Debates of Feb. 6th, 1997

Excise Tax Act

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Mr. Speaker, I was pleased to be able to speak to Group No. 2 and also now to Group No. 3.

In introducing my presentation to Group No. 2, I wanted to point out that these particular amendments to this bill are about a whole larger picture than simply the GST. I wanted to bring it to the attention of Liberal members opposite so that they might be able to recognize some of their past deeds that they committed during the 1993 election.

I talked about when is a promise not really a promise. It was clear that in that case it would not really be a promise if it was a verbal promise made by the Liberal Party even though, as I pointed out, the highest courts in the land have recognized that a verbal promise is and can be and has been deemed to be legally binding. But not to the Liberal government.

I would like to use another phrase now to introduce my comments on Group No. 3 of the amendments. I am drawing a line from an old move called "Love Story" many years ago. The line is "being in love means never having to say you're sorry". I would like to revamp that line and say this to the Liberal members, that telling the truth first means never having to say you're sorry. They might consider that in the next election campaign as they go door to door, coffee shop to coffee shop, meeting to meeting, verbally making election promises to the people of Canada that they know they are not able to keep and will not keep.

This is the very thing that has created the cynicism, the mistrust, the attitude that politicians rank lower on the acceptability scale than the lowest form of occupation we can find in this country because politicians like these people across the House here have partaken in a deception of the Canadian people in the 1993 election. They have verbally promised the Canadian people that they would kill, scrap and abolish the GST. Yes, they did. Evidence shows it over and over again that is exactly what they did and they have the gall to sit here and deny that they did not say it when they have been caught in their own lies.

[The Speaker]

My colleague, the word "deception" was borderline. The word "lies" is not acceptable in this House. I would ask the hon. member to withdraw that immediately.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Yes, Mr. Speaker, of course I withdraw the word "lies".

This party, these members have been caught in their own misrepresentation when they went door to door all across this country and told the people of Canada, rank and file hardworking Canadian taxpayers that they were going to give them some tax relief by killing the GST.

I said earlier telling the truth first means never having to say you are sorry. The minister of heritage had to say she was sorry about her promises on the GST. She had to resign and seek election again in her riding. The Minister of Finance on record has said: "I'm sorry. We promised to kill the GST. It was a mistake and we apologize for it".

It is absolutely unbelievable that two ministers in this Liberal government have come forth and said they were sorry, not having to do so, not willingly. They were dragged kicking and screaming to that apology, kicking and screaming by the mounting pressure from the Canadian people and the Reform Party, which led the charge. While these two ministers have come forward and made public apologies about their GST misrepresentations, the Prime Minister of this country, the person who has been elected to the highest office in this country, who is supposed to display the highest form of integrity and honesty, has not come forward even though the Prime Minister has been shown several times on video tapes from the 1993 election to be saying: "We will scrap, kill and abolish the GST. I promise you that".

He has said that many times and he does not have the integrity to come forward and say "I am sorry, we made a mistake. I got caught up in the election furore of 1993 and I said some things that perhaps we could not keep, some promises we could not keep". He does not have the integrity to do that.

This is the Prime Minister of Canada we are talking about. What kind of an example does that send to the Canadian people when the Prime Minister of Canada cannot stand up and say "I was wrong, we were wrong, we should not have done it, we should not have said it"? What kind of an example does that send to Canadians? What kind of an example does that send to the Canadian youth who look to their parliamentarians for direction? They are told that the parliamentarians in this House of Commons are people of integrity and honesty. What kind of an example does that send?

Be sure about this fact. The Reform Party will stand here day after day and we will hold the feet of the Prime Minister of Canada to the fire on the GST misrepresentation, as we have done to all the members here; as we did to force the minister of heritage to say she was sorry and resign from her seat; as we did to force the Minister of Finance to say "I'm sorry it was a mistake"; and as we will continue to do into this next election. Hopefully the Prime Minister will show some integrity and take his position at the apology table and tell the Canadian people "I'm sorry, we should not have said that".

The provinces across Canada recognize exactly what kind of a scam is going on in this House, what kind of a scam is going on in this GST harmonization. Ontario has said that the plan would cost its consumers between $2 billion and $3 billion extra per year in their purchases. Ontario's premier has gone so far as to say that the subsidization package given to the maritimes was in fact a bribe. Alberta's premier has said the compensation component was a bribe put forward to get Liberal premiers in Atlantic Canada to sign on to the deal, and sign on they did. Why? Because their Liberal premiers-

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, on a point of order. It is clear that the member who is speaking now is carrying with him a degree of frustration for whatever reason. He has alleged in this House within the last 60 seconds that what is happening in this House is a scam.

Mr. Speaker, I suggest to you to consider whether that may be unparliamentary. He has also used the word "bribe" and I ask you to consider whether that may be unparliamentary. He has also alleged that I as a member of my party did or said things in the last election campaign which I know not to be accurate. I know this is a point of debate but I would ask you, Mr. Speaker, to call on the member to use parliamentary terms.

[The Speaker]

My colleagues, there is no need for me to recall to your memory that we have had a pretty rough couple of days here. Yes, our emotions are right here on our sleeve. I would prefer that words like "bribe" not be used. We have used words like "scam" before, possibly in the context of the last few days.

It might be advisable if all members would lower the tone a bit of their rhetoric. I do not mean in their voices but I mean in their choice of words.

I would appeal not only to the hon. member speaking now but to all hon. members to keep this in mind. We are all a little bit caught up in the whole thing. I do not judge the words that were used to be unparliamentary under normal circumstances. The hon. member used the word "misrepresentation". We have used that word and I find it to be in its context acceptable. I believe he was quoting someone else when he used the word "bribe". I would remind the hon. member that he cannot quote someone from outside the House and use words we are not allowed to use in the House.

The point has been brought up and I am sure all hon. members will want to adhere to this request. The hon. member still has about two minutes left.

[Dick Harris, Reform, Prince George—Bulkley Valley, BC]

Thank you, Mr. Speaker. Saskatchewan's minister of finance has said the plan would need a massive shift on to the province's consumers. Manitoba has also said that the cost to consumers would be too high and they declined to sign on to this harmonization deal.

It is not surprising, but there has not been one call of outrage from the Liberal premiers of the maritime provinces that have signed on to this deal. They are part of the Liberal Party, I suppose, and this is probably status quo, I would assume.

However, the most amazing thing is that the people who contribute most to the economy of the maritimes, the retailers, the manufacturers, the farmers and the consumers, have all said that this is going to be a hurtful tax. Where is the representation from the maritime members of Parliament? Not one word has been heard from the people who were sent to Ottawa to represent the best interests of maritime Canada, because they are not permitted to utter one word in opposition to this harmonized sales tax.

We are talking about the extra costs associated with the closures of five Greenberg stores in the maritimes. This is a loss of 79 jobs. Seventy-nine jobs in the maritimes is big stuff. Greenberg's management says that there is a chance that all their other stores may be closing in other areas of Atlantic Canada as a result of harmonization.

Bill C-70 is just a symptom of a whole bigger picture and that bigger picture is honesty and integrity. As I said at the beginning of my presentation, if politicians would tell the truth the first time, they would never have to say they are sorry. That is something that every Reformer in this House knows. That is something that every Reform candidate who goes out in the next election knows. Members can bet that in contrast to the other candidates from the other parties, every Reform candidate in the next election will know that if they tell the truth first they never have to say they are sorry.

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

Mr. Speaker, I am pleased to speak on behalf of the government on these Group No. 3 motions.

Unlike some of my colleagues, I am going to try to stick as much as I can to the actual motions before us and talk about what they are rather than talking about everything else.

