Mr. Speaker, initially there had been an accord that I would be sharing my time, but that has now been changed and I will not be doing so.
I am pleased to have the opportunity to address the House today in support of this bill, which makes amendments to the GST and harmonizes the HST in the Atlantic provinces. I am pleased to do so because I want to try to bring forward some of the more positive features while recognizing that there are difficulties. A model has been put forward that is applicable to other provinces, with the same advantages to other provinces.
No special deal has been set up, as some colleagues would pretend, in order to try to make politics. It is rather interesting when one talks about the Reform Party these days. There are a lot of articles about how much difficulty it is having. It is not unusual to notice why. We have just heard from one of their more moderate members who spent much of his time talking about going to jail for putting a sticker at the wrong place on a chocolate bar. Let us get serious. Would that really happen?
He talked about the arrogance of the Prime Minister. What nonsense. We have one of the most gentle, kind, down to earth prime ministers we have ever had. There is no arrogance. That is the kind of sentiment that Reform wants to put out in order to gain political points.
He talked about Bombardier, which is one of the large, prosperous and significant companies in Canada, and within a few seconds was talking about weird, wacky interest groups and somehow put them together. If you are an interest group, does that make you weird and wacky? No, I think not. I know of a lot of interest groups whose members are extremely well educated and knowledgeable who have specific and important objectives. Just because they
come to Parliament and to governments to share information and seek assistance does not mean that it is inappropriate, but there goes the Reform philosophy. It puts Bombardier and weird and wacky interest groups all together. That comes from one of their more moderate members.
Is anybody surprised that Reform is having difficulty trying to convince Canadians that it is a serious political party? It does not surprise me.
I recognize that the scrap versus replace debate is ongoing. I understand the position of both groups. I made it my job to do so. However, I think any fair-minded person would recognize, if they took the time to look at it, that this legislation is a big step toward the accomplishment of another of the government's red book promises, as imperfect as it may be.
I want to quote what was in the red book as opposed to what the opposition parties that are trying to make political hay are saying. They recognize that taxes are not popular. They recognize that when a tax is changed, that is the time to try to embarrass the government. There is no serious criticism in trying to make what is happening better, simpler, easier, more acceptable to businesses and consumers. There is none of that. There is simply an attempt to exaggerate items, but they exaggerate to the point where no one really believes them.
I will return to the quote.
A Liberal government will replace the GST with a system that generates equivalent revenues, is fair to consumers and to small business, minimizes disruption to small business, and promotes federal-provincial fiscal co-operation and harmonization.
That is what we said. I realize that in the course of the debate, there are a number of things people may have said. And unfortunately, they may have caused some people to jump to conclusions. That is really too bad.
Suppose we look at what we said officially.
The broad elements of the final agreement with the Atlantic provinces included-it is important to understand that because therein lies a model which could be applicable to other provinces-a substantial reduction from current combined rates down to 15 per cent in the three participating provinces; a single administration for both federal and provincial sales taxes; tax inclusive pricing so consumers will know in advance of their purchase the exact price they will pay. For transparency purposes, the tax or rate of tax will be shown separately on the sales slip.
A national approach to interprovincial sales will ensure a level playing field for businesses in the participating provinces. Federal rebates and the GST low income tax receipt will continue to apply under the harmonization agreement.
A key element of the new system is a single set of rules and forms, as well as a single administration. Tax relief for charities and public sector bodies will continue. Participating provinces will provide rebates for the provincial component of the HST to charities and qualifying non-profit organizations.
In each province, municipalities, hospitals, schools, public colleges and universities will receive a partial rebate of their tax.
I believe that businesses in participating provinces will become more competitive at home and abroad. Some have indicated exactly that, recognizing that some people have disagreed with them.
Furthermore, businesses will collect and remit the HST on sales in the participating provinces. This approach ensures that sales tax is collected and remitted in a more effective and efficient manner. Surely we have a commitment to be more effective and efficient. Perhaps the Reform Party does not want that.
Simply put, the harmonized sales tax means a simpler tax system for both consumers and businesses which is more efficient to govern.
I would like to address an issue about which I am pleased with the direction taken. I have always supported and continue to support the removal of the GST from all reading materials. It is a position which I took a long time ago and I have not wavered from it.
