Madam Speaker, I will avoid the temptation to do anything other than answer the question that I thought was asked and use the time to respond to that question as is intended to be the case at this hour in the House. Let me begin by reminding the House what the Minister of Finance said in his statement on sales tax harmonization on April 23.
Anyone who believes that business in this country does not pass on provincial sales taxes to the consumer is simply naive. Consumers are already paying for the imposition of retail sales tax on business inputs in the form of higher prices. Because of reduced competitiveness for Canadian products in both domestic and international markets as a result of those higher prices, consumers are also paying in the form of fewer jobs and lower wages. There will therefore be no shift in tax burden from business to consumers under harmonization. Canadian consumers are already bearing these costs in one way or another.
In fact, consumers will benefit from harmonization. Competitive market conditions will ensure that businesses pass on the tax savings under a harmonized valued added tax to consumers. This will result in a decline in price on most goods and services they buy. In combination with the lower sales tax rate in harmonized provinces, these price declines will result in lower after tax consumer prices on many purchases and substantial overall sales tax savings to families and individuals.
Removing sales tax from business inputs will also enhance the competitiveness of Canadian goods and services when competing with foreign suppliers in international markets and at home which will benefit individual Canadians through higher and more stable employment and income levels.
Moreover, harmonization will lead to an additional benefit to business and consumers, reduced complexity and tax compliance costs. For business, harmonization will mean one sales tax not two, one tax base not two, one tax rate not two, and one sales tax administration not two.
These savings will be substantial. As much as $700 million in annual sales tax compliance costs will disappear under harmonization on a national basis according to the Canadian Institute of Chartered Accountants. Like the tax savings which businesses will receive under harmonization, these savings will also lead to lower consumer prices and increased economic competitiveness in harmonizing provinces.
The only real consumer costs associated with this issue are those imposed on Canadians in non-harmonizing provinces by governments which continue to cling to inefficient and uncompetitive retail sales tax systems.