prevent him or any other member in this place from doing that.

I sympathize with the member. I believe that all of us in this place get tired of preparing presentations only to have some procedural thing prevent us from presenting our views to the House. Indeed from time to time the government elects to enact closure or time allocation and prevents members from all parties from speaking to important legislation. That too is tragic. It is very unfortunate that this morning we had a process which did not fall into place the way it was intended to allow people to speak to that legislation. That was unfortunate for all members concerned.

I want to say that I have a personal point of view on that very important issue. I am a father of three young children and unfortunately my middle child has taken up smoking in this last year or so. I wanted to bring the personal perspective as a parent and that I have struggled for the last 12 or 15 years to try to quit smoking. I know how addictive nicotine is.

I wanted to bring forward how tragic it is for all parents who have to deal with children who have taken up cigarette smoking. I know we are all concerned about that. It is certainly why the Reform Party endeavoured to assist the government in fast tracking the legislation and to do all we could to assist the government in helping the youth of our country who unfortunately are taking up cigarette smoking despite all the education about it.

I will now move on to Bill C-70, the harmonized sales tax. Never before has a particular government initiative, the goods and services tax, caused such fury in our nation. Anyone in Canada can reflect on the debate which took place inside and outside the House of Commons during the days, weeks and months that the Mulroney government was bringing forth the GST. It tried to ram it through despite the polls which consistently showed time after time after time that roughly 85 per cent of Canadians were opposed to this tax.

Why were they opposed to the tax? Obviously people are opposed to any tax, but the reality goes much deeper than that. I made the remark a couple of years ago when we were debating gun control in this place that I believed that Canadians had reached the same point with gun control as they had with taxes. They had reached the breaking point.

They reached that point with the GST. That is why there was such an uproar all across the country against the Mulroney Tories, the Conservatives, and the much hated GST they were attempting to implement. It was so much so that as will be recalled when looking at the history of this tax, Mulroney had to actually go to the extraordinary step of appointing eight additional senators to the other place in order to ram through that legislation against the wishes of the vast majority of Canadians.

What have we got now? I recently wrote an article for the newspapers back in my riding of Prince George-Peace River in which I briefly detailed the history of the GST. I find it more than a bit ironic that this tax caused a couple of Conservative MPs to be thrown out of their caucus because they dared to represent their constituents and that last spring this same issue caused the Liberal Party, which is now the government, to throw a member of Parliament out of its caucus.

Despite the fact that this Liberal government would like to pull the wool over the eyes of Canadian voters that the Liberals are different from the Conservatives who came before them, what we see is that they are exactly the same. And they wonder why Reformers and Canadians from coast to coast are saying Liberal, Tory, same old story. Nothing changes.

On the subject of the member of Parliament for York South-Weston, it is more than interesting that in a speech to the Rotary Club of Toronto he addressed the topic "Honesty, Ethics and Accountability: Does it exist in Canada's political system". In the little time I have left, I would like to quote one thing from his remarks that day:

Removing me from the Liberal caucus accomplished two things. Firstly, it accomplished the government's main objective. It sent a very clear message that the PMO is intent to maintaining control over members of the Liberal caucus. But in addition, separate and apart from the Liberal Party or the GST, it sent a second larger message to the Canadian public. The action taken by the government on this issue has reinforced Canadians' worst suspicions-that political parties will promise anything to be elected, and once in power will not fulfil that promise. That message is the reason people question whether there is honesty or ethics in our political system.

That is a direct quote from the member for York South-Weston on how he was treated by the government on this very issue of the GST and his stand against it.

[Pierre Brien, Bloc, Témiscamingue, QC]

Mr. Speaker, I also want to address Bill C-70, which is basically a series of amendments to the GST.

Three years ago, the Liberal members opposite promised to abolish the GST. You will remember that, every day during the 1993 election campaign, Liberal candidates would canvass their ridings, all over the country, telling people to vote for them,

because they would eliminate the GST. The Liberals were even more vocal outside Quebec. They said: "We will scrap the GST".

