Debates of Feb. 11th, 1997

Excise Tax Act

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member refers to the GST as another tax. He well knows that the GST was a replacement of an existing tax, the manufacturers' sales tax, the FST. The FST generated some $18 billion of revenue in its last year of operation. When the GST came in, it generated only $16 billion.

Although the basis on which the tax was changed, the amount of revenue collected by the federal government actually went down in the first year of operation of the GST. It was a replacement.

I will still continue to support the premise that one of the reasons why Canadians did not like this tax is because they could see it on each and every purchase every time they made one. It was different from the shelf pricing. I think this is one, but not the only one, of the components. I remind the member that the GST was a replacement tax, not another tax.

[The Speaker]

The hon. member for Skeena. May I ask the hon. for Skeena if he will be using the full 20 minutes himself?

[Mike Scott, Reform, Skeena, BC]

No, Mr. Speaker. I am going to be splitting the 20 minutes with my colleague from Kootenay East.

[The Speaker]

Therefore, it will be 10 minutes and 5 minutes of questions and answers.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, just before I get into the text of my remarks, I have to respond to what the hon. member from across the way was saying.

The Liberal Party, if anything, is extremely acrobatic. It is interesting to watch the flip-flops, pirouettes and the changes of course and direction that this party takes whenever it considers it politically expedient to do so.

I was in the construction business during the 1970s and I was faced with the increasing FST remunerations that we had to make. These were hidden taxes at the time. The finance ministers in those days, Mr. MacEachen I remember and Mr. Chrétien who was a finance minister back in the 1970s, loved this tax because it was a way for them to increase their revenues without getting Canadians upset. It was an invisible tax for most Canadians but it was certainly visible to me, as I was in the construction industry and had to pay federal sales tax on many of the goods that we were purchasing and incorporating into our work when we were building construction projects.

Now we hear that the Liberal Party supports the idea that taxes should be visible. Frankly, I find that unacceptable. I just do not believe that these people are serious when they talk about being straight with Canadians.

That gets me into the text of my remarks which has to do with broken promises and the broken promise we are debating today. The Liberal government did not promise to harmonize the GST. It did not promise to incorporate it with another tax. It said it was going to kill, scrap and abolish the GST.

After the Liberals made that promise and were elected, they said that they did not promise to kill, scrap and abolish the GST. They held that line for a long period of time. They have finally come around, after the Prime Minister's disastrous town hall meeting last fall, and said: "We are apologizing but not for breaking a promise. We are apologizing because Canadians are confused about what we have said and if we have contributed to that confusion we are sorry". That is typical of this government.

It is typical of this government to engage in obfuscation, mirage and sleight of hand. It is typical of this government to say: "Now you see it and now you don't". That is what has happened since the election campaign in 1993 and the reality of the spring of 1997.

Let us just go through a few examples. The Liberals like to manufacture facts about the health care system and their spending on it. They paint themselves as defenders of the Canadian health care system. They wrap themselves in the red cross every time they can and say: "We are concerned about health care for Canadians and we want to make sure that universal health care of a high standard is delivered to every Canadian from coast to coast".

In reality the government has cut $3 billion a year out of health care spending. It has cut $7 billion in health care spending since being elected. It does not want to be held accountable for that so it points fingers at everybody else. It says: "these are the bad guys over here, they're going to cut your health care, they're going to cut

your social programs and so on". This government has done far more cutting than any of the other political parties in this country even suggested.

This is not a Reform promise. It is not a promise that the Reform Party would make. The Liberals promised they were going to maintain stable funding for the CBC. Once elected they gutted the CBC's budget. They ignore the best interests of taxpayers in favour of political expediency every time. Let me give a few examples.

The EH-101 helicopter was cancelled. A decision had been made to purchase helicopters. A contract was entered into before this government was elected. But this government in its infinite wisdom said: "This is not a good deal for Canada and we are going to scrap it". It cancelled the agreement to buy helicopters.

First of all, what was the cost of cancellation? It is not known for sure but the figures seem to be coming in at around $500 million. Not a single helicopter has been bought but the Canadian taxpayers are out $500 million. We do not have one helicopter to show for it.

The Sea King helicopters are falling out of the skies. They are unsafe to fly. There is not enough of them to do the job. I do not have search and rescue capacity in my riding of Skeena because there are not enough helicopters that fly to go around. That is the reality of this government.

Now the government admits it has to do something so it is looking at some kind of a replacement for the Sea King helicopters. It is now talking about providing a helicopter that is substantially smaller than the EH-101. There is conjecture that whatever helicopter is picked it is not going to be able to do the job. That is the reality of this government.

