Mr. Speaker, I thank the hon. member for Prince George-Bulkley Valley for his question.
The GST is not the single greatest cause of the underground economy. The GST is 7 per cent. A much higher tax is the personal income tax which is 54 per cent in Ontario.
If people were going into the underground economy to avoid taxes otherwise payable, they would have a 54 per incentive to do it in the personal income tax system, which I happen to think is at the ceiling of what can be charged and should come down as opposed to a 7 per cent tax incentive to do it on the GST.
When this tax is harmonized with various provinces, when compliance with the tax has been made more simple for small business, when the tax is included in pricing so it is fairer to consumers, it will be an even better tax. I know the member will support those provisions because they will cut down the cost of public administration, help small businesses and help consumers. It will be in the interests of all of us.
The member asked if I am not interested in finding ways, whether they come from the Bloc or not, of increasing taxes. We are interested in finding fair ways to ensure that the tax burden is shared. We want to get rid of the underground economy. It is not fair to those who are paying their taxes that there are some people who might be abusing the system and not paying their fair share. This is one of the big areas on which we want to clamp down. The minister mentioned ways in his budget and there will be other measures coming forward in the future.
We want to end abuses that take place through the use of offshore companies just as Bloc members suggest. However, they have come up with a whole new system: offshore profits must be taxed at full Canadian rates. We would be the only country in the world that was doing this. What would happen to Canadian based multinationals? What jobs would flow out? Are they going to do this for Quebec based companies in their next budget? They would be insane to and they will not do it. I will make that prediction.
If some companies are abusing the system, such as using unfair transfer pricing or not having fair market value attributed to goods and services, then we will come down on those companies, be they Canadian or foreign owned, like a ton of bricks. That is our promise.