I will use polite words and define "to scrap" as the equivalent of to abolish or to eliminate. The Prime Minister even repeated that statement in the House on several occasions, in response to questions from Bloc members and members from other parties as well.

Three years later, we have before us a few proposed changes here and there, and what amounts to some kind of political compromise to compensate those maritime provinces that have harmonized their tax structure.

Over these three years, abolishing the GST gradually became synonymous with harmonizing the GST. To my knowledge, the dictionary does not mention "to harmonize" as a synonym for "to eliminate" or "to abolish". I may be wrong, but I doubt it. In any case, voters will not be fooled.

As for the Deputy Prime Minister, she went even further than her colleagues and said she would resign if her government did not abolish the GST. She said that because she thought her party had made a commitment-after all she is now the Deputy Prime Minister-to abolish that tax. She did resign, but only to immediately run again in a byelection that cost Canadian taxpayers hundreds of thousands of dollars. Indeed, her constituents were not the only ones who had to pay. Everyone in this country had to pay for this political circus by the Deputy Prime Minister.

If she was so convinced that her government had not kept its promise, why did she not resign and go back to private life, period? Probably because she missed the limousine, her position as Deputy Prime Minister and all the advantages she enjoys every day.

Having missed all that for a few weeks, she naturally came back, resumed her duties, and was taken back into the fold as though nothing had happened, and nothing more was said.

It is a rather sorry saga, but there is more. The Deputy Prime Minister's political adventure was a costly one, but there was more to come, so that she could go to the voters and say: "Look, we have kept our promise", because they harmonized the tax in the maritimes and everyone knows perfectly well that right now the Liberals are strong in that area of the country. So they gave a political gift, because we must call a spade a spade, of $1 billion so that the maritimes would accept harmonization. Not just so that they would accept it, but also to sweeten the bitter pill of unprecedented unemployment insurance cuts in the Atlantic region.

These cuts were condemned by the same members who today are on the other side of the House, let us remember. These people thought the Conservative agenda with respect to unemployment insurance was scandalous and shocking, and made no bones about it. When they came to power, they cut benefits, and later reformed the system twice, both times for the worse, further cutting benefits.

As well, there are still a number of technical problems that have not yet been worked out in this reform, but we have been raising them in question period every day.

Therefore, this political compensation of $1 billion for the maritimes is aimed at softening up voters so that Liberal members and the few ministers can go back to their ridings and say: "Yes, it is true we did not keep that promise, but look at the $1 billion we got for the maritimes".

But who is paying this billion dollars? The taxpayers in Quebec and in Canada. They are all paying for this billion dollar political compensation package. And that is not all, because the way it has been set up, with respect to the compensation and reorganization of the tax in these provinces, there will be further compensation when it comes to equalization payments for the maritimes, given that the rate of taxation has gone down.

This could be the result. There is a possibility that equalization payments to these provinces will increase. In addition, as if that were not enough, we could keep paying for this harmonization indefinitely, all so as to avoid keeping this ridiculous promise.

Everyone saw just how impossible it was for the government, when it came to power with a deficit of around $37 billion or $38 billion-padded, of course so as to be able to say it had reduced it afterward-to deprive itself of $17 billion in revenue and yet eliminate the deficit just like that, overnight?

That is what the Liberals were telling people. Some MPs were taken in. I remember, I was sitting on the finance committee. To continue the drawn-out GST circus, they had the Standing Committee on Finance tour the country to consult Canadians on their ideas for a replacement formula. When they came to office in 1993, they started looking at the alternatives, as if they had just realized, after the election, that they could not deprive themselves of some $15 billion to $17 billion without finding an alternative.