The Pearson airport cancellation, whether one agreed with the deal or not, whether it was thought to be a good deal or not, was a deal that was done and above board. I do not think any of the inquiries that have been set up to look into this deal has ever shown any impropriety on the part of the government or the people who were contracting to do the deal. It was a political decision and the Liberal Party was unhappy with the political decision, probably because they did not make it and it was not their friends who substantially benefited from it. It was a political deal but it was above board.

The Liberals were elected and they said no they were going to cancel this deal. Arbitrarily they are going to abrogate a signed agreement. Can you imagine the arrogance of this government? Can you imagine the arrogance of the people who made that decision? On top of that, to protect themselves and insulate themselves from any political repercussions, they tried to pass legislation through the House that stated they could not be sued for their actions. Can you imagine the arrogance of that?

If they really felt that they have made a good decision on behalf of the Canadian taxpayers you would think they would be more than willing to go to court to defend themselves, that the people who felt they were wronged in this action had a cause of action and wanted to sue the government. They knew immediately when they cancelled the deal they were going to get sued. They knew they were wrong. They knew they had violated a contract. What do they do? They tried to pass legislation. Thankfully that legislation was not passed and now they are going to have to face the music. Unfortunately the Canadian taxpayers are going to end up footing the bill. It is one more example of "now you see it, now you don't". It is one more example of no political accountability for the decisions that are made. It is one more example of putting politics ahead of the best interests of the Canadian people.

Let me give another example, the Somalia inquiry. This government has done its level best, along with senior officials in the military, to pin the rap of the Somalia disaster on the lower echelons in the army. They have done their level best to evade and avoid any responsibility for either the events that occurred in Somalia or for the mishandling and covering up of the events that happened subsequent to it.

Now the Minister of National Defence has given the inquiry its marching orders. He has told the commission to cut the inquiry short and to report to the House in time for an election. When did we start looking at proper public policy in the best interests of this country based on the timing of the next election? Frankly, I find that unacceptable. It is appalling.

The government promised jobs, jobs, jobs. The Prime Minister partly delivered. Every Liberal of note from coast to coast got a job in the last three and a half years. However, what about the 1.5 million Canadians who are unemployed? What about the people who are out there pounding the streets, looking for work? What will happen to the people who have given up, who do not believe they will be able to find work? The Prime Minister just brushes them off and says: "Tough luck. Some people win and some people lose".

Canadians are counting the days until they can hold this government accountable for all of this and much more.

[Jim Karygiannis, Liberal, Scarborough—Agincourt, ON]

Mr. Speaker, I noted with interest the comments of my colleague. He spoke about the EH-101 helicopters. He spoke about the Pearson deal. He spoke about the Somalia inquiry. I cannot understand what party he really represents, the Reform Party or the Conservative Party. I would have expected that speech from a Conservative, but the only Conservative member in the House is not the one who is speaking. Is the member running for the Reform Party or is he running for the Conservative Party?

The people of Canada clearly stated before the last election that they did not want the EH-101 helicopters. They also said they did not want the Pearson deal. If we listen to the member, we are listening to the Conservatives of pre-1993.

I wonder if the Reform is going to pick and choose in which ridings it is going to run and in which ridings it will not run. The member has presented himself as a Conservative.

The member also spoke about the hidden tax and about taxes in general. In England they have the VAT, the value added tax. It is 16 per cent. People know they are paying 16 per cent. In Canada we have the PST and the GST. In the maritimes we are trying to harmonize those taxes. Then, when people go to the till, they will get a bill which will say the item is $100. They know they will pay $100. At the end of the day they will be paying $100 for an item and the taxes will be included.

My constituents know they will have to pay tax, whether it will be 16 per cent as it is in England or 15 per cent as it will be in the maritimes.

Maybe we could get the Harris government to come to the table. A lot of its members have privately said they want to harmonize. I know Mr. Harris is holding out because he wants a big buyout. If we were to hold out to him $2 billion or $3 billion he would jump and say: "I want to harmonize at 13 per cent or 14 per cent". If we were to get the Harris government to the table to harmonize the taxes, at the end of the day $100 at a tax rate of 14 per cent or 15 per cent would still be $100. The member opposite would certainly agree that Canadians would be happier with that than paying $100 and having the tax added on top.

My question for the member is very simple and clear. Is he running for the Conservative Party or the Reform Party? I am confused. The way he is carrying on, it sounds like he is running for the Conservatives. If he is not running for the Conservatives, let us make sure we get the Reform policy.

[Mike Scott, Reform, Skeena, BC]

Mr. Speaker, unlike my colleague from across the way, I am running for something. I am running for Reform. I am not running away from accountability like those people are.