First, government Motion. No. 120 deals with clause 262. Clause 262 of Bill C-70 adds new provisions to the Federal-Provincial Fiscal Arrangements Act that set out the statutory authority for the federal government to make payments to the participating provinces equal to their respective share of the provincial component of the HST determined in accordance with the harmonization agreements. This motion amends new section 8.4 and 8.5 of that act to provide that, for government accounting purposes, the revenues from the HST shall be recorded net of these amounts payable to the participating provinces. I point that out in support of the government's motion.

I will respond to some of the remarks that have been made in the debate on this group of motions. I oppose the opposition motions that are a part of this group. My first comment is with respect to some comments made earlier this morning by the Bloc Quebecois.

As I said this morning in English, Bloc members are opposed to harmonization and this is very odd. It is odd indeed, since there is already harmonization in Quebec. Could it be that opposition members want to keep the benefits of harmonization all to themselves, their businesses and consumers?

The reality is that members of the Bloc Quebecois know the value and merits of harmonization. They are not suggesting that

Quebec cease, unravel and turn back the clock on harmonization in Quebec. They are not saying that at all. However, they are saying to the maritimes: "Don't harmonize, this is a terrible thing".

I wonder whether they want to preserve the advantages of harmonization for the businesses of Quebec, particularly because they border on other provinces, while they would deny those advantages of lower prices to consumers and the simplicity to retailers that would come from harmonization in provinces contiguous with Quebec. It is a little surprising to see the Bloc stand up hour after hour and attack harmonization.

I will turn to members from the third party and the spectacle we have seen in the House. They are from one regions of the country and they are once again saying to another region: "You don't want this. We know better. Don't do this. This would be terrible for you," while consumers are telling us overwhelmingly, "this is what we want," and the provincial governments agree.

We hear a great deal from members of the third party about respecting local governments and regional decision making. When regional governments have made a decision it is only okay if that decision agrees with the views of the members of the third party, but if they take a decision in the interests of Atlantic Canada, in the interests of business and principally consumers, that is not good enough for the third party.

I really do not want to get into this debate. I want to speak precisely to the motions before us. It is really incredible that they keep speaking about retailers but I have not heard them speaking for the consumers. This harmonization measure will benefit consumers immeasurably and enormously. People in those provinces know that, which is why they are going down this route.

No doubt this is a complex bill. There are adjustments in any tax legislation. That is why we are debating these motions, why we had very good and effective amendments at the finance committee and why we are debating a number of government motions again, to make the bill work better.

I welcome this opportunity to speak to this. This is a big and complex country. It is possible that one region of the country might decide for the moment that one course of action is more in the interests of their people than another. It is unfortunate when members from one region presume to tell the people of another region what is good for them. They are perfectly capable of making up their minds, and they have done so in Newfoundland, New Brunswick and Nova Scotia.

[Maurice Godin, Bloc, Châteauguay, QC]

Mr. Speaker, I am pleased to speak on Bill C-70. Before addressing the subject matter of the bill, I would like to respond, if I may, to something that was said by the hon. member who spoke before me.

He accused the Bloc Quebecois of being against harmonizing the GST. Either he misunderstood what we said or he got it wrong. Quebec was the first province to harmonize its sales tax with the GST, and we did it at our own expense. What we disagree with is the fact that, months before an election, the government is considering spending $1.3 billion to help eastern provinces harmonize their taxes, while we did it at our own expense. That is what we object to.

Allow me to say a few words today about Bill C-70. First of all, I wonder about the democratic values underlying this Liberal government's actions. The public is shocked by the way this government operates, which is hardly transparent.

I told you yesterday how difficult it was to obtain information from Heritage Canada on the cost of the Take it to Heart program, an initiative to promote Canadian citizenship. The Liberal government is taking a hard line on more serious and complex issues. There are countless examples. Just think of the Somalia inquiry, the Krever Commission, the Airbus affair, the Pearson Airport deal. The Liberals are camouflaging the facts and hindering the proper functioning of our democratic institutions.

If we had to find a three-letter word that best sums up the image, the weakness, the incompetence of this government, the one that would immediately come to mind is "GST", because it represents unkept promises, mismanagement, improvisation, arrogance, lack of accountability, deceit.

That same undemocratic attitude motivates the government in connection with the GST. They are rushing this bill through, systematically concealing the facts from Quebecers and Canadians, so as to clear the way for the next election campaign.

What they will not be able to conceal, however, is the embarrassment of the Prime Minister and the Heritage Minister over their failure to keep their promise to scrap the GST, to kill it. It is clear that the Prime Minister does not want to have to apologize again, as he had to after his appearance on the CBC on December 12, when Johanne Savoie, a Montreal waitress, backed him into a corner by asking him about his campaign promise on the abolition, pure and simple, of the unpopular goods and services tax. Let us recall the Globe and Mail editorial headed The Prime Minister is lying'', where it states, and I quote:The Prime Minister told a lie. Not a fib, not a prevarication, not a disingenuous remark-''

[The Speaker]

Order. Dear colleague, we cannot use the words of someone else when these words cannot be used here in the House. I would, therefore, ask you to withdraw the word "lying" because it is neither parliamentary nor acceptable.

[Maurice Godin, Bloc, Châteauguay, QC]

Mr. Speaker, I withdraw these words because I was quoting a text, not making an accusation.

That is what Quebecers and Canadians will remember-in any case, they heard it on television and they read about it in the media-when they mark their ballots in the next general election.

I deplore the attitude of a government that tries to prevent us from doing our job as parliamentarians. As a member of the official opposition, I may remind this House that we had less than 24 hours to examine a very technical bill more than 300 pages long, before proceeding with second reading.

This week, the opposition had not yet received the printed version of Bill C-70 as amended in committee, and this was 24 hours before resuming debate on third reading. How can we possibly do our job as parliamentarians under those conditions? Either the Liberal government is terribly inefficient or it is deliberately engaging in obstruction. Hon. members may draw their own conclusions.

This has been said before but it bears repeating: the Liberals do not keep their promises and have a very selective memory.

Not so long ago when they were in opposition, in November 1989, the Liberal members of the Standing Committee on Finance maintained that the goods and services tax proposed by the Conservative government was not a good proposal and that no amount of tinkering would make it fair to the taxpayer.

But what are that same party's representatives proposing today, if not tinkering? It makes no sense. Hiding the tax in the price does not change anything. The GST stays the same, at the same rate, and the provincial tax will harmonize accordingly. This tax will be just as bad and just as unfair to the taxpayer.

By hiding the GST in the sales price, the government is opening the door wide to a possible increase in the GST in the days to come. And do not tell us that consumers want this. Consumers want the Liberal government to keep its promises, including scrapping the GST.

The official opposition believes there can be no sales tax reform without a tax reform that covers all forms of taxation at all levels of government. For more than three years, the Bloc Quebecois has been asking the Minister of Finance about this, but the minister and his government prefer to cut transfers to the provinces, and the Prime Minister prefers to choke the unemployed.

There was the survey by the Canadian Chamber of Commerce in 1994, in which 70 per cent of Canadian businesses said they were opposed to hiding the tax. In February 1996, the same survey reconfirmed this point, with not 70 per cent but 76 per cent of Canadian businesses opposed to harmonizing the tax. That is revealing.

Another major problem is the political gift to the maritime provinces of some $1 billion in tax money paid by Canadians. The official opposition thinks all provinces should also benefit from agreements relating to harmonization, including compensation. Why should there be a double standard on the issue of compensation?

As my time is up, I will conclude by saying that Quebecers will see once again it does not pay to work with the federal government. They will see that the approach of this government has not changed. It is plan B, and we will continue to oppose it.

[Dale Johnston, Reform, Wetaskiwin, AB]

Mr. Speaker, it is a pleasure to speak to Bill C-70 today. We are talking about an act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt Servicing and Reduction Account Act and related acts. Among all that verbiage comes the GST and the blended sales tax.

