Debates of Feb. 6th, 1997

Excise Tax Act

[Bob Kilger, Liberal, Stormont—Dundas, ON]

Mr. Speaker, let me see if I can be of assistance to my colleagues.

I believe the parliamentary secretary is asking the House to consider, over and above its co-operation as to the motions having been read, that if votes are requested that they would be deemed deferred as opposed to having to make the request each and every time with the yeas and the nays and so on. I would ask the Chair, can that be done?

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, it is much clearer when the government whip tells us. Yes, we agree to have the divisions on these motions deemed to have been deferred.

[The Deputy Speaker]

Colleagues, I think I get the sense of the House that all of the motions in this grouping will be deemed to have been moved, seconded and read. If a division is demanded it will be deemed deferred. Is that agreeable?

[Some hon. members]

Agreed.

[Barry Campbell, Liberal, St. Paul's, ON]

Mr. Speaker, I would like to thank you and the hon. chief government whip for clarifying what I was trying to say. Given how sensitive everyone is in the House these days, I want to tell the hon. member opposite that I take no offence at what he said a few moments ago about my earlier attempt to explain what the government wanted to achieve.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, I did not in any way wish to insult my Liberal colleague. If I did not understand what he said, it was because I had not put on my earphones to listen to the interpretation.

[The Deputy Speaker]

Okay.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

moved:

Motion No. 114

That Bill C-70 be amended by adding after line 45 on page 336 the following:

"253.1 (1) Schedule VI of the Act is amended by adding the following after Part VII:

Part VII.1 PRINTED BOOKS, AUDIO RECORDINGS OF PRINTED BOOKS AND VERSIONS OF SCRIPTURES OF ANY RELIGION

1. In this Part, "printed book" does not include anything that is or the main component of which is a ) a newspaper; b ) a magazine or periodical acquired otherwise than by way of subscription; c ) a magazine or periodical in which the printed space devoted to advertising is more than 5 per cent of the total printed space; d ) a brochure or pamphlet; e ) a sales catalogue, a price list or advertising material; f ) a warranty booklet or an owner's manual; g ) a book designed primarily for writing on; h ) a colouring book or a book designed primarily for drawing on or affixing thereto, or inserting therein, items such as clippings, pictures, coins, stamps or stickers; i ) a cut-out book or a press-out book; j ) a program relating to an event or performance; k ) an agenda, calendar, syllabus or timetable; l ) a directory, an assemblage of charts or an assemblage of street or road maps, but not including

(i) a guidebook, or

(ii) an atlas that consists in whole or in part of maps, other than street or road maps; m ) a rate book; n ) an assemblage of blueprints, patterns or stencils; o ) prescribed property; or p ) an assemblage or collection of, or any item similar to, items included in any of paragraphs ( a ) to ( o ).

1. The supply of a printed book or an update of such a book.

2. The supply of an audio recording all or substantially all of which is a spoken recording of a printed book.

3. The supply of a bound or unbound printed version of scripture of any religion.

(2) Subsection (1) comes into force on April 1, 1997."

Motion No. 115

That Bill C-70 be amended by deleting Clause 254.

[Lawrence MacAulay, Liberal, on behalf of the Minister of Finance]

moved:

Motion No. 116

That Bill C-70, in Clause 254, be amended by adding after line 5 on page 337 the following:

"4. Nova Scotia offshore area 8 percent

1. Newfoundland offshore area 8 percent"

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

moved:

Motion No. 117

That Bill C-70 be amended by deleting Clause 255.

[The Speaker]

We now proceed to debate on the motions in Group No. 2.

[Yvan Loubier, Bloc, Saint-Hyacinthe—Bagot, QC]

Mr. Speaker, this is a bill which, according to the motions tabled, deals with the GST harmonization process in three Maritime provinces.

Where is the harmonization? What do they mean by harmonization? There is no harmonization in this bill, in this agreement with the Maritimes. It is a local agreement.

When it comes to harmony, we heard from witnesses in the finance committee recently that they are far from having harmony in the three Maritime provinces. This is particularly true for the businessmen who are, at the present time, furious with the government because of one of the so-called harmonization clauses, which would include in the product price the 15 per cent tax rate decreed by the government, which replaces the GST in these three provinces and the numerous sales taxes that were in place until now.

Imagine the terrible headache this represents for businesses which distribute their products to other Canadian provinces, or have branches in those provinces. It is already difficult for a business to manage a price structure when a number of different products are involved, so imagine managing not one price structure but two, with all that this involves in the way of computer programs, stock management plans and so on.

Businessmen in these three provinces have asked the government to review this section of its bill in order not to include the new tax in the price, because they no longer know which side is up. This is the first point in any discussion of harmonization: that there is no harmonization.

