Mr. Speaker, I rise to speak to Bill C-70. The first thing we need to do when speaking to this legislation is to talk about it in context. To do that, we need to go back, believe it or not, about eight years to the time when the current finance minister was seeking the leadership of the Liberal Party.
At that time if I remember right-I have a newspaper clipping somewhere from the Calgary Herald -the finance minister came out four square against harmonization. The reason he was so opposed to harmonization at that point was that he foresaw, quite correctly, that harmonization would make it extremely difficult to ever lower taxes once it was in place.
That is what he said in 1989. I truly believe that what he said is true. What has happened since then demonstrates in a way that I cannot say with words, that the government cannot be trusted on these issues, that it will say one thing and do quite another. The Liberals are more interested in staying in power than in serving the people.
Between 1989 and the election of 1993, we heard over and over members of the opposition, people who currently hold positions of responsibility in the government, people like the defence minister, the Prime Minister, the finance minister and the Deputy Prime Minister, say in one form or another that they were going to axe the GST, they were going to scrap the GST, they were going to abolish the GST.
People who are currently prominent Liberal backbenchers-if that is not an oxymoron-said over and over again that they would get rid of the GST. Many of them had it in their campaign literature. We pointed out in the House who those people are. The member for Niagara had it in his campaign literature. The member for Vancouver South had it in his campaign literature. The hon. member across the way is challenging me on this. I have given him some names and I trust that he will check this out so that he knows how he is being duped by his own party.
We all recall a few days before the last election campaign-I do not think the member across the way will deny this-that the Deputy Prime Minister appeared on national television and said that if the GST was not scrapped, axed and abolished, she would resign. She said it on national television.
In the days following the election campaign, all of a sudden the government did a complete 180 degree turn on those types of promises. Members across the way will say that on page 22 of the red book it states that the Liberals were only going to replace the GST.
The Liberals said one thing in the red book, of which approximately 70,000 copies were distributed. They were saying something completely different when they got on national television where millions of people were watching. It was probably the only information most people got on the Liberal platform because that document had so little circulation for very good reasons. On the one hand the current government was saying one thing and on the other hand it was doing another thing.
Let us fast forward a little. It was well into the government's mandate when it started to finally feel the pressure of all the promises Liberals had made and had used to lever themselves into power. They had made a ton of promises about these things. I see my friend from Broadview-Greenwood is here. He remembers this very well. Those promises were catching up to them.
Finally, after an embarrassing situation here in the House where government members had to vote against scrapping the GST, even though that was the promise many of them had made on doorsteps across the country during the election campaign, the Deputy Prime Minister, after polling her riding, saw that it was safe for her to resign because she knew she could be re-elected again, and resigned. It cost the country half a million dollars or something like that, but finally she did resign. She was subsequently re-elected. We all know that. I think that was a disappointment to Canadians who felt that if she resigned she should not run again.
While all that was happening, the government was going through all kinds of machinations to make a deal with Atlantic Canadian premiers. It offered them a backroom deal of $1 billion if they would come on board to be part of a harmonization deal.
People will remember that the provinces were not exactly lining up to come on board and sign a harmonization deal. The government did talk about a harmonization deal but all of the provinces said that there was no way they wanted to be part of it. That was until the government put $1 billion on the table. Is it not funny how $1 billion will change attitudes, especially when that $1 billion is designed for Liberal premiers in Atlantic Canada?
That was the second time in this sorry saga that the people of Canada had been let down. They had been let down initially when they were told that the GST would be scrapped and it was not. The second time was when a backroom deal was cut with Atlantic Canada premiers and people were left out in the cold. Despite the fact that in Atlantic Canada this deal was going to fundamentally affect their lives they had no say. It was $1 billion, and the people of Atlantic Canada were left out.
That is not where this tale ends. We wish it did but it goes on. The government said it was going to introduce HST legislation or as it is euphemistically called in Atlantic Canada BS tax legislation. That was done on December 2, 1996. It was only days after that when the Prime Minister appeared at a town hall meeting and he was still in denial. I guess the Prime Minister is so cocooned, so distant, so disconnected from reality he still cannot get it through his head that what he said in the days leading up to the election campaign were words that people had actually counted on him fulfilling.
