Debates of Nov. 28th, 1997

Canada Co-Operatives Act

[Some hon. members]

Agreed.

[The Acting Speaker (Mr. McClelland)]

Accordingly, pursuant to agreement made earlier this day, Motion No. 2 is deemed to have been proposed and seconded.

[John Manley, Liberal, Minister of Industry]

moved:

Motion No. 2

That Bill C-5, in Clause 302, be amended by replacing, in the French version, paragraphs 302(24)(a) and (b) with the following:

“a) soit cinq ans après ce jour;

b) soit à tout moment, mais au plus tard dix ans, après ce jour, tel qu'il est mentionné dans les statuts de la coopérative.”

[The Acting Speaker (Mr. McClelland)]

The question is on Motion No. 2. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

(Motion No. 2 agreed to)

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

moved that Bill C-5, an act respecting co-operatives, as amended, be concurred in.

[The Acting Speaker (Mr. McClelland)]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[An hon. member]

On division.

(Motion agreed to)

Canada Pension Plan Investment Board Act

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, the leaders of each party have consulted and I must advise you that unfortunately it was impossible to reach an agreement pursuant to Standing Order 78(1) or 78(2) concerning proceedings at the report stage and at the third reading of Bill C-2, an act to establish the Canada pension plan investment board and to amend the Canada Pension Plan and the Old Age Security Act and to make consequential amendments to other acts.

Pursuant to the provisions of Standing Order 78(3), I give notice that a minister of the crown will be presenting a motion on time allocation at the next sitting of the House in order to assign a specific number of days or hours for the debate at those stages and for the decisions required to dispose of these stages.

[Some hon. members]

Shame.

[The Acting Speaker (Mr. McClelland)]

It being 1.33 p.m., the House will now proceed to the consideration of Private Members' Business, as listed on today's Order Paper.

Goods And Services Tax

[Wendy Lill, NDP, Dartmouth, NS]

moved:

That, in the opinion of this House, the government should consider the advisability of increasing literacy in Canada by removing the Goods and Services Tax on all reading materials.

Mr. Speaker, it is a pleasure and privilege to rise today to put forward Motion No. 93 which reads as follows:

That, in the opinion of this House, the government should further contribute to increasing literacy in Canada by removing the Goods and Services Tax on all reading material.

Since the GST was introduced in 1990 under the Conservative government of Brian Mulroney and implemented in 1991 the people of Canada have been subjected to a 7% tax on all reading material. That includes books, children's books, magazines whether at the news stand or by subscription, and newspapers. In fact all reading material.

The GST is the first federal tax on reading in Canada's history. Provinces have never taxed books. Every time someone opens their wallet to buy a magazine or a novel they pay an extra 7¢ on the dollar to the federal government. Post-secondary students who buy their own books must pay tax. Literacy learners who mostly buy their own materials must pay tax. Tutors in literacy are also affected. Canadians purchasing books for self-health purposes and to further their knowledge must pay tax. Parents who buy their children books must pay tax.

We recognize there are GST credits and other educational credits for students, but these do not make up for the fact that we tax textbooks. We are talking about a tax burden on a fundamental activity which people the world over take part in and benefit profoundly from, reading, something very simple, something very intimate when shared.

I had the honour of attending the public readings of the governor general literary award winners last week. It was a very special event to be involved in a public reading. We all know reading is something quiet and restorative. It helps us to connect with ourselves and link up the outside with our inner selves. It is a healthy, nurturing and calming pastime.

Unlike our national sport, fights never break out in groups of readers. Reading is educational, sustainable, non-polluting and non-violent, an A1 activity. Yet we are being taxed by the federal government for the privilege of engaging in it.

I would even go so far as to put forward the radical idea that reading is an important cornerstone of the country's culture. If writing is so then reading must also be.

In 1960 the O'Leary royal commission asserted that magazines and newspapers were the most important publications in creating a Canadian culture and sense of identity:

So far as the written word is concerned it is left largely to our periodical press, to our magazines, big and little, to make a conscious appeal to the nation to try to interpret Canada to all Canadians, to bring a sense of oneness to our scattered communities.

One does not have to be reading a 400-page novel by Jane Urquhart or David Adams Richards. One can be enjoying a favourite column in the newspaper or the weekend funnies.

My children still love to pour over magazines which advertise toys at Christmastime, reading every word about the toys they are interested in over and over and over so that they can conjure up a perfect picture in their minds of how wonderful that toy will be when they finally see it under the Christmas tree.

Magazines and newspapers are the reading material of choice for young Canadians and new learners. For someone young or old trying to crack the barrier between the non-reading and the reading world, magazines provide a colourful, picture filled non-threatening and potentially successful journey into the world of print.