Second, when we speak of harmonization, we must speak of true harmonization. In 1991, Quebec harmonized its sales tax with the federal GST. Quebec even collects the GST on behalf of the federal government.

Quebec has never demanded, nor has it ever received, compensation for losses or costs incurred because of this harmonization. The three Maritime provinces have come to the aid of the Minister of Finance on the GST, accepting the so-called harmonization, which is supposed to serve as a model for all of Canada.

However, this gesture costs $1 billion or thereabouts, $961 million, if I remember correctly, in compensation. This is nearly $1 billion our generous Minister of Finance paid, using our money, the money of taxpayers who are listening, to compensate the maritimes as part of a purely political agreement which does nothing to deal with the problem of the GST and especially not the problems Canadian Liberals have with the GST.

The Prime Minister, his Minister of Finance and the Deputy Prime Minister made a solemn commitment in 1993, in 1992 even before the election campaign and as far back as 1989, when the GST was coming on stream, to scrap this hated tax. That is how the Liberals referred to the GST. They ranted and raved. They said:

"We will strike the GST".

Those are the words of the Prime Minister. The Deputy Prime Minister said: "We hate this tax and we will scrap it". They have not scrapped it, and now they want to harmonize it. It will costs us $1 billion for a harmonization that in fact does not exist and which is not what the Canadian public understood those guys opposite would do.

They served us up a pack of lies, and they have been doing that for three and a half years. A few days ago I was listening to the Premier of New Brunswick, Frank McKenna. I must admit I was shocked, upset and even insulted by the way he behaved on his trip to Asia with Team Canada. I think it is inconscionable that on his Asian trip, the Premier of New Brunswick, instead of recruiting local companies or attracting potential customers, governments and big corporations, was trying to recruit companies from Quebec and get them to move to New Brunswick.

Do you know what Mr. McKenna's message is when he does this kind of recruiting, when he tries to steal from his neighbour on a trip intended as an opportunity to find new international markets and not to steal companies from Quebec? Do you know what he told those companies? He told them what he told companies from Ontario: "If you move to our province, for the next two or three years, your corporate tax burden will be reduced by $400 million". So where will those $400 million come from?

What a coincidence: it just happens to be New Brunswick's share of the compensation paid by the federal government for harmonizing the provincial sales tax with the GST.

What this means, and this is absolutely crazy and unfair to boot, is that federal money, one quarter of which comes out of the pockets of Quebecers, is used to finance a corporate raider, Mr. McKenna, so he can attract Quebec companies and in the process transfer Quebec jobs to New Brunswick. That is the spirit of federalism. Amazing. I never saw anything like it.

New Brunswick is no longer the poor little province from the maritimes. New Brunswick is building itself an industrial force in the high tech sector with our money and, what is more, its premier had the gall in Asia to raid our firms in an effort to attract them to New Brunswick. This is unacceptable and it is an indirect effect of a supposed political harmonization of sales taxes in the maritimes that our show off Minister of Finance presented as a revelation he received from somewhere or other to get out of the mess the government was in with the GST.

This minister, who claims to be a strong federalist and who would thus normally treat all the provinces in Canada the same way and co-operate with them, ends up subsidizing one province to dip into another, its neighbour, and draw business away. It makes no sense. This kind of behaviour is unacceptable.

If the approach used in the case of the famous compensation of nearly $1 billion, which comes out of our pockets to buy three maritime provinces in the GST-sales tax harmonization process, were applied to what Quebec did in 1991, the federal government ought to pay Quebec $2 billion.

If it insists on paying this compensation of nearly $1 billion, it should pay the Quebec government $2 billion. "Out of the question", say government representatives, "have you lost your marbles?" We have not lost our marbles. If we used the calculations and the logic the Minister of Finance put forward in signing the agreement with the maritime provinces, then, if the maritime provinces are entitled to nearly $1 billion, Quebec is entitled to nearly $2 billion for the harmonization it has done since 1991. This is in addition to the other bills we have often sent the government, but this one, I must admit, is particularly hard to take.

In Quebec in 1991, we were good boys and girls. We decided we were going to make things easy for our businesses and set an example as well by harmonizing and thus lead a movement in the other provinces of Canada toward a harmonized system to facilitate interprovincial trade. Billions are involved. Trade between Ontario and Quebec in particular represents $36 billion. Our reward for this vision is nothing. We are being treated as if we are worth less than

nothing. The maritimes get $1 billion. We are entitled to $2 billion, instead we are sent packing as if our request were unwarranted.

So, clearly, in the motions in Group No. 2 on harmonization, we totally disagree with the unreasonable, unfair and unacceptable scheme in the three maritime provinces.