He appeared at the town hall meeting. He actually chided a young woman from Montreal, Johanne Savoie, for having the nerve to try to hold him accountable for his promise. He said to her: "Tell me when you heard me say that I would scrap the GST". Much to his chagrin she did exactly that. She told him that she had seen him on television. She told him that she had heard him on the
radio. He denied it but the CBC reported seconds later on a newscast that indeed he had said those things.
The Prime Minister was caught. He was hung on his own words. Again the Prime Minister was in denial. He was trying to tell people that he had not said those things when in fact he had. I wish I could say that the Prime Minister saw the error of his ways, apologized and said that he would not do that again and it was wrong for him to do that, but he did not. The whole thing continues on. The sorry mess continues.
After that the government in its wisdom decided that not only was it not going to allow people the chance to be involved in having a discussion about the $1 billion that went to Atlantic Canadian premiers, and people were not going to be allowed to hold the government accountable on breaking a promise to get rid of the GST, the government was not going to even allow people from Atlantic Canada to come to hearings on the GST.
During hearings in January, I moved a motion that hearings be extended and moved to Atlantic Canada so that the people there could have a say on this issue. I would say that unless people have that opportunity, we have at least taxation without consultation if not taxation without representation.
I know there were some hon. members opposite, and at least one from Atlantic Canada, who said "I am sensitive to the fact that people in my region should have a say in this. I am going to advertise and we will fly them from Atlantic Canada to Ottawa". In other words, in her situation, because I guess she felt that she could only push her luck so far with her colleagues, she was trying to do what she could.
Certainly that flies in the face of all logic. The finance committee should go to Atlantic Canada to talk to people about a taxation system which will affect their lives in a fundamental way.
We had all kinds of people come forward from business. Provincial politicians came forward. We had people come forward representing groups such as chambers of commerce who said that there were flaws in the legislation. There were things that were wrong with it. They had to come to Ottawa because Ottawa was simply too arrogant to go to them.
Ottawa could not be bothered to go to Atlantic Canada, despite the fact that this legislation is going to have a profound impact on the economic future of Atlantic Canada. That is wrong. It is fundamentally against everything which every member in the House believes in, even if some cannot bring themselves to say it. Just about every member of the House knows that if we are going into a region to say "we are going to change your tax system completely", then those people should have the right to have their say before a committee which has some influence on how the legislation will be implemented. It is common courtesy. It is common sense. It is something that should happen as a matter of course in a democracy.
Unfortunately Liberal members voted it down. It is shameful. It is ridiculous. I hope that when those members return to their ridings in Atlantic Canada they will come up with an explanation to justify how they could deny their constituents what should be a basic right.
I have talked about the lack of process in inviting input, but that does not mean there were not people who were raising their voices, speaking out against many aspects of the harmonization legislation.
One of the biggest problems people have with the HST legislation is the tax in pricing component. I talked to dozens and dozens of business organizations and people who had grave concerns about the impact it would have on their businesses in Atlantic Canada and, as a consequence of the impact on those businesses, on the people of Atlantic Canada.
People came forward from Carleton Cards who said they will close 19 stores in Atlantic Canada if this legislation goes through. There was no caveat on the comment. They said they will do this.
Woolworth's has 125 stores in Atlantic Canada. Those stores fall under a number of different names. It might close as many as 25 per cent of them. Over 30 stores in Atlantic Canada will be closed because of this legislation. It said that some of the things in the legislation and the tax in pricing component will mean extra costs to business. That will mean that all the stores which are marginal, which are barely making a profit, will all of a sudden become unprofitable. Many stores will be facing new leases in the near future and given the choice between signing a new lease or closing the store, knowing that the legislation will mean they are destined to be unprofitable, those businesses will be closed. Obviously the people working in those stores will lose their jobs.