Reading is thankfully something which Canadians continue to engage in despite the barrage of audio visual images coming at us at all hours of the day and night. Reading, however, like many other good things in our cultural and physical environment is somewhat on the endangered list and not helped along in the least by the GST.

Canada has a very high illiteracy rate. One if five Canadians tested in a recent international literacy survey could not understand the label on a bottle of aspirin well enough to know the safe dosage. When provided with a nutritional analysis, only one out of four Canadians could calculate the percentage of calories that came from fat in a Big Mac.

On September 12, 1997 the Globe and Mail quoted the Minister of Finance as saying: “I can't see how taking the tax off books is going to stimulate literacy”. The Minister of Finance continues to contend that literacy is not a financial issue and therefore, I guess, somehow not his responsibility.

This kind of thinking is very disturbing because it indicates that he either does not understand his own job or he is flailing about for any excuse to denounce the Don't Tax Reading Coalition's ongoing campaign.

I will try to take him through it step by step. The GST makes reading material more expensive. Reading is the foundation of literacy so literacy in this case is entirely the responsibility of the minister.

Clearly the best way to promote literacy is to ensure no obstacles are in the way of those who are trying to achieve it. Anything that makes books more expensive, for example a 7% federal tax, is certainly a large obstacle.

An international survey done in 1996 found that 97% of Canadians who achieved the highest literacy levels had more than 25 books in their homes. Only 50% of those in the lowest literacy levels had more than 25 books in their homes.

The GST prices reading materials out of reach of low income Canadians. It is truly regressive for that reason. Relatively speaking, lower income Canadians spend a larger amount of their income on reading materials than those of higher income Canadians. The government's own data say so.

Why should the Minister of Finance care if we are a nation of bookworms? After all, it is the age of the Internet and computers. Why not toss out the idea of reading along with the time honoured belief in universal health care and pension plans?

Why do we want to be literate? Because it is good for business. Britain, Japan, Australia, Ireland and the United States do not tax books. They know that strong literacy skills are essential in the modern workforce. Strong literacy skills are even more essential in this technologically driven era. Bear in mind, one has to be able to read to use the Internet. Canada's ability to train and redeploy its workforce to compete internationally is hindered by inadequate literacy skills.

Senator Joyce Fairbairn opened an international policy conference on adult literacy in November, saying on behalf of the Minister for Human Resources and Development:

A highly skilled literate workforce is crucial to a strong and internationally competitive economy as industrialized countries around the world fight to maintain and expand their share of high wage jobs.

Decision and policy makers have to take literacy seriously because the information society and the global economy require individuals and economies with high literacy and numeracy skills.

Today's new jobs require highly literate workers. Literate adults and senior citizens will be far better equipped to maintain their independence and quality of life in the future, thus lessening the need for social services.

The percentage of unemployment decreases as the literacy level decreases. The Minister of Finance and his government should surely be interested in these facts. He should also be interested in the stunning impact the GST has had on the Canadian publishing industry.

Within the first three months the GST was introduced, book sales dropped by 14% and the market has never really recovered. The used book trade has dropped even more sharply from 15% to 20%. Magazine sales are down 15%. Newspaper circulation is down 5%.

During the most recent recession of the early 1980s and every previous recession in Canadian history sales of reading materials have increased but not this time. It is astounding to think of the revenues that have been lost because of this regressive tax.

Writers' royalty earnings dropped significantly due to the imposition of the GST. We should think of the legions of artists, printers, book sellers and publishers who are no longer working because of the plummeting fate of the publishing industry.

The Government of Ireland, incidentally, tried a tax on books 10 years ago and withdrew it after six months because it was having such a negative impact on sales, but not our government.

Let us consider the astounding economics of book publishing. The authors of children's books currently gets 5% royalties on the sales of their creations. The government gets 7% in tax. Yes, the government is earning more than the writer while the publishing houses continue to tread water with the odd infusion of funds from a beneficent government.

The impact on the magazine industry with the imposition of the tax has been profound as well. Many consumers simply would not remit the GST on their subscription renewals. Magazine publishers have had to remit the 7% even if they have not collected it.

All of this reminds me of a story in Jewish folklore found in a letter to the editor of the Globe and Mail from a Charlottetown reader. It is about a mythical town of fools. In one story the citizens of the town discover that a storm has left a wide crater in the middle of their main street and they fear that passers-by will fall in and break their legs. After much discussion they decide not to fill the hole but to build a hospital beside it.