While I am doing walking tours in my constituency, whether it is in Leduc, Ponoka, Wetaskiwin, Lacombe, Bentley or elsewhere, I ask the shop owners and the people in their employ what is their biggest problem or what it is they would like to discuss. I tell them they have their MP before them. It is an opportunity for them to tell me what it is they like about the way the country is run or more likely, what it is they do not like about the way the country is run.

The most often mentioned thing about how they do not like the way the country is run has to do with the GST. The GST makes reluctant tax collectors out of shop owners, business people, people who have concerns about paying their staff, about paying for their lights and their heating. People have concerns about keeping their shop open, keeping their staff on payroll and making a living for themselves and their families.

Not only do they become reluctant tax collectors, but if for some unknown reason they do not follow the collection of the tax or the filing of the papers to the exact degree the bureaucrats insist on, then they are subjected to all sorts of harassment, penalties, interest and audits. An army of people rain down around their necks and tell them that this voluntary job, this job they took on under great duress, is not being done properly and if they do not do it properly they can face all sorts of penalties and interest charges.

More specifically we should be talking about the blended sales tax or the harmonized sales tax, the BST or the HST. Those acronyms conjure up some great possibilities, but I guess I will not allow myself to go in that particular direction at the moment.

One of the things that is particularly grating to general members of society in the province of Alberta is that even though we do not have a provincial sales tax, we are now compelled to pay a sort of surreptitious provincial sales tax in order to help fund this $1 billion fund. This $1 billion fund has been called all kinds of things. I know that Mr. Speaker has advised us to be very judicious in our choice of words, so I have chosen the term persuasion fund, which I hope will pass the parliamentary committee.

Residents of Alberta are going to have to pay into this $1 billion persuasion fund whether they like it or not. Residents of Alberta are quite proud of the fact that they do not have to pay a provincial sales tax. Now of course it looks as though they do.

When the GST came about, we all remember the events which led up to the imposition of the GST. It was first talked about as having to be a 9 per cent tax. I remember very well. I was on county council in those days and we all agreed that if we had to pay some kind of a consumption tax in order to ever see our way clear of this deficit and debt that we would wind up having to pay for, that yes we could see ourselves paying some kind of a tax, provided that all of the revenues from that tax went toward debt reduction and deficit reduction.

As a matter of fact we even went so far as to say-and this was just brainstorming, it was nothing official or in the minutes of the meetings-we were talking among ourselves. We decided that if the government of the day were to say there would be no exemptions, there would be no kickbacks, there would be no partial exemptions-well, kickbacks perhaps, partial exemptions shall I say.

I will use the municipalities in Alberta as an example. They were exempt for I believe it was 57 per cent of the GST. I believe that is the correct amount. That necessitated the employees of the county of Ponoka to fill out a GST form to apply for this rebate on goods that they bought. They paid the full 7 per cent up front and then they were allowed to recover I believe it was 57 per cent of that by remitting the form.

We said that it was too complicated. Immediately we could see that it was going to require extra bureaucracy and extra help in order to figure out who was eligible and who was going to get the rebate and who was going to pay the full shot and so on.

We said that if it was something that was going to go straight toward the debt to reduce the debt and improve our lot in the days and years to come, then we could probably live with it if it was around 3 per cent and was applied to everything: toothpaste, diapers, bread. We said that we could handle that because we could see ourselves working toward a goal.

I believe the thinking of the government of the day was that if it started off at 9 per cent and wound up with 7 per cent, then the people of Canada would say: "Whew, at least it is not 9 per cent", and perhaps they would accept it.

The people of the constituency of Wetaskiwin told their sitting member, who was a government member at the time: "We will not support you. We do not want the GST. If you vote in favour of the GST we will not support you". The member said he heard what they were saying but the government of the day voted in the GST.

During that time the Liberals sat in opposition. There was a great hue and cry against the inequities and the unfairness of the GST. We could see during the election campaign how the Liberals promised to scrap, kill, abolish and otherwise do away with the GST.

[Paul Szabo, Liberal, Mississauga South, ON]

And replace.

[Dale Johnston, Reform, Wetaskiwin, AB]

The member opposite says "replace". Yes of course it was written as replace in the red book, a very limited production paper that was only available to certain people in Canada. At the town hall meeting the Prime Minister admonished the lady who asked him about his GST promise. He said: "Obviously you did not read the red book". She probably did not but I would suggest she is in good company. There are millions of other Canadians who never had an opportunity to read the infamous red book because as you know, Mr. Speaker, it was not made available to everybody in Canada.

The bottom line is that the GST was something about which the opposition parties said: "No, we will not accept that. This is a matter of fact if we are in power". It is almost as though they thought there was not a ghost of a chance of their getting into power so they could promise the moon. As it turned out they did get into power. People put their trust in them that they would live up to their word and do away with the GST but they did not do that.

This is a little bit like the NAFTA agreement. In opposition the Liberals said over and over how unfair the agreement was, how they would abolish it, do away with it, scrap it and get rid of it. History has shown and will show that it was hardly amended and was accepted almost holus-bolus by the Liberal government once it came into power.

For the many merchants in my constituency who put up with this GST nightmare daily, and I hasten to say that of the problems that come to my constituency office, the GST and problems with the GST are number one.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to participate in the debate of Bill C-70, particularly the Group No. 3 report stage motions. The parliamentary secretary has nicely laid out the rationale for those particular motions. As a result of where we have gone with this debate I would like to recap a

couple of the things we are talking about with regard to the so-called harmonized sales tax.

Members will know that before the goods and services tax, there was a federal sales tax which was included in the pricing of manufactured goods. It generated some $18 billion in revenue for the government in its last year of operation.

The Mulroney government made some changes and introduced the goods and services tax. Interestingly enough, in the first year of operation the goods and services tax generated for the government some $16 billion in revenue, which was actually $2 billion less.

In essence, what happened is that Canadians got a $2 billion tax break right off the bat because of the introduction of the GST, but they were angry about it. They were angry about the GST. It really is ironic that Canadians were given a $2 billion tax break about which they were angry.

Canadians were justified in a sense because it was a change. It was visible. Not only that, it was visible on each and every purchase that Canadians made.

When I went to the shelf I saw an item and the price was there. I made a purchase decision and I went to the cash register, but at the cash register the price I had to pay was different. It was more. It was significantly more. That, I believe, is the reason Canadians do not like the goods and services tax. It was a change. It was visible to them at the cash register but not when they made their purchase decision. There is a bit of irony in that.

Then came the election. Before the election the Liberal Party was in opposition. The role of the opposition is to be the opposition and to deliver blows that would tenderize a turtle, as someone once said. Liberals in opposition said "we do not like this tax because Canadians said they did not like the tax". They did not like the optics of it. However, after a number of years there was not much to be done about it. All of a sudden it was generating $18 billion in revenue to the government.

The question becomes is there anybody who supports a policy, as the Reform Party has been outlining, that would simply eliminate the tax. Is there someone who would say let us have no more GST ever again, it is over, gone and done? That is what the Reform Party has been suggesting that the government promised in the last election campaign. Just get rid of it. Add the $18 billion to the deficit.

Nobody in this place would want to do that if they were the government of the day. We cannot afford to add $18 billion to the deficit. That is clear to all Canadians. All Canadians know that it was not just to get rid of the GST, it was to replace it with a revenue neutral system. That means that we will have to collect the same dollars, but we will look to see if there is a better way to do it. In fact, the red book said, as well as many of us in our speeches and literature, we will, through the finance committee, with all parties, have an opportunity to look and see what is the best way to deal with this.

As it turns out, the best replacement for the GST is the GST. That is what it really comes down to. It is unfortunate in a political sense, but in a fiscally responsible sense we have to do the right thing.

