Mr. Speaker, I must first of all deplore the way the Minister of Finance tabled documents this morning, an hour and a half before his presentation in the House, without our hearing from him in the past three days about his intentions regarding the GST. If this is not a way to circumvent democratic principles, I wonder what it is, especially when such an important issue is at stake.
What strikes me about the finance minister's speech is that we could have taken his old speeches from 1990, for example-the old speeches made by members of the Liberal Party of Canada-and turned them completely around to arrive at this morning's speech. A few years ago, the Minister of Finance was saying the exact opposite of what he said in his speech this morning.
All those who expected the GST to disappear, to be scrapped-as many in Canada and Quebec did and as many Liberal members had been promising for three or four years-will be sorely disappointed. The GST is staying; it is not being scrapped but replaced by another kind of GST. This is in total contradiction with the many oral and written promises made by members of the Liberal Party of Canada.
Allow me to quote just a few of them. On March 11, 1996-not so long ago-the Globe and Mail reprinted this quote by the Deputy Prime Minister:
"I have already said personally and very directly that if the GST is not abolished I will resign".
That is what the Deputy Prime Minister herself said on October 18, 1993.
My second quote, which dates back to the 1993 election campaign, comes from the Prime Minister:
"We will scrap the GST".
To scrap means to eliminate; therefore the GST was to be eliminated, not replaced by another kind of GST to give the appearance of keeping an election promise.
I could give you any number of quotes but I will make do with a last one. On May 2, 1994-not so long ago-the Prime Minister said this: "We hate this tax and we will make it disappear". The GST is staying; the only disappearance is in the price of the product.
The finance minister's new measure is hiding two important things. First of all, some of the figures in the finance minister's speech this morning are hidden; one figure is real, however: the cost of harmonization with the maritime provinces. It is the cost of buying an election promise that was not kept.
The Minister of Finance has paid off the maritimes so that they would help him keep an election promise through shameless window dressing, as we saw this morning. A total cost of $1 billion has not been denied so far. One billion dollars is what Quebecers and Canadians from the other provinces will have to pay for an election promise that was not kept by the Minister of Finance and the Prime Minister. One billion dollars is what this measure is really costing us.
But there is more. It will cost more than the $1 billion they said it will cost us in the next four years. I do not know if the Minister of Finance and his Liberal colleagues have realized this-there are many things they fail to realize-but reducing consumption taxes from 19 to 15 per cent will force all Quebecers and all Canadians from the other provinces to pay more in equalization to the maritime provinces in the future. Did he realize this? No, or if he did, he is hiding this additional cost from the people.
Are these increased equalization costs, which all taxpayers in Quebec and Canada must pay in addition to the $1 billion the Minister of Finance promised the governments of the maritime provinces in the short term, acceptable? Are they acceptable, when we compare this harmonization process, this buy-off of the maritime provinces, to Quebec's treatment in recent years?
Everyone here knows that Quebec's sales tax has been harmonized with the federal sales tax. Quebec is administering this federal tax. Quebec has been a good boy, a good corporate citizen in not demanding any compensation for this harmonization.
Why is Quebec's effort in that area not recognized now? Why is the federal government now dipping in the pockets of Quebecers and Canadians to give $1 billion in compensation to the governments of the maritime provinces, but not to the Quebec government? We were good boys and good girls in harmonizing our tax with the federal sales tax and not asking for any compensation so far. Is that what they call managing the Canadian federation? There is something wrong here.
The new GST is a sneaky tax. It is sneaky because it is hidden in the price of goods and services. I listened to the Minister of Finance who said earlier that, in 1994 and even in 1995 and after, representations had been made to the finance committee by many people who told committee members that they were irritated and upset as consumers to see the GST added to their purchases.
Others warned them against changing four quarters for a buck and hiding taxes.
Let me read what the Liberal majority wrote in 1994 in its report. They said: "It would just not be appropriate to hide from Canadians how much they pay in taxes to their government, and creating a hidden tax would affect their ability to force the government to account for how these taxes are collected and, to a lesser extent, for the use made of public funds".
That is the kind of representations that were made to the finance committee. Most witnesses told us: "First, abolish the GST, and if it absolutely has to be replaced by something else, make sure it not hidden from the public. Let it also be obvious that the federal government is unable to manage public finance properly, which explains why it has to keep dipping deeper and deeper in the pockets of taxpayers in Quebec and Canada". That is what people were telling us. "Show us the true face of public finance".
Instead, the Minister of Finance is proposing a hidden tax. Worse yet, in 1989, in its minority report on the GST, the Liberal minority, which was the official opposition then, wrote that, if the GST were hidden in the sales price, it would make it that much easier for the government to raise it later.