Rather than removing the GST from the sale of books Ottawa is throwing life rafts to the publishing industry and the Canadian literacy program. What we need to do is empower the consumer. Take the 7% stranglehold off the book marketplace and then the demands for and sales of books will rise. That is what is really needed to benefit the publishing industry.

Finance claims that the general public has become accustomed to GST on magazines and books. But the Don't Tax Reading Coalition to this day gets hundreds of phone calls, letters and petitions complaining about the GST. People hate the principle of paying tax on reading. Books are for learning and improving. They are not cash cows. Eighty-three per cent of Canadians are on record as opposing a tax on reading.

I say to the Minister of Finance that it is time he filled that hole caused by the devastating tax on books. It is time to do the right thing, do what the Liberals promised before the 1993 election at a policy conference chaired by the Minister of Finance. As well during the election and after the 1993 election the Liberals promised to reaffirm the historic principles embodied in the tax free status of the printed word and remove the GST from reading materials. The prime minister said so himself.

We recognize that the government has tried to reduce the impact of GST on books by offering tax rebates to municipalities, schools and qualifying literary organizations, but these rebates are only for institutions. What about the individual consumer?

Taxing books deals a crippling blow to our fight against illiteracy. If want to be a country that reads, then we must eliminate the tax on books.

In closing, I would like to read from a well loved and respected Canadian children's writer, Sheree Fitch, on the topic of GST:

On the road to Lunenburg A village by the sea I met some politicians Here's what they said to me; This is the road to Lunenburg We're committed to literacy I said I know you really care... So...what about reading and the GST?

On the road to Heart's Content In the middle of Newfoundland I met a group of children Here's what they said, off hand; We really like your books miss, We really like them a lot Where do we go to get them? Two dollars is all we got.

On the road to anywhere In the middle of the galaxy, I met a child who always smiled Here's what she said to me; Yesterday I saw the moon It wasn't in the sky It was in a book—it sounded round The gold got in my eye. You see—I learned to read, miss. Isn't it grand? I never knew it possible To hold the moon in my hands I never knew it possible To hold the moon in my hands.

In closing, I believe it is time we tackled the problem of literacy in our country by taking the tax off the printed word. It is time we took the tax off our country's imagination.

Mr. Speaker, I would like to put forward a request for unanimous of the House to make this motion votable.

[The Acting Speaker (Mr. McClelland)]

Does the hon. member have unanimous consent?

[Some hon. members]

No.

[The Acting Speaker (Mr. McClelland)]

Resuming debate.

[Tony Valeri, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, the government is firmly committed to supporting literacy. The question has always been how can we do this without jeopardizing the hard won progress that we have made in getting the nation's finances in order.

It is quite clear that any measures taken must be effective and in fact fiscally responsible. That is why the government has introduced an initiative that rebates 100% of the GST paid on books to public libraries, schools, universities, colleges and other bodies which promote literacy.

This means that there is no GST on any books distributed freely for use in primary or secondary schools or other educational settings. This also results in tax relief on books, not only for structured learning in our schools and colleges but also for life long learning through public libraries and front line literacy groups.

The GST rebate on books recognizes the important role played by educational institutions and community groups in helping individuals get the tools they need to learn how to read. In addition, it is an efficient and responsible investment. Targeting assistance for front line literacy groups will certainly ensure a greater impact for every dollar of expenditure.

The special rebate complements government initiatives announced in the 1997 budget to support learning and education in Canada. And this year funding to the National Literacy Secretariat will rise by 30% to $30.3 million, creating more opportunities for individuals to improve their literacy and communication skills.

For students the education credit has been increased to recognize the non-tuition costs of schooling and the tuition credit has been expanded to cover not only tuition fees but also mandatory fees imposed by post-secondary institutions for educational purposes. In addition, students are now able to carry forward any unused tuition and education credits to be applied to future income.

Further, the annual contribution limit for registered education savings plans has been doubled and parents are now able to transfer that unused RESP into their registered retirement savings plan. Furthermore, the Canada Council provides support to Canadian authors and assistance is available to Canadian publishers through the Department of Canadian Heritage.

There are a number of ways that the government has taken on the initiative of literacy and is ensuring that the expenditures being made are targeted to front line literacy groups so that we can ensure that individuals who are most in need of literacy assistance will get it through the tax and rebate that we have provided through the GST.

Quite clearly the government does not claim that targeted tax relief will answer all the challenges that we face with respect to literacy and education. However, we are certainly convinced that these measures will go a long toward supporting efforts to improve literacy levels in communities across Canada. The Prime Minister, the Minister of Finance and all members of the House are committed to ensuring that literacy is a priority for the government. It is a priority which is reflected when we speak with Canadians.