The finance committee studied the issue. During its 35 days of hearings I was there. I heard what business and industry were saying to the finance committee. They did not want two systems of consumption tax at both the federal and provincial levels. They did not want to have two sets of forms. They did not want to have two different bases. If the tax was going to be kept in its general form as a consumption tax, what they wanted was to have the federal and provincial taxes harmonized. They wanted to have it applied to the same base. They wanted one return. That would be more efficient and more cost effective for business.

In fact, if we bring the provincial component into the GST system, that means that provincial taxes will be eligible for an input tax credit the same as the GST. Members will know that provincial taxes which are charged on top of each other through the process of production, et cetera, account for about 30 per cent of provincial revenues. That means that Canadians have been paying tax on tax. In fact, harmonizing the taxes will save businesses 30 per cent of the provincial taxes which they would otherwise have to pay. That money will be available for businesses to pass on to consumers through lower pricing. That is extremely important.

The proof is in Quebec. Quebec has had the best of all worlds. It did not wait for the federal government to harmonize and to come forward with this bill. It made its own deal and harmonized itself.

There is a harmonized tax system in Quebec and it is taking advantage of a lower tax base, of lower pricing so that its exports have out performed other competitors in Canada.

Its exports have performed much better. Even though Canadian exports are at record levels, Quebec exports have been much better. Quebec is a model to follow. It has proved it. The consumers have accepted it and the system has worked. That is what we really have to look at.

One final point I would like to make has to do with the underground economy. Everyone knows that whenever a tax is introduced into a purchase scheme, there will be people who say "Gee, 7 per cent GST. If I don't do this, if I do this economic activity under the table, I can reduce my price to the consumers by

7 per cent. I won't remit it to the government". We have underground economic activity.

Ontario, for example, where the tax is 8 per cent, has 15 per cent combined cost. Businesses looking at this will not forego the opportunity to recover 15 cents on the dollar by doing its business under the table. In fact, by streamlining the system, by harmonizing those taxes, there will be a major disincentive to operate underground. These are other benefits that will come.

I would simply like to raise that we have, with the three provinces in the maritimes which have combined rates of some 17, 18, and 19 per cent, will have real rate reductions, will have price reductions and will have a more efficient tax mechanism to operate with, which will be in the best interests of consumers in the maritimes.

I am sure when the other provinces come on side with the HST that Canadians will all benefit from the initiatives that this government has brought forth in Bill C-70.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, I appreciate the opportunity to say a few words on Bill C-70, the Group No. 3 debate.

Earlier today I had the opportunity to speak on motions in Group No. 2. As members will recall, I had spoken a lot about the political side of imposing the GST and now the harmonized sales tax in the Atlantic provinces.

I mentioned at the time that the public has had an opportunity to speak at the polls in Atlantic Canada on two occasions and the public has had the opportunity to speak to the government through the standing committee and through members of Parliament.

As was indicated by other speakers today, the public in Nova Scotia, New Brunswick and Newfoundland in particular, because the committee did not travel to Atlantic Canada, did not have a direct opportunity to address the bill as it appears today.

I was impressed with the results of the two election polls that were taken with regard to this. To reiterate quickly my remark from this morning, in Prince Edward Island where the government had chosen not to harmonize but where the threat to harmonize remains, the public spoke loud and clear, defeated the Liberal government and elected a Conservative government in an election in which the harmonization was an issue on the doorstep.

In Nova Scotia in a riding known as Halifax Fairview where the people had a chance to put the harmonization effort to the supreme test, at the polls, not only did the government lose that but it lost it very soundly. New Democrats won that seat by 65 per cent of the vote.

As other members in the Chamber have indicated, Liberal members from Atlantic Canada have not been very vocal in this debate in the House on the harmonization matter. I think it is very clear that had New Democrats been sent to Ottawa from the Atlantic provinces the voices of those people would be heard in this Chamber. Never has there been a better example of how New Democrat representation is representation of the people. There is no question that the people of Halifax Fairview are being heard through the New Democrats in this House today because of the representation we are able to make.

On the matter presented here in the bill and through these amendments I have a number of additional remarks to make, including ones relating to some of the matters that were raised by the Liberal speaking prior to me. I think he is going to hear himself quoted back to him on many occasions. I was astounded to hear him say the best replacement for the GST is the GST itself.

Certainly the Prime Minister and other members of the Liberal Party have not used that kind of a representation of what it is that they are doing with harmonization, but certainly the GST and the HST in the public view are not the kind of promises that it thought it was getting in the last election when it chose the Liberals over the Conservatives at the national level. The public wanted to get rid of the GST, not to get it back renamed.

The member also talked about the benefit to business that the harmonization effort brings. There is no question about it. If we want to look at it from the banks' and the multinationals' point of view, the HST is a windfall for them. In fact, we have calculated that if the HST were applied across Canada, it would be a $6 billion windfall for business in this country, a transfer of money from the consumer to the corporations. That means absolutely nothing to this government, it seems, that the transfer is just a natural state of affairs.

We in the New Democratic Party reject that notion very strongly and we reject the harmonized sales tax because it threatens to transfer more funds from the already overtaxed consumer to the much undertaxed multinational corporate sector.

I think that instead of harmonization, which is the key word in the debate today, we should be talking about national standards and we should be talking about national standards not just in taxation matters, fair taxation right across the board for all Canadians, but also national standards in all the matters that fall under federal jurisdiction and within federal responsibilities.

During question period today I raised the issue of grain cars not moving from the prairies to the ports because the railroads have failed to live up to their commitments under the grain car allocation policy. The federal minister of agriculture refuses to accept his responsibility, even his authority in this regard.

It is time the federal government accepted its full responsibility on matters within its jurisdiction and started to move and set national standards.

In this regard, fair taxation or grain movement, we have to find ways to ensure that not only in the design and funding of programs but in maintaining and enhancing our standards of living right across Canada we have to develop and follow these national standards within the federal authority.

What about in the environment? It is something I have been very active in and I have done a lot of work here in the House of Commons and outside the House of Commons and is something Mr. Speaker is very interested in I know. Environment is an area where we are devolving power to the provinces and neglecting a strong national standard across the country, in transportation and the grain car situation I mentioned earlier and also a national railway policy, a national highway policy, a national airline policy, which gets us away from the deregulation and devolution powers that have made our country now a patchwork of poor transportation systems. We need national standards across the country which will serve to help eliminate poverty in all provinces of Canada.

I could speak about literacy and education, training and tuition fees. Just yesterday the province of Ontario announced another increase in tuition fees. They increased 20 per cent last year and will increase 10 per cent this year. These are massive increases for young people who want to pursue post-secondary education in the province of Ontario.

British Columbia, which recognizes the value of education to young people, froze tuition fees two years ago to ensure that every student that passes grade 12 or meets other eligibility requirements to attend post-secondary education has an opportunity to achieve that higher education.

Affordability is very important in education. We need national standards in that regard.

We need national standards for health care, as opposed to harmonized standards across the country. The national health forum this week talked about a national prescription drug program. It is very important not to devolve that or harmonize it with the provinces. We must have national standards.

We need national standards for child care. We need youth dental programs. We need home care programs. These all require a very strong national presence to ensure that the services are delivered effectively. We must ensure that all Canadians, whether in Newfoundland, Quebec, Saskatchewan or British Columbia, have equal access to the same care, programs and services.

There is a lot which should be said about these types of things. I am sorry there is not enough time to deal with them. I hope I will have an opportunity to continue my remarks when the next group of motions comes up for debate.

[Suzanne Tremblay, Bloc, Rimouski—Témiscouata, QC]

Mr. Speaker, it is almost imperative that every member rise in this House to speak on this bill because, of all the bills and issues examined during the 35th Parliament, the GST will no doubt have been the most momentous.