Consultations were held, and witnesses appeared one after the other, those who wanted to see the tax done away with, and those who said "Listen here, that was a dumb promise, you cannot keep it". All this just to produce a report, which was probably already written right from the start, which stated "Yes, but it would be

preferable to harmonize the GST with the provincial taxes". I will get back to that, as behind this tax harmonization is a strong desire to centralize. It was already obvious in these recommendations that the tone had changed, that they were singing a different tune.

What was going on in Quebec at the same time? In Quebec, the provincial sales tax was adjusted annually. Finally, Mr. Campeau, who was the minister of finance, harmonized his tax with the federal sales tax. Without any compensation whatsoever, Quebec harmonized its tax.

The maritimes, which followed suit, got compensation. Now they have a problem on their hands. What will they do if Ontario harmonizes now? What will they do if the western provinces harmonize now? Are there likely to be other billion dollar gifts? This may be the promise that will have cost Canadian taxpayers the most in a very long time. How far will they go with this madness of very dubious promises that weigh heavily on Canadian taxpayers?

Where are they going? They do not really know. Moreover, there is an injustice. If one province receives compensation, why not all of them. Those who acted first are penalized. The little measure to sweeten the pot is the removal of the tax on books. Just a minute. That is not the case. It is for institutional purchases. Individuals must not think that there will be no more tax on books. They will get a surprise. With Christmas coming, they will discover there is no change.

What harmonization with the federal government means is that the federal government will collect taxes for everyone, including Quebec. The federal government likes to collect money, make the provinces dependent on transfer payments and then say: "Yes, we will give you so much money".

If things are not going well with federal public funds, transfer payments are cut. The provinces have to make painful cuts, because they manage the daily fare of health, education and social programs, which affect the public. The federal government is above all that and continues to waste money left, right and centre and to spend it, as we have seen in the case of the Deputy Prime Minister, on endless political spectacles. I have no doubt that voters, and I will conclude here, will remember this come the next election campaign, and there will be talk of the famous Liberal promises.

I will be keen to see how they go about trying to be credible the next time. Everyone will remember the GST and everyone will remember the other promise not kept, the one that is even more important, that of the jobs they never delivered. We can hardly wait to meet them along the next election campaign trail.

[The Acting Speaker (Mr. Milliken)]

Order. It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Notre-Dame-de-Grâce-International Court; the hon. member for Frontenac-asbestos industry; the hon. member for the Battlefords-Meadow Lake-child poverty.

[Paul Forseth, Reform, New Westminster—Burnaby, BC]

Mr. Speaker, October 1993 was a significant time for all Canadians. It was when a majority of Canadians elected a Liberal government after nine years of the Tories.

The Liberals promised this and they promised that. At every campaign meeting Liberal candidates would be waving their red book, saying a Liberal government would fulfil all its promises and put the country back on its feet.

Historically the Conservatives are known as the Tories and the Liberals are known as the Grits. With respect to the GST and all of the governance in fact that we have ever had from this country it is Grit or Tory, same old story.

Canadians elected the Liberal government because it promised to scrap, kill and abolish the GST. Now we have Bill C-70 which is not about scrapping the GST but about harmonizing it.

In the 1993 election campaign the Liberals were desperately searching for that one hot button item to woo the voters. They found it. It was the GST. When a Liberal candidate spoke about getting rid of the GST they always received a positive reaction from the audience. Unfortunately-

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, I am quite sure that what my Reform colleague has to say is interesting, therefore I believe we should be as many as possible to listen to him, and I call for a quorum count.

[The Acting Speaker (Mr. Milliken)]

I will ask the Clerk to count the members present.

And the count having been taken:

[The Acting Speaker (Mr. Milliken)]

Indeed we do not have a quorum. Call in the members.

And the count having been taken:

[The Acting Speaker (Mr. Milliken)]

I see a quorum. Resuming debate, the hon. member for New Westminster-Burnaby.

