Exactly. His Reform friends are influencing that deliberation.
I am pleased the member for Calgary Centre acknowledged that he got some material from someone who has to be respected. Unfortunately we often hear a lot of rhetoric from the other opposition party. We wonder if it would be attributed to the Fraser Institute or to Newt Gingrich or if they would make the same kind of attribution that the hon. member so rightly did.
I want to discuss tax included pricing. The opposition parties are creating a lot of confusion and debate around this point about which I will provide some clarification. At the time the GST was first promulgated under the Conservative government, I thought if they were going to bring it in they should have it out front and centre so that people could see it. That was a reasonably honourable thing to do.
However, if people opposite were frank with themselves they would acknowledge what we are now hearing from Canadians, myself included on this point. When Canadians go to the cash register they are continually surprised when tax is added on to their items. A $100 item becomes $115 dollars. Canadians are fed up with that.
Contrary to what the member opposite says, the HST will not be hidden. It will be on the receipt. If you travel to Europe or other places you will see the taxes are included on the bill and also on the sticker price. We are moving to what many other countries have moved to, and the tax will be there and visible for all eyes to see.
In Atlantic Canada we are reducing the GST component of the HST so why would we want to hide it? Why would we want to hide a tax we are reducing? It makes no sense. It argues the point quite well that we are not really trying to hide a tax; we are trying to respond to what Canadians are asking for from sea to sea.
I would like to comment briefly on the origins of the HST. When the GST was brought in, the manufacturers' sales tax was eliminated. Many Canadians, myself included, did not factor that in very heavily at the time. Independent surveys showed that the manufacturers' sales tax on white goods and big appliances in most cases was passed on to the consumer. We have lost the benefits of the manufacturers' sales tax.
When we campaigned in 1993 we said that we would do everything we could to replace the GST because it was not a popular tax. We looked at a whole range of options. The red book said that we would harmonize the GST and make it simpler and more equitable. The HST will do that.
An aspect which is sometimes forgotten is the notion of the embedded PST. That is a term which deserves an explanation. When Atlantic Canada moves to the HST, the whole tax collection and remittance system will become a value added type tax.
Those Canadians who have small businesses, medium sized businesses or who work in the accounting offices of big companies know how the GST works. They take all the GST they have paid on the goods they have purchased, deduct that from the GST they have charged to customers and remit the net. Essentially it is a value added tax.
When the tax is harmonized in Atlantic Canada, the provincial sales tax which is currently in the cost of goods that businesses buy will be relieved. Therefore, the cost of the goods which are produced by those companies will be reduced. The result will be that the companies in those provinces will be more competitive.
Some of the Atlantic premiers, such as Frank McKenna of New Brunswick, are very aggressive when it comes to developing and attracting business. They know that the harmonized sales tax will position their provinces very well. In fact, Quebec has moved along a similar avenue.
In Ontario the Harris government is doing nothing because it likes to play politics. We have run into that on a whole range of issues, such as CPP reform, but that is an issue for another day.
If we faced reality in Ontario, the taxes could be harmonized. Instead of a 15 per cent tax there would be a 14 per cent tax. Perhaps in the future it could be reduced even more. In doing so, businesses would be more competitive. Things would be simpler for businesses. Right now they fill in the GST forms and then they fill in the PST forms. It is very complicated. People spend their time filling in forms when they should be focusing on expanding markets or developing new opportunities. When the tax is harmonized there will be one form to complete and one cheque to remit. With the new tax commission things will be simplified even further.
Some Canadians might say: "What does that do for me?" If businesses in Ontario and the other provinces are more competitive, it is good for all of us. Their businesses will grow and they will be able to hire more people. They will be able to expand their markets. Some of those benefits will flow to consumers. We have independent research which shows that happened after the GST was implemented a number of years ago.
If we had the perfect solution we would eliminate all taxes. This debate has gone on and on and we are left with looking at what are the practical alternatives. The HST is a practical alternative. In addition, it will create some real benefits for people in Atlantic Canada. If other provinces would follow suit they would realize the same benefits.
We all know that if the tax is harmonized in Ontario there will be some difficulty because consumers will now have to pay this harmonized tax on services at a higher rate than they paid before. That is the reality.
What do we do? Do we go dig a hole and lose ourselves in some of those facts? Or do we say that it will to be better for industry. Businesses will be more competitive. They will be able to compete better with Atlantic Canada and Quebec in world markets.
Exports are what it is all about. Growth in the economy has come through exports. If businesses are not competitive, even within our own provinces, then we are going to have some difficulties. I think Ontario should take the lead of Atlantic Canada and Quebec and harmonize the tax.
The member for Calgary Centre talked about the fact that people who do not comply with this law would be sent to jail, debtor's prison and all this sort of rhetoric. I do not think the hon. member was around for the debate subsequent to that announcement. There was some legitimate confusion among Canadians about people being thrown in jail and the way in which people would be charged under summary convictions or under various areas of the Criminal Code. The fact is that people will not be thrown in jail.
I find it ironic that Reform Party members, who stand up and talk about law and order and crime and punishment and who go on and on about the underground economy, the minute the government stands up and says: "Look, if you are start fiddling around with your HST, we are not going to throw you in jail but, yes, we are going to take it very seriously. We are going to treat that as a pretty serious-