Mr. Speaker, the hon. member for Huron-Bruce raises an important question.
On April 23 the Minister of Finance introduced over 100 measures to streamline the operation of the GST. One important simplification was the elimination of the notional input tax credits and the introduction of a change in approach for used goods.
The credit allowed dealers to claim 7/107ths of the price they paid for used goods. It was assumed that the full credit was passed on to consumers. However many consumers felt that this was not always the case.
The notional input tax credit system was criticized for being overly complex and susceptible to abuse. The tax will now be applied on the net difference in price when a consumer trades in a used good as partial payment for another good.
The new system for trade-ins is easier to understand and limits tax compounding. The new rules came into effect immediately so that consumers would not delay making decisions on the trade in and purchase of automobiles. Such a delay may have led to revenue losses during any transition period for businesses in this sector. Delaying implementation may have also led to further fraudulent activity.
In further response to the member's comments with respect to harmonization, he is absolutely right. A move toward harmonization in all provinces in this country will help to alleviate and eliminate the sort of problems he outlined.