Debates of April 23rd, 1996

Goods And Services Tax

[Michel Gauthier, Bloc, Leader of the Opposition]

Mr. Speaker, this is not economic compensation for a problem created by the federal government; it is political compensation.

It is very easy to understand. If consumers in the Maritimes are asked to pay less sales tax in order to participate in the minister's proposal, and the federal government pays out $1 billion in compensation for this tax Maritimers will no longer have to pay, this is tantamount to saying to the people in the other provinces:

"Pay up $1 billion now, so the people in the Maritimes can pay less sales tax". This is what everybody understood.

Will the Minister of Finance confirm that the government's propensity to centralize everything including the collection and management of the GST and sales tax will cost Quebecers some $250 million?

[Paul Martin, Liberal, Minister of Finance]

Not at all, Mr. Speaker. First, costs are being shared between the federal government and the governments of Nova Scotia, New Brunswick and Newfoundland. In other words, the costs are shared more or less equally for four years. The adjustment payments will stop at the end of the four years.

Clearly there is a structural change. We are sharing the costs of these changes, because all of Canada will benefit when we create more jobs in the Maritimes, which will certainly be the outcome.

Second, the idea of centralization is perfectly ridiculous. The federal and provincial governments are joining together to reduce the burden on the taxpayers in these provinces and to reduce administrative costs.

Representatives of Canada's accountants' association have said this streamlining will save taxpayers $100 million. They have said that Canadian firms could save as much as $700 million, if we could do the same thing. This is a lot of money, and I think it is worth it.

Now, with the basic point the member is making is that taxpayers in the other provinces should not help in the case of structural change, for example, he is in fact denying the principle of equalization payments, which benefit Quebec enormously.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, if the Minister of Finance has any reason to excuse himself to the people of Canada, on behalf of his party, it will be for having made political hay by promising abolition of the GST and then not making good on the promise. That is what he ought to do.

This morning, the government decided to disguise the sales tax by hiding it in the price of goods and services. Yet, while in opposition, the Liberals stated in the dissenting report of 1989 that "if the GST is camouflaged in the price, it will be far easier for the government to raise it later on".

My question is for the Minister of Finance. Does the minister acknowledge that, through his operation this morning, all that he has done to make people think that he was eliminating the GST was to hide it in the price of goods and services.

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, it is obvious that the hon. member does not understand the plan. It is perfectly visible. The tax will be on the bill when the purchaser's bill is rung up. It is visible. There is no intention whatsoever of hiding anything at all. I trust that the hon. member now understands.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, on the bill or not, the Prime Minister's commitment, the Minister of Finance's commitment, their party's commitment, was to abolish the GST. The Deputy Prime Minister even laid her seat on the line, as did some other Liberals at election time or shortly thereafter.

Will the minister admit that what he is proposing at last to the people of Quebec and of Canada is what he condemned loudly not so very long ago, disguising the GST in the price, where it will be far easier for the government to raise it from time to time without the public's noticing?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, first of all, the tax will not be disguised, it will show on the bill. Second, in the negotiations with the Atlantic provinces, agreement was reached on a mechanism for changing the tax, if a change in the tax was wanted. This means that it will be even harder to raise it. It will require a consensus among the provinces.

I have one other point to make. The hon. member believes that, instead of an integrated federal-provincial tax, instead of implementing in the Maritimes a tax system similar to what there is in Quebec, he is saying there should be a totally different tax, that Quebec should be pushed aside.

I can tell you that, at the meeting of finance ministers, Quebec asked us to really respect their desire to have a tax that can be harmonized with the Quebec sales tax in order to have a uniform tax, for that will be to Quebec's benefit. The hon. member ought to ask his head office if that is what is wanted.

Liberal Party

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, on page 92 of the Liberal red book the Liberals promised "more free votes will be allowed in the House of Commons".

This promise is made in a paragraph which also promises MPs a greater role in drafting legislation through House of Commons' committees. It is obviously talking about a free vote on government legislation, not private members' bills.

There have been some free votes on private members' bills in this Parliament and previous Parliaments, but this Prime Minister has steadfastly refused to allow even one free vote on any government legislation.