I think the agreement in the House is perhaps how we will achieve the goal of increasing literacy in this country. We feel we have balanced that approach through our tax expenditure and will continue on that track to ensure that Canadians are well served by the expenditures the government makes.

[Rahim Jaffer, Reform, Edmonton Strathcona, AB]

Mr. Speaker, I rise in the House to speak on Motion No. 93, which reads:

That in the opinion of this House, the government should consider the advisability of increasing literacy in Canada by removing the goods and services tax on all reading materials.

I applaud the member for Dartmouth for presenting this motion. My constituency of Edmonton—Strathcona is home to the University of Alberta, an institution that is poised to become one of the finest in Canada. So I can appreciate how important it is to address the question of taxes on reading materials.

In fact, I even support the argument presented by the hon. member that the GST on books and other reading material works to discourage reading. As the cost of books and reading materials goes up, the demand goes down. That is the irrefutable law of supply and demand.

I am surprised to learn, however, that the member from the New Democratic Party has embraced such an important free market concept. I wait eagerly for the day when the NDP caucus stands in solidarity in the House and declares that taxes kill jobs. It will be a great day for Canada.

At the heart of the motion is the claim that taxes can create perverse incentives. In this case it is argued that taxes on books discourage people from purchasing books. This was not the intended purpose of the tax but the unintended and unseen consequences of the tax.

This argument is completely valid and it is an argument that has been made throughout history by many great scholars. It was an argument made by 17th century satirist Frederick Bastiat in his classic essay What is Seen, What is Not Seen , and it is an argument that is being made today by Nobel prize winning economists like James Buchannan and others.

What I find curious, however, is that while the members of the New Democratic Party understand the principle of supply and demand when it applies to books, they do not understand this principle in other applications.

For instance, when Reform argues that increases to the CPP contributions are a tax on jobs, the members of the NDP seem confused. However, when the cost of labour goes up, demand for that labour goes down. Taxes kill jobs.

When the cost of books goes up, the demand goes down. It is a very simple law of economics that has been proven over the course of history.

Let me provide the House with another example. The Liberal government taxes consumption at 15%. That means that when we spend our money we are now paying about 15% in taxes on average. When we save our money we are taxed at 54%.

This is another example of the perverse incentives which taxes can create. The incentive in this case is not to save. With the state of our CPP, encouraging Canadians not to save is a very bad idea, and yet I have heard so many individuals on the ideological left claiming that RRSP tax exemptions should be eliminated because they are a tax avoidance measure employed by the wealthy.

There is also the question of capital gains tax. This is a tax on productivity. When people are taxed for creating wealth, disincentives are created for productivity. Yet those on the ideological left are often heard calling for a higher capital gains tax. That is a recipe for economic stagnation and unemployment.

I could go on and on. For every tax and government regulation created there is an unseen and unintended consequence. Overtaxed cigarettes and liquor create underground, illegal black market industries. Increased payroll taxes create unemployment.

It is simple. Big government is the very source of our economic problems and not the source of the solutions. Big government is a disease masquerading as its own cure. I wish the NDP could come to appreciate this fact.

Having said all that, I regret that neither I nor the members of my caucus can support the motion. Reformers believe in tax cuts and we hate the dreaded GST, but it is our position that tax cuts should be broad based so that one product or one industry is not given preferential treatment.

I am sceptical of the merit of eliminating taxes on certain products or even on certain industries while neglecting other products or industries.

We subsidize Canadian book publishers to the tune of almost $20 million. Now the Liberals are adding another $15 million to this subsidy in the interests of promoting Canadian culture. A GST tax exemption would add to this preferential treatment.

Do not get me wrong. Canadian businesses are overtaxed. Canadian consumers are overtaxed. However, a fair tax system is one which provides for broad based tax relief.

Every Canadian business makes the claim that its product or industry makes a vital contribution to Canadian society and should be granted certain tax concessions. I am very sympathetic to this claim. Canadian businesses are overtaxed and they are looking for any way to get out from under the thumb of the federal government, but we must be extremely careful when we create tax concessions which give certain industries preferential treatment.

My hon. colleague from the NDP will very likely point out the many preferential tax concessions which are currently in place, but I would counter that by promising that a Reform government will implement a more simplified tax system which will be built on the principles of equality and fairness.

Having said all this, I am not convinced that GST on books is affecting literacy in Canada. Access to literature through public libraries and public schools ensures that those who wish to have access to books can do so. However, I would agree that access to the latest information may be hampered as universities and public schools try to find money in their budgets. But this is not a threat to literacy in the country.

