The Liberal government has negotiated with three of the Atlantic provinces an agreement combining the provincial sales tax and the GST into a single national sales tax. The new tax will amount to 15 per cent. Current tax rates in the Atlantic provinces are quite high: 12 per cent in Newfoundland and 11 per cent in Nova Scotia and New Brunswick.
So, the federal government has forced these provinces to bring their tax rates down to 8 per cent, and to this end, their service tax base was broadened. The cost of this whole operation, or $961 billion, will be borne by the federal treasury.
The federal government will also look after collecting the tax. For this purpose, a national revenue commission will be created to take over the administration of the unified tax from the Atlantic provinces by January 1998. This is an attack in due form, aimed at eventually taking over all tax collection in Canada. The actual amount of the tax will be hidden in the sales price but will show on the bill. The government is creating a hidden tax, which will make
it easier to raise it later on. The minister also introduced a stringof technical changes to the GST that only an expert could make sense of.
Regardless of the actual words used in the Liberal's red book, the fact remains that a promise was broken. Two Liberal members, namely the hon. member for York South-Weston and the hon. member for Broadview-Greenwood have left the Liberal caucus, and this does them credit. They were strongly supported by their constituents in making this decision. There are at least a few members who stand on their own two feet. The same cannot be said about the Deputy Prime Minister, but at least some still do.