He talked about the EH-101 helicopter deal and he talked about the Pearson airport deal. Those were contracts that were in place when this government came to power. There is a longstanding tradition in this country that succeeding governments honour the contracts and the agreements that are in place. This government has broken those longstanding traditions. It has abrogated these deals. It has cost the Canadian taxpayers a billion dollars.

We do not have effective helicopters that can fly. And Pearson airport in Toronto will be 10 years behind in getting modernized so it can accommodate the passengers going through it. That is the reality of this government: put political expediency ahead of the best interests of the taxpayers, ahead of the best interests of the people who want to fly to and from Pearson airport, ahead of the best interests of the people who have to fly those helicopters for search and rescue and the other activities they are used for. The government puts their safety on the back burner in the hope that it will gain some political advantage by doing it. Frankly, it stinks.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, I would like to talk about pizzas and muffins. It seems to me that a lot of times when we get talking about PST, GST, HST, BST there is a sense of confusion regarding what the issue is really about. I would like to return this debate to the issue at hand, which is the harmonized sales tax for Newfoundland, Nova Scotia and New Brunswick.

In talking about pizzas and muffins, I am mindful that we are talking here about the restaurant business. We have to remember that at the introduction of the GST, in the first three years there was a net loss of 46,000 jobs in the restaurant business. The government should be concerned about this, having campaigned on jobs, jobs, jobs. If it is going to be making any changes to the tax regime in Canada, it really should be taking into account what the effect might be on jobs in the area where it is going to be making these changes.

Talking about pizza, we are talking about a really delicious pizza at $14.99. That would be a medium size pizza at Pizza Hut. When people went to Pizza Hut or any other food concession during the recession which started around 1991, they were faced with the fact at the till that this $14.99 pizza all of a sudden had an additional 7 per cent added to its price.

As a consequence, as a per cent of the Canadian food dollar from 1991 to 1996, restaurant revenue dropped from 42 per cent of the Canadian food dollar to 38 per cent of the Canadian food dollar. From 1991 at 42 per cent to 1996 at 38 per cent, we can see clearly that the recession had a dramatic impact on the choices people were making. Perhaps they were deciding that rather than spending $14.99 on a medium pizza, they might go to a smaller pizza and get away at $11.99.

The identifiable reality is that the GST cost jobs in the restaurant market. Why do we know that? Why can we not just say that perhaps the situation occurring was that people were deciding that they were going to be staying home more as a result of the recession. That was part of it but this is interesting. In a comparable economy in terms of the behaviour of people with respect to eating

out, that of the United States, from 1991 to 1996 the per cent of the American food dollar increased from 42 per cent, which is where the Canadian percentage started, up to 46 per cent.

What was the one fundamental difference between the American and Canadian economies and American and Canadian consumers? There is one fundamental difference. I suggest there may be more but probably the most over arching was the fact that there was the application of the GST.

When people arrive at the till in Newfoundland, Nova Scotia or New Brunswick they end up paying $17 or $18 for this $14.99 pizza. A pizza is not essential to have; it is not a have to have product and therefore it is very price sensitive. What happens now that we are looking at inclusive pricing? Pizza not being an essential product, people are going to go into a Pizza Hut in Prince Edward Island and come across a pizza for $14.99. True, they will pay $17.24 when they arrive at the till, but the fact still remains that they will see $14.99 on the menu. When they go into Fredericton, Moncton, St. John's, Halifax or Sydney, they are going to be faced with a menu that indicates $17.24 instead of $14.99. What effect will this have?

Most Canadians have the good, or bad, fortune of always being concerned about what they are eating, this by comparison with third world countries and indeed some of the people in this country who have difficulty even obtaining food. Suppose I go into a restaurant. I am in there for a cup of coffee and I see that the low fat muffin has only 285 calories and four grams of fat. As I sit down and I happen to notice the overlap of my belt I ask myself whether I really need those four grams of fat. I decide while I am in this healthy mode that no, perhaps I do not even need this muffin because it is telling me it is going to give me four grams a fat and I think I will pass on it.

The next day I go into another restaurant and they are a little bit smarter. They do not tell me anything about low fat muffins or high fat muffins. They just tell me that the muffin is going to cost me $1.49. It looks really good and it probably will go down really well with a cup of coffee. The difficulty though is that particular muffin, unknown to me because I choose not to ask, instead of having 285 calories has 600 calories and instead of having four grams of fat has 21 grams of fat.

That is a reality in the marketplace. We subject ourselves to this in that we say: "Just a second, I do not really need this information". Now, when people go into my friend's restaurant in Saint John, they are going to be faced with a $17.24 pizza. They are going to be making some judgment calls at that point which they would not be making if in fact they were faced with a $17.24 bill when they arrived at the till. That is the reality.

