Exactly. So, for a bill of approximately 272 pages, there were 113 amendments. You can see that both the process and the bill itself can be described as an improvisation right from the start. Proposing 113 amendments to 272 clauses is a neat trick.
Not only did they table these amendments, which is ridiculous enough in itself coming from a government that claims to be serious, but at the same time, those amendments to the bill were provided to us two hours in advance, and involved modifications and outright deletions.
I get the feeling the government is so anxious to conceal things about the GST that it wants to prevent us from doing our job as the official opposition. And despite our asking continually during the three days of hearings in January that they be extended, because people from the maritimes wanted to take part in the finance committee hearings in order to explain that the government was making a mistake, with its perpetual improvisation, with its game of pretending to do something about the GST, whereas it had promised to scrap the GST, to abolish the GST, our request was refused. As a result, the bill is riddled with inconsistencies, even practical barriers for businesses. We shall return to that point later.
As for the improvisation I referred to, even this week when we undertook examination of Bill C-70 at the report stage, we did not even have the bill as amended by the committee available to us when we started our examination. That takes the cake. This is a solemn institution, with a government that claims to be responsible, and, when Bill C-70 is studied at report stage, we do not even get the latest amended version of it. I think Liberal members are so stricken by pre-election fever that they forget to do their work properly. Lucky for them they have an official opposition that looks after the interests of Quebecers and Canadians while this fever rages.
Not only is the government continually improvising, it is diverting taxpayers' attention in this bill. Why? Because the bill talks about harmonizing in a small part of the country: three maritime provinces at a cost of $1 billion, we must not forget. It is too awful for us to keep silent on this political compensation.
They are hiding the truth. It is not the truth to say that harmonizing is necessary in the maritimes, and this will provide an example for the future. The truth is that the government made a commitment to abolish the GST. The commitment was not made by the rank and file of the Liberal Party. The Deputy Prime Minister, who made a big production of her resignation and re-election at the cost of half a million dollars, had promised her government would abolish the GST. So did the Prime Minister. We must not let this be forgotten, because we will soon be going to the polls, and the people will remember that, when the Prime Minister makes a promise, he will not necessarily keep it, because he can say whatever he likes and do the complete opposite once he is in power.
The people will remember. They will remember that, during the election campaign, the current Prime Minister said, and I quote: "We will scrap the GST". Scrapping does not mean harmonizing and it certainly does not mean paying $1 billion in payoff to the maritime provinces in order to come out smelling like a rose in the matter of the GST.
The people of Canada and Quebec will remember as well that the Prime Minister said on May 2, 1994: "We hate this tax and we are going to eliminate it". They will remember each time the Prime Minister opens his mouth to make a solemn commitment, as we have seen regularly since that famous evening in Verdun, the first referendum evening when he made a slew of commitments he did not keep either. People will know that the Prime Minister's commitments are not worth the microphones he utters them into.
The Liberals, the government, the Liberal Party of Canada have a very selective memory on the subject of Bill C-70, and the comments I heard earlier from my colleagues prove it. First, when they were in opposition, the Liberals got themselves in a great state. My colleague from Sorel remembers that, because he was a member of the Conservative Party, which was in government and which set up the GST.
In their minority report, a report dated November 1989, when they were in opposition, the Liberal members of the Standing Committee on Finance stated, and I quote: "It is the position of the Liberal members of the finance committee that the Conservative goods and services tax proposal is flawed and cannot be "patched up" in a way that would it fair for Canadian taxpayers". This is a quote from page 262.
What have the Liberals done with Bill C-70? A patch-up job. In the three Atlantic provinces, the existing GST and provincial sales taxes are being replaced with a single tax called HST, or harmonized sales tax. But the fact of the matter is that it is the same tax. It is the GST with a different name, with approximately $1 billion in bonus for the maritimes. They have done a patch-up job to meet their election objectives. They have made a partisan patch-up job at public expense, at the taxpayers' expense, with the taxes paid to the federal government every year.
Here is another quote from the Liberal minority report, at page 277, regarding the fact that the new harmonized sales tax would be included in the sales price. I may have failed to mention this detail. The maritimes tax harmonization scheme provides for the new 15 per cent tax to be included in sales prices.
Coming back to the minority report tabled by the Liberals in 1989, at the time when the goods and services tax was established and the Liberals were in opposition, let me quote from page 277 of the minority report, which stated: "The great danger of making the GST a hidden tax is that it would be much easier for the government to raise the rate in the future". In those days, the Liberals opposed tax inclusive pricing, arguing that the Conservatives would do everything they could to raise the tax without anyone noticing. The Liberals are doing that very thing. That is incredible.