In Atlantic Canada those jobs are precious. People need those jobs in Atlantic Canada. For crying out loud, the unemployment statistics which came out on Friday told us that unemployment in Newfoundland is at 20 per cent. That is a human tragedy of unbelievable scope. However, the government entertains to let businesses close because of its legislation and a part of it is not even necessary to carry forward the great bulk of the legislation to achieve any good that could come from the legislation, according to these businesses.
I have not even mentioned the other businesses that closed down. MMG Management closed a number of stores in New Brunswick, and I believe 72 or 75 jobs were lost as a result. This is not an abstract piece of legislation that has no effect in the real world. I
can guarantee that the effect is quite profound and I would say for those people who have lost their jobs it is a great tragedy.
That is one aspect of the legislation that people were speaking out against, but again they had no voice in Atlantic Canada, first because there were no hearings in Atlantic Canada and second, I would argue, because a bare few MPs from Atlantic Canada have even bothered to speak to the legislation. I have yet to see one of them stand in question period and go after their own minister, asking why they are not listening to the people of Atlantic Canada on concerns they have with this legislation.
However, it does not end there. There are other concerns that people have. One is that the legislation will mean that a disproportionate impact of the tax changes will fall on the poor in Atlantic Canada. For years the government and Liberals have talked about how they care more. They have tried to assume the superior air. They have tried to take the moral high ground on the issue of compassion and they have tried to tell Canadians they care more. But it is indisputable that this legislation will mean that the people of Atlantic Canada who can least afford it will bear the brunt of the cost of this legislation.
Let me give an example. Children's clothing will go up in cost in Nova Scotia, heating fuel for homes will go up in cost, utilities of various kinds will go up in price, gasoline for cars will go up in price. People who can least afford it will be trapped by this new legislation because they are on a fixed income and do not have the means to make it up.
Contrarily, ironically, a fur coat will cost less; a yacht will cost less. But did we hear members from Atlantic Canada raising this in question period? No. They are absolutely mute on this point. Did the people of Atlantic Canada have a chance to raise this before the finance committee in their home towns in Atlantic Canada? Absolutely not. Again I think the government has let the poorest of the poor in Atlantic Canada down.
There are other problems with this legislation, not what is in the legislation but what is not in the legislation, which is the fulfilment of the promise the government made to end the GST on reading materials. It would be bad enough if it simply did not fulfil the promise, but when it ends up doubling the GST on reading materials, I think that simply mocks the people to whom the promise was originally made.
The don't tax reading coalition wrote to the Prime Minister in the lead-up to the 1993 election and asked him if he would remove the GST on reading materials. "Oh, my, yes", the Prime Minister said. "Yes, we will get rid of the GST on reading materials. After all, we passed that sort of policy at our policy convention". Subsequent to the Liberals' policy convention in 1993 they also passed another policy in 1995 to get rid of the GST on reading materials. But the GST remains on reading materials.
I know some will argue that they have removed it in some ways for university and libraries. I want to be fair. They have done that, but they have come nowhere near fulfilling their promise. In fact, by introducing the harmonized sales tax in Atlantic Canada they have doubled the GST on books.
Once again we have the Liberal myth versus the reality. The myth being "we are going to get rid of the GST". The myth being "we care about the poor". The myth being "we are going to listen to people". The reality was they did not get rid of the GST, they did not remove it from reading materials. The reality is they raised prices for the poorest of the poor in Atlantic Canada. The reality is people did not have a voice because there were no hearings in Atlantic Canada.
There is even more, and I must comment on these things. One of the things we have heard from the government over and over again is what the finance minister spoke to the other day. He said "we believe in tax fairness". He talked about the tax fairness measures he and his government have introduced since they have been in power.
If you are a taxpayer, when you look at these so-called tax fairness measures, you will be bound to say that this is not tax fairness but a tax grab. In so many cases the finance minister removed legitimate deductions simply so more revenue could be raised. If it were tax fairness the Liberals would have given the money back to Canadians in the form of a lower rate. That would have been fair. But they kept the revenue.
