Debates of March 20th, 1996

Committees Of The House

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Madam Speaker, I have a second motion. If the House gives its unanimous consent, I move:

That, the following change be made to the membership of the Standing Committee on Procedure and House Affairs: Pagtakhan for Bélanger.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Is there unanimous consent to move the motion?

[Some hon. members]

Agreed.

(Motion agreed to.)

Petitions

[Ronald J. Duhamel, Liberal, St. Boniface, MB]

Madam Speaker, a group of seniors in my riding call on the government to ensure that reforms of seniors' benefits be consistent with the historic commitment of the Liberal Party to elderly Canadians.

The petitioners want adequate income, appropriate health care and affordable housing. I believe they reflect the opinion of most seniors in Canada.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, pursuant to Standing Order 36, I have two petitions to present today. The first petition is from Airdrie, Alberta.

The petitioners would like to draw to the attention of the House that managing the family home and caring for preschool children is an honourable profession which has not been recognized for its value to our society.

They also state that the Income Tax Act discriminates against families who make the choice to provide care in the home to preschool children, the disabled, the chronically ill or the aged.

The petitioners therefore pray and call on Parliament to pursue initiatives to eliminate tax discrimination against families who decide to provide care in the home for preschool children, the disabled, the chronically ill and the aged.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, the second petition is from Burnaby, B.C.

The petitioners would like to bring to the attention of the House that the consumption of alcoholic beverages may cause health problems or impair one's ability, and specifically that fetal alcohol syndrome and other alcohol related birth defects are 100 per cent preventable by avoiding alcohol consumption during pregnancy.

The petitioners therefore pray and call on Parliament to enact legislation to require health warning labels to be placed on the containers of all alcoholic beverages.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Madam Speaker, I have a petition pursuant to Standing Order 36 to present from my constituents in the Kerrobert community and Luseland area. It was circulated prior to the budget.

It calls on the federal government to recognize that Canadians are paying approximately 52 per cent of the cost of a litre of gasoline at the pumps in the form of government taxes. The petitioners do not want to see an increase in taxes in the federal budget because of this high tax. I am happy to present this petition on behalf of my constituents.

[Dave Chatters, Reform, Athabasca, AB]

Madam Speaker, I rise in accordance with Standing Order 36 to present a further 2,400 names to the much larger petition asking Parliament not to increase the excise tax on gasoline.

I realize it is irrelevant to the recent budget, but certainly relevant to next year's budget. I am pleased to present them.

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Madam Speaker, I rise today to present a petition signed by numerous constituents of my riding of Tamil descent. They ask the Government of Canada to take an active role in bringing an end to the turmoil and atrocities from all sides that are currently taking place in Sri Lanka.

The petitioners ask us to assist to bring an immediate ceasefire and peace with justice in that part of the world.

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

Madam Speaker, pursuant to Standing Order 36, I wish to present a petition from my constituents of New Westminster-Burnaby.

I am pleased to point out that their diligent effort has paid off. These petitioners request that Parliament not increase the federal excise tax on gasoline and strongly consider reallocating its current revenues to rehabilitate Canada's crumbling national highways.

[Svend Robinson, NDP, Burnaby—Kingsway, BC]

Madam Speaker, I have here a petition signed by people in Quebec who call upon Parliament to amend the Criminal Code to ensure the right of all Canadians to die with dignity by allowing people with terminal or irreversible and debilitating illnesses the right to the assistance of a physician in ending their lives at a time of their choice, subject to strict safeguards to prevent abuse, and to ensure that the decision is free, informed, competent and voluntary.

[Svend Robinson, NDP, Burnaby—Kingsway, BC]

Madam Speaker, I have a second petition that is signed by residents of Manitoba and British Columbia which notes that the charter of rights and freedoms guarantees that everyone has the right to protection against discrimination and that the Government of Canada has recognized that this includes discrimination on the basis of sexual orientation.

The petitioners therefore call on Parliament to amend the Canadian Human Rights Act to prohibit discrimination based on sexual orientation.

Questions On The Order Paper

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Madam Speaker, I ask that all questions be allowed to stand.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Shall all questions stand?

[Some hon. members]

Agreed.

Motions For Papers

[Paul Zed, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Madam Speaker, I ask that all Notices of Motions for the Production of Papers be allowed to stand.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Shall that agreed?

[Some hon. members]

Agreed.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

I wish to inform the House that because of the ministerial statement Government Orders will be extended by 15 minutes.

Since today is the last allotted day for the supply period ending March 31, 1996, the House will now proceed as usual to consideration of supply bills. As is our custom, do hon. members agree that this bill should be distributed now?

[Some hon. members]

Agreed.