What is this going to do to advertising? First off, the advertising that currently occurs in the maritime provinces is going to be thwarted seriously. If we stay with the pizza example, when Pizza Hut wants to advertise in Nova Scotia or New Brunswick, there is a spillover from ATV and other networks into Prince Edward Island. Suddenly it cannot advertise a $14.99 pizza; it has to advertise a $17.24 pizza. What about national advertising? How will that be impacted?

What we are talking about here is just one very small segment of the economy that the Liberals have shown a gross insensitivity to: the entry level jobs within the restaurant business. Many people, unfortunately in my judgment, have negative things to say about McDonald's but outfits like that are terrific. They bring people into the marketplace. They train those people and get them into the workforce. Restaurants and fast food outlets have the ability to give part time work to homemakers who want to or perhaps have to supplement their income. They provide the opportunity for part time work for seniors.

What we are talking about here is the Liberals' unfortunate gross insensitivity to what this HST is going to be doing to the people of Nova Scotia, New Brunswick and Newfoundland. It is going to make a difference and not just in the food sector.

What about the barbeque that might be an incidental purchase at Canadian Tire? Instead of paying $149.99 which is the price point for a modest barbeque, suddenly it is going to be $172.40 on the sticker. It is going to have an impact on Canadian Tire, Home Hardware and all of those places. What about purchasing an automobile and the advertising relative to purchasing an automobile?

It can be argued, and perhaps some would, that the money will ultimately be paid anyway so why not tell people about up front? It is a fact of life that there will be discontinuity between the three provinces and their merchandising practices and the other parts of Canada, including Prince Edward Island. The way in which business is conducted will be different. It will be a patchwork quilt from coast to coast to coast.

Even candy bars at the 7-Eleven, in those very tempting bins that sit by the door selling three chocolate bars for 99 cents. I am hoping my wife will never read this Hansard but I am tempted from time to time. All of a sudden it will not be 99 cents. It will be $1.14 and I am going to think that maybe I should not have those chocolate bars. This is going to impact people at the most simple level in those three provinces, walking in and out of 7-Eleven stores, buying an automobile or ordering a pizza.

It cannot stand that the government will allow there to be the confusion of different standards from province to province. We have seen the impact that the dislocation of the GST has created in the restaurant and bar business and the three years that it took to

bring it up to speed and to get back to even a small semblance of normality. It really never has recovered.

How much is this HST, this patchwork quilt, this kind of backhanded way of wheedling out from under the GST promise going to cost the people in that area of the country? It is a scandal that the government has decided it is going to ram, jam, cram this bill through the House at the people in those three provinces.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I thank the hon. member and I concur with his statements. However, I want to ask him if he is aware of what just happened in New Brunswick.

Is the member or anyone in the House aware that those who own restaurants and pubs in Saint John and the rest of the province of New Brunswick who buy their beer and wine at the wholesalers have been told that there will be an 11 per cent surcharge added on? They thought they were going to get a bargain with the HST because it was coming down from 18 per cent to 15 per cent.

That is why I say that when you hide it we are in trouble because that is just the beginning. It could not be put on the HST because two premiers have to agree to increase it and to decrease it all three premiers have to agree. However, it will be hidden another way and we have it already.

I have to say that those restaurant, pub and tavern owners in my city are absolutely furious about this. This is a serious situation and I wonder if hon. members had heard anything about it. The people have talked to me.

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, I can advise the member that I was not aware of it, but it is very typical of what happens with taxes.

In the province of British Columbia we have the situation of the forest renewal fund. That fund was never ever going to be touched. The NDP told us: "Oh, my goodness, the sky would fall before that was ever touched". What happened when they ran short of money is they turned around and grabbed it.

I do not believe for a split second that the Liberal government or its successors, unless it is ourselves, would not twist things around ever so slightly, just a little bit here and just a little bit there so that it would end up with the tax not appearing, as the legislation currently calls for, on the sales receipt. That would disappear. Over a period of time it will disappear and once again it will be a hidden tax.

I concur with the member. It is just taxes, taxes, taxes. Canadians are absolutely sick and fed to the teeth with taxes.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I would like to commend my colleague from Kootenay East for a great speech and also the member for Saint John, an individual who lives in the maritimes. She obviously knows firsthand what is going on with respect to the effects of the HST on the people in the maritimes.

When the government was elected three years ago, it had an excellent opportunity, a golden moment, to simplify the taxation system so that it would benefit all Canadians and kick start the economy. What did it do? It brought on a harmonized sales tax about which the federal institute of private businesses has said very clearly will cost jobs. It will put companies out of business. It will increase the cost of doing business. Worst of all, it will hurt those people who are most dispossessed and of the lowest socioeconomic groups in our society. In particular, it will affect people in the maritimes, an area that all of us know has been extraordinarily hard hit economically over the past 10 years.