[Paul Forseth, Reform, New Westminster—Burnaby, BC]

Mr. Speaker, before the last election the Liberals knew full well what they would do with the GST. They knew that scrapping the goods and services tax would not be an option. They knew they would not be able to come up with an equal amount of revenue, yet true to Liberal form they said that they would abolish it.

Now members of this government are trying to say they never said scrap, abolish or kill the GST, that they said harmonize or streamline. If this government never used the words scrap, abolish or kill then why did the Deputy Prime Minister resign her seat? Why did the member for York South-Weston leave the Liberal caucus? Why did the member for Broadview-Greenwood support the member for York South-Weston for sticking to his principles? Because they all knew they were wrong. They knew full well that their constituents did not elect them to harmonize the GST.

The member for York South-Weston did the right thing by keeping his promises to his constituents. As is the true Reformer style, that member voted the wishes of those who elected him. Now it seems this independent member wants to walk back across the floor to join his Liberal colleagues.

Today it was reported in the Montreal Gazette that the same member said: ``That issue is over and done with. I've made my point and I don't intend to speak to that issue again''. I remind the member that the issue of the GST will not be over as long as the Liberals are in power. And they confirm it again today with Bill C-70.

Liberal members and all Liberal candidates will have to go into the next election and explain to all Canadians why the GST is still there.

In Ontario, Liberals are going to have to sell the electorate on harmonization when Ontario premier Mike Harris says he has no interest on harmonizing the GST with the provincial tax. Whenever Harris has been asked about the possibility of harmonizing the taxes, he firmly states that the federal harmonization plan would cost Ontario consumers between $2 billion and $3 billion a year. Ontarians are not going to buy the Liberal harmonization promises no matter how it is sugar coated.

Manitoba premier Gary Filmon says that the harmonization is "a bad deal for Manitobans". He also says what the government "cannot do is help us with the transference that takes place off the backs of businesses and on to the backs of consumers. Consumers in Manitoba would have to pick up $300 million a year of the burden. It just doesn't work. It is a bad deal".

The same words are echoed by the Governments of Saskatchewan, Alberta and British Columbia. In fact, these provinces are not even willing to discuss the proposal with the Prime Minister.

Bill C-70 is a bill that deals specifically with the provinces on the east coast. This bill is not going to change the tax in my home province of British Columbia so when and if Bill C-70 is given royal consent, my constituents are still going to be paying the GST.

This bill is not about harmonization or streamlining. It is about failing to follow through on a promise. With Bill C-70, the Liberals need the support of provincial governments. If they had proposed this plan in the last election, Canadians would have soon discovered that such a plan would not work. Had the Liberals followed through on their election promise, provincial support would not have been necessary. I guess that provincial governments would have loved seeing an abolished GST.

Canadians were cheated in the last election concerning that kind of promise. There is no other way to say it. Putting everything into practical terms, the Liberals promised that they would give back money to Canadians to alleviate a personal tax. Now, over three years later, Canadians have not received their share.

However, there is a solution and the solution is not too difficult to achieve. What Canadians need to do is get rid of the party of dead promises and elect a party that will follow through on what it says. The Reform Party is the only party that will make promises which can be kept. We are not about using hot button issues simply to attract a vote for the short term.

I really wonder if the east coast residents know what they will be getting with a harmonized tax. Do they know that they will be paying more for children's clothing, funerals, books, auto repairs, electricity, gasoline, home heating fuel and even hair cuts? Probably not. Consumers are going to be hit hard by the passage of Bill C-70.

I was told recently that the Investment Property Owner's Association tabled a report in the Nova Scotia legislature which states that renters can expect to shoulder some of the higher operating costs that will hit landlords with a harmonized GST. Again the government is going to go after those who have lesser incomes, all for the sake of some political expediency. My only hope is that the east coast media gives these people the facts about the implications of harmonization. However, my fear is that the Liberal media will say very little about it leaving the east coast residents in the dark.