This government got elected under false pretences and it is a shame that no court exists where ordinary citizens could sue the government for broken promises, failing to keep its word or getting elected under false pretences.

Any which way you read the red book and understand the words written in this magnificent book, one fact cannot be misinterpreted: in the minds of almost every citizen of this country, it was quite clear that this government, which ran under the Liberal banner, was going to rid us of the GST. There was absolutely no doubt about that. Witness how baffled everyone was to hear the Prime Minister say that everyone but him was mistaken and that he had never made such a promise.

Earlier, I heard our colleague from Mississauga South say nobody in this place could consider getting rid of the GST because it generates $18 billion in revenues for the government. I think that, when it was in opposition, there were people with enough sense in the Liberal Party to realize that, once in power, they could not do without $18 billion in revenues.

So, and this would appear to be a conscious process, given what we heard during the election campaign and what was written in the red book, once the Liberal Party took office, it did say: "We will do as always. We fooled Canadians. They were dumb enough to vote for us. Too bad. We will not abolish the GST, because we cannot afford to lose $18 billion in revenues".

I think Canadians are fed up with traditional parties that promise the world but cannot honour their promises once they take office.

People are beginning to understand. This is a very dense bill-I do not want to insult those who wrote it because they are eminent jurists, but I will admit to not having read it through since it is rather dull. One quickly gets bored, unless one is paid to read it, or sits on a committee that will be taking an in-depth look at it. Because it is dense, perhaps even in more ways than one.

This bill was thrown together. One can tell there is an election in the offing, and the government does not want to be reminded, all

through the election campaign, from coast to coast to coast, that it did not fulfil its promise on the GST. So, the government is in a hurry and it has hastily thrown together a bill that has 272 clauses. Over 100 amendments were tabled at second reading. Even on the last day of consultations, that very evening, 13 new amendments were presented.

On February 3, even the French CBC news bulletin-but the Prime Minister does not listen to it, so he may not have been aware that his bill was so hastily thrown together-mentioned the need to make amendments, adding that the government might back down on one major issue, that of hiding the GST in the price.

I clearly remember the statements made by members of this government, when they formed the official opposition and the Mulroney government introduced the GST. They were adamantly opposed to the GST being included in the sales price. The main argument of the Liberal opposition back then was: "We will never let this tax be included in the price, because the government would then be able to increase it without anyone really knowing about it".

However, once in office, the same Liberal Party decided that the tax would be hidden, that it would be included in the price. Today, that tax stands at 7 per cent, but it could go up to 8 or 9 per cent in the next budget and nobody would notice. It would then be reported in newscasts or in the newspapers, for about 24 hours, and the Minister of Finance would say that his document was misread. Indeed, government members often tell people and journalists that they misunderstood a statement or that they misread a document. Liberal members are the only ones who can read. But the fact is that, after about a day, people will forget that the GST actually went up.

One major difficulty with respect to this bill is the following: when the government was in opposition, one of the things it said was that the Conservative government's plan to tax goods and services was a bad one and that no amount of fixing would make it fair to taxpayers.

Here we have their own first fix-up attempt, which has not been too successful because, as I was mentioning earlier, there have been several amendments. It will complicate people's lives considerably. Imagine it is the morning of April 1, the agreement has been signed, the tax is coming into effect, some merchants have done all their work and will display their prices with the tax included, but the merchant next door has not included his tax. He has not harmonized as quickly as his neighbour, so his merchandise will show a lower price. In the opinion of those who are looking at the question of how this wonderful harmonized tax will be implemented, there will be chaos in the maritimes for several months.

The Retail Council of Canada has also condemned inclusion of this tax in the sales price as a policy that will drive up costs and add to confusion among consumers.

Several businesses have appeared before the committee and pointed out that-without wanting to give any of them publicity-companies like Canadian Tire, Sears, and many others with stores in every province in Canada, will have to have separate prices and labelling for the province of Quebec, for the maritimes and for the other provinces, because things are different, the regulations are different.

We were even informed that, in certain cases, there could be a product requiring four labels. One would include the sales tax in the price; another would display the price without the tax; another, the sale price including the tax; and the last, the sale price without the tax. It will be a real headache for consumers.

Our colleague, the member for Mississauga South, said that Quebec was an example to follow. I hope he realized that it is an example to follow across the board, and that, in his province, he will work for the sovereignty of Ontario. It is not enough to harmonize the tax. If we are a model to follow, then he should also work for the sovereignty of Ontario.

At the time of the "beau risque", Quebec agreed to harmonize its tax. In good faith, it sat down with government representatives and organized the thing. This was a deal worked out between Robert Bourassa and Brian Mulroney. In the end, we realized that we had been taken to the cleaners. Two years later, the new government harmonized the tax along the lines of the Quebec model, but handed over one billion in compensation to the maritimes. The Premier of New Brunswick is using $400 million of this compensation to come to Quebec and engage in what I would call an almost obscene recruitment of companies to his province, to the detriment of the Quebec economy.

I hope that we will one day follow Quebec's example throughout Canada and reorganize this country, with its unharmonious tax.

[Myron Thompson, Reform, Wild Rose, AB]

Mr. Speaker, it gives me pleasure to once again speak on Bill C-70, a bill which obviously is being pushed and driven by the Liberal government to become law, irrespective of a lot of things.

I was looking at a list of items that have been submitted regarding this bill from people who have some expertise and have studied this matter. The Retail Council of Canada said that by forcing stores to bury the new tax in prices, the harmonized tax regime will cost retailers at least $100 million. If that is true, why would a government impose it on businesses that are there to provide jobs?

Another study by the accounting firm Ernst & Young said that a mid-sized national chain with 50 stores in the Atlantic provinces would pay up to $3 million in one-time costs and up to $1.1 million a year to comply with a regional tax in price sales system.

A tax is being imposed on a chain of 50 stores and it will take millions of dollars to implement the program. The Halifax Chamber of Commerce predicts that the harmonized sales tax will push up new house prices by 5.5 per cent and as well will force municipalities to raise property taxes. The Canadian Real Estate Association says harmonization will increase the cost of a new house by $4,000 in Nova Scotia and Newfoundland and $3,374 in New Brunswick.

There is the chain Greenberg Stores. Five of them are closing and jobs are being lost. The GST harmonization is responsible for the closure of those stores. One of the Liberal government members said earlier that those stores were in trouble anyway, that it was not the GST harmonization. Part of the reason so many retail stores are in trouble across this land is because of the tax laws we have and this was probably the icing on the cake. There have been so many bankruptcies throughout the country, even in my riding. A lot of them are because of tax laws and tax problems. The GST is certainly one of them. The management of this chain said there was a 50-50 chance that further stores will be closed and that there will be more job losses.

What I cannot understand is that sitting in this House are members of Parliament from the Liberal Party from the Atlantic provinces. They represent those provinces and they sit silently. There is no outcry from them whatsoever. Nothing is being said. I would like to know why. The provinces are speaking. The province of P.E.I. evidently is not very supportive of this idea. Nova Scotia and New Brunswick have spoken loud and clear.

I look at the number of names on petitions. I am talking about thousands of names of individuals, consumers from these provinces. And the government still insists that this is really an acceptable way of dealing with the GST, that harmonization is really acceptable. I have to wonder.

Looking further into this whole idea we see that consumers will pay more for certain things, like children's clothing, books, auto repairs, electricity, gasoline, home heating fuel, and haircuts among other things. Liberal Party members will get up and say that when averaged out over the whole spectrum, consumers will find that they are actually saving money. That is not so.

Most of the items, which were GST exempt at one time, are the types of items used by young families who are struggling and trying to make ends meet, trying to keep the heat on in their homes, trying to pay their rent. They are the ones who all of a sudden will be paying this additional money on different items that never were taxed before. I do not see any benefit in taking more money from those who need it the most.