[The Deputy Speaker]

Normally the members who are opposed to the motion explain why and then the parliamentary secretary sums up why the government agrees or disagrees. It is the minister who has moved the motions and accordingly I will go to the Parliamentary Secretary for the Minister of Finance.

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

Mr. Speaker, I am under your guidance. When we group motions like this, it is a little bit confusing for us. The problem arises because within the grouping are some motions put forward by the government and some by the opposition. I would propose to speak now in favour of the motions we have put forward and in that same 10 minute allotment in opposition to some of the others, followed by my colleague opposite.

There are three things I want to say. First is in response to what the hon. Bloc Quebecois member has said with respect to adjustment assistance. As he well knows, there is no basis for the claim that Quebec would qualify for adjustment assistance based on the formula that is being applied for that assistance to the maritimes. Quebec simply did not incur any loss of sales tax revenue as a result of harmonizing and that is just a fact of life. The formula requires adjustment assistance if a province loses approximately 5 per cent in sales tax revenue in moving to adjustment. In fact Quebec made money. That is the way it was; there is no justification for adjustment assistance.

Second is with respect to harmonization.

Members of the Bloc oppose harmonization. This is very strange, because there is harmonization in Quebec. Is it because Quebecers want to keep the benefits and advantages of harmonization for themselves, for their businesses and their consumers?

There is no question that harmonization provides a comparative advantage. Provinces that are harmonizing will have a more efficient business sector and cheaper prices for consumers than ones that are not. I detect underlying this intense opposition to harmonization, striking the word throughout the bill as the opposition proposes, is an attempt to deny the benefits of harmonization to provinces that live right next door to Quebec and to preserve those advantages for Quebec. I hope I am not right, but I suspect that may underlie some of the opposition.

The government motions to amend clauses 150, 160, 198, 203, 204, 241 and 254 are related. They would ensure that the provincial component of the HST would apply to Nova Scotia and Newfoundland offshore areas in relation to activities to which the Canada-Newfoundland-Atlantic accord implementation act and the Canada-Nova Scotia offshore petroleum resources accord implementation act apply.

This treatment would be consistent with the terms of the existing offshore petroleum resources accord, Canada-Nova Scotia and the Canada-Newfoundland-Atlantic accord and the related implementation act under which taxes equivalent to retail sales taxes in Nova Scotia and Newfoundland currently apply.

Further, among the motions, subclause 150(6) of Bill C-70 enacts a new definition of basic tax content for purposes of part IX of the Excise Tax Act.

The concept of basic tax content is principally used to determine the amount of additional input tax credits that a registrant may claim when the registrant increases the extent to which capital property is used in commercial activities and the amount of input tax credits that are recaptured when the use of the capital property and commercial activities are reduced.

Generally, the basic tax content of the property is the tax that was payable on the acquisition after deducting rebates on certain other amounts that the purchaser was entitled to recover and after taking into account depreciation of the property.

The motion proposes to include in the calculation of a basic tax content a tax that would have been payable but for the fact that the purchaser acquired the property for use exclusively in commercial activities. This change will ensure that the correct result is obtained in determining the amount to be remitted or recaptured if there is a subsequent change in the use of the property.

Government Motion No. 63 proposes to amend clause 204 of Bill C-70, which adds new section 220.06 to the Excise Tax Act. This section ensures that goods delivered to a purchaser in a participating province do not escape the 8 per cent component of the HST when they are supplied by an unregistered, non-resident person who has not paid the tax on bringing the goods into Canada or into the province.

In this case, as a result of section 220.06, the recipient could be assessed a tax. The proposed amendments remove the references in the section to a "specified motor vehicle" that is required to be registered in a participating province. These references are inappropriate because a special regime is intended to apply to sales of registerable motor vehicles.

Where a registerable motor vehicle is sold by a non-registrant, in circumstances in which the 7 per cent GST does not apply, as in the case covered by section 220.06, neither should the 8 per cent component apply. Instead, a special 15 per cent provincial levy will apply to the vehicle which will be payable to provincial licensing authorities when the vehicle is registered in the province.

Therefore, section 220.06 should not apply at all to sales by non-registrants of motor vehicles that are required to be registered in a participating province. The amendments also clarify when the tax under section 220.06 becomes payable.

In conclusion, I apologize for that bit of reading into the record but it is required in order to adequately explain some technical amendments to the act.

I would only add that with respect to motor vehicles, yesterday we heard some suggestion of an unlevel playing field between people who sell vehicles privately and people who purchase used vehicles from dealers.

If members opposite understood the impact of the harmonization legislation, they would understand that in participating provinces there will be a level playing field because registrants' provinces, when purchasers register a vehicle, will be paying all sales taxes applicable. That will alleviate a situation that prevails and will continue to prevail in provinces that are declining to harmonize at this time.