I can understand the frustration which the hon. member feels for this issue. The Liberals broke their promise to scrap the GST as it applies to books. The Reform Party has criticized the government's lack of accountability in this House. Campaigning promises should be kept.

We support the member of the NDP in so far as she is bringing the question of accountability to the attention of this House. We cannot, however, support the motion for the reasons I have already stated.

In closing, I applaud the hon. member for the NDP for her clear economic thinking and for bringing the issue of accountability to this House.

[Suzanne Tremblay, Bloc, Rimouski—Mitis, QC]

Mr. Speaker, I rise today to speak on Motion M-93 moved by my colleague from the NDP, the hon. member for Dartmouth.

The motion reads as follows:

That, in the opinion of this House, the government should consider the advisability of increasing literacy in Canada by removing the goods and services tax on all reading materials.

When Bill C-70 on harmonizing the GST was debated in the last Parliament, the Bloc Quebecois made the same request: that the GST on books be completely abolished. The Bloc Quebecois is therefore pleased to support this motion today.

Let us start with a little semantics, to be clear on the scope of this motion.

In French, literacy translates as knowing how to read and write, or the ability to understand and decode information to give it meaning. Illiterate persons are those who do not know this code. Without this code, they do not have the capacity to read or write, let alone the knowledge to do so. Functional illiterates know the code but experience various degrees of difficulty in understanding, using or interpreting it to give it meaning.

That having been said, it is inappropriate to translate literacy by “alphabétisme”. But semantics is not the topic of my remarks today, so I will stick to the text of the motion as it stands. Let us move to the topic of the motion asking that the government remove the GST on all reading materials.

The federal government has been repeating ad nauseam that Canada is the best country in the world. According to the government, illiteracy is not a problem in Canada. Just look at the mind-boggling statistic quoted in the 1997 edition of L'État du monde : the literacy rate in Canada is estimated at 104%. Let us take a closer look at this statistic which seems mind-boggling at first glance.

We will refer to Reading the Future: a Portrait of Literacy in Canada , a document published jointly by Statistics Canada, the Department of Human Resources Development and the National Literacy Secretariat in 1996. This document is based on the International Adult Literacy Survey.

In a chart illustrating the various levels of reading ability among adults aged 16 to 65, Canada's rate is 101% for the category “comprehension of narrative texts”. Does this means that every Canadian knows how to read and write? Of course not.

Indeed, out of this 101%, 17% of the population only reach the first level of reading. At this level, a person can read the directives on a bottle of aspirin. Twenty-six per cent are at the second level. At this level, a person can read, in an article, a short sequence of information on the characteristics of a garden plant. Thirty-five per cent are at the third level of reading. At this level, a person can read movie reviews and select the least favourable one.

Finally, 23% of the population reach levels 4 and 5. At these levels, people can read information on leaflets and integrate them in an interview, or they can use an advertisement from the Department of Human Resources Development to answer questions that use different words from the ones in the add.

The percentages are similar for the other two categories that were part of the test to evaluate reading ability, namely comprehension of schematic texts and comprehension of texts with a quantitative content.

The International Adult Literacy Survey defines literacy as the ability to use printed matter and written information to function in society, reach one's objectives, improve one's knowledge and increase one's potential. The survey shows that an impressive number of Canadian adults have a very low level of reading ability, which prevents them from fully participating in Canada's economic and social life.

The survey also shows that the availability of reading material is the primary factor in maintaining people's ability to read and understand. A country whose people read less than those of another country will be less productive and less competitive. This brings us to the purpose of the motion, which is to remove the GST on all reading materials.

According to the International Association of Publishers, Canada is the G-7 country that imposes the highest taxes on reading material. In Canada, the tax is imposed only by the federal government. The United States, Japan, England, Australia and Ireland are among the countries that realized the importance of not taxing books.

This tax has had a very negative impact. Sales of new books dropped by 10%, those of used books by 15% to 20%, and those of magazines by 15%. Newspapers' sales dropped by 5%, the first drop in 20 years in that sector. These combined drops have hurt publishers and writers, as their income also dropped.

The fact that the GST on reading material would have such an impact was anticipated. Anyone in the country who wants to buy reading material must pay a tax. Students who want to buy books must pay taxes. Functionally illiterate people who want to learn to read must pay a tax. Parents who want to buy books for their children must pay a tax. People who want to improve their knowledge and learn new things must pay taxes.

I have something to tell members opposite. I am thinking of a word which I cannot use in this House, because they would jump up from their seats. Still, I have that word in mind to describe their attitude and their behaviour regarding the GST on books. Let me explain.

At their 1992 convention, the Liberals adopted a resolution whereby they pledged to abolish the GST on books and reading material. In 1993, in a letter to the Don't Tax Reading Coalition, the Prime Minister promised to implement his party's resolution.