The Canadian Real Estate Association says that a harmonized sales tax will push up new housing prices on average by about $4,000 in Nova Scotia and Newfoundland. In New Brunswick, new housing prices are expected to climb as much as $3,300. In fact, the Halifax Chamber of Commerce is predicting that municipalities are going to raise property taxes all because the eastern provinces were bribed into the harmonization deal.

The Liberals have been speaking about how they never said this and never said that during the campaign. I am not going to stand here and accuse individual members of what they said because I was not present during each of their campaigns or following them door to door as they went knocking. However, I will tell constitu-

ents in each federal riding to make their own accusations. They remember what was said.

I want to offer the House some comments by members with regard to the GST. I think Canadians will get the idea of what the majority of Liberal members meant during the 1993 election.

For example, the member for Mississauga West, referring to a reply from a Department of Finance letter which said that Canadians were getting used to the GST, said: "If anyone believed that I do not think they are in touch with reality".

The member for York South-Weston commented that: "I hope we do not try to hoodwink people into thinking our commitment was contingent on the provinces agreeing to harmonize their taxes with the GST. A good number of my colleagues feel the same way. The gun control protest will appear to be a nursery school tea party if we do not fulfil that commitment on the GST".

Bill C-70 will not be accepted by Canadians. The only bill that Canadians will accept is the one that completely gets rid of the GST. But the government does not have what it takes to follow through on its promises. The Prime Minister expelled the member for York-South Weston for voting no confidence. I hope that the Prime Minister and his party will be prepared to have the Canadian people vote no confidence in the next election and instead vote for a party that will bring integrity and honesty back into government.

The Minister of Finance has publicly admitted that the government made a mistake in promising to scrap the GST. Yet government members continue to say that no mistake was made. Government members are going in all different directions. The government is unstable and unfit to run this country. Bill C-70 is two inches thick of smoke and mirrors.

The finance minister is only fooling himself if he thinks that this bill is going to solve the GST problem. As the member from Mississauga said, if the government thinks that people have got used to the GST, then the government is out of touch with reality.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, before I get into my remarks, my colleague from Swift Current reminds me that the official opposition is going into a leadership race and that the member for Vegreville may be resurrecting his campaign for that position.

In talking about the goods and services tax and the harmonization that Bill C-70 represents, it is obvious to anyone who has been paying attention to what has been going on for the last few years, particularly since the run up to the 1993 election and since, that this bill is a cruel hoax perpetrated on the people of Canada, particularly the people of Atlantic Canada.

It is a political ploy designed to provide the illusion that the government and the Liberals are doing something about the goods and services tax. It was an issue in the last campaign. My colleagues have gone on all afternoon highlighting the statements, promises and remarks that were made by government members when they were running in the 1993 election.

The bill is designed to give Canadians the impression that the government is trying to make good on an irresponsible promise it should never have made and ought to have known better. I certainly believe that there are many members opposite, including the Prime Minister, as the evidence shows, and including the finance minister, who knew better than to make a promise they could not keep. They knew at the time they could not keep that promise but they went ahead and made it anyway in order to attract electoral support and to convince Canadians to vote Liberal in the last election.

They knew full well the deep resentment that Canadians held for the Conservatives for bringing in the goods and services tax. They knew what a hot button issue it was. They said: "Vote for us, folks, and we will get rid of it". They had no intention of doing that. As a matter of fact, they knew it could not be done. Any responsible Liberal knew it could not be done, but they went ahead and promised it anyway.

Now we have shifted away from kill, abolish and scrap, which was the election promise of so many current MPs who were running for the Liberal Party, and now it is replace.

When I thought about what I might say today, I knew I would have to choose my words carefully. I do have respect for the Chair and for this institution. I do not have a lot of respect all the time for what the government does in the House and what certain members opposite try to say to Canadians.