I would like to bring to the attention of the public another quote from the report of the Liberal minority, which was in opposition at the time. They were sitting then exactly where we are sitting today. Regarding tax reform, the Liberals said, and I quote from page 300 of their report to the finance committee: "Sales tax reform cannot be undertaken independent from income tax reform, corporate tax reform, social welfare reform or independently of the other levels of government. Canada is in need of an overall tax reform that encompasses all forms of taxation and all levels of government".
Not only did the Liberals not abolish the GST, but they have not undertaken any overall income and corporate tax review.
We had to nip at the heels of this government for three and years, and we had to submit ideas and analyses ourselves to reform individual and corporate taxation, as was done in November for businesses and just recently for individuals. The official opposition had to do the government's job as regards tax reform, because the government is not doing its job. It even goes against its own vision, doing exactly the opposite of what it claimed it would do when it sat in opposition. As for the participation of other levels of government, we know what to make of it.
Officials representing the governments of Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia were literally pushed aside. Why? Because this is a bill providing $1 billion in compensation, something which is unacceptable to officials representing Canadian provinces other than the maritimes, including those from Quebec. It is unacceptable because the government takes money paid by the taxpayers from all these provinces to compensate the maritimes through a local harmonization process. This is unprecedented. It is obviously a political and partisan measure that makes no sense at all. We have now reached the point where, in order to make local tax changes in the maritimes, the federal government takes the taxpayers' money to compensate the provinces concerned. It makes no sense.
The result is a bill that is in total contradiction with what the Liberals claimed to defend before they took office. It has nothing to do with the tax reform they claimed to support at the time, particularly as regards the GST, a tax which they then claimed to hate. The Liberals said they hated the GST. At the time, they pointed their fingers at the Conservative government and relentlessly attacked its members on the GST issue. All the Liberal members who were there at the time said the GST had to be abolished, that it had to be scrapped, because nobody wanted that tax in Canada. Once they took office, there was no problem any
more. Not only did they keep the GST, but they are also tinkering with it, something to which they had been opposed at the time.
In addition, with respect to the process surrounding the debate on Bill C-70, we added our voice to that of the Government of Quebec and the governments of certain Canadian provinces and urged the federal government to make public the details of the calculations that prompted it to hand over $1 billion, or close to $1 billion, in compensation to the maritime provinces.
Each time, we came up against a blank wall. The government is refusing to make public the criteria behind this compensation, how it was calculated and the figures available for the three maritime provinces. Their refusal to release this information means that there is something to hide. Could it be that the $1 billion in compensation is not justified? Could it be that a request from the governments of these three Atlantic provinces was thrown on the table and the Minister of Finance responded with this $960 million subsidy? Could it be that this is nothing more than a partisan agreement, something to show Quebecers and Canadians that the government is working to reform the GST, that it is doing something? Because, by doing something, they are giving the impression that the Liberals are gradually starting to deliver on their promise.
It is not right that $1 billion of our money has been spent and no details are available about how this amount was arrived at.
I again ask the Minister of Finance, on behalf of the Government of Quebec and the provincial governments who have been asking for this information since the early summer, to make it public. I remind him of this request that he make public the criteria and the method used to calculate this $1 billion in compensation to the maritimes.
This is not the only bill Quebecers and Canadians will be stuck with as a result of this agreement between the federal government and three maritime governments. Three, five, ten, fifteen, twenty or one hundred years down the road, taxpayers outside the maritimes will also be hit with the ongoing costs of equalization payments.
With your permission, I am going to give a little explanation of the equalization process for the benefit of the public. A province gets an equalization payment if it is determined that its tax base, in other words its ability to collect taxes from taxpayers, is not sufficient to enable it to provide public services equivalent to those available elsewhere in Canada. There is a very complex formula. I would urge you, Mr. Speaker, since you sometimes seem to enjoy the complexity of things, to read a lengthy but very interesting document put out by the Minister of Finance explaining all the calculations in detail; the technical wizardry is something else.
So when we analyse the tax base and are faced with the fact that in the maritimes the Liberal government purposely made the suggestion, which was accepted, to reduce the sales tax base, we see that equalization will play a greater role in the future than it already does in the three maritime provinces. Let me explain.
In the three maritime provinces, sales tax plus the federal tax on goods and services, the GST, added up to around 19 per cent: provincial sales tax plus GST equalled a tax of 19 per cent on goods purchased in those provinces. In the agreement with the maritimes, this tax is reduced from 19 per cent to 15 per cent. In other words, 4 per cent of potential tax revenue was eliminated.
Eliminating this 4 per cent of potential sales tax revenue of the three maritime provinces will necessarily mean that equalization will play a more important role.
