We are not talking about video tapes here. We are talking about taxation and we have been seeking to deal with it since were were elected. The finance committee has met innumerable times and we have spent hours and hours of individual members' time from all parties of the House to come to grips with what is a very serious problem. Instead of cat calling back and forth about it, we should be trying to wrestle with it.
I believe members opposite are saying they want a rational solution to the problem. Let us try to find a rational solution to the problem rather than saying scrap it. The party opposite says scrap it and at the same time wants to see the deficit reduced. How can we deal with a deficit of $17 billion? Take it out of the taxes and put it into the income tax system? This is not realistic.
We are seeking a realistic solution to a very complicated problem. There is a realistic solution that I think we can be proud of when we look at the Atlantic provinces. What have the Atlantic provinces achieved by agreeing to harmonization? This is the way to deal with it.
In my province of Ontario we have two different systems of tax being collected differently. Some apply to services and some do not. It is an irrational system to have two different levels of consumption taxes applied, collected differently and imposed particularly on small and medium size businesses that have to bear
the extraordinary input costs of dealing with this system. It just does not make any sense.
The Atlantic provinces have been willing to grasp this nettle in a way that deals with many problems. It deals with the problem of the small business which looks at the fact that its cost to apply this tax will be less. It deals with the problems of the manufacturers in the general economy by insuring that the proper input credits will be given both in respect of PST and GST. That would eliminate one of the most serious macro economic problems about this tax, which is its inefficiencies and the way in which it interferes with rational economic planning and manufacturing.
It deals with the problem of the consumer, who in the end really does not want a system as complicated as the present one. That makes a lot of sense.
I suggest that if we in the province of Ontario would be willing to look at a similar solution, and if the rest of the provinces would be willing to look at a similar solution, it would be of extraordinary benefit to the country. In the first place, it would remove what is a very serious non-tariff barrier to trade within the country. We cannot ignore the fact that at present the tax structure of the country inhibits people from moving back and forth and offering their services in different parts of the country.
I happen to know of service providers in the province of Ontario who will not go to the maritime provinces at this time because the cost of having to calculate what their services would be and how they would pay the tax is not worth their while. As a result, the maritime provinces are losing the benefit of the input of those people and the people of Ontario are losing the opportunity to compete in those marketplaces. It is inefficient. It does not make sense. The maritime provinces have provided an opportunity for the rest of Canada to follow.
The tax will deal with the problem of proper management. It will deal with the input level issue. It will deal with the question of services which today account for 60 per cent of the economy. It is totally a modern solution to the problem. This is the only way we can go.
What I find a bit odd is that it is members from Quebec who are protesting a system that is ultimately the same as the one in their own province. They have harmonized their PST with the GST.
Why? Is it because Quebec's representatives at the provincial and federal levels have recognized that it is in the interest of Quebec taxpayers to harmonize? Having done so, they are asking the rest of the country why they are following suit. "You are nuts to harmonize your provincial sales tax with the GST," they say. I do not understand this reasoning at all.
I am surprised that Bloc Quebecois members are not saying: "At last, the rest of the country is recognizing that what we did makes sense. We congratulate the rest of the country for following our example and we urge the Province of Ontario and the other provinces to follow suit. And in the interest of Quebec taxpayers, we are going to eliminate the non-tariff barriers between Canadian provinces for the greater benefit of all Canadians, not just in Ontario, but in Quebec and the Atlantic provinces".
We in this country no longer have the privilege of living in an isolated world. We live in a world in which our goods and services compete in international marketplaces. Furthermore, our goods and services compete in international marketplaces not just when they are exported but they compete in international marketplaces within our own country, within our own jurisdictions, because we have competing goods and services coming in.
We have to face the fact that in 1998 when the NAFTA comes into effect goods and services will move across the borders of Canada, Mexico and the United States much more freely than they do today. We have to recognize that we need in place a tax system which will recognize that reality and not be an inhibition to the productivity of our citizens, our manufacturers and our sales people in this country. Otherwise we are going to be in real trouble.
The harmonization solution which will be implemented in the Atlantic provinces will go a long way in dealing with a lot of these issues.
The members of the foreign affairs committee have had the opportunity to travel and meet people, for example, in the European Union. People in the European Union have spent the last 30 years trying to harmonize their taxes.
When I was a law professor at the University of Toronto years ago, I remember meeting experts from the European Union who said: "You created a tax system with different rates in different provinces? You have a PST in some provinces, different from the GST? How could you possibly invent a system that is not harmonized? We have spent 30 years trying to harmonize our system and you have created a system that is a nightmare". That was in 1986.
The government is trying to cure the nightmare that was created by the previous administration. Instead of the members opposite screaming and yelling and saying: "This is crazy. Did you watch last night's video?" why not say: "Let's pull together. Let's look at this mess. Let's find the best solution possible". The finance committee has looked at this. We have all looked at this. The harmonization proposal for the Atlantic provinces is finally ad-
dressing in a concrete, positive way a tremendous problem that we have as Canadian citizens.
Speaking as a member of Parliament from the province of Ontario, I hope that the members of Parliament from my province and the premier of the province of Ontario will have a look at it and say: "This is the way we should go. This is for the benefit of Canada. This is for the benefit of the citizens, not only of the Atlantic provinces, but Ontario, British Columbia, Alberta, Quebec and every other province in Canada".