I would like to remind the House of what some of our friends across the way said when they were in opposition and the Conservative government wanted to pass the GST bill.

In November 1990, the Deputy Prime Minister claimed that charging the GST on books was akin to promoting ignorance. In 1991, the Minister of Canadian Heritage said that it was harmful to Canadian unity and identity. In 1990, the Minister of Industry gave a 20-minute speech explaining in great detail why he was opposed to the GST.

In December 1990, the member for Ottawa Centre tabled a pile of petitions against the GST. The parliamentary secretary to the Minister of Transport tabled four petitions against the GST. The government leader tabled a petition against taxing books and cared about the functionally illiterate.

The Minister for International Cooperation and Minister responsible for Francophonie tabled a petition against taxing books and magazines. The member for Carleton—Gloucester also tabled a petition, saying it was outrageous to tax newspapers and any reading material, whether it is intended for educated people or, worse yet, for those learning to read.

The government does offer tax reductions on books purchased by some libraries, educational institutions and organizations promoting literacy. But that is not enough. The government is still pocketing $120 million in taxes on reading material.

The Minister of Human Resources Development wants to increase training and development programs. He should know that, according to international studies, a substantial number of applicants can be turned down because of the fact that their limited reading skills in turn limit their capacity to enrol in adult and continuing education.

To conclude, I urge the government and the members across the way to stop behaving like tartuffes and to practice what they have always preached, by abolishing the GST. If they were brave, all members, including Reformers, would give unanimous consent to make this motion a votable item, so that we can put an end to taxing ignorance.

[Mark Muise, Progressive Conservative, West Nova, NS]

Mr. Speaker, I rise today to speak in favour of increasing literacy levels in our country and in our communities.

As a father of two young girls, literacy is something that is very important to me. We should never lose sight of the fact that literacy skills are a key to learning. Many people think that literacy begins when we go to school and ends when we finish our formal education. However, studies have shown that the first years or year of a child's life will have a significant impact on their learning.

Reading to a child, whether it be when he or she is in the womb, a newborn or a toddler, is an important first step in developing a lifelong desire to learn.

Whether students are headed for post-secondary education or directly into the labour force, they need fundamental learning skills and basic knowledge. These are essential if they are to keep on learning, advance their careers and achieve their personal goals.

In short, the future of our youth and of our economy depends on whether today's students are being given a sound background in primary and secondary schools.

We all have a role to play in promoting literacy in our homes and communities. As to exempting books from the GST/HST, I would be open to hearing more information on this.

The GST was designed to raise no more money than the hidden tax it replaced. Special credits offset the impact of GST on low income earners, schools, hospitals, municipalities and new homes, Basic groceries, financial services and prescription drugs are not taxed.

By law, GST revenues can only be used to service or reduce the debt. In April 1996, Ottawa and Nova Scotia, New Brunswick and Newfoundland agreed to harmonize their sales taxes and to bury the tax in the price.

At that time Progressive Conservative members and senators from those three Atlantic provinces tried to expand the list of goods and services that are exempt from GST or HST. Examples of the proposed exemptions were books and funerals.

This being my first term, I was not part of the government that implemented the GST but I was a member of the party that saw the need to replace the hidden federal sales tax.

Unlike the Liberals who vowed to abolish the GST, the PC party recognized from the beginning that the GST would have to be fine-tuned after introduction. We see this as a continuing process. As all members know, the Liberals did not scrap the GST, much to the chagrin of certain members of this House.

During the Hamilton East by-election, the NDP leader for her part promised to cut the GST to 5% from 7%. She said she would eliminate the GST on new homes, children's shoes and clothing, books, school supplies, furniture and other essential family purchases.

She did not mention that the British Columbia NDP government raised the sales tax to 7% from 6%. Nor did she mention that one of the very first things that Saskatchewan's NDP government did was to raise its rate to 9% from 7%. Having improved its financial position, it has since lowered it back to 7%.

In closing, I want to reiterate my party's commitment to improving literacy levels in this country. However, the government must act with prudence. Before endorsing this motion, we must weigh the benefits of any changes against the potential cost. I would like to see hard data on the impact that taxing books has on literacy in comparison with lost revenues.

[Mac Harb, Liberal, Ottawa Centre, ON]

Mr. Speaker, I rise to speak in support of literacy in our society. I thank my colleague for putting her motion before the House of Commons. I will be focusing on the problem of literacy.

As the member from Rimouski indicated, presently in Canada over 25% of the total population is considered to be illiterate. Certainly if we were to look at the cost to society as a whole as a result of that, it would be in the range of $15 billion to $20 billion annually.