We must ask, what in the world are we doing? Businesses are closing and there is a good prospect that others will be closing. There are thousands of signatures on petitions by people who are absolutely opposed to this whole thing, and I am talking about petitions from the Atlantic provinces. Yet the government continues to push because this is the way it is going to do it. Why? Do we not believe in listening to the people in this place?

I only have to back up a few years. Mr. Speaker, you will well remember when the GST was brought in what would happen to those who dared to speak the voice of the people.

When someone does speak for the people, when someone goes against the party, they are out. They will be kicked out. They will be punished. They will wish they had not done it, et cetera.

Now we have Bill C-70 and I see the same thing happening on that side of the House. The finance minister, the Prime Minister and all the rest of the chief executive in the dictatorship that exists said to the members of the Liberal Party: "This will be passed. You will vote yes. If you do not, you will be booted out. You will be punished. You will be sorry".

It is a shame. We live in a democracy, but a person from Prince Edward Island or Nova Scotia or New Brunswick cannot stand in his place with a petition that has been signed by thousands of people and say: "I am going to represent my people in my riding in the Atlantic provinces and vote against this bill". They will not do it and it is an absolute shame.

However, we are carrying on. Is this thing going to be implemented simply to cover the backsides of members of the Liberal government when they reneged on killing or scrapping the GST which they campaigned on so vigorously in the last election? Is that what it is for? Is it simply to implement page 22 of the dead book which most of the members obviously were not aware of, not in the way they campaigned? It certainly was not harmonization they were campaigning on. It certainly was not a replacement they were campaigning on. It was scrapping it. That is what they were campaigning on and they were doing it vigorously. Looking at this whole bill, I suggest the real reason is it is another way to get more revenue to spend because spending is a favourite pastime of this government.

Spending for such things as all these patronage appointments. Commissioner of the National Film Board. Boy, what a salary. He must work twice as hard as any member of Parliament because he makes twice as much money. Then there is the Canadian Labour Relations Board, other commissioners, and the Immigration and Refugee Board. They have to keep top dollars up there. We have to really pay out on these patronage appointment positions, plus we have to give them a tax free allowance. Judging from what I see from the public accounts, with these kinds of salaries, members of

Parliament had better not stand in line at the bank with any of these fellows because we will look like we are on welfare.

We go through this list and here is Health Canada spending a whole bunch of money on age and opportunity. Oh yes, here is another thing we are spending it on: lunchtime radio planning committee by Health Canada. A network of older women. Positive straight men, we will spend $47,000 for this. I have no idea what that is about. Listen to this one: seniors and sexuality, $116,000. Boy, am I glad I turned 60. Now that I am 60 years old I bet I can really benefit from that $116,000.

It is absolutely ridiculous when we go through this entire list of spending. If that is what it is all about, then this government needs to be doubly ashamed of itself for trying to bring this kind of legislation forward. It ought to be ashamed.

[Richard Bélisle, Bloc, La Prairie, QC]

Mr. Speaker, I am pleased to speak to Group No. 3 of motions concerning the fiscal arrangements between the federal government and the maritimes, specifically Motions Nos. 118 to 124, which are of interest to us at this time.

There can be no sales tax reform without personal income tax reform, corporate tax reform, social security reform, nor without the participation of other levels of government.

Canada must undertake a tax reform which encompasses all forms of taxation and all the levels of government involved. Why, then, have the Liberals systematically refused, since they have formed the government, to carry out such a total reform of the Canadian taxation system, despite the numerous suggestions from the Bloc Quebecois which has just tabled a second document on tax reform, via my Bloc Quebecois colleague, the member for Saint-Hyacinthe-Bagot? That document was tabled this week and addresses personal income tax in particular.

Quebec harmonized its own sales tax alone and without financial assistance. The costs of this reform were assumed by Quebec businesses.

Quebec companies have yet to benefit from all the advantages of a fully harmonized sales tax. It is intolerable that the federal compensation formula should help the Atlantic provinces to compete fiercely with Quebec for new investment. The Maritime provinces are advertising in newspapers in Quebec and the other provinces that are not harmonized in order to attract companies from those provinces.

Furthermore, the $400 million in federal compensation paid to New Brunswick will be used to finance the tax cuts announced last December by the province's Minister of Finance.

If the federal government is really serious about wanting to boost Quebec's economy, it could put its money where its mouth is by giving Quebecers the amounts to which they are entitled. According to information provided by the federal government, Quebec would be entitled to compensation worth not $1.9 billion but $2 billion. And even if we apply the more restrictive federal formula to the data currently available, Quebec would be entitled to $1 billion in compensation.

Harmonization is costly for businesses in Quebec. At this time, the QST is not refunded on certain inputs of large companies, and it was necessary to increase corporate taxes in order to finance this reform. Harmonization will not cost Maritime companies a penny. They are entitled to a full tax refund on inputs, without any increase in income tax, since the federal government compensates these provinces through the harmonization agreement.

This may be a political ploy to make unemployment insurance reform as it applies to seasonal workers in these provinces more palatable to the Maritimes. Otherwise, why would Ontario, Quebec and the other provinces not be entitled to compensation?

The Bloc Quebecois is against the GST harmonization plan in the Maritimes. This bill was rushed through. It is based only on political and electoral considerations. It is poorly drafted, and is not the model of harmonization that citizens of the Maritimes deserve and asked for from the federal government.

If the federal government can come up with $1 billion for the maritimes, let it also find the $2 billion Quebec is entitled to. All the provinces must be treated fairly, and the federal government must stop funding New Brunswick's zealous raiding in Quebec with the tax money of Quebecers.

For all these reasons, the Bloc Quebecois is asking the government to redo its homework and this time take the time it needs to introduce a responsible bill and especially to listen to what people have to say on harmonizing the GST with provincial sales tax.

We are talking about an agreement between the federal government and the three maritime provinces, which account for some 15 per cent of Canada's population. This is the model they say they want to apply to all provinces in Canada.

Right now in Canada, most people oppose the minister's proposal and the establishment of a single 15 per cent tax, which would be managed by the Canada revenue commission the government intends to set up and which would result in an increased tax burden for Ontario, Alberta and Quebec. Everyone agrees that the Minister

of Finance is mistaken in thinking that all the provinces will agree to his harmonization proposal.

Knowing the history of Quebec and of its struggle for independence in tax matters, especially since the 1960s with Jean Lesage, I know Quebec will never agree to be part of a federal plan of this sort.

[Jay Hill, Reform, Prince George—Peace River, BC]

Mr. Speaker, it is a pleasure for me to speak to Bill C-70, the harmonized sales tax for Atlantic Canada.

I had the opportunity to speak at second reading prior to the Christmas break. It is a pleasure for me to speak again to the legislation because the real problem with the legislation is not so much what it is trying to accomplish, it is that it points out to Canadians what happens when a government does not keep a promise. That is the underlying message people are getting from this legislation.

A number of previous speakers have noted that it is certainly viewed with a lot of concern by Canadians. I have enjoyed listening to their interventions this afternoon, particularly those of my colleagues from Wild Rose and Prince George-Bulkley Valley who made some excellent points about the legislation.

I want to pick up the focus of the speech of the member for Wild Rose which was that there is an underlying issue here. Are MPs allowed to vote the wishes of their constituents or not? Are they allowed to get input from their constituents, especially on the government side of the House?

He remarked that we are only too well aware of what happens when someone dares to counter their party line under the old party system in this place. MPs who dare to stand with their constituents on important issues are turfed out of their party and have to sit as independents. Of course, the member for York South-Weston and his riding executive, I might add, are very well aware of the ramifications of being a Liberal member of Parliament who would dare to vote with their constituents against legislation when it is so obviously not supported by those constituents back home.