This is an absolute outrage. I hope the public will get involved and provide constructive submissions to the Minister of Finance, the Minister of National Revenue and the Prime Minister in an effort to demonstrate what good, concrete, effective solutions can be put into place to provide a simplified tax system, a lower tax system, a fairer tax system to kick start the economy that will not hurt those people who are the worst off in our society but rather will improve the economy of the maritimes and the country.

What would the hon. member do to provide for a sensible taxation system that could kick start the Canadian economy?

[Jim Abbott, Reform, Kootenay East, BC]

Mr. Speaker, we would first have to get our deficit to zero. We have to stop spending more money than we are taking in. At that point we would have the option to ask what we would do. The Reform Party has proposed to offer the average family of four in Canada $2,000 by the year 2000 in a tax reduction: $2,000 by 2000 will become a battle cry of people across Canada.

Second, we would make all sorts of changes in the area of personal exemptions so that the people at the low end of the scale, the single parent families that are presently continuing to pay tax would be taken off the tax roll. It is our projection that for those people earning $30,000 and under, we could remove 89 per cent of the taxes those people are paying.

By lowering the taxes of people at the bottom end of the scale, the people in the lowest income decile, we would have the opportunity to give them the ability to make decisions about their own lives with their own money. That money, interestingly, would end up back in the economy immediately because obviously a family of four with an income of $20,000, $30,000 or $40,000 will be spending all of its income on the essentials and the necessities of life with a few frills. The family of four with a $100,000 income will of course have choices.

The beauty of our idea is that by making sure the taxes stay in the hands of people in the low income decile or the low income area, those people will spend the money and put it back into the economy.

Once again we come back to pizzas and muffins. We end with more pizzas purchased. We end up with more muffins purchased. We end up with more barbeques purchased. We end up with more chocolate bars purchased. In that way we end up with more people working. It is a direct way for Canadians to help themselves with their own money rather than the government helping them with their own money.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, this is the first opportunity I have had to speak to the bill on the harmonization of the GST.

I have heard a number of noteworthy and notable speeches by the Liberals to justify the appropriateness of this bill. I cannot agree with them. This bill represents the Liberals' acknowledgement of failure to my mind. During the election campaign, and even before, when the Conservatives thought they had found the magic formula for getting out of hot water and halting the growth of the deficit, in short, for better selling themselves to Canadians, they came up with the GST formula. I recall the Liberals, who were in opposition at the time, being all in a lather over this tax, which was to be added to the Canadian tax system.

The current Prime Minister, who was then the Leader of the Opposition, did not want to outdone. He said: "I will scrap the GST. We hate this tax and we are going to eliminate it".

Recently, confronted with the remarks he made at the time, the Prime Minister tried, as we say, to put the toothpaste back in the tube and discovered that it was no easy task. First he denied, then he softened his denial increasingly and finally he said that Canadians had been a bit slow in not understanding, that it was not what he wanted to say.

However, if the words "I will scrap the GST" are given their usual interpretation, nothing other than "dump out" for "scrap" comes to mind. That was what the then Leader of the Opposition, who hoped to become and has since become the Prime Minister, really meant.

Speaking of failure, upon taking office, the Prime Minister gave its finance committee the mandate to look for a viable alternative to replace the infamous GST, the goods and services tax. The committee held hearings, heard witnesses, summoned accountants close to the Liberal Party of Canada and came up with a couple of alternatives before ending up with the HST. Since the first two options were rejected, we are left with the HST.

Let us look at why the government is trying so hard to distance itself from its election promises. Having put out feelers and considered various options, why come up with this HST?

Several answers can honestly be given to this question. First, we have seen that not everyone was happy with the human resources development reform in Canada, the employment or unemployment insurance reform. In fact, I dare say the hardest hit were seasonal workers in the maritimes. I personally visited the maritime provinces twice in the past two years and I could see that, in the fishing communities, boats were put away. In every backyard on Lamèque Island, there is a boat that has not been used once in the last two summers. This has caused discontent.

I can remember the hon. member for Beauséjour and the Minister of Human Resources Development going back to their ridings to try and sell their so-called employment insurance reform. They had to be placed under the protection of the RCMP. When a member or a minister needs a police escort to sell any bill or policy to their supporters, there is a problem.

The members concerned probably realized there was a problem and managed to convince the Prime Minister he should admit it.

This, I think, is where the reform and harmonization of the GST really originated. The government wanted to pay off the maritime provinces, where 32 of the 33 ridings are held by Liberals. The federal government wanted to preserve that, particularly in light of the fact that a maritime province just elected a Conservative government, something which was totally unexpected. So, the Liberals said: "We have to do something, otherwise maritimers might turn against us".