To finish my exposé, in the future, after paying one billion dollars in compensation to the government's three maritime provinces, Quebecers and Canadians will continue to pay through equalization, Quebecers perhaps to a lesser extent because they will be asked to vote in a future referendum on the sovereignty of Quebec, but other Canadians will have to pay in perpetuity for the sales tax forgone by the maritime provinces as a result of reducing total consumer taxes from 19 per cent to 15 per cent.
The Minister of Finance is not advertising the fact. When we asked him about this in the House, he was vague to say the least. He was confident about the positive impact on economic growth and said that the tax revenues connected with his fantastic harmonization agreement with the maritimes would ensure that equalization would not be a major problem.
It is totally unrealistic to say that equalization would not be a major problem and that taxpayers will not pay in perpetuity for this very costly agreement with the maritimes.
According to Bill C-70, the agreement with the three Atlantic provinces could be used as a model for implementing the new harmonized sales tax system, which is nothing more than the GST in disguise. It is just as heinous as the previous tax. They say this could serve as a model for a new consumption tax system in other provinces in Canada. If this is the model, then, as we say, things must be pretty rough.
Even in the maritimes, they are rejecting this new system. This new tax system is going to be a fiasco. In the maritimes, they fear it
will bring total chaos. If this is the model they want to implement elsewhere, it is not worth much, and the government has problems.
Since the Liberals set aside only three days for finance committee hearings, witnesses from the maritimes willing to come to Ottawa to testify on this bad piece of legislation had to be turned away. As some of them told me, the Liberals thought that, during those three days, the representatives of the three maritime provinces would praise the government, tell them what a good job they had done, and say that they were happy to have the $1 billion in compensation paid by the people of the other provinces and proud of the agreement and of being used as a model for the implementation of a new tax system elsewhere in Canada.
The Liberals, however, got a great surprise-so did we for that matter. According to the Minister of Finance, this agreement appeared to be well received in the maritimes, and we believed him. We did not take his word, as usual, but we did think there was an element of truth. He believed what he said. He had met representatives of the maritimes, and everything was fine. Even the members from the maritimes said the agreement was a wonderful thing.
During the three days of finance committee hearings, the representatives of the maritimes told us that the bill had to be done over from scratch. The bill could not be used in the maritimes, because of the minister's endless changes. I myself would not do this bill over from scratch. I would pitch it in the garbage.
Why. The answer is simple. The aim of the bill was to improve opportunities for economic growth by promoting consumer spending, which would create thousands of jobs in the maritimes. According to some representatives from the maritimes, the new harmonized sales tax would create so many jobs the affected provinces would not have enough room for them all.
In fact, this tax may threaten rather than create jobs. There are very high costs associated with setting up and managing a new sales tax system. Representatives of large businesses operating in the three Atlantic provinces as well as in other Canadian provinces cautioned us not to proceed. Not only will setting up this new system cost approximately $100 million, but businesses operating in the maritimes will have to pay between $90 and $100 million per year in recurring management costs.
There are no savings. Harmonization may well prove to be a monumental fiasco. Representatives of major organizations like the Retail Council of Canada, whose members are responsible for 65 per cent of the retail trade, told us tax inclusive pricing was a bad idea. According to them, it will confuse consumers and result in additional management costs for retail operations, regardless of their size.
Sears Canada, Woolworth Canada and Canadian Tire-not exactly small businesses-also told us not to implement this system. They asked that the implementation of the system be deferred because of the incredible difficulties inherent to its setting up and management.
Businesses like Canadian Tire, Woolworth and so on are in the habit-and I think this is normal-of seeking the highest possible rate of return, so they centralize in huge warehouses the goods that will be sold through their many stores across Canada.
Goods are shipped from these large warehouses to the retail stores operated by Canadian Tire, Woolworth and other companies. But before they are shipped, the goods are tagged or labelled. At present, there is centralized tagging for all of Canada, which means that the procedure is the same throughout the country. The tags indicating the retail price are the same in Ontario, Quebec and the maritimes.
But the new system and the inclusion of the new harmonized sales tax in the sales price for the three maritime provinces will change all that. Large chains that warehouse and tag their goods themselves will be forced to put, on one side, goods for sale in the three maritime provinces and, on the other, the goods for sale in the other Canadian provinces and Quebec.
Why? Because the price will not be the same. The retail price of goods sold in these chain stores in Quebec, Ontario, Manitoba and so on, will not include the sales tax, while the price of goods sold in the maritimes will. So, these are two different systems.
They require different accounting processes and different inventory management systems. This means not only a different inventory management system, but also a different management system for the taxes to be paid by these businesses. The stock value is based on the costs of buying goods and on resale costs. Imagine the mess. All this to help but a fraction of the Canadian population. This will result in an increase in overall costs and in a terrible mess.
