Debates of Nov. 6th, 1997

Supply

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Madam Speaker, I have a hard time keeping a straight face. When I listen to this member of the official opposition it makes me think that I am watching the film about Sybil. I am not denigrating people who suffer from psychiatric disorders. Sybil suffered from multiple personality disorder, which meant that each individual personality was not aware of what the other one was doing or saying.

Here we have a party which has changed its position regarding GST numerous times, even before 1990, and its members do not seem to remember each individual change. How many times have they changed their position? Let me count the times.

Before 1990 they exploited public opposition to the GST to get two of their members elected to this House. In 1991 the leader of their party reversed that position, saying it would not be repealed because that would increase the deficit, and yet in speeches he gave he talked about applying it to part of the debt.

Anyone with a brain in their head knows that if you apply it to the debt it increases the amount of time the tax would be in force.

Then in 1992 they changed their position again. My God, how many times is that?

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

Madam Speaker, I want to thank you for giving me the opportunity to speak to the motion regarding the harmonization of the GST and the QST in Quebec.

The motion reads as follows:

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.

The GST Act came into force on January 1, 1991. As everyone knows, the federal government of the day implemented this new tax in great haste without a thorough analysis of its application, causing many technical difficulties.

Today, this legislation is still criticized, mainly by small and medium size businesses which are forced to collect this tax for the federal government, thereby incurring considerable administrative costs. A business must collect this 7% tax from the consumer. It is reimbursed through an input tax credit. This tax credit may be requested by each individual in the production and distribution chain, with the result that it is the consumer, and the consumer alone, who pays the GST.

It would be normal and fair for the consumer to have some say over where his money goes, since he is well aware that the GST is a very important source of federal revenues. Furthermore, this is why, despite their 1993 red book promise, the Liberals have not yet abolished the GST. Yet this tax adds considerably to the tax bill of already overtaxed citizens.

We in Quebec were good sports. We were the first to harmonize the tax, just as we were the first to defend Canada's interests in the free trade issue. Now that other provinces want to follow Quebec's lead and harmonize the GST, the federal government is getting generous. If the federal government gave $1 billion to certain governments in the maritimes, why is it refusing to give the people of Quebec their fair share for harmonizing the GST? Is it the size of the cheque required that is scaring it off?

Speaking of the size of the cheque, in the interests of fairness, we in the Bloc Quebecois are suggesting through this motion that the federal government create a neutral arbitration panel, with one representative to be appointed by the federal government, one by the Quebec government, and one to be neutral. One of the things this committee would be called upon to do is to work out the amount of this cheque.

Imagine what the Government of Quebec would do with this $2 billion it has coming to it. It could certainly improve its public image, which has taken a beating because of the cuts of over $2.237 million made by the federal government in social transfer payments to Quebec. And this does not stop the Minister of Finance from tooting his own horn in every public forum about the good job he is doing.

It is not difficult to arrive at a zero deficit with the methods used by our dear Minister of Finance; all you have to do is cut social transfers to the provinces by 54% and shamelessly dip into the employment insurance fund. This money belongs to the unemployed and to the employers who contribute to it. In fact, speaking of the employment insurance fund, we recommend strongly to the Minister of Finance that he lower the employment insurance premium rate from $2.90 to about $2.50.

With these new rates, small and medium-sized businesses could, among other things, start investing in job creation. Even with these rates, the employment insurance fund surplus would allow the Minister of Human Resources Development to reevaluate the eligibility requirements for employment insurance.

Yes, it would be interesting if the Minister of Finance, instead of digging directly or indirectly into the pockets of the less privileged in society, could respect the commitments he made in 1995 to reduce departmental expenditures by 19%. It is much easier for the government to act as it does than to tackle the real waste problem.

Has this government really taken steps to stop waste? No. Think of the billion dollars that this government foolishly let slip from the state's coffers when it privatized our air traffic control system.