When will the Prime Minister live up to his red book promise and allow free votes on government legislation?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, I would like to know how many free votes the members of the Reform Party have had lately.

When some members of the Reform Party expressed disagreement about some of that party's policies which were completely unacceptable, they were humiliated in their caucus by the rest of the caucus because they were more moderate and made more sense.

We have had more free votes in this House than ever before. However, when it is a question of confidence in the government, when one has no confidence in the government, then just like the Reform Party, one is in the opposition.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, there is a disgusting pattern emerging in this type of answer.

First we have campaign promises: scrap the GST, free votes in the House of Commons. Then we have the red book interpretation, modification, qualification. Then we have the government's action which is something else again. We end up having a simple, clear promise broken and public trust in the government broken. There is no integrity here.

Is it now the government's position not to allow free votes on government legislation?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, I would like to talk about the member keeping his word. The leader of the third party said in 1990 that he called for the election of Reform Party candidates who would rip out the GST. That was in 1990.

In 1991, the leader said that the GST could not be repealed immediately because it would increase the deficit. I am only in 1991. Now I have to move to 1992.

The Reform changed its position yet again, saying that it would reduce the GST in stages after, only after, the budget was balanced.

I compliment him for his great statement: "We commend the government on its attempt to harmonize the tax with the provinces".

[Some hon. members]

Hear, hear.

[Preston Manning, Reform, Calgary Southwest, AB]

Mr. Speaker, the question is on free votes. No amount of going around the mulberry bush, no amount of false bravado from the members, will avoid the fact that the question is on free votes in this Parliament.

The Prime Minister is showing the same contempt for question period that he has shown for democratic representation in disciplining the member for York South-Weston.

Liberal spin doctors said that the member for York South-Weston had to be disciplined because he voted against the government, not because he voted against the GST. They implied that if the member had simply voted against the new GST legislation the punishment would not have been necessary.

Let me put this theory to a little test. Will the Prime Minister allow his MPs a free vote on the GST legislation that the finance minister introduced this morning?

[Jean Chrétien, Liberal, Prime Minister]

Mr. Speaker, we have many bills in this House-

[Some hon. members]

Yes or no, yes or no, yes or no.

[The Speaker]

The right hon. Prime Minister.

[Jean Chrétien, Liberal, Saint-Maurice, QC]

Mr. Speaker, we have seen the Reform day care program.

We had many votes in this House where sometimes members did not vote with the government. There were many votes. I did not ask them to move to the other side.

I had some discipline. It happened to the former Reform whip who is sitting there, or he was yesterday, who has been changed because he disagreed. We have discipline in the party.

When there is a vote in the House of Commons and the question is: "Do you have confidence in this government?" and if you have no confidence in the government, that means that you are no longer a member of that party.

It has been a British tradition for 400 years. I have to tell the member of the third party that a vote of non-confidence in the government leads to what happened.

I have no lessons in democracy to learn from the Reform Party. Yesterday the leader of a party was recognized by the Speaker to ask one question and the Reform Party wanted him to shut up. That is the type of democracy they are preaching.

Unemployment Insurance Reform

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, my question is for the Minister of Human Resources Development.

On Saturday, more than 5,000 people from Quebec and New Brunswick, including Acadia, rallied in Rivière-du-Loup as 117 churches in eastern Quebec rang their bells to protest the proposed unemployment insurance reform. The archbishop of the Rimouski diocese himself recently took a stand against the plans concerning

seasonal workers, which he described as a serious threat to the very survival of the regions.

In light of the massive opposition to the unemployment insurance reform and, particularly in the regions, to those rules that severely penalize seasonal workers, does the minister not agree that the best thing to do would be to withdraw this bill and draft a new one in partnership with those concerned, providing for a true reform of the unemployment insurance system?

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, for two years now, we have been trying to overhaul the unemployment insurance program, or employment insurance program, as it is now called. During these two years, hundreds of groups, organizations, companies and individual citizens were consulted and, since December, when the bill was introduced in this House, presentations have been made and briefs submitted by all kinds of people from every region.

Some people were worried and they expressed their concerns to us. Over the course of a few weeks, the committee to which this bill had been referred heard a number of witnesses, who, again, expressed their views, concerns and worries.