It is a dramatic improvement in those provinces that are harmonizing.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, it is a pleasure to speak once again to Bill C-70, in particular to this group of motions.

There seems to be a common theme not only in how the bill came into being, but in the whole process that surrounds Bill C-70. It really explains why people are so concerned about the harmonization legislation. The common theme is a general lack of accountability, a lack of being able to hold the government accountable, and a series of gaps that have made the GST a real tar baby in terms of governments being able to deal with it and not draw all kinds of flack.

Let me start by going back a bit in time. I want to follow up on comments that were made by members of the Bloc Quebecois. First, we need to remember how this legislation came about in the first place. In 1993 during the election campaign the Prime Minister and the current Deputy Prime Minister said that under a Liberal government the GST would be gone, it would be eliminated. Of course, that is not the case.

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

I did not say that.

[Monte Solberg, Reform, Medicine Hat, AB]

The hon. member across the way says he did not say that. The Prime Minister in a town hall meeting denied that he said it too. "I did not say that. Show me where I said it". Unfortunately, for him the public record is very clear because minutes later the CBC showed clips of the Prime Minister saying on national television: "We will kill it. We will scrap it". A clip was shown of him in a radio station during the election campaign saying that the GST would be gone.

I remember very well how the Prime Minister tried to dress down the young woman from Montreal for having the audacity to try and hold him accountable. What a terrible thing to do. That has become a common theme. I will explain a little more about that in just a moment.

During the months that followed the election, members of the government tried to downplay their election promise. They tried to say that what they really said was they would replace the GST. However, they knew that statement was not resonating very well with the public. The opposition was making yards here in the House when we kept pointing out that the government made a promise and it was not being fulfilled.

Finally, the Deputy Prime Minister conducted a poll to see if she could resign and still get re-elected in Hamilton East. She did, indeed, conduct the poll at great expense to the taxpayers. Then a byelection was held that cost a lot of money and, of course, she was subsequently re-elected.

Canadians were expecting more. When members say they are going to resign, it does not mean they are going to resign and run again right away. Nevertheless, that points once again to a lack of accountability in the House of Commons. People want members of Parliament to be responsible for what they say.

A little further along we get to the point where we are having discussions about the harmonized sales tax because the government said: "To get us out of this, we are going to give Atlantic Canada $1 billion". That is what it did. Atlantic Canada had no interest in a harmonized sales tax at all until the $1 billion was slapped down on the table. To get the government out of this promise it slapped down the $1 billion and Atlantic Liberal premiers said: "Maybe we are interested after all". Just show people the colour of money and it is amazing what they will do.

We had that incident. What followed? Ultimately legislation came down and hearings were held. Were hearings held in Atlantic Canada where this was going to affect people? Reform members moved an amendment during the hearings and Liberal MPs said: "We are not going to extend the hearings. We are not going to have hearings in Atlantic Canada," despite the hue and cry from people

in Atlantic Canada who were saying there were all kinds of flaws with the bill.

We heard dozens of witnesses who said: "We have big problems with tax in pricing and big problems with many components of the bill". The fact that people had many problems with the HST and the fact that the government acknowledged there were problems with it and tried to make some changes along the way, points out that Atlantic Canadian MPs were not listening to the people of Atlantic Canada.

Why were the people of Atlantic Canada not allowed to have hearings in Atlantic Canada? This is one of the most fundamental tax changes in the history of Atlantic Canada. Certainly it is taxation without consultation. I would argue it is taxation without representation.

Business group after business group, all kinds of people representing provincial jurisdictions, came before the finance committee and said: "Here is a problem". If Liberal MPs in Atlantic Canada had been representing their constituents that would have never happened because the Liberal MPs would have gone to the finance minister and told him that people have raised these concerns and they should be dealt with.

Mr. Speaker, do you know what happened? They did not do that. They were mute. That is bad enough, but they allowed businesses to close in Atlantic Canada because of this legislation. They said nothing and people in Atlantic Canada lost their jobs. They lost their livelihood.

Debate is ongoing in this country about child poverty. The children in the homes of the people who have lost their jobs already or who probably will, according to business people who appeared before the committee, are going to be in a situation where their parents do not have an income. I would argue that is one of the biggest reasons why we have child poverty. In this case the government is actively encouraging unemployment by not being sensible about the tax in pricing component of this bill. The Liberal MPs in Atlantic Canada have done a horrible job of representing their constituents.

Where were they when all the negative aspects of this bill came forward? People from around the country were forced to come to Ottawa to make their case. That was the job of the Liberal MPs but they were silent. They were mute. Some Atlantic Canadian MPs are cabinet ministers. They sit around the cabinet table. They did nothing: the fisheries minister, the defence minister. Many of them sit around the cabinet table and they were absolutely silent.