And the Minister boasts about having set up an extraordinary model. Extraordinary indeed. It is a model that is costing us $1 billion, that will cost us even more in equalization payments, that will trigger implementation costs of $100 million for businesses in the maritimes, that will result in yearly recurrent expenses of 90 to 100 million dollars in additional management costs, because managing stocks, prices and the movement of goods in the Canadian provinces will be a terrible nightmare for these businesses.
This is serious. It is no wonder that, on the third evening of January, when the snow was falling and it was really nice outside, the Liberals tabled 113 amendments to their own bill. They do not know what to do. They do not want the charming Minister of Finance, who is a very credible person, to lose face. He could indeed lose face with a bill such as this one. It makes no sense. If, even with a $1 billion gift to the maritime provinces, the federal
government is still not able to sell this unenforceable bill, then there is a problem.
I personally told the chairman of the Standing Committee on Finance that it made no sense to table such a bill. I did not get a clear answer from him. I have the feeling that he too is beginning to think the days are long when dealing with Bill C-70.
It came as no surprise when, yesterday, the government displayed an undemocratic attitude that has become something of a tradition in the past three and a half years by imposing closure on this bill. The more we talk about the GST, the more it hurts the government. There is a difference between harmonizing, particularly if it is done improperly as in the maritimes, and abolishing the GST, which is what the government pledged to do.
The more we talk about this bill, the more we analyze it. After all, the government only gave us 24 hours to review this legislation, including its explanatory notes, to make sure the interests of taxpayers are protected.
The closer we look at this bill and the more people we consult, even in the maritimes, the more we are left with the conclusion that you have to be a little strange, to have a brand of logic that perhaps only they understand, to bring in a system of taxation like this one. It makes no sense.
I ask the Minister of Finance, who is listening attentively, to delay implementation of this bill, to listen to the arguments put forward by the maritimes and by the official opposition and the other opposition. It makes no sense to implement a bill like this, that is costly for everyone, just so that he will look like he is doing something about the GST. It is unbelievable, but this is what often happens, more often than not. We therefore formally ask him to postpone this bill.
We agree that politics have changed. A politician can make mistakes. And a politician who makes a mistake and admits it can be forgiven. The Minister of Finance made a mistake; the Prime Minister also made a mistake. He made a mistake with this bill. He has made many since we have known him, but this bill takes the cake.
If the Minister of Finance admits that he made a mistake with this bill, that it is costly, that it is a fiasco, we will probably forgive him, because to err is human, but he must stop feeding us this nonsense. He must stop telling us how wonderful this bill is, when he cannot even convince the people in the maritimes that he is right.
Having given my views on Bill C-70, I would like to take a moment to look at taxes on books.
The government is proudly telling anyone who will listen, and I heard a Liberal colleague crowing about it just recently, that it has lifted the tax on books. It is true that it has lifted the tax on certain books, but not all. Furthermore, when the Finance Minister tabled his bill, I congratulated him on this aspect of it, but asked him to chuck the rest. I congratulated the Finance Minister on taking a first step by removing the GST on books. But he did not go far enough. He is exempting books bought by institutions of learning. This represents only a small percentage of the books bought in Quebec and in Canada.
We are asking, as we have for years, that the GST on books be eliminated. Even before the last election, my seven colleagues who founded the Bloc Quebecois-and I acknowledge the presence of the hon. member for Sorel-battled to get the GST taken off books. They joined forces with the entire literary community of Quebec and Canada to demand that culture not be taxed, that books not be taxed, and that steps be taken to make culture more accessible.
The first seven representatives of the Bloc Quebecois-Bloc Quebecois: the first generation, they might be called-were the first to rise up in defence of Quebec literary culture, and Canadian literary culture as well. This is somewhat incongruous, but there is something rather incongruous about the Bloc Quebecois too. It does, however, fit in well with history until Quebec decides to take charge of itself and declare its sovereignty.
Yet it is somewhat peculiar for sovereignists to be defending Canadian culture, by demanding that the GST be removed from all books and fighting a minister for international trade who is prepared to put it up for grabs by the Americans or anyone else in the world. And it is somewhat peculiar for sovereignists like my colleague for Richmond-Wolfe, the culture critic, to rise in the House and demand that the CBC and the major cultural institutions be given back all the money they have been robbed of in the past three years. All this devastation is caused by the same person: the finance minister, who looks good, winks nicely and just oozes charm, but he can sure wreak havoc.
What we are doing may be peculiar, but we are doing it nonetheless. We are standing up proudly in defence of culture, and we are asking the Minister of Finance-and this is the second time the official opposition is asking him this-to abolish the GST on books, thus giving a boost to the culture he claims to be defending.