Let me remind you of the facts. The Minister of Finance himself had estimated our air traffic control system at $2.6 billion. As for the Minister of Transport, he had estimated it at $2.4 billion. So we can say that the average value of the air traffic control system is $2.5 billion. Why was this system sold for $1.5 billion, as the Auditor General of Canada asked in his latest report.

I repeat the question: How can this government shamelessly and without regret justify this billion dollar shortfall that could have been used, for example, for our young people, our single mothers, our old people?

Speaking of young people, I must tell this House how appalled I am that in 1997, children are going to school in the morning on an empty stomach. This does not seem to sadden our Heritage Minister, when you consider how freely she is throwing our money to the wind.

We must not forget that it is that same minister who was forced to resign because of an 1993 electoral promise that was not kept, namely that “we Liberals will abolish the GST”. Not only did she come back, but she continues to waste people's hard-earned money with her bogus projects. We have for instance her flag project, which is blowing in the wind and scattering taxpayers' money around. In 1996-97, this foolish initiative cost $15.5 million.

I will mention only that project, but I can tell you today that with all her useless programs, that minister has spent $94.6 million of the taxpayers' money.

What a disgrace! Let us think about hungry children.

I cannot go on about this government's shameless wastefulness because it makes me ill.

Before wasting money needlessly, let us think of all our people who are living in poverty.

I believe that any self-respecting government which is interested in making proper use of its taxpayers' money should, before it spends money needlessly, get the go-ahead from all of its elected representatives, without any partisanship. Second, it ought to follow the recommendations of the auditor general to the letter. We must not lose sight that the auditor general's function is to watch out for the taxpayer's interests. Third, all governments ought to follow the lead of the municipal governments and pass anti-deficit legislation. Fourth, they should reform the corporate tax structure so that it helps create jobs, and the personal income tax system so that it will be more equitable.

At the present time, we know that this supposedly sensible government is on the verge of spending hundreds of millions of dollars on helicopters without having the decency to reveal all the pertinent details of the purchase.

I am imploring the Minister of Public Works and Government Services to have the courage to break the chain and to consult his colleagues in the House before he issues a purchase order to the tune of several million dollars. This would offer him a golden opportunity to practice what he preaches, the transparency of government operations.

Indirectly, it is GST funds with which the Minister of Intergovernmental Affairs is allowing Guy Bertrand to take the case of the legitimacy of Quebec's sovereignty before the Supreme Court.

He and his colleague, the Minister of Justice, must put an end to this legal wrangling, which is costing the taxpayer a fortune.

[Denis Coderre, Liberal, Bourassa, QC]

Madam Speaker, on a point of order. I will be happy to hear my colleague, but on the subject matter of the debate.

[The Acting Speaker (Ms. Thibeault)]

I would ask the hon. member to speak to the motion under consideration. You may continue.

First, the hon. member for Saint-Hyacinthe—Bagot, on a point of order.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I would ask my colleague of Bourassa himself to stick to the subject. I listened to him and he did not say a word on the motion we moved. The only thing he tried to do was to destroy the reputation of my colleagues and of the Bloc Quebecois and he talked about everything but the motion. He should apply his remarks to himself.

[The Acting Speaker (Ms. Thibeault)]

This is not a point of order. The hon. member for Saint-Eustache—Sainte-Thérèse has the floor.

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

Madam Speaker, I will continue with my speech.

It must be remembered that in a democracy only a people has the right and the obligation to determine its future.

We must put an end to the intrusion by the federal government into areas under provincial jurisdiction and, thus, bring overlap to an end.

Hon. members will understand that I am referring here to Bill C-14, a debate that will make us throw a lot of money down the drain.

I will end my speech by inviting all hon. members, without reference to their political allegiance, to strongly support this motion.

[Paul Bonwick, Liberal, Simcoe—Grey, ON]

Madam Speaker, before I direct a question to the hon. member from the Bloc I want to say that I was very shocked to hear about the promises my Reform colleagues made. They made promises to the Canadian people about what they would or would not do with the GST. How many times have they changed their minds just because of the political tide?

I suggest once and for all that they come out with a solid position, quit changing their minds and quit being hypocritical with the Canadian people.

