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.