I would like to delve a little deeper into the whole issue of integrity and promises. When I had the opportunity to speak the last time on this legislation, I spoke about a promise made being a promise kept. As I travel across my riding of Prince George-Peace River, and I have spoken to a number of my colleagues who represent other ridings, they hear the same message I hear: Canadians have never been so cynical about politicians, political parties and the political system as they are today. That is certainly a sad reflection on this institution and the whole system of government.

It is important when leaders of political parties and individual candidates are running that they are held accountable for the promises and the statements they make on the hustings trying to garner votes from the Canadian public. It is well known that there is an election on the way.

In the few minutes available to me, I want to reflect on the now infamous red book, or as my hon. colleague for Wild Rose just called it, the dead book, and look briefly through it because it is quite a voluminous document. I want to pick out a few of the promises that were made in that document. I will quote from the document.

On page 20 of the Liberal red book, their manifesto from the 1993 election, they make the following statement.

To achieve such economic growth and job creation, a Liberal government will introduce a series of measures described in this plan.

Then they go on to name some. One thing that is noted is reducing grants to businesses. I wonder how that relates to the recent announcement of an $87 million grant to Bombardier, $50 million in loans and grants to Pratt & Whitney. I am told that the total amount the government has either loaned in zero interest loans or forgivable grants to that company is somewhere in the neighbourhood of $1.2 billion over the last several years. How do the Canadian people, the voting public, relate this to the promise made in the red book? I would certainly question that.

The red book states on page 22 concerning the GST:

But instead of introducing fairness and simplicity into the tax system, the Conservative government not only imposed the greatest tax increases in our history, but compounded unfairness and complexity by introducing the GST. In addition to the difficulties that it has caused to federal-provincial fiscal relations, the GST has undermined public confidence in the fairness of the tax system.

The GST has lengthened and deepened the recession. It is costly for small business to administer and very expensive for the government to collect. The GST has fallen far short of its promised revenue potential, partly because it has stimulated the underground cash economy where no tax can be collected.

Rather than scrap, abolish, get rid of or whatever other term was used by a number of Liberal MPs during the 1993 election campaign, today we are debating the harmonization or the blending of the sales tax in the Atlantic region.

On page 24 of the red book it states: "The Canada-United States Free Trade Agreement (FTA) and the North American Free Trade Agreement (NAFTA) are flawed. A Liberal government will renegotiate them". On page 24 in the red book it states:

A Liberal government will review the side agreements to ensure that they are in Canada's best interests. A Liberal government will renegotiate both the FTA and NAFTA to obtain:

a subsidies code;

an anti-dumping code;

a more effective dispute resolution mechanism;

These are promises that Reformers clearly remember debating the Liberal members opposite during the campaign in 1993. The free trade agreement was a hot topic back then.

On all three of those points the Liberal working groups failed. They failed to produce a subsidies code. They could not reach a consensus with the United States. Canada and the U.S. were not able to agree on an anti-dumping code and were not able to achieve a more effective dispute resolution mechanism. The side agreements they did obtain consensus on, the labour and environment concerns, were not binding on either side.

Let us look at the promise that was made in the context of what it accomplished. I would submit that it accomplished nothing. I would further suggest that in all likelihood the Liberals knew it was going to accomplish nothing when they made the promise. That is probably the most horrendous part of it all. They made the promise and included it in their now infamous red book.

On page 30 it states:

In our federal system, education is in provincial jurisdiction. The Liberal Party believes that Canadians in every province should actively support the efforts of their provincial governments to meet the difficult challenge of equipping our children for the future. The federal government, however, can and should support and facilitate the national effort to equip Canadians to compete in the world.

With regard to health care, on page 80 it states:

Without doubt, part of the immediate pressure on the program has arisen from the decision of the Conservative government to steadily withdraw from health care funding, thus passing costs on to the provinces. Economic conditions may change but the health care requirements of Canadians will continue. It is essential to provide financial certainty and predictability for our health care planning.

These are fine words and great rhetoric. What actually took place? There was about a 40 per cent cut downloading on to the provinces. This Liberal government has slashed $7.2 billion out of the Canadian health and social transfer since it came to power. That is the reality, that is the promise and that is what was delivered.

A chapter I particularly enjoy reading was "Governing with Integrity". On page 91 it states:

If government is to play a positive role in society, as it must, honesty and integrity in our political institutions must be restored.

Page 92: "Open government will be the watchword of the Liberal program". Yesterday when the leader of the Reform Party asked the Prime Minister to explain and table the documents outlining the ethics guidelines which he has said he has given to his ministers to hold them accountable, the Prime Minister turned around and made some ludicrous attacks on the Reform Party. He did not even try to address the question.

Have there been any open hearings on the HST in Atlantic Canada, which is what we are discussing today? People certainly wanted to be heard in Atlantic Canada. They have some grave concerns about this legislation.

What has the Liberal government done? How has it backed up its fine rhetoric from 1993 which is found on page 92? I submit that the government has not done it. Canadians are watching and listening and they are fed up with this nonsense. They are fed up with a government that promises one thing in its documents and fails to deliver time and time again.

[Osvaldo Nunez, Bloc, Bourassa, QC]

Mr. Speaker, I rise to speak to the motions in Group No. 3. Naturally, I support the amendments proposed by the Bloc Quebecois to Bill C-70, an act to amend the Excise Tax Act and the Federal-Provincial Fiscal Arrangements Act.

In my earlier speech, I have already criticized the agreement between the federal government and the Atlantic provinces, which cost Canadian and Quebec taxpayers close to $1 billion. I also asked a bit earlier for the government to pay Quebec $1.9 billion, since that province has already harmonized its tax with the federal tax.

Under this bill, the GST will become the HST, the harmonized sales tax. But, despite its name, it is the same GST that the Liberals fought so hard against when they were in opposition. The Liberals, and in particular the current Prime Minister, promised to abolish the GST. They made this promise on television, with great enthusiasm, although recently, he tried to say that he had never promised to eliminate the GST. What is certain, because we saw it on television, is that in 1993 the Prime Minister said that he would indeed scrap the GST, that they would eliminate it. His colleagues, when they were in opposition, said the same. I have here a few examples.

On November 7, 1990, on page 15245 of Hansard , the member for Windsor, now the Solicitor General of Canada, said, in response to a question: Mr. Speaker, the Liberals are speaking for Canadians when they say the GST has to be stopped. If the Minister is interested in listening to Canadians, he will listen to the Liberals who are saying in this House, across the country and in the Senate that the GST must be stopped''. He added:Mr. Speaker, yesterday, the Liberal senators, in accordance with policies announced by

the Liberals, voted in favour of an amendment that would exempt books and periodicals from the goods and services tax. However, the Conservative senators rejected this amendment". Then he asked his question: "My question for the Prime Minister is this: why does he claim to be listening to the country when he refuses to withdraw his GST and has the nerve to tax books? Why does he want to impose his GST? Why does he want to impose ignorance on this country?"

Now we know that the Liberals do not want to lift the GST except from certain books, not all books and periodicals, as the Bloc Quebecois has always requested, even when it did not constitute a party, and as is done in Quebec. Books and culture cannot be taxed.

To continue, on March 25, 1991, on page 18931 of Hansard , the same member for Windsor, now the Solicitor General of Canada, asked a question, using the following words: ``Will the Deputy Prime Minister admit that the government was wrong in applying the GST on books and on the economy, and set up this task force today?'' What a difference between that and what the Liberals are saying today.

Another well-known member at the time, now Minister of Canadian Heritage, said on March 25, 1991, at page 18927 in Hansard : ``Mr. Speaker, a tax on books is not going to do much for Canadian unity and Canadian identity''.

