Mr. Speaker, it is with a true sense of the importance of this motion that I table it in the House. I will read it again:
That this House condemn the government for blatant unfairness to Quebec in the matter of the GST, the government having denied it compensation without letting it submit its arguments to an independent arbitration panel made up of three experts, the first to be appointed by the federal government, the second by the government of Quebec and the third jointly by the first two.
Why did I move this motion? Because we are convinced that Quebec is being treated with blatant unfairness regarding the harmonization of the provincial sales tax with the GST, compared to the three Atlantic provinces.
This is blatantly unfair to the people in Quebec who have had to support their share of the cost of the harminonizing carried out in the Atlantic provinces, while paying alone for harmonizing their own sales tax with the GST. It is also unfair, and I am saying so as industry critic, to Quebec businesses, out of which the Quebec government had to get more money not only by increasing their tax burden but also by putting restrictions on input tax credits.
This is such a major restriction that, through its finance minister, the Government of Quebec undertook to put up $500 million, if the federal government agrees with Quebec's figures, to complete the incomplete business harmonizing.
It is extremely important to mention that, like the Bloc Quebecois' position on this matter, this motion in no way constitutes an attack on the Atlantic provinces, which benefited from the federal proposal. We have nothing against equalization, on the contrary. But this is a completely different matter.
The way we see it, discouraged at being unable to convince all the provinces except for Quebec, which had readily agreed to harmonize, signing an agreement to that effect with the federal government back in 1990, the federal government looked for some way of proving that it had acted, in part, on its promises. Finally, an agreement was reached with the Atlantic provinces, providing that they would harmonize their sales tax with the federal sales tax in exchange for $1 billion.
In so doing, and this is one of our main reasons for presenting this motion this morning, the federal government gave the Atlantic provinces the means to intensify economic competition, by enabling Mr. McKenna, who was Premier of New Brunswick at the time, to compete unfairly with Quebec using full page ads announcing that better conditions could be found in New Brunswick for businesses. Quebeckers were stunned to see him do that.
In fact, the federal proposal allowed the Atlantic provinces to reduce their sales tax by four percentage points and to fully refund the tax paid by businesses on their input, which Quebec cannot do, since it paid for all this without any assistance.
How did the federal government achieve this result? Simply by devising a formula designed to favour the maritimes. Without getting into details, the federal government's compensation formula provides that only the reduction of the sales tax level is to be compensated, and since that level exceeds 5%, it means the formula was tailored to the needs of the Atlantic provinces.