They had a chance to demonstrate that they really believed in tax fairness when members of the medical community, private ambulance services and physicians, said to the government that when the legislation came into place, many people like farmers and pharmacists were able to zero rate GST because they could not pass it on to the people who ultimately consumed the services which in their case would be the provincial governments. They asked to be treated in the same way as others who were zero rated.
There were some wonderfully warm words from the other side that this is important, we need to be fair to everyone, the tax system should treat everyone fairly. But what did the Liberals do? They said no. They said "tax fairness only means that we get more money. We close loopholes", as they call them, "so we can get more money. It does not mean that we would ever give money back to anybody. That would not be fair. We would not want to treat everybody the same, especially if it meant giving taxpayers a break".
Again the government let people down. It says on the one hand that it believes in tax fairness but on the other hand it does something quite different.
People raised some other concerns with respect to tax in pricing. One of the first people we had before us in our Ottawa hearings three weeks ago was a gentleman who raised a concern about a provision in the legislation that would allow the government to send someone to jail if they inadvertently did not put a tax inclusive price on a chocolate bar or whatever. When he raised this issue the finance committee was in an uproar and everyone said "we will fix this. We will not allow that to happen. That is ridiculous. What happened here? How did this happen? We are going to fix this".
To its credit, the government will no longer send anybody to jail if they inadvertently do not put the proper price on a chocolate bar. What bothers me is the fact that this provision was in a press release that came from the finance department betrays an attitude. It tells us that the finance department and by extension the finance minister are so disdainful of the public on these sorts of issues that they will put things in a press release that they want to be widely disseminated by the media to the public. It speaks of an arrogance in the government that in the past has been the downfall of other governments.
When people raised this, politicians on the finance committee immediately saw this was wrong. They protested against it and it was changed. But my question is how did this get in there in the first place. Why did they have that type of language in the legislation?
At every stage over the last three years we have seen the finance department become more and more aggressive with respect to people who are trying to do their own books. All of a sudden an official from finance or revenue shows up says: "We are going to squeeze every nickel out of you and if you do not give us every nickel, we are going to camp on your doorstep and make life miserable for you". Everybody knows. The government has hired more auditors and tax collectors. It has made life generally more miserable for people who are simply trying to get by and run a business out there, the people who create real jobs.
I think the government went over the line in the harmonized sales tax legislation when it publicized in a press release that a person will go to jail for 30 days if he does not put the proper price on a chocolate bar. It bespeaks an attitude, one I do not think Canadians like. It is an attitude we saw coming from the Prime Minister in the town hall meeting. It is an attitude we saw coming from the Prime Minister in an interview in the Toronto Star on the weekend. Frankly, I think Canadians are a little sick and tired of that type of arrogance and that kind of disdain for regular rank and file Canadians who are simply trying to get by.
I want to say a word about the tremendous bureaucracy the government is putting in place in introducing harmonized sales tax legislation. Tax in pricing is something that simply does not have to be in the legislation in order for the government to carry forward with the bulk of its changes but it has insisted on it being in there. The government has said it has to have it despite the protest from businesses which said it is going to cost jobs in Atlantic Canada.
Businesses said they are going to end up passing on costs of $100 million a year to Atlantic Canadian consumers and the government does not care. The government said not to worry about it, that it will set up a regulatory regime to make it a little easier for them and it will not be such a big deal.
The government has even come down with guidelines saying to those who want to have catalogues in Atlantic Canada that in their catalogues they must say in type which is one thirty-second of the page in size that the prices do not include provincial sales taxes. Are we now going to see an army of bureaucrats come out with pocket protectors, rulers and magnifying glasses? Are they going to come into Atlantic Canada and sit down and measure the type in catalogues? Are they going to be measuring signs in stores?
The government came up with 20 or 25 different ways of allowing people in Atlantic Canada to comply with the legislation before the government would come down on them for not being in compliance. The end result is we are going to have 20 or 25 different systems.