Meanwhile, government members were diligently looking at ways to resolve grievances and claims that were recognized as legitimate. Out of this committee study came amendments that will cost the employment insurance program some $365 million.

These amendments will address the issue of benefits paid on the basis of the number of weeks worked and, in part at least, the problem with the intensity rule, by excluding households making less than $26,000 a year, as well as, to some extent, the issue of the dividing factor used in calculating the benefits to be paid to recipients.

That said, I must admit that we did not achieve perfection. And whatever was achieved, we achieved without any help from the opposition.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, the opposition was consistently shoved aside, and this point will be made over the next few days. What is important to remember is that, regarding the number of hours worked, the researchers who advised the minister-if only he had followed their advice-said: It is a leap in the dark. There are huge problems and, in what he just said, the minister only addressed a reduction in cuts.

My question to the minister is the following: Does he not realize that because he has not heard what all sides had to say and consolidated all the information, hundreds of thousands of families, in fact millions of people, will be hit very hard by his reform in years to come? Does he realize that this reform could even have serious social impacts?

[Douglas Young, Liberal, Minister of Human Resources Development]

Mr. Speaker, we have done our very best to listen to everyone who had anything substantial to say. The problem in this whole process, as those who attended committee meetings and followed our hearings soon realized, is how widely divergent the views held by the various witnesses were.

As far as those responsible for creating jobs in this country are concerned, namely small and medium size businesses, the original act, let alone the amendments, went much too far and was way too flexible. For the Canadian Labour Congress on the other hand, we were much too strict and demanding.

In a situation like this one, the role of government is to try to strike the happy medium and find solutions which, as far as possible, meet the chief requirement, which is, in this case, to help those in need.

I would like to stress the fact that, if there were problems in committee, if some suggestions were overlooked, it is because we did not manage to address every representation that was made. But for the most part-

[The Speaker]

Time is slipping away. I would ask both the person asking the question and the person answering to please condense their remarks.

Taxation

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, the government's harmonization agreement is a half-baked national embarrassment. It is no wonder that the member for Broadview-Greenwood decided to take the high dive from the Liberal caucus.

Not only does this agreement take $1 billion from the many to give to a few Liberal politicians-and I notice that Brian Tobin is here to get his hands on the spoils today-it obviously breaks the Liberal promise to scrap, kill and abolish the GST.

Why is the government laughing in the face of voters by failing to fulfil its promise to scrap the GST?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, I dealt with that part of the member's question in my remarks this morning. I said that we were right to criticize the GST. The timing was wrong, it caused duplication and tremendous costs were imposed on business.

I also said in my speech this morning that we were mistaken in believing we could bring in a new tax immediately that would not cause a distortion to the economy. In fact we went through two and one-half years of very hard work. The House of Commons finance committee heard over 500 witnesses and considered 700 briefs. We

looked at a series of over 20 alternatives before coming down with this which is by far the best public policy.

The hon. member can continue along this vein as long as he wants but what is painfully evident is the lack of substance in the Reform Party's questions. The issue is that the Reform Party has stated that it supports harmonization. Does the Reform Party want to deal with the substance of the issue or in fact deal with what Canadians want?

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, the member knows that the Liberals ran on the promise to scrap the GST. That is the only reason many of them are here today. Not only that, they fought the Mulroney-Wilson plan to hide the GST. They called it a job killer. Now the revenue minister is saying it is a job creator. They laughed at the Tory attempt to harmonize the GST. The member for York South-Weston was right: power does change people.

If the GST was bad then, why is it not bad now? Are the Liberals saying that Brian Mulroney was right?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, when the Reform Party said that it supported harmonization in its response to the finance minister, were Reformers saying that Brian Mulroney was right?

The fact is that at the time the Tories did it we talked about it. We were in the middle of a depression. They brought in a tax that was not harmonized and no sufficient attempt was made to do so.

We have brought in fundamental tax reform in Atlantic Canada, something that is going to give Atlantic Canadians a far greater chance to export and to create jobs. We have set in place a process that is going to allow other provinces to come in. We are in the process of changing the nature of fiscal federalism for the benefit of this country. The Reform Party ought to deal with the substance of it.