I have a friend in northern B.C. who has a rather laconic way of describing people who habitually cannot tell the truth, or who habitually lie. He says that somebody who does that would rather lie on credit when they could get cash for the truth. I think that is what we are faced with here. We are faced with a government and high profile cabinet ministers who would prefer to mislead Canadians in an election campaign in order to attract electoral support when they know full well that they cannot live up to the promises they have made. It also shows that the government, time and time again, will put political interests ahead of the best interests of the country. A case in point is this harmonization bill. It is designed to create the illusion that the government is actually doing something about the GST. In fact, it is a billion dollar rip-off for the rest of Canada, those people who live outside Atlantic Canada, and it will hurt the people who live in Atlantic Canada. Many of them have already come to that conclusion.

How many stories have we heard in recent weeks about small businesses having to close? They are telling the government not to proceed. They cannot possibly live with this additional tax. Consumers in Atlantic Canada know this means an additional tax burden on them. It is a hoax. It is not going to make anything better, it is going to make things worse.

Why is the government proceeding with it at this time? Why does it not come clean with Canadians and say: "We made a mistake. We should not have said that we were going to kill, scrap and abolish the GST because we cannot do it. Now, in the best interests of the country, let us balance the books. Let us get rid of the deficit and after that we will slowly start to reduce the GST until we can phase it out altogether". That is the responsible thing to say to Canadians. It is certainly what my colleagues in the Reform Party are saying to Canadians. It is what we believe.

If the justice minister will let us keep our guns, we will find a way to hunt that GST down a couple of years after we balance the books and we will kill it, but not before we balance the books and not before we eliminate the deficit.

This relates to other taxation issues, in that the government collects taxes and fees for services for specific commodities and services with the unwritten promise that those moneys collected are going to be used for the purposes which the government has identified.

For example, 60 cents out of every dollar that a Canadian spends at the gas pump goes to taxation of one form or another. A lot of it is road tax. A lot of that is collected on the basis that the moneys are going to be used to build new infrastructure or maintain existing roads and bridges. You do not have to be a rocket scientist or an engineer to see the state of Canada's infrastructure at the present time. You do not have to drive a great deal to notice the state of Canada's roads and bridges. Yet the government continues to collect hundreds of millions of dollars in fuel taxes designed for roads and bridges. Where does the money go? It goes into the big black debt hole here in Ottawa.

We cannot forget that the government of the day, that wonderful Progressive Conservative Party, which introduced the GST in the first place, said: "We are making a solemn promise. When we introduce this tax we are going to use it to reduce the deficit." Does anybody remember that? By how much did that government reduce the deficit? I do not think there is a Canadian who believes that the Progressive Conservative Party ever intended to reduce the deficit. I do not think there is a Canadian who, at this stage of the game, believes that the Liberals intended to kill, scrap and abolish the GST, even though that is what they solemnly promised to do in the last election.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

There is no question that you cannot read. Read the red book. Read what it says.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, I hear a bit of noise coming from across the way. I see a sea of agreeable faces, but there are two or three who do not agree with me over there.

There are other issues. The fishing licence fees that were imposed on Atlantic Canadians was nothing more than a $50 million cash grab on the part of the Liberal government. The Liberals say this is an access fee. It is in return for the services that are provided to fishermen. What services have they provided? It is nothing more than a tax grab to feed this black debt hole here in Ottawa. There is no intention to match the funds that are received for specific purposes and actually see that those funds are spent in those areas.

In closing let me say one more time that it is time for this government to come clean. It is time for this government to tell Canadians "we should not have made this promise, we are sorry that we have lied to you, we are going to abolish this idea of harmonization".

[The Acting Speaker (Mr. Milliken)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. Milliken)]

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Milliken)]

All those in favour of the amendment will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. Milliken)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. Milliken)]

In my opinion the nays have it.

And more than five members having risen:

[The Acting Speaker (Mr. Milliken)]

Call in the members.

And the bells having rung:

[The Acting Speaker (Mr. Milliken)]

At the request of the opposition whip, the vote on this matter is deferred until Monday at the ordinary hour of daily adjournment.