Once again Bloc members are crying. They are holding their hands out to the Government of Canada, “please give us billions of dollars”.

The question they should answer for themselves is whether it is fair for Canadians to pay Quebeckers $2 billion, for that matter even one penny. There has been no loss established. In fact, there has been a gain. I think members should ask themselves is it fair. I think not. It is hypocrisy. The answer will be somewhat from a spoiled child. Is the answer fair? I say no, it is hypocritical.

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

Madam Speaker, we are not asking for any favours. We are asking for justice.

[Darrel Stinson, Reform, Okanagan—Shuswap, BC]

Madam Speaker, I cannot help but sit here and chuckle over the word hypocrisy coming from the opposite; hypocrisy, the finest word the government has every used and abused to the Canadian taxpayer.

It was not that long ago, but it is kind of short in the memories of some of the Liberal members, who had to resign their seat over the misrepresentation of the GST.

The Liberal government, to the member from the Bloc, seems to forget that it campaigned to get rid of the GST. It sold that bill of goods to the people of Canada. I imagine it did the same in Quebec.

When we were debating the harmonization of the GST in the Atlantic provinces I can remember standing up in the House and giving a speech on the problems this would create in the Atlantic provinces. We all know that when governments start talking about harmonization, if you take the front part of the word it is harm. It harms the citizens of the country. It does not matter where this is tried. It found this out in the Atlantic provinces.

I would like the hon. member from the Bloc to answer a question. Who was in provincial power at the time harmonization took place in Quebec? Were they also led down the garden path by the government in power at the time?

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

Madam Speaker, in 1990 it was the party of Robert Bourassa that was in office.

[Ghislain Fournier, Bloc, Manicouagan, QC]

Madam Speaker, I was offended by the remarks of the member opposite, who thinks Quebec is a welfare case that does not pull its own weight and that we should not be asking for what is owed us. As if we were asking for money that did not belong to us. This shows a lack of respect for Quebeckers. The money we are asking for, the $2 billion, is money we paid for. It is ours. We do not come here with our heads hanging. We paid this money.

You cannot speak that way, sir. It is an offence to Quebeckers. I would be ashamed to speak that way, to speak such words in this House.

[Gilles-A. Perron, Bloc, Saint-Eustache—Sainte-Thérèse, QC]

Madam Speaker, I can understand the emotion and the indignation of my friend from Manicouagan. I can understand how a person can rise and jump about a bit. This is what happens when you hear all sorts of not very intelligent remarks in this House.

[The Acting Speaker (Ms. Thibeault)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Hochelaga—Maisonneuve—tobacco act; the hon. member for Sarnia—Lambton—trade.

The hon. member for Abitibi has the floor.

[Guy St-Julien, Liberal, Abitibi, QC]

Madam Speaker, we are speaking about a part of the Bloc Quebecois motion, which says:

That this House condemn the government for blatant unfairness to Quebec in the matter of the GST—

First of all, let us talk about the position of the Bloc Quebecois. In its electoral platform, the Bloc said that Quebec, which chose a phased-in harmonization starting in 1991, has not received the same compensation as the three maritime provinces, since Ottawa offered them $961 million as of April 1, 1997.

As far as the GST is concerned, the Bloc Quebecois considered that the transfer of all federal fields of taxation would create some interesting prospects for Quebec. Also, the bloc proposed a series of tax measures in the context of a sovereign Quebec. For example “A sovereign Quebec will have the power to abolish the GST and replace it with a tax on commercial operations better adapted to free trade”. This quotation is from the householder published by Roger Pomerleau, the member for Anjou—Rivière-des-Prairies.

[Denis Coderre, Liberal, Bourassa, QC]

We fixed his fiddle.

[Guy St-Julien, Liberal, Abitibi, QC]

Since we are talking about GST, let us go back to the beginning of the GST. We will go back to the Quebec National Assembly on December 14, 1990. What I find strange in this vote is that Quebec decided to harmonize its tax. The Bloc Quebecois and the Parti Quebecois have always told us that this was a unanimous vote by PQ opposition members.