I was extremely pleased with the announcement made by the Minister of Finance on October 23, 1996. At that time the minister announced the government's intention to implement a 100 per cent GST rebate on all books purchased by public libraries, schools, universities, public colleges, municipalities, qualifying charities and non-profit organizations across Canada, effective immediately. I have not heard the opposition talk a lot about that.
This change includes all classroom books distributed freely to students by educational authorities. As a result, all books purchased by these bodies will not be subject to the federal sales tax anywhere in Canada.
This rebate affirms the federal government's commitment to support literacy. However, I must confess that I consider the measure to be a partial sucess as opposed to a total success. This special rebate recognizes the important role played by public
libraries, educational institutions and other community organizations in helping people learn how to read and improve their reading skills, something which has become increasingly critically important in today's society.
Finally, I have received numerous representations from physicians in my riding and from across Canada. The physicians have made what I consider to be an effective case concerning the application of the GST to their practices. Although physicians are treated for income tax purposes as small businesses, they are unable to claim a GST refund on the medical supplies used in the delivery of health care.
I am told that the recent agreement between the federal government and the Atlantic provinces will make matters even worse than they were. I believe that doctors deserve to be treated the same way as any other self-employed Canadian or small business.
As I said at the finance committee meetings which reviewed Bill C-70, I have concerns with respect to the GST and physicians. Officials acknowledged that such difficulties need to be addressed. It continues to be my hope that an equitable solution can be found. Surely there is a solution that is acceptable to both physicians and government. I am seeking a solution that is acceptable to the government and to the doctors. I will continue to play a role to that end if I am requested to do so.
Finally, I would like to sum up the benefits of harmonizing the GST. This is not to say there are no obstacles to overcome, no problems. Obviously, the system is changing, and when we change something, we know there will be problems. We cannot anticipate everything, but the benefits are there, and I will mention a few. It is one of the most effective measures for supporting job creation and economic growth in that region.
Some people say we should remove the GST altogether. We would love to be able to do that, and if it were at all possible, that is what we would do. However, we cannot forego the revenue. The Prime Minister and the Minister of Finance have said many times it would be impossible to abolish, to shelve this tax, without replacing it with a tax increase to keep revenues at the same level.
I also wanted to talk about tax cuts, something not often mentioned by my opposition colleagues. For consumers in the three provinces where the tax is being harmonized, this new system will mean a tax cut and eliminating the tax on the tax. That was not mentioned.
The new tax will be better for consumers, business and governments-that is what harmonization is all about-and it will be easier for the consumer, because tax will be included in the sales price. What consumers see on the price tag is what they will pay at the cash, but retailers will indicate the tax clearly on the sales slip. Those are the advantages.
Businesses in harmonizing provinces will have only one sales tax administration to deal with and not two; a single group of auditors and not two.
It is a better system for the economy, because the harmonized tax will be more effective from an economic standpoint. It is a national strategy for interprovincial sales to ensure the rules of the game are fair for businesses in participating provinces. Furthermore, federal refunds and the GST credit for low income earners will continue to apply under the harmonization agreement.
I believe that the government is taking a big step forward with this bill, as imperfect as it is. It is a complex bill. It was complex before, it is complex still today and it will continue to be. Clearly there will continue to be challenges and difficulties to surmount. Surely if we are what we pretend to be in this House, we ought to be identifying not only the problems, not only the hurdles, not only the challenges, not only the insensitivities if they exist, but also the solutions to correct it. I have not heard that.
I have heard gross exaggerations that they will remove the tax and they will do this and they will do that and then they will do this and that and this and that, knowing full well there will never be an opportunity for them to do it. It is very easy to promise everything when you know you are not going to have to do it. But where is your responsible behaviour when you look at a piece of legislation and you are unable to look at not only the difficulties but the merits; when you are able to identify not only the problems but to suggest corrective measures as opposed to empty exaggerated rhetoric that attempts to aid a drowning party and somehow lift it up? That is what is happening here.
I personally look forward to the signing of agreements of this nature across the provinces. I am hopeful my colleagues will use their resources, their knowledge, their insights in order to make this legislation even better than it is. If they were to do that, they would be helping consumers across Canada. If they were to do that, they would be helping business men and women across Canada. If they were to do that, they would be helping our country, which is already number one on a number of measures, become even better, stronger, more united, more oriented toward helping each other as opposed to being pecky and picky and attempting to destroy the very fabric that holds us together.