This is what the Liberals held as true in 1989, but now that they are in power, the tax is not supposed to go up? We will have a hidden tax and it will not go up, contrary to what the Liberals held as true in 1989. It is a disgrace to change one's mind so radically and suddenly, at the expense of Canadians.
Even back when they were in better frame of mind and did not have an election promise made by he Prime Minister to keep, Liberals were not the only ones to say that the GST should not be hidden. In 1994, a survey conducted among its members by the Canadian Chamber of Commerce showed that 70 per cent of Canadian businesses were opposed to a hidden tax. That is 70 per cent. If that is not a majority, I wonder what is.
Recently, in February 1996, the Canadian Chamber of Commerce conducted the same survey again, just to realize not only that its members' opposition was holding strong, but also that the percentage of those opposed to hiding the tax in the sales price had
risen from 70 per cent to 76 per cent. Could the message be any clearer? I do not think so. This is hypocrisy on the part of a government that is not able to call things by their rightful name and to show the Canadian reality as it is.
There is a lot of hope in that document. It refers to an agreement reached between the federal government and the three maritime provinces, which account for roughly 15 per cent of the Canadian population, and points out that the idea is to apply these precepts to all provinces. I have some news for the Minister of Finance. A vast majority of Canadians are opposed to the minister's project to establish a single 15 per cent tax to be managed by the Canada revenue commission, which would bump the provinces. This would mean that, in Ontario for example, the tax burden would increase, while in Alberta the commodity tax would go up from 7 per cent to 15 per cent. Canadians unanimously believe that the Minister of Finance is mistaken if he thinks that other provinces will go along with his project.
This unanimity exists particularly in Quebec where, for several years now, Quebecers have been working hard to harmonize the two tax bases and to manage them. Indeed, Quebec looks after the collection and the administration of the GST on behalf of the federal government. So, we worked very hard to achieve harmonization at no additional costs.
The minister was too quick to dismiss the case of Quebec by saying, in his document Towards Replacing the Goods and Services Tax , that: ``Since the harmonization process with the province of Quebec will be completed this year, the government will now work with the other provinces to extend the system to the whole country''. The minister was too quick to dismiss the case of Quebec, because it is one thing to harmonize tax bases, as Quebec is doing, with the project being about 95 per cent completed, but it is quite another to endorse the minister's project to impose a single 15 per cent tax, while the GST and the TVQ together amount to 14 per cent. This project would result in a one per cent tax increase and would push Quebec aside by giving the Canada revenue commission the mandate to administer the new 15 per cent GST. Indeed, there is a difference between the current harmonization process and the finance minister's project.
Given Quebec's history of struggles to achieve autonomy in the field of taxation, particularly since the sixties with Jean Lesage, I can assure you that it will never agree to such a taxation system.
Far from promoting tax harmonization, this project could well undermine efforts made in Quebec over a period of several years to achieve that result. Let us not forget that this harmonization project was implemented with the agreement of both parties and with a lot of goodwill. Today, the Minister of Finance is trying to fulfil an election commitment-but fails to do so because he does not abolish the GST. He comes barging in and says: "We will replace all that; we will ensure that, from now on, the federal government will be the one to manage this tax".
As a Quebecer, I would tell myself that it is not really worth co-operating with the federal government, since we are not paid to do that, nor are we compensated like the maritime provinces, who were paid off. Next time, we will say no and there will be no harmonization process. Quebec will say no. We will not get into a system whereby Quebec will lose its authority to set its own tax rate. Worse still, the federal government will raise the tax rate by one percentage point while the premier of Quebec has been doing everything he can, since he came into office, to avoid increasing Quebec's sales tax by one point, and even by half a point.
We cut where we can. We put a lot into streamlining and consultation, and we should let the federal government interfere and increase the sales tax by one percentage point? No way. Quebec will say no. We should lose the capability to fix our own rate? Quebec will say no. We should allow a federal agency to come in and make decisions on behalf of the Government of Quebec? There is no way Quebec will agree to that. You can expect tension between the federal government and Quebec to build up, when things were going so well as regards the consumption tax.
Why are they acting this way? Merely to get votes and to look as if they are fulfilling their promise, an election commitment the Prime Minister himself-and we have it on tape, as I said yesterday-is unable to keep.
With an election coming up, it is sad to see how the government is describing this election measure, because that is what it truly is, and the whole situation. The government is trying to deceive the population by saying that the GST has been eliminated-poof, as my hon. colleague from Rimouski-Témiscouata would put it-when in fact it is making a big deal out of a minor agreement reached with three maritime provinces and takes this opportunity to say: "As you can see, we can keep our promises". The fact is that they have done nothing to keep their promise. The GST is still here, there is still some friction between the federal government, Ontario and Alberta, and the expected friction with the Quebec government bodes no good.
We find this measure unfortunate. We also disapprove of the way the Minister of Finance and the Liberal government have dealt with this issue.