On December 13, 1990, at page 16668 in Hansard , another well-known member, now Minister of Health, said: ``They are signed by residents from the province of Nova Scotia, namely, the city of Halifax and surrounding areas. These residents petition the Government of Canada in their opposition to the goods and services tax, in particular as that tax applies to books, magazines and newspapers. All petitioners on these three petitions call upon the Government of Canada to withdraw the goods and services tax as it is an impediment to small business as well as to Canadian consumers''.

On December 4, 1990, at page 16171 in Hansard , another member, the member for Glengarry-Prescott-Russell, now Minister for International Co-operation, said during tabling of petitions: ``Mr. Speaker, I have a petition which I would like to present pursuant to Standing Order 36. It is against the taxing of books and urges the government to abandon the GST, at least with regard to books, but preferably to abandon the GST altogether. Why stop there? Let us go all the way.''

Another well-known member, now Minister of Public Works, the hon. member for Sudbury, said that she wanted the government to carefully reconsider its position and at least change the goods and services tax if it was not prepared to scrap it.

The Liberals have always spoken out against the GST, especially to request that books, magazines and newspapers be exempt from this unfair tax. In the few minutes remaining, I would like to mention the concerns and disappointment of many Canadian citizens of various ethnocultural origins regarding changes in the tax treatment of Canadian pensions as they affect non-residents.

I was approached on the subject by representatives of various ethnocultural communities, and especially by the Portuguese and Greek communities. They wrote to the minister and met with officials of the Department of Finance to try and deal with the problem, so far without success. A 25 per cent tax on pensions is too much for elderly people on low incomes.

We all agree that we need a fair tax system. Major reforms are needed. However, compulsory and uniform taxation of the often very modest pensions paid to Canadians living their last years abroad is unacceptable. These elderly people are often subject to double taxation: by Canada and by their country of residence. This situation is becoming increasingly widespread, since a growing number of immigrants who are retired go back to their country of birth to live there.

From a strictly economic viewpoint, the return of an elderly person to the country of birth is a major benefit for Canada. In fact, after working and contributing to Canadian and Quebec society for many years, sometimes for most of their lives, these immigrants leave Canada and no longer depend on Canada but on their country of origin for medical care, social services, recreation, public services, etc.

On the other hand, it seems that more money comes into Canada in the form of pensions paid by other countries than leaves Canada in the form of Canadian pensions paid to non-residents. That is why we must deal with this problem as soon as possible. I urge the government to find a solution that is equitable.

[Bill Gilmour, Reform, Comox—Alberni, BC]

Mr. Speaker, today we are debating Bill C-70, the harmonized sales tax bill or, as many have called it, the blended sales tax bill. I gather that is what the Liberals were going to call it, but shortened down it became the BS tax as opposed to the harmonized sales tax. I believe the term BS tax came a little close to the truth, so the Liberals decided to call it the harmonized tax instead. However, the BS tax is how Atlantic Canadians and many other Canadians are beginning to view this tax.

I would like to examine where this tax came from. It came from the GST. The government lacked the ability to deal with and deliver on its GST promise. The GST is the most hated tax the country has ever seen.

The Mulroney government pushed through the GST. We can recall the days when the Conservatives dragged forward an obscure part of the Constitution in order to stack the Senate to get the GST through. What about all the Liberal senators? What did the Liberal senators do at that time? They screamed that the bill proposing the GST was horrible and had to be axed.

It will be most interesting to see what those same Liberal senators do when the HST goes to the Senate. It is a very similar tax in that it is hated. I hope the Liberal senators will examine the HST and deal with the terrible parts of the bill, parts which Atlantic Canadians are saying will not fly.

What happened to the Mulroney government over the GST? It went from being a majority government to a party which can hold a caucus in the front seat of an imported pick-up truck. That is what happens to a government which does not listen to the people.

The Liberals promised to kill, abolish, eliminate the GST, not blend it. They promised to get rid of it. The Prime Minister said it on television, as well as the Deputy Prime Minister and the finance minister. They are all on tape and on film saying that is what they would do. Where are we today? We are dealing with the HST, the BS tax, and trying to fulfil a Liberal promise and what is it going to do?

It establishes a 15 per cent tax in the Atlantic provinces. To some of the Atlantic provinces this is just fine because they take the 7 per cent general sales tax and the federal tax and add that to the provincial tax. In most cases in the Atlantic provinces it is over 15 per cent, so this is a deal. This is a deal because Atlantic Canadians can now say this is a lower tax than they would be paying originally. In some cases it was 17 or 18 per cent, so they dropped it to 15 per cent. This is just fine. The administration of it is a horrendous nightmare, but from a political point of view this was just fine and the Atlantic premiers bought into it.

However, there is a loss in revenue. Where is this revenue going to come from? Naturally it comes from the rest of Canada. Alberta will not buy into it. B.C. will not buy into it. Ontario will not buy into it. They have categorically said there was no way that these provinces were going to buy into a blended sales tax. If we look at Alberta, that is the classic example. It does not have a provincial sales tax but it has the 7 per cent GST. Why in the world would it possibly settle for a 15 per cent tax? It would be ludicrous. B.C. is the same and Ontario is the same, only to a lesser degree. It is absolutely a no sell for the rest of the country.

The Ontario finance minister has said "just blending in Ontario would cost the province of Ontario $3 billion". That is the type of lunacy that we are talking about in this bill to try to sell it to the rest of the country.

What does this do? It is a transfer of wealth. It is a transfer of money from the rest of Canada into Atlantic Canada. If this were for a good reason nobody would complain. However, the ludicrous reason we have here is it is a political sell-off to Atlantic Canada. It is the way the Liberals are trying to say this is the way they will solve the problem. Again, here they go manipulating Canadians.

Besides transferring this wealth around, the administration is a nightmare. All the businesses and consumers are up in arms saying good lord, this will not work. Where are the Liberals? We have about 28 Liberals from the Atlantic provinces but they would not even allow open hearings with Atlantic Canadians. They are saying "you cannot do that, why would we want to have people in front of us telling us what might be wrong with this bill?"

This is the type of legislation that the Liberals are forcing through that is simply not going to fly.

However, there is a bigger picture. This bill deals with what this government has or has not dealt with and where it is not going. The bigger issue is integrity. Where is the integrity of a Prime Minister who, on national television, said one thing about a tax and then said "I didn't say that", when in fact he lied to Canadians? He is just saying that the integrity of the whole government is okay. It is not okay. What about trust? Canadians want to trust their politicians. They want to be able to trust their politicians. This is just another example of Liberal lunacy.

What about truth? What about representing constituents? What about those Liberals MPs who are out on the east coast? They do not represent their constituents. We are going into an election that is going to be very much about the integrity of politicians representing their constituents. When they go to their federal ridings representing the issues and the people who sent them there, obviously the members from Atlantic Canada who are in this place are not representing their people. What is more, they refuse to listen to those constituents to tell them what is wrong with this bill.

In summary, I would say that this bill will not fly. There are huge holes in it. It is a transfer of wealth. It is about the integrity or lack of integrity of this government and the leaders of this government. I believe that the very short part of the deal is that Canadians are going to go to polls and say that this is not what they want in the form of a government. They want integrity, truth and representation. That is what we are going to see when we go to the polls shortly.

[Clifford Lincoln, Liberal, Lachine—Lac-Saint-Louis, QC]

Mr. Speaker, I rise on a point of order. I noticed that my hon. colleague just mentioned that the Prime Minister lied. I ask you to check the record and ask my colleague to withdraw.

[The Deputy Speaker]

I thank the hon. member. If necessary, the Chair will check the blues. Perhaps the member would be kind enough to indicate what he thinks he said and if he used unparliamentary language, whether he would withdraw.

[Bill Gilmour, Reform, Comox—Alberni, BC]

Mr. Speaker, yes I did say that the Prime Minister lied and I will withdraw that comment.

[The Deputy Speaker]

I thank both my hon. colleagues.