Consumers are going to be hopelessly confused. What started out as tax simplification is now going to be tax complication. It completely defeats the whole purpose of the legislation. It is ridiculous to be doing it this way but the government, never to be swayed by common sense or logic, decides to boldly go ahead and damn the torpedoes.
I have talked about the process and I have pointed out that initially the government said it was going to scrap the GST and it did not. Then it went ahead with the backroom deal and left the Canadian people out. It gave Atlantic premiers $1 billion to go ahead with the legislation. Then it refused to have hearings in Atlantic Canada.
I think it is appropriate that this has been topped off with the government now invoking closure on this legislation. Once again it is shutting the Canadian people out of the process. It is saying to the people that elected representatives cannot stand up for the people of Atlantic Canada to point out the flaws in this legislation, to try to get the government to change its mind when so many people have indicated they have grave concerns with the legislation. And here we are debating this legislation for the last time.
This government has used closure more often than any other previous government. Twenty per cent of the legislation that passes through this House is subject to closure. In other words the government says it is going to shut down debate here in the Parliament of Canada. This is the place where democracy should reign supreme, and the government routinely denies members of Parliament the right to freely express themselves. I think that is wrong.
It was wrong when hearings were not held in Atlantic Canada. It was wrong when the premiers of Atlantic Canada cut a deal with the Prime Minister for a billion dollars and left Canadians out of the process. It was also wrong when the government deceived Canadians about its intentions with respect to the GST.
This movement to introduce closure simply punctuates the sentence. It puts a period on a sentence of anti-democratic behaviour and behaviour that simply does not become mature men and women.
We have arrived back at where we began. I want to make the argument for why this whole idea of harmonization is a bad idea. At the beginning of my speech I pointed out that the current finance minister, the member for LaSalle-Émard, when he was in opposition in 1989 and running for the leadership of the Liberal Party, pointed out that harmonization would make it very hard to lower taxes in Canada. He was prescient. He was dead on. He knew exactly of what he spoke. Political convenience made him change his mind over the years.
There is no denying that harmonization will make it virtually impossible to lower taxes in this country. Let me explain why. There are two major reasons.
The first reason exists in the agreement itself. The agreement states that in order to raise the rate of the harmonized sales tax, it requires only a simple majority of provinces and the federal government to agree and then they can go ahead and raise the rate. However to lower the rate requires absolute unanimity. It requires everybody to get on board and say that they agree to lower the GST, or the harmonized sales tax, or the BST, or whatever you want to call it.
When was the last time we had complete agreement on anything in this country? For crying out loud, we have had the Charlottetown and Meech Lake accords. It is fairly obvious that in a country this big and this diverse it is going to be virtually impossible to get 10 provinces, two territories and the federal government to ever agree on anything let alone lowering taxes which almost never happens in this country.
The finance minister was right in 1989. He was right when he said that harmonization would make it impossible to lower taxes.
I want to make another point with respect to the difficulty this poses in coming up with ways to lower taxes. One of the arguments I would make for not introducing harmonization is that when we have a single rate of tax across the country we eliminate competition between jurisdictions.
One of the great advantages of my province of Alberta is that we do not have a sales tax. Frankly, I think it is because Alberta does not have a sales tax that Saskatchewan's sales tax is not higher than it already is. The same would apply to B.C. People already come across the border to shop in Alberta because we do not have a sales tax. If we go to a single rate across the country, we will not have the type of competition that puts downward pressure on taxes. We need that in this country of all countries. In the G-7 we need it.
I looked at a graph the other day and granted, it was of income taxes. In this particular case it showed the increase in income taxes in Canada compared to the G-7 average. Without a word of a lie, our income taxes between 1965 and 1994 have gone up 1,000 per cent higher than the G-7 average.
No one can tell me that we do not need every mechanism possible to keep downward pressure on taxes in this country. We have had 35 surreptitious, sneaky tax increases by this government alone. We had 71 by the Tories before it. Every year because of what is called bracket creep, the government raises taxes in effect. Any time inflation is below 3 per cent, none of that is indexed. We end up paying probably close to $2 billion more in new taxes every year.