Not only is that regrettable but in a modern democracy that is unforgivable. In a modern democracy when people are expected to make very difficult decisions every day in their lives, those same people certainly have the ability to be involved in the debate about the future of their tax system, something that is a fundamental part of everybody's economic well-being. I want to make a strong argument that the Liberal government has completely failed the people of Atlantic Canada in giving them the type of representation that all Canadians deserve.

I have one final point because my time is running short. The government led physicians and the providers of private ambulance services to believe that it was truly interested in restoring tax fairness in the taxation system. It led them to believe that perhaps under this legislation it would amend the act so that physicians and providers of health care would be given equal treatment under the taxation system with many others.

The problem is that physicians and private ambulance services are not allowed to pass on GST costs like other small business people are. Therefore, they have to bear those costs themselves. For doctors it amounts to something like $1,500 per year per physician.

I heard the finance minister yesterday say that he is very concerned about tax fairness and how the government has closed this loophole and that loophole. Is it not interesting that the government is only concerned about tax fairness when it means more money for the government, when it means taking more money out of people's pockets? But when it comes to treating people equally and perhaps having to give a little money back, it does not want to hear about it. Tax fairness? That is not tax fairness. Tax fairness is only when we take money away, and I think that is wrong.

I make the point that again that the government has an obligation to treat everybody equally under the tax code, including physicians and private ambulance services.

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

Mr. Speaker, I am pleased to have the opportunity today to say a few words on the report stage motions in Group No. 2 regarding some aspects of Bill C-70.

Bill C-70 is essentially legislation that gives the government the opportunity to enter into agreements with Atlantic provinces to harmonize the hated goods and services tax with the provincial sales taxes in the provinces of Newfoundland, Nova Scotia and New Brunswick. It is interesting to note that the province of Prince Edward Island is absent from that list. Prince Edward Island has just completed a provincial election. Its government changed hands and a new government is now in place.

There have been a couple of elections in Atlantic Canada since this harmonization deal was proposed. The results are certainly interesting to look at. The federal Liberal government should pay some attention to the results of those elections. I speak of the Prince Edward Island election and the provincial byelection in the constituency of Halifax Fairview.

Both election campaigns had tax fairness and harmonization as a key component. If the Liberals look at the results of those two elections they will see that they have a lot more responsibility yet to give to the people they have been elected to represent. With the government changing hands after the Prince Edward Island election, the former Liberal government was removed and a new Conservative government was put in place.

New Democrats are very proud that for the first time in the history of the province of Prince Edward Island, a New Democrat was elected to that provincial chamber; not only a New Democrat but the leader of the provincial New Democratic Party, Dr. Herb Dickieson, a medical physician, a practitioner who campaigned very strongly not only on taxation matters and representation but on health care as well. There is certainly a message this government should be taking from these results.

More important, in the province of Nova Scotia the new leader of the federal New Democratic Party, Alexa McDonough, served her constituents well in the provincial legislature for 14 years. She had to resign that seat in order to take the position as leader of the federal New Democratic Party, and we hope very soon to have her joining us here in the House of Commons so she can bring the views of Nova Scotian New Democrats and of all Canadians to this Chamber.

When we look at the election that replaced Alexa McDonough in Halifax Fairview, the Liberal government in the province of Nova Scotia said prior to that byelection that when the byelection was called it would put its all into it, that it would campaign on its record, that it would campaign on taxation, on how it was dealing with harmonizing the provincial tax with the federal GST. The people of Halifax responded very clearly to the challenge of the premier of Nova Scotia, a challenge that said "our record on taxation is on the line". Not only did the government get defeated in that byelection, but a New Democrat who campaigned on tax fairness was elected in that byelection with 65 per cent of the vote.

Everyone in Canada seems to think that New Democrats are western based, that the New Democratic Party is a party that defends western interests via small protest votes in the House of Commons. But 65 per cent of the people of Halifax Fairview said to the Government of Nova Scotia and to the Liberal members of Parliament in this House that this harmonization deal is wrong, they do not buy it, they do not accept it and they want a New Democrat representing their interests, giving their comments to government in this House of Commons. Those two elections in Atlantic Canada certainly indicate why it is necessary that more New Democrats are elected in the next federal election to this House of Commons, more New Democrats who speak clearly on behalf of Canadian interests, the middle class and working Canadians right across this country from coast to coast.

We are looking at a harmonization deal in Atlantic Canada and that is why I raise those two issues here in the Chamber today. There are other issues right across Canada that could come about as a result of the acceptance of this harmonization deal for the three Atlantic provinces that are signing on. All Canadians have a responsibility to examine this deal, check out this legislation and see what is happening in the Atlantic provinces so as to avoid similar things happening in the rest of Canada.