This is how the idea of harmonizing the GST came about. I listened to the hon. member for Scarborough-Agincourt, who said in his speech: "This harmonization is great. It means that, in some provinces, the combined federal and provincial taxes will go down from 19 to 15 per cent, a 4 per cent reduction. People will be pleased".

Sure. However, that 4 per cent represents the $961 million that maritimers will no longer pay, but that the rest of Canadians will still have to pay, that is to say, taxpayers from Quebec all the way to the Pacific. This $961 million represents what we will have to pay, because maritimers will no longer do so, thanks to their lower combined tax rate.

The government should admit this to Canadians from the other provinces who will have to make up for this $961 million shortfall. There is no doubt in my mind that Quebecers, like the others, will pay their share, if not more, because it can no longer be said that

this $961 million will be prorated. It is not true. We can already exclude three provinces that will not contribute. There are players missing.

Instead of dividing that $961 million by ten, since there are ten provinces, it will be divided by seven, because three provinces will not pay. Instead, they will benefit from that measure. Quebecers have traditionally paid around 23 or 24 per cent of federal taxes. In this case, their actual contribution could go as high as 30, 31 or even 32 per cent of this $961 million. This is what is so unfair.

This is probably an attempt to make people forget about the closure or downsizing of military bases in New Brunswick and Nova Scotia. In any case, the government wanted to redeem itself. I listened to the members opposite, particularly the hon. member for St. Boniface. These defenders of every possible Liberal cause told us that this HST was the greatest thing since sliced bread, that Canadians should rejoice forever, and that the Liberals would definitely make it to heaven now.

You will understand if I have my doubts, particularly when you never know who or what this tax is going to hit next, and when it makes no allowance for soft sectors such as culture, and other sectors such as restoration. These are sectors that need a break, if I may put it that way, sectors that need general and regular support from the government.

Fine. The minister made a compromise that he thought was commendable but that I call almost insignificant, by exempting universities and schools from paying GST on books. The GST on books was being paid by him, or by governments. So he was doing himself a favour, or at least reducing the amount he owed himself. This is not something that is going to help industry. A tiny part of the book industry sells books in schools or in municipal or public libraries.

But think of all these writers, all those who publish. I will give you an example. Take sheet music. Music is not a profitable field, and even less so when it comes to writing it down on paper. An entire printing process has to be set in motion in order to sell 60, 70 or 100 copies of a musical score across Canada.

It can easily cost $2,000 for the printing setup and perhaps 100, 150 or 200 copies in certain cases of the musical work in question will be sold. If we want to respect copyright, something which has not yet been recognized, the place where an artist may sometimes derive some sort of benefit or profit is on the performance of the musical work, not through circulation of the paper on which it is written. This is a way of publicizing the musical work, but it is generally more profitable when it is performed, when it is heard, when it is broadcast.

This is where the artist can make a bit of money, when it is performed by orchestras, be they chamber, symphonic or philharmonic. Printing music is expensive and often cuts into the profits of the composer, the person who wrote it, the author. But now they have decided to squeeze him dry, to make his life more difficult. If he sold 80 copies, the Minister of Finance would perhaps be jealous because he cannot sell his copies of the budget for very much. But you can be sure printing his budget costs plenty. What I can tell you is that the poor people are being put through the wringer. This is at the root of our cultural industry and the Liberals could care less.

They are much keener when it comes to doublecrossing people, as they did in the Peason affair. They cancelled a contract and, in the end, it is going to cost us just as much as if it had been honoured. And the promoter will not have any of the financial risks that are typical of this kind of undertaking.

When we had the debate in June 1994, I said as much to the minister, the current Minister of Defence who was then Minister of Transport and who was in charge of the Pearson airport case. At the time he said the hon. member for Chambly was exaggerating, and that is on the record. And all this was supposed to cost us $20 to $25 million, those were the figures he mentioned, but certainly not more. We are not going on a witch hunt, and we must look to the future, the minister said at the time.

Almost three years, or at least two and three-quarter years later, we see nothing, absolutely nothing has been done about the Pearson airport case. And now, the government is facing a law suit totalling between $650 and $700 million in damages.

Recently, we read in the media that there might be an out-of-court settlement, something like the offer they made to the former Prime Minister of Canada. I do not know whether apologies will be forthcoming this time. It seems that $70, 80 or 90 million is the offer they will start with, but negotiations are not over yet. Actually, the Liberals are delighted that they managed to do indirectly when they could not do openly, which is to take care of their friends. They argue that if they do not settle, it will cost the government a lot more, and they use this argument as a sword of Damocles. Quite some case. So how do people manage to do favours for their political friends when they are in power?