Supply

[Monte Solberg, Reform, Medicine Hat, AB]

moved:

That, in the opinion of this House, the GST should be "killed, scrapped, abolished".

Madam Speaker, Canadians have been waiting a long time to hear this debate in this place. After all, the promise to scrap, axe and abolish the GST was one that the Prime Minister, the Deputy Prime Minister and the finance minister made at various times over the last several years and of course during the election campaign.

After over two years into the mandate of the government, it is more than past time to have this debate. Sadly it is a debate that has to come from the opposition rather than the government which was proposing it during the election campaign.

It was a major campaign promise. In fact, I would argue that it was probably the most important promise that the government made during the 1993 election campaign. Some members across the way who were on doorsteps throughout this country told Canadians face to face that should the Liberals assume power the GST would be history, that it would be gone.

I am not going to make an elaborate argument against the GST. I do not think I have to. Government members have already made the argument for me. They made the argument during the election campaign and even since then.

I would like to run through a chronology of the different quotes that have been dug up from various members opposite to demonstrate there is a huge weight of evidence that the government did promise to abolish, to axe, to scrap, to get rid of, the GST. Today it is fudging on that promise.

By the way, Madam Speaker, I will be splitting my time with the hon. member for Capilano-Howe Sound.

I would like to go back into the public record and point out to the House what was said by hon. members on the Liberal side in the lead-up to the last election campaign and let Canadians judge for themselves and hopefully remind the Liberals and perhaps tweak consciences a bit so that when it comes time to vote they will vote for their constituents instead of voting for the party whip.

Let us go back to 1990. This was in the wake of the GST being brought in by the previous Tory government which had its own undemocratic ways about jamming bills through. I will go back to the Edmonton Journal of March 6, 1990 for the first in a long series of quotes that I am going to use this afternoon.

The Liberal Party would scrap the GST, the current Minister of Human Resources Development pledged in a nationally televised debate with former finance minister Michael Wilson in March, 1990: "The goods and services tax is a regressive tax. It has to be scrapped and we will scrap it".

Let us go to the Windsor Star of November 9, 1990. This is a quote by the current Liberal House leader: ``Not only do the Liberals oppose the GST now, that opposition will continue even if the bill is passed. We are not interested in tinkering with the GST. We do not want it at all''.

From an April 4, 1990 article in the Montreal Gazette : I would abolish the GST''. That was stated by the current finance minister. The current Prime Minister of Canada said in the Montreal <em>Gazette</em> of September 27, 1990:I want the tax dead''.

Let us look at the chronology to see how things change over the course of years. Let us go to the Ottawa Citizen , February 11, 1991: ``I say we will replace the tax. This is a commitment. You judge me by that''. These are the words of the Prime Minister. The words are starting to change.

From the Toronto Star , November 7, 1991:

`Some senators are confused and upset by [the Prime Minister's] inability to consistently say that a Liberal government will scrap the GST', a senior Liberal source said yesterday.

[The current Prime Minister] was accused of flip-flopping after he backed away from a promise to abolish the GST on Monday, saying the tax would be `fundamentally changed' under a Liberal government. On Tuesday [the Prime Minister] was back saying he would scrap the tax after the 88,000 member Canadian Federation of Independent Business released a critical report on the GST.

I have dozens and dozens of quotes. I will obviously have to abbreviate them to get through my entire presentation. Let us skip ahead to the 1993 election year. Here is an interesting quote from the Toronto Star , February 12, 1993: ``The Liberal leader says it could be 1995 before he decides how to keep his promise to scrap and replace the goods and services tax''. We certainly wish it would have happened in 1995 but 1995 has come and gone.

I think a lot of people will remember this quote from 1993, one week before the election. I know the member across the way will remember this one because these are words that live in infamy in the world of the Liberals. This is from the current Deputy Prime Minister appearing on a CBC electronic town hall meeting one week before the election: "If the GST is not abolished under a Liberal government I will resign".

She said "abolished". As the hon. member for York South-Weston has been fond of pointing out about his own government, abolish is not synonymous with harmonize, which is what the Liberals are trying to convince Canadians they were saying during the election campaign. However, that is not the case and Canadians know better.

I want to fast forward a little now to 1994 and then ultimately to 1995 and 1996. Here is what the Victoria Times Colonist said on May 18, 1994:

The federal government will replace the hated GST within two years [the current Prime Minister] pledged Thursday.

Revenue minister-predicts that voters will punish any provincial government that fails to merge its sales tax with a revamped goods and services tax.

"Revamped"? That sounds suspiciously like tinkering with the worst tax ever imposed on Canadians instead of trashing it. If the voters are going to punish any government, it will be the federal Liberals for failing to deliver on a clear, specific election promise.