Although this is called harmonization there is very little harmony in the way in which this legislation is being implemented or the way in which the idea is being accepted by people in Atlantic Canada. The consumers, retailers, interest groups, the clergy and others have not found much harmony in the way in which they respond to this legislation.

I think this is recognized in the fact that the name has changed several times during this process as well. You were in this House, Mr. Speaker, when the hated goods and services tax was brought in by the previous government. The GST was considered by a lot of Canadians, there was great turmoil in this House of Commons and elsewhere, and as a result of that turmoil we have a country that is divided over sales tax and the implementation of sales tax regimes.

Prior to the introduction of the goods and services tax, retail taxes were primarily the prerogative of provincial governments. Yes, there was a manufacturers sales tax levelled for the federal government at the wholesale level, the manufacturers level. But the retail prerogative was primarily the responsibility of provincial governments.

Provincial governments used that prerogative to establish social policy within the provinces as well as using the taxes as a source of revenue. Many provinces did not tax books. Virtually no province in this country taxed labour costs. No province wanted to tax children's clothing or food items. With the introduction of the goods and services tax there was a tax applied to some of those matters that the provinces had chosen not to tax in the interests of the consumers and the residents of those provinces. I forgot to mention home heating fuel and even the costs of funerals which many of our provinces decided should not be taxed.

As we move into the harmonization of the GST we are seeing that the provinces lose that prerogative to use tax policy for social purposes and to exempt certain income levels of people from retail taxation and to exempt certain classes of items from retail taxation. The GST and now the harmonization system has removed that.

It was originally called the manufacturers sales tax, MST. With the Conservative government it became the GST, the goods and services tax. The government in changing the system and wanting to blend it with the provincial sales taxes began calling it the blended sales tax, BST. It did not like the sound of BST so now the harmonized tax is called the HST. For those who like to think about these things remember the words of Alexa McDonough in a speech

recently. She said with regard to this new BS tax, now the HST tax "what have they got against horses?" I think this is a very interesting situation that we have happening in this country. While there are a lot of things to be said on these individual motions and on the bill itself, I am sure I will have other things to say on the next round of motions.

I hope to be able to put a few additional comments with respect to the motions and the harmonization deal on the record later in the day.

[Translation]

[Osvaldo Nunez, Bloc, Bourassa, QC]

Mr. Speaker, I am pleased to rise today to speak at report stage of Bill C-70, 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.

This bill is a collection of various amendments to the GST, which will become the HST, or the harmonized sales tax. Let me tell you right now that this tax is very unpopular in my riding of Bourassa, in Montreal North, especially among business people. I must add that I support the motions put forward by the member for Saint-Hyacinthe-Bagot, which are included in Group No. 2.

This Liberal government is highly embarrassed by the broken promise of the Prime Minister and the Minister of Canadian Heritage to abolish, scrap, and kill the GST. As we all know, the member for York South-Weston even left the Liberal Party over this broken promise among other things.

The Liberals are bent on reaching an agreement with the maritime provinces for harmonizing this tax, which will cost Quebecers and Canadians nearly one million dollars. Moreover, the government intends to ram this legislation through, which undermines the quality of democratic life in Canada.

By the way, the Liberals allowed only three days of public hearings on this crucial, essential, very important bill. The opposition asked that the consultations be extended, but their request was rejected by the Liberal majority on the Standing Committee on Finance. The government wants to put an end right now to this embarrassing issue of the GST, even though Bill C-70 is a very bad bill.

During the 1993 election campaign, the Prime Minister kept repeating: "We will scrap the GST. Nous allons éliminer la TPS". Later, on May 2, 1994, he said: "We hate this tax and we are going to eliminate it". This broken promise will be very costly for the Liberal Party of Canada in the next election.

In a minority report dating back to November 1989, Liberals, when they were the opposition, stated: "The Liberal members of the finance committee maintain that the goods and services tax proposed by the Tory government is bad and that no "repair job" of any kind will make it fair for taxpayers". What the Liberals are doing now with Bill C-70 is nothing but a repair job, a cosmetic make-over.

GST remains as it is, at the same rate, whereas the provincial tax is the one doing the harmonizing. There can be no sales tax reform without a reform of personal and corporate income taxes nor without the involvement of other levels of government. Canada has to undertake a tax reform encompassing every form of taxation at all levels of government.

Like the Bloc Quebecois, I demand for Quebec a $2 billion compensation for having harmonized the QST with the GST. It is unacceptable that the federal compensation formula should help Atlantic provinces compete fiercely with Quebec in the quest for new investments. When I see in Quebec newspapers ads by maritime provinces seeking to lure away Quebec businesses, to me thats provocation.