To look at the source of it, we really have to go back to the early days of schooling, to the primary level, to the secondary level and to the graduate level. According to Statistics Canada, many graduating university students are considered to be functionally literate.

We have a problem here that is of a big magnitude. There is a problem here that is not only a federal responsibility but a responsibility of the provinces, school boards, the family and society as a whole. What we need is a holistic approach to the whole problem of illiteracy.

Personally, I congratulate the government and, in particular, the Minister of Finance as well as the Prime Minister for ensuring the continuation of funding to the secretariat in charge of literacy in Canada. The funding for that agency was due to end in 1993-94. Thanks to the efforts of many of my colleagues on the government side that funding has continued despite the fact that education is a provincial responsibility.

Many positive things are taking place in society. A council of ministers is looking at the issue of education across the country. Provincial ministers of education across the country are looking at the whole notion of standards in the area of education. I believe this is the essential element to finding a solution to the problem of illiteracy in Canada.

It is very unpleasant that in the second richest country on earth one out of every three students drop out before they reach university. As one of the richest countries on earth, over 25% of the population has difficulties reading or writing.

We spend per capita more than almost any other country in the world. Next to Sweden we spend over $50 billion a year on education. If someone turns around and says we need more funding for education, my answer would be no, we need to look at the way we are spending our resources.

I am not one of those people who says we need more school boards across Canada. I am one of those people who says we should eliminate every school board across the country from coast to coast to coast. In every municipality we should have one director of education that reports to a municipal or regional government. These elected officials would have to go to the public every three years in any event.

We would have democracy through the regional government. We would be able to eliminate the different administrations from coast to coast that cost millions and millions, if not billions of dollars. Then we would be able to put that money back into schools, into classrooms to provide necessary resources for students. That would be the first step.

The second step would a revamp of the way we do things. We need a national strategy for education and literacy. We need national literacy and education standards. If I were to graduate from a university or any educational institution in Newfoundland, I should be able to obtain the equivalent education in British Columbia or in Alberta. If I finished my education as an engineer or as a technologist in New Brunswick, I should be able to practise elsewhere in Canada.

We need transportability of education similar to what we have in the national health act. We need an understanding across the country that we live in the same nation. If I finish my first year of university in western Canada I should be able to transfer my credits to eastern Canada. Unfortunately we do not have that now.

There are many complications in the system. Instead of creating ways to help students at the provincial level progress in their education, we are creating complications and walls in front of them. Although education and literacy are provincial responsibilities the government has made literacy a national priority. I am delighted by that.

We need a co-operative approach among the municipal, provincial and federal governments and the business community which has a very important role to play.

We complain consistently that over 20% of students graduating from university cannot find jobs. Part of the reason they cannot find jobs is that some students are graduating in fields where there are no jobs. Who is setting the priority? Who is telling students in every university and community college in Canada where the jobs are? Someone should tell them which fields to consider if they want to find jobs in institutions, businesses or government agencies.

It certainly does not help anyone if every student across the country wants to become a lawyer. It will not help everyone if every student wants to be enrolled in history. There is no national strategy by the provinces to address this issue.

As for the federal government, one by one our ministers have consistently spoken about the need for a co-operative approach among different levels of government. I hope one day soon, as usual, the federal government will be open to the provinces asking it to act, whether as a chair, a facilitator or whatever, to develop those standards in education, standards in training and standards in literacy. I also hope we will look at standards in the environment, standards in every single sector.

We are a nation of different provinces. We all live under one Confederation. We are diverse. We need at least a common understanding that we require a minimum standard everyone across the country agrees on.

To that extent education is a provincial responsibility. That is fine, fair and square. The bottom line is an understanding among the provinces that on an annual basis we need a national testing standard in the core subjects. I am not talking about geography or history but about core subjects such as math, science, physics and chemistry.

We also need a strategy to provide the necessary tools to teachers across the country. How often have we seen provincial governments going to teachers at the university level, the community college level or the high school level to ask what they can do to help them do their jobs better and have a more educated or far more prepared student population? It rarely happens.

Look at what happened in the province of Ontario, for example, with Bill 160. The educational community was on one side and the government was on the other. In between them we had the population of Ontario shaking their heads. Rather than have an abrasive approach among governments, educational institutions and teachers we need a co-operative approach. That is what is necessary. We need a co-operative approach in education and literacy.

Looking at the wealth we have in the country and at the quality of our institutions we can do it. There is no doubt in my mind.

[The Speaker]

I would inform the House that we have approximately nine minutes left in debate and it is the custom to give the last five minutes to the mover of the motion.