In fact, when [the current Prime Minister] was trying to entice Canadians into making him prime minister, he said it was the only specific promise he was making.

The weight of evidence is overwhelming and in the court of public opinion Canadians are not only trying this government, they are convicting it. I think they will mete out a very harsh penalty at the next election.

Let us go to the Ottawa Citizen , August 10, 1995: ``The hated GST will be replaced with a new national sales tax in next year's federal budget, the Prime Minister promised Wednesday''.

From the same day, an interesting quote from the hon. member for Mississauga West: "I think the GST is going to become a hot point. I think if we do not do something about it our credibility is gone. People in my riding hate the GST. It is not like one of those mild we do not like it, they hate it. If the GST is merged with provincial sales taxes voters will not be satisfied unless the overall tax take is simultaneously reduced. You cannot just do a little paper switch or move the shell and hide the peanut".

I think that is a wonderful quote and I think it is a perfect analysis of the situation.

Here is an interesting quote from the Ottawa Sun : ``In 1993 the Liberals promised to scrap the Tories' hated GST but so far have not kept their word. That broken promise, stressed the member for Broadwood-Greenwood, is going to come back to haunt them in an election expected next year. It is one word. It is trust''.

The hon. member for York South-Weston said: "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". That came from a Liberal member, a member who went to doorsteps along with all the other members across the way trying to convince Canadians that if they voted Liberal they would get rid of the GST.

Now we have some members who are feeling their conscience. They are coming forward to the media and urging their party that the GST must be scrapped, abolished, axed, as they said it should be during the election campaign. Now we are starting finally to get some debate about that in the House thanks to the Reform Party because obviously the Liberals have not brought this forward to this point and it is not in their interest to do it.

This vote is a chance for Liberal members across the way to throw off the fetters of party discipline, to vote with their constituents and to finally fulfil their promise to get rid of the GST.

[Ron MacDonald, Liberal, Parliamentary Secretary to Minister for International Trade]

Madam Speaker, this is a very important debate. It has transfixed the Canadian public since the previous Conservative prime minister, without consultation with the Canadian public, brought in the tax and barrelled it through the

House of Commons. Clearly there are many of us on this side who understand the veracity of opinion with respect to this tax.

As the hon. member opposite selectively quotes, I remember quite clearly in the red book and during the election campaign we as a party in waiting, one that was soon to have been given the trust of the Canadian public, made it extremely and exceptionally clear what our platform was.

Rather than having to wait until opposition members with selective memories misquoted us, we put down in writing, in black and white, what our policies were.

With respect to the GST we had said in opposition that it was the wrong tax at the wrong time. At that point it was the wrong tax, it was the wrong time and it aided and abetted in the deepening of a recession caused by the previous government's misguided economic policies.

At the time of the election it was very clear to us that we would be faced with an enormous task to try to balance the books, to try to put our fiscal house in order. What we said at the time in the red book, in black and white, is that this government would get rid of the GST and that we would replace it with a taxation system which was easier to administer, fairer to small businesses and which took in the same amount of revenue.

I know my hon. colleague from the Reform Party is an avid reader. He quotes the red book often. It is one of his favourite pieces of reading material.

Would his party support today the abolition of the GST if it knew it would lead to a $17 billion increase in the deficit? If not, would he specifically tell us which programs would be cut which would amount to that $17 billion? Which social programs would be laid to waste? Which transfer programs would he and his party cancel? What would be the impact of those program cancellations be to, for instance, the people of Labrador who are in the middle of an election campaign and who are wondering which party better represents the future for the people of that riding?

[Monte Solberg, Reform, Medicine Hat, AB]

Madam Speaker, the hon. member raises a number of issues. Let me underline that the confusion about what the Liberals said is apparent in his own party. I have quoted things which several Liberal members have said in the last couple of months. These are people who campaigned door to door under the impression that the Prime Minister, the Deputy Prime Minister and the finance minister meant what they said and intended to do what they said. Obviously they feel they have been let down.

The hon. member raised a good question. What would the Reform Party do? The Reform Party would wipe out the deficit and eliminate the GST in stages, unlike the government which is leaving a $17 billion deficit out there. The only thing that can happen when we have a deficit that large is that the government would move toward eliminating all kinds of services to seniors. It is talking about making more cuts to social programs, which it said during the election campaign it would never touch.

We see more broken promises. Quite frankly, we are seeing hypocrisy from that side equalled only by the government before it.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Madam Speaker, Reformers do not really know how the Liberals can or will deliver on their red book promise to scrap the GST. However, it is their problem, not ours.