The $400 million federal compensation paid to New Brunswick will be used to finance the income tax reductions announced in December by the finance minister of that province. I condemn the raiding campaign launched by Premier McKenna against Quebec.

The federal government is showing a lack of openness and fairness in that matter. It refuses to communicate detailed data on the maritimes. This refusal is unacceptable considering that a $1 billion compensation will be paid to those provinces from the income tax and other taxes paid by all Canadian taxpayers.

If the federal government really wants to help boost Quebec's economy, it will have to give Quebecers the money coming to them in all fairness. On May 21, 1996, the Quebec government asked for a $1.9 billion compensation under the adjustment assistance program. Quebec harmonized its tax with the federal tax and is in charge of its administration. It is easy to see that co-operating with the federal government is not very profitable.

I take this opportunity to mention that yesterday, my party, the Bloc Quebecois, has made public an excellent report demanding an overhaul of our personal income tax. In 1996, it had a similar report on the corporate income tax, a report that drew compliments from the finance minister.

I hope the federal government will implement recommendations and proposals from those two reports in its upcoming budget. It should be bringing some order back, and a higher degree of fairness, in our tax system. For example, we know that Canadian banks do not pay their fair share of taxes when they are hoarding staggering profits of over $6 billion. We have the same problem with the chairmen of these banks. They are paid huge salaries but do not contribute a fair amount to government revenues.

The Bloc Quebecois report contains a number of suggestions to make our tax system more stable and fair. Rich taxpayers should pay more, and the poor should pay a little less. Taxpayers with big salaries could end up paying about $1,500 more each year, and those in the middle class as much as $800 less. Extra federal revenues would amount to $2.5 billion. This is an remarkable proposal by the Bloc Quebecois.

We should also be closing loopholes available to the rich. I congratulate the hon. member for Saint-Hyacinthe-Bagot on the excellent job he has done in this matter, and more particularly concerning his RRSP-Employment proposal. The Bloc Quebecois report suggests something extremely innovative, that is, to create an Employment RRSP program, which would allow the unemployed to start their own businesses with funds from their RRSPs. According to this report, maximum withdrawals of $25,000 would be repaid over 13 years. This tax initiative is very fair and should create many jobs.

I have seen the response of the labour movement, in particular the CLC, which is demanding more fairness in tax system. They say that the current tax system is not fair, that average income earners must bear a disproportionate tax burden. This view is shared by the whole labour movement.

However, the government in its last budget cut part of the tax credits for the workers' fund, in particular the Fonds de solidarité of the FTQ. As a former unionist, I cannot accept the government making cuts in this outstanding job creation tool.

[Cliff Breitkreuz, Reform, Yellowhead, AB]

Mr. Speaker, I am particularly pleased to participate in the debate with you in the Chair. I am sure you remember all too well how you were treated by the governing party when you stuck to your principles and was kicked out of the party. I commend you for taking that stand.

Here we are just four days back sitting in this House and we are debating some aspects of the GST. That should be good news to Canadians because by now every Canadian must know about all the promises government members made, from the Prime Minister to all the Liberal candidates who knocked on doors during the last election promising voters that if elected they would abolish, kill or scrap the GST.

Having made all those promises to do away with the GST, the government finally got around to legislation to accomplish that. Is that what we are debating? Are we debating the government's promises? Are we debating a bill that would see the end of the GST? After all that is what the promises were. No, that is not the debate, not at all.

So much for the Liberals' broken promises. Instead of debating a bill to end the GST and reduce it to the rubble heap where it belongs, we are debating the harmonization of the tax, not reducing this most reviled tax to the rubble heap, but how to harmonize the tax with the provincial sales taxes in Atlantic Canada.

Let us look for a moment at the word harmonize and then briefly examine why the government targeted Atlantic Canada specifically. Harmonize is such a nice word. It rings like music to the ears and well it should because the word has a soothing, musical connotation. But that is not all. It also implies a sense of unity, which is not something this government knows too much about, a sense of togetherness and co-operation. When applied to the GST however, harmonization means the four C's . When applied to the GST, harmonization means coercion, confusion, cost and cover-up.

Why target Atlantic Canada? Probably because it was the most vulnerable. Atlantic Canada has been dealt several serious blows by the powers residing in Ottawa. The golden triangle interests became concerned about the economic muscle and the trade activity that characterized Atlantic Canada for decades, possibly even centuries. Ottawa effectively wiped out the shipbuilding industry, which at one time was a flourishing industry; the fishing industry, and we all know about that; the sealing industry, and God knows what else. Well, I guess we do know.

Eventually Atlantic Canada will have to bear the costs of harmonization of the GST, notwithstanding the billion dollar incentive to embrace it now. But more about costs a little later if time permits.