Take for instance in my riding, we have a thriving industry called Unibroue. Unibroue was established by people who decided to ignore the rules and regulations of federal and even provincial legislation and start brewing beer, good beer, outstanding beer: Raftman, Blanche de Chambly. I know my friends in the Bloc have sampled and enjoyed them all-

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

In moderation.

[Ghislain Lebel, Bloc, Chambly, QC]

Unfortunately, I know that Ontarians did not have that pleasure because Unibroue, which makes Blanche de Chambly, Raftman, Eau bénite and la Maudite, which are specialty beers, does not have access to the Ontario market: André Dion, my friend from Chambly, and I salute him, cannot sell his beer in Ontario.

It is sold in Australia, in France, in Belgium, in Germany, in Luxembourg. It sells like hotcakes in the United States, they cannot keep up with demand. I think it is sold in Japan too, but not in Ontario. None is sold in Ontario, because the big buddies of the present federal regime control the distribution of alcohol throughout Ontario.

So Unibroue, from whom astronomical sums were demanded for sales in Ontario, finally was never able to sell a single bottle there, was never able to get it displayed or promoted by the Liquor Control Board of Ontario, because it was a Quebec product. I see my Ontario friends over there are appalled, but they are nodding in agreement. What I am saying is the truth.

The Peace Tower has been restored. In my riding, there is an industry by the name of Ferco, owned by Armand Rainville. It could have been involved in the renovations to the centre block here. Mr. Rainville invented a platform with a retaining wall, which could have been moved up and down the tower. Use of this platform would have reduced the costs of renovations. This is a good product, the proof being that the company rented out their equipment to construct the Atlanta stadium for the Olympics. Their machines are in Thailand, and just about everywhere in the world except Ottawa. They could not place one to Ottawa, because they are not buddies of the regime, friends of the Liberals who paid $3,000 for the privilege of attending a little supper in Westmount where the Prime Minister would deign to look upon them and greet them. That is another way of giving the advantage to one's friends. That is what politics is all about.

People tell me that, deep down, ministers have a bit of a masochistic streak. They have to reveal their private life and all their assets and fight an election campaign. They often get their ears boxed. They get accused of this or that. You really have to want power to subject yourself to all these things and push to be elected and become a minister. I say they are not there for themselves but for their friends. It is their friends they can gratify, provide pleasure and accord certain honours to.

Consider the distilling industry in Canada. Try to start up a distillery in Canada-legally, I mean-to develop a recipe for a fine gin, rye, whiskey or what have you, try to set up shop, with a license and everything. You will never manage it.

Those who have the manufacturing monopoly in Canada are pretty much those we allow to run off with $2 billion in family

trusts. These are the little privileges that the major parties in power offer their friends in exchange for a contribution to election coffers.

The maritimes are no exception. They began to think about blowing off steam perhaps and letting it be known that they had had enough. I saw the Minister of Human Resources Development in a room trying to strut his stuff and being escorted out by police because there was a guy there who was a bit of a bruiser and who was threatening to rough him up.

They will be going after this guy's vote in the next election. We know it is coming. It will be in June. They want his vote and they think they will get it with Bill C-70. They cut his fishing quotas. They lowered his unemployment insurance and made him work longer to get it. They cut his pay. Still they will go after his vote. With $961 million, they are good until June. In the meantime, they will convince him to vote for the Liberal Party of Canada. That is the strategy.

This approach does not fool Canadians and Quebecers. They will make it very clear to the government that this kind of attitude, I might say, this sort of legislative scheming is not acceptable.

Canadians and Quebecers are no fools. In the next election, they will do as they did in October 1993: they will again sweep members of the Bloc into power. I add that, if we had members in the maritimes, they too would be re-elected.

Mr. Speaker, I know you agree with me, although I will not make you say so.

I add that the Bloc Quebecois will vote no, and especially the member for Chambly.

[The Deputy Speaker]

Before we move on to the period for questions and comments, I must point out that the Speaker always agrees with what is said in this House; he is neither for nor against.

[Beryl Gaffney, Liberal, Nepean, ON]

Mr. Speaker, I listened with great interest to the statement of the member from the Bloc with regard to the GST and the harmonized sales tax in particular. He seemed to have a great deal of difficulty dealing with the business portion and how businesses in Canada would be far better off under the HST than what they presently are under the GST.

It would almost lead one to assume that the member is anti-business. How can you say that when businesses will have to deal with only one sales tax? There will be one sales tax rather a federal and a provincial tax? How can you be against that? Is that not to the benefit of businesses? Of course it is. It will reduce the costs of

businesses. Their costs today are far higher than what they will be under the HST.

If you look at the participating provinces that have already agreed to the HST, these businesses we already know are far better off under this system than the provinces that have not signed up.