[Rick Laliberte, NDP, Churchill River, SK]

Mr. Speaker, I will try to be brief.

The motion asks for the government to consider removing GST on books and reading material. This inhibits and puts up blockades and barriers in people's journey down the road to literacy. The worse effect is for the people who cannot afford it. That is what my colleague pointed out. People who can barely afford to buy a book have to also pay the 7% GST.

The Reform Party says that it supports tax incentives but not GST on books. Liberal members on this side are telling us that they appreciate the literacy issue but removing the GST from books is not necessarily on their agenda.

The last Liberal member who spoke created an interesting debate, and I have to take him on. He indicated that we do not need school boards. That is a major debate.

School boards, university senates and boards of directors of community colleges are trying to create an ownership of their communities and regions by representing parents and children to try to envision the future of their education. At the moment, there is no national vision on education as it has been decentralized to the provinces.

A national vision creates a vision for the journey from kindergarten to grade 12. After grade 12, when they graduate, we drop them off. If the student survives, great. We congratulate them if they find a career. If they do they will probably be wealthy enough to buy a house or a vehicle and maybe some books for their children, but there is no journey.

Our acts of education say that the provinces are responsible for our children until they are 21 years old. In reality, the majority of these graduates are 17 and 18. We are short-circuiting our investment on our children.

Why not invest in our children regardless of what journey or where they are at in high school, university, trade school, community college, business school or any other school they are in until they are 21 or 25 years old? Why not take this huge tax grab that we call GST and invest it correctly?

Historically, the biggest tax incentives came after the second world war. The country was ready to fight in a war against some aggression in the world and suppress it. We won that war. Now this tax incentive in money and resources is to make our lives safe and peaceful in an international community. However, we cannot do this without the betterment of our children and a vision for our youth in this great country we call Canada from coast to coast to coast.

The GST is a major test for the parties. The hon. member is raising a major issue. The GST on the print media is a disincentive for these children and does not give them the opportunity to get their hands on books, magazines and a learning stage. This is a simple test.

Other bigger debates will come into this House and I look forward to being a big part of those debates if they enter the House. In the meantime, let us take the GST off. That is all the member is asking.

[Marlene Catterall, Liberal, Ottawa West—Nepean, ON]

Mr. Speaker, there is only a little over a minute left in this debate. I just want to make one point.

I think my colleagues who have spoken before have outlined a number of initiatives that are being taken in the area of literacy both to help very young children and right through to university and so on, to help the libraries and schools that are instrumental in helping young people to read and adults to learn to read, often for the first time very late in life. They are instrumental along with a number of community organizations that are also supported by the funds that are raised in part through the GST.

I have to ask a question of my colleagues on the opposite side of the fence. One of the results of taking the GST off reading materials would be to reduce the amount of revenue coming from the GST. We have to ask ourselves who it benefits. Among others, the people who benefit are the people who are buying things like Hustler , Penthouse , Playboy and the swimsuit edition of Sports Illustrated .

Is it really important to help literacy by helping publications that are doing quite well, thank you very much, and do not need any help whatsoever from the taxpayer? Or, should we look in fact at investing directly into literature and reading material that is available to the general public as we do through schools, libraries, universities and so on and through very directed literacy programs delivered on the ground by community organizations across this country?

I, frankly, prefer the latter.

[Ken Epp, Reform, Elk Island, AB]

Mr. Speaker, I want to just add my two bits worth to this debate.

Being an educator all my life, I of course know the value of books. I think it is unconscionable that students who, for the most part these days, are having a great deal of trouble making ends meet, are taxed to death by a government that has this insatiable hunger for tax revenue.

With respect to what the hon. member from the Liberal Party opposite said just a few moments ago, I have a tendency to agree that there would be a loss of tax revenue obviously from some printed materials that many would value not worthy of that exemption from the GST. On the other hand we find that taxpayers' money is being used via Heritage Canada to subsidize equally offensive publications and equally offensive productions. I have seen and heard them myself. That is using taxpayers' money.

Perhaps we should strike a deal. Let us say that we will not take the tax away from books if at the same time we will stop using that tax revenue for things which come into exactly the same category.

To be very honest I feel that we need to reduce government expenditures so that we can reduce the amount of debt and reduce the amount of interest payable. Then we could reduce in total the amount that Canadians have to pay in taxes.

If we get on to that and reduce the GST, say in stages to zero on everything, in the end all Canadians will benefit, especially those who are interested in promoting literacy in the country which is the motive of this bill, but in other areas as well. It would be a great boon to our economy if the government got its cotton pickin' GST fingers out of our lives.