We have some of the highest taxes in the industrialized world and we need every mechanism, every tool we can find to push taxes down. That is why our party has argued that it is time to have a debate about taxes in this country.
Some people have said: "Let us look at the deficit problem and the debt problem". We agree with that. That has been the Reform Party mantra for 10 years. We have been saying let's balance the budget. But balancing the budget is not the end. It is the means. We have to shrink government and balance budgets so we can have lower taxes which creates all kinds of wealth in this country. That creates jobs, permanent jobs, well paying jobs. That is what it is all about.
We need to have the tools in this country to lower taxes. We do not want to give any government some kind of veto power to keep taxes high. That is what the government is proposing to do not only with this legislation but with future legislation that would have to deal with the harmonized sales tax.
That is wrong. We cannot afford to have higher taxes. Do people in this Chamber realize that in 1996 we had record high taxation which led to record high personal indebtedness, which led to record bankruptcies? There were more bankruptcies in 1996 than in any previous year. For 76 months in a row, as a result of all that
taxation, we have had unemployment over 9 per cent in this country.
Can there be any question that taxes kill jobs. By now we must have learned that message. If people doubt it, I invite members to look just south of the border to the state of Michigan. Look to Michigan, a state that was part of the rust belt only a few years ago. It elected a new governor in 1990. He introduced 15 tax cuts. Michigan produced 450,000 new jobs between 1990 and 1995. That is more jobs in one state than the entire country of Canada produced in that five-year period. That is 450,000 in a state of what, six or eight million? In a country of 30 million, we could not produce that same amount of jobs.
That is unbelievable to me. It is unbelievable that we have not learned that lesson. The lesson is that taxes kill jobs. If we ever are going to deal with the problem of unemployment, we must learn this lesson. We must get our tax rates down. It is time that members in this place learned that lesson.
I must point out for a moment that our party has introduced a plan that will offer Canadians a way to get to the point where we have lower taxes. We will give people the tool that the government is denying with this GST legislation.
We have said that we will shrink the government. We will get rid of some of the wonky subsidies. We will not hand out money to Bombardier any more. That would not be done under a Reform government. We will not give money to some of the weird and wacky special interest groups who love to grace the halls of Parliament at budget time to cry for more money. They will not get money from the Reform Party. People are just a little sick and tired of giving money to those sorts of people.
We will cut spending for all those departments that more properly belong at the provincial level. We will not have those any more. We will provide Canadians with a government that does about 10 things and does them well. We want a government that focuses on getting the justice system right. Instead of doing 20 or 25 things and doing them all poorly, let us do 10 and do them right. Let us fix the justice system.
Let us fix national defence. It has become a national embarrassment the way the government cannot get a handle on fixing national defence. There is a rot at the top of national defence and we cannot fix it. If we would focus on fixing it instead of spending money on flags or whatever it is we are doing, we could actually do these things. We would be doing the country a great service.
Let us do those 10 things well. Let us get out of certain areas that we are in right now which more properly belong to the provinces. Like welfare. The provinces and lower levels of government have the solutions to things like the welfare problem. They are much more capable of dealing with it than bureaucrats 2,000 miles away. Let us let the provinces deal with those things.
If we shrink government we can balance the budget and give a dividend back to Canadians in the form of lower taxes, $2,000 by the year 2000. That is what Reformers propose to do. That is the way to help people in Atlantic Canada, in central Canada and in the western part of the country. That is how Reform is going to help people. We will not go around raising taxes or removing the mechanisms to lower taxes. That is what the government has done. That is not our plan at all.
I will summarize by saying that the finance minister was right in 1989. He foresaw that harmonization meant higher taxes. He foresaw that this legislation would simply mean that at some point in the future, when the deficit had been dealt with, it would be impossible to lower the GST to give Canadians the benefit of their hard work.
I conclude by saying that we are opposed to this legislation. I hope that hon. members, in particular those from Atlantic Canada, will see the folly of this legislation and will vote against it.