I will tell you this evening that there were several PQ members missing in the National Assembly. They were not there to vote against the GST. Several of them were missing. As a Quebecker, I thought it was a unanimous vote by the Parti Quebecois in the National Assembly.

In his speech, the Minister of Revenue, Raymond Savoie, told the National Assembly:

The GST strikes me as a fairer tax because it is based on the consumption of goods and services. And the more goods we consume and the more services we use, the more justified it is to opt for this method of taxation as opposed to the traditional one based strictly on revenue ratio.

But the funniest thing—because we are still talking about the GST, we will stick to that—is that when Ms. Marois, now a minister, but then the member for Taillon, spoke to this bill, she was completely opposed to the opposition party, to her party, and said that for her, the important thing was that businesses should be more competitive. For her—Ms. Marois—it was more important that our businesses should be on an equal footing with other sectors in the United States. In that sense, she was in favour of this harmonization, or the movement, and the minister was very happy to hear that.

There is another thing that should be pointed out about the GST, because we must go back to where it all began, in 1990. It is important that Quebeckers and the people of Abitibi understand what the GST was. Why is the motion today coming from the Bloc?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Because it is not coming from your neck of the woods.

[Guy St-Julien, Liberal, Abitibi, QC]

When you lost the election in 1985, the difference between the rate of taxation in Ontario and that in Quebec was 10.5%—this is still 1990—because today it is only 3.5% and on the decrease. It is steadily decreasing. It was not the intention of the government in power at that time, the Liberal government,to obtain compensation. They knew there was an agreement with Ottawa.

Throughout the speech by the Quebec Minister of Revenue, he is careful to stress the notion of fairness. We were guided by our wish to see that those with low incomes did not pay for this reform. We were not going to foot the bill for this reform. Measures were introduced.

These people are getting refunds. The opposition never says that low income Canadians receive GST refunds. It never says that the elderly and students receive GST refunds. We never hear anything about that, but it is good for these people. They tend to consume less that we do.

Measures were introduced. These people are getting refunds and these changes will cost nothing to families with an income of around 30 000 $, for instance. They will lose nothing.

One thing should be said regarding the GST in Quebec, we are making changes, reducing it from 9% to 8% and to 7% in 1992. The overall impact should be beneficial, good for democracy and I believe empowering, or at the very least advantageous for Quebec society as a whole.

One thing is very important, and that is that the minister took note of the change and really sought to be fair. He noticed that the government was committed to the notion of economically advantageous mechanisms across North America and this is what this bill is all about. This is why Mrs. Marois supported free trade.

One thing in this debate in the national assembly was very important, the vote. When it took place, quite a few PQ members were absent.

But one thing should be said, according to my notes—

[Antoine Dubé, Bloc, Lévis, QC]

Could the member give us the list of those who were present?

[Guy St-Julien, Liberal, Abitibi, QC]

Madam Speaker, if the hon. member wants to know who was there, I can send the list to his office. I can tell you that I have the list of those in favour and those against. Not bad for a member in Ottawa.

Let us talk about the memorandum of understanding between the two levels of government. On August 30, 1990, the Government of Quebec and the Government of Canada announced the signing of an agreement whereby the federal government fully transferred administration of the GST to the Government of Quebec which, in return, would harmonize the tax base of the provincial sales tax with the federal tax until January 1, 1992.

It had become necessary to replace the federal sales tax. Before the GST, the federal government had a manufacturers sales tax, a tax which had become obsolete in many ways, but was never mentioned by the hon. members opposite. That old tax had 26,000 exemptions. There were so many gaping holes in that legislation that the government of the time had to do something, hence the GST. With the replacement of the manufacturers sales tax with a more modern sales tax and the decision to harmonize the two taxes, Quebec was putting its economy in a better position to compete with the other provinces.

[Antoine Dubé, Bloc, Lévis, QC]

Madam Speaker, on a point of order. Is the hon. member speaking on behalf of the Liberal Party or on behalf of the Conservative Party?