What does the member have against businesses and trying to help businesses in every province in this Canada, not just in Quebec? Quebec is a province in Canada.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I have nothing against the principle whereby governments have to dig into the taxpayers' pockets to maintain services. The hon. member for Nepean should realize that.

What I do have a problem with is doing it in a roundabout way that is not obvious to the people. It is a pity that she is not a member of my party, because she is criticising me for being against business, the business they are crushing under loads of paperwork.

Furthermore, not only will harmonization not help business, this harmonization proposal introduced today will have the exact same effect as the GST, except that you have changed the G for an H.

When I had my practice as a notary, people would come to see me and say: "The GST is going to put an end to the underground economy, you know. It will not be in anyone's interest to hide the GST because, in the end, they will collect over there". But look at what happened to jobs, jobs, jobs. The GST may well be the main reason for this mess. On account of the amount of paperwork and related administrative constraints, from the very beginning, people decided to work their way around the tax. When the government is unable to collect the GST at the front end, it is just too bad, as they say, but it will not be able to collect it at all. That is how, Madam, the underground economy is encouraged. In a word, I am against the underground economy and for business. And I hope you will too.

[The Deputy Speaker]

My colleagues, if you could make a point of addressing your comments to the Chair instead of to one another, this would prevent all kinds of problems, as we have seen recently.

[Barry Campbell, Liberal, Parliamentary Secretary to Minister of Finance]

I would have a very brief question, Mr. Speaker. Strangely enough, remarks by Bloc members always include a reference to the fact that they are against harmonization.

I would like to know if harmonization is somewhat successful in Quebec. My question is simple: Does harmonization work in Quebec, yes or no?

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I would like to reassure my learned colleague that, indeed, collection of the GST and QST is working well in Quebec. But the federal government did not have to fork out $961 million for it either.

The Government of Quebec willingly harmonized the taxes; it was not ordered to. It acted on its own, as it quite capable of doing, and as the maritimes, apparently, are not.

Under federal government schedules, the Government of Quebec should be entitled to fair compensation for the work it did on its home ground that benefits the federal government. As always, Quebec will not be compensated, but the maritime provinces will be.

[Barry Campbell, Liberal, St. Paul's, ON]

Mr. Speaker, I would like to know if this means the Bloc member supports harmonization.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, not at any cost. This is not harmonizing, it is a disguised form of welfare. The government calls it harmonization, but it is nothing short of a hold-up. It takes $961 million from the pockets of some taxpayers, puts it in the pockets of others and calls this harmonization.

Instead of giving it to the poor, to the fishermen to whom I referred earlier, the one receiving that money will give it to the businesses moving to his province, as the premier of New Brunswick did. You are using our money to compete with us and to attract industries, a sector so dear to the hon. member I was told not to look in the eye. But that is the problem.

[Barry Campbell, Liberal, St. Paul's, ON]

Mr. Speaker, the hon. member opposite, in response to what I said, has talked about this issue of adjustment assistance.

It is interesting because we have had this discussion several times in this House. I wonder if he is really aware of the manner in which the Government of Quebec harmonized with the GST, the number of years that it took and, as a result, the province of Quebec, I am sorry to say this but it is true, operated two parallel systems and as a result saw enhanced revenues in those years, not a decrease in revenues.

The formula that results in adjustment assistance being paid to the Atlantic provinces which are harmonizing states that any province that loses 5 per cent of its retail sales tax revenue during a transitional period as a result of moving to harmonization will receive this adjustment assistance.

The fact is if Quebec, under that formula, would not have qualified then it would not qualify now and that is just the way it works. If Ontario or British Columbia were to harmonize now they would not be entitled to compensation either but other provinces would be. It is a formula that recognizes that there are some adjustments in transitional costs that result when one harmonizes

overnight, April 7, 1997. Quebec took several years to harmonize, operated two systems in parallel and saw an enhancement in revenue, not a decrease. I wonder if the hon. member knows that.

[Ghislain Lebel, Bloc, Chambly, QC]

Mr. Speaker, I would appreciate it if you let the hon. member know that Quebec did not get rich with its own adjustment. Quebec made the adjustment to maintain some administrative and financial logic. It had to adjust to the conditions imposed by the federal government, which encroached on direct taxation in an area of provincial jurisdiction.

We are now being criticized for having moved to let the steamroller go by. It is the Liberals in Quebec that did that. The hon. member is wrong. Let him show us his criteria. Let him tell us why the maritime provinces were compensated, while Quebec was not. Let him do a point-by-point comparison between the two provinces.

Instead, the member is complaining, saying that Quebec is not entitled to compensation. But based on what? How could we be eligible if we are not? The member simply cannot answer that question. He should just answer it, instead of wasting hours of debate. When we are a little too blunt with the Liberals, they gag us, as they did today.