I remember vividly discussions about the strategy which Reform should follow during the election campaign. The suggestion came up that the idea of scrapping the GST is very popular; it would gain us lots of votes. However, cooler rational heads prevailed and said we could never deliver on that. It is not responsible to go to the people of Canada during an election campaign and say we will get rid of tax revenue worth $17 billion when the country is going bankrupt. Appropriately, we did the responsible thing and said we would eliminate the GST, as the people of Canada want, once the budget was balanced.

The difficulties in which the Liberals find themselves could not have happened to nicer guys.

I will address a question which has not been raised. The defence on the other side is: "We did not say we would get rid of it; we said we would replace it with something else. We would harmonize it". Harmonizing sounds like a good and interesting idea. However, it does not meet the requirements I believe the people of Canada have for a taxation system.

The general idea of a value added tax is supported widely in academic circles. It is a tax which encourages savings and investment. At a low tax rate it would not be too onerous and it would catch people in the underground economy who do not pay taxes. Whenever they spent their money, they would end up paying taxes.

The political process so destroyed the basic idea of a value added tax that it is appropriate it is not called a VAT like in Europe, but that it is called the GST. It is ironic that the cause for this abomination, the GST, this caricature of a value added tax was caused by the Liberal opposition members who sat on this side of the House. I have heard it told repeatedly how it all came about.

In a heated attack by the rat pack, the Minister of Finance of the day, Michael Wilson, without thinking through what he did, gave in to the incessant demands that at least food should be exempted from the value added tax. All the experts who have studied the history of the tax have told us that from that moment on we ended up not having a good GST, not a good value added tax. We ended up with the current abomination because he opened the floodgates

on exemptions which resulted in all kinds of difficulties which now exist. It is they who made it such a hated tax.

I sat through many, many weeks of hearings. Nearly a thousand witnesses told us what an abomination this tax is. Some episodes of how terrible a tax it is stand out in my mind. These difficulties will not be eliminated by harmonization; they will be aggravated.

The most memorable event was when a gentleman came to testify before the finance committee with a shopping bag full of cancelled receipts from his store. He runs a used goods store in Toronto. His business had shrunk by over one-half. He said: "People see a price of $100 on a used refrigerator. They say that is what they want and to ring up the sale on the cash register. The sales attendant hands a bill of $107 to the individual who says that he wants it for $100. We tell the customer there is GST on it. After a long debate which really irritated and made all the customers in the store mad, the individual gave up and said to cancel the sale and take back the refrigerator".

It was a most dramatic representation. The store owner said it was not an isolated incident. The receipts he had in the bag all had been cancelled within six weeks. He said: "It has been going on like this. My business is being wiped out. Where do these people go? They go next door, to smaller stores, to entrepreneurs who are less honest than I am and they end up not paying the GST". This is just one example.

We remember the difficulties of paying GST when we buy five muffins but not if we buy six. There were representations from restaurant owners who told us they cannot stand the competition. When they sell a pizza they have to charge GST on it. However, someone can go next door to a supermarket where the pizza is all made for them and all they have to do is pop it into an oven and they do not have to pay GST. That is highly unfair.

There are other things that are not very well known. The municipal sector is given special treatment. That sector does not have to pay GST. Fine, but consider that it has been found that some functions carried out by municipal workers can be achieved more efficiently and cheaply by contracting to the private sector. Lo and behold, when municipal employees collect the garbage there is no GST but when it is contracted out, there is GST. There is a tax on privatization. Is this right? This is highly inefficient.

We heard horror stories about the way in which the GST encourages the underground economy. Many conferences have been held and papers have been written on this subject. There are stories.

We hear about people who order a wing built on their house. They are given two prices, one with GST and one without. They

can pay by cheque if they wish or alternatively, they can pay by cash which will cost 7 per cent less. As we heard again and again in the finance committee, the people who offer these dealings not only fail to pay the GST, but they probably do not report the income from their work either.

We heard horrible stories about businesses being affected by a strange ruling. Natives are not subject to the GST. A store located outside the border of a reserve used to be quite profitable selling candy to children from the native reserve. It was doing fine, thank you. Children coming home from playing baseball would buy candy. Now the store is not able to compete any more. Somebody has opened a store on the other side of the border and does not pay any GST.

To summarize my point, the government is holding out the hope that all the difficulties existing with the GST, which the people hate so much and which we heard so much about in the finance committee, can be wiped out by harmonization. That is not going to be possible because of the abomination of having so many different exemptions to the tax. It is a terrible tax that cannot be saved. That is the conviction I have reached.

I therefore move:

That the motion be amended by deleting the word "should".

[The Acting Speaker (Mrs. Ringuette-Maltais)]

The amendment is in order. On questions or comments, the hon. Parliamentary Secretary to the Minister of Finance.