[Guy St-Julien, Liberal, Abitibi, QC]

Madam Speaker, I could answer that some of his colleagues have been members of a communist party and, today, we do not know whether they are speaking for the Bloc Quebecois or for some communist party.

In agreeing to harmonize the two tax systems, Quebec was putting its economy in a better position to face competition from other provinces and other countries. Indeed, in reducing the cost of inputs and capital, it was making industries in the province more competitive.

There is also one thing we must talk about: the administration of the two taxes should be more efficient and less costly, both for business and for governments. As a result of the agreement, retailers were finally going to enjoy more uniform tax rules and introduce a single accounting system and a centralized administration.

Madam Speaker, you are telling me that my time is almost up. I thought I had 20 minutes for my speech.

[The Acting Speaker (Ms. Thibeault)]

You have 11 minutes left.

[Guy St-Julien, Liberal, Abitibi, QC]

Do I have confirmation that I have 11 minutes left? Thank you. You see, this side also has learned to count.

The harmonization of Quebec's provincial tax with the GST was done in two stages. Thus, on January 1, 1991, the provincial tax base and the GST base were harmonized for personal goods, that is, personal property. As of January 1, I repeat, the base was extended. It now includes services and personal property.

What happened on January 1, 1992? Quebec, our Quebec, the Quebec of Quebeckers, the Quebec of the Abitibi people, the Quebec of Canada— because my Canada also includes Quebec—started administering the GST collected on its territory. In 1992, the federal government helped Quebec take on new administrative functions—the opposition is quiet about that—by handing over the infrastructure, i.e. facilities and equipment, and providing $20 million over three years toward start up.

We know that several million dollars worth of facilities and equipment were involved. In addition, federal employees were offered comparable positions within the provincial public service. We know that people in the Quebec provincial public service are very well paid. They are in a very good position to do good work.

Both governments share on an equal basis the cost of administering the sales tax. What happened to revenue generated by the consumption tax in Quebec over five years? It increased by nearly $2 billion. Members opposite often throw figures like $1 billion, $1,000 million, $2 billion, but now we are going to have the real figures.

We are still on the same topic. We were talking about the GST all along. Within five years, the revenue generated by the consumption tax in Quebec increased by nearly $2 billion, or a 50% increase. Statistics show that, while Quebec collected $4 billion in sales tax in 1987-88, in 1991-92 the new sales tax grossed $6.158 billion.

When discussing sales tax revenue, it is important to known the real figures. They are all there. In terms of growth over 1989-90, with the GST—not the old outdated sales tax, but the GST—in 1990-91, Quebec's revenue increased by 2.7%, or $240 million. In 1991-92, it grew by $1 billion, or 20% more. And, in 1992-93, $888 million.

The figures provided by Quebec officials tell us that, since 1990-91, the province received $3.463 billion, for an average increase of 11.3%.

Quebec is once again using the obsolete federal estimate of $4.8 billion regarding the revenues generated by a harmonized sales tax, instead of the revised amount of $4.575 million. So, what do we make of the inaccurate statements found primarily in Quebec's public accounts, particularly on page 218? It is important to know these facts.

The provincial government says one merely has to look at Quebec's public accounts or budget documents to see the extent of the costs generated by harmonizing Quebec's sales tax with the GST. However, these documents clearly show that revenues from the provincial sales tax increased by $3.463 billion following harmonization in 1991.

The Quebec government uses the argument that the $961 million compensation to the maritime provinces is equivalent to $423 per capita, while the compensation claimed by Quebec amounts to $273 per capita.

This comparison does not make any sense, since compensation is not at all calculated on a per capita basis. This is where the Bloc Quebecois is mistaken, when it refers to $961 million. These arguments are only based on the total provincial losses of sales tax revenues following harmonization.

Do you know where the Bloc Quebecois' mistake come from as regards the $961 million? It comes from the fact that, in Quebec, government expenditures increased much more rapidly than federal transfers.