Let us turn to the first C , coercion. Part of the harmonization plan would force businesses to hide the new harmonized sales tax, the HST, in the price of the product or service being sold. And here is the clincher. Businesses in Atlantic Canada had better be aware of this and I am sure they are. They should be well aware of this, but perhaps there are people across the country who still may not know. Here it is: Shopkeepers, businesses, people who make a mistake and sell a product without including the tax in the price would face fines, jail and hence a criminal record. And that is it. It is off to the calaboose, to the gulag for those brave souls who would reveal how much tax Canadian consumers are paying. That is right, it is off to jail, which is absolutely despicable.

Imagine this happening in a country that boasts about its freedoms, liberties and open society. While rapists and robbers can be granted absolute discharges by a judge under sections 763 and 737 of the Criminal Code, Gramps, Pops or Annie down at the cornerstore will be excluded under these sections and they will rot, will languish in jail for not including the HST in the price of a chocolate bar.

Will this government reduce our country and subject Canadians to this kind of lunacy? It is absolutely unbelievable. This reminds me of Bill C-68, the gun control bill. Criminals will possess and use their guns but farmer Jones who may forget to register his .22 or his 12 gauge will be hauled off to jail. If farmer Jones is a grain farmer and does the unthinkable, that is, he sells his wheat or barley to the Americans, then Mr. Jones faces a double whammy. Mr. Jones could be in the same fix as Mr. McMechan.

Andy McMechan did what any other owner of a product in Canada can rightfully do which is they can sell their product abroad. That is what Andy McMechan did. He also did the unthinkable. He sold his wheat to the Americans, just like a steel maker or any kind of fabricator or a cattleman or someone selling any kind of service. These people can sell their goods and services abroad, even to the Americans. But farmers cannot sell their wheat or barley abroad without first selling it to the Canadian Wheat Board and then buying it back at a greatly jacked up price. Then with a permit they can sell it abroad, even to the Americans.

Andy refused to buy back his own wheat and barley, but he did sell to the Americans. Then they came, probably at midnight or maybe just before dawn so the neighbours could not see. Government officials descended on McMechan's farm to seize his farm truck which he would not allow. Then the government officials hauled Andy off to jail without his being formally charged.

Get this. Andy McMechan languished in jail for about six months without being formally charged, but they allowed him to spend Christmas with his family. He risks losing his farm because of the coercion of the government.

Did Andy receive an apology from the government for what the government subjected him and his family to, like a former Prime Minister received? Not that I know of. Andy is an average, hard working taxpayer. The former Prime Minister even though he is out of office is still a member of this country's political elite. He received an apology, plus a cool million dollars or so. What might happen to Andy? He just might lose his farm. So much for coercion, the way it applies to the HST.

I will now speak a bit about the confusion it creates. I have to read this because it is confusing even to read about what the HST will do to Atlantic Canadians. It is probably confusing enough to have a combined provincial and federal sales tax in three of Canada's provinces, two separate sales taxes in six provinces, and only one sales tax in one province. If we need it to be more confounded, how about this.

The new HST legislation will exempt some items from the hidden tax rule and allow businesses to show both a tax inclusive price and a tax exclusive price, as long as the former is displayed. Shoppers could conceivably be faced with four different prices for the same marked down item: the original price with the tax; the original price without the tax; the sale price with the tax; and the sale price without the tax. Confusing? I should say so. It seems to me that businesses in this country are increasingly being reduced mostly as tax collectors for governments.

There is more about examples of costs. A study by the accounting firm Ernst & Young estimated that a mid-sized national chain with 50 stores in the Atlantic provinces would put 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. The Halifax Chamber of Commerce predicts that the harmonized sales tax will push up new house prices by 5.5 per cent as well as force municipalities to raise property taxes.

I see my time is up, but I hope I get a chance to talk a little more about this particularly agonizing piece of legislation.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, it is a bit embarrassing and even humiliating to have to claim what is rightly ours.

Once again, the province of Quebec, through Mr. Landry, is talking about $2 billion that we now have to claim, compared to the maritimes. The GST saga under this Liberal government will go down in the history of our Canadian Parliament, and what a tale it will be. It will be known as one and even several broken promises.

During the 1993 election campaign the prime minister and his ministers promised during their tour of Canada, especially in Quebec, that they would create jobs. "Jobs, jobs, jobs", they kept saying. The next election will be here soon and they will probably use the same slogan and again promise us "jobs, jobs, jobs". In my riding of Matapédia-Matane, we are still looking for the jobs the federal government has supposedly created.

There was another promise. First, let me remind the House of the promises made in the red book on page 22: "The GST has lengthened and deepened the recession. It is costly for small business to administer and very expensive for the government to collect. And the GST has fallen far short of its promised revenue

potential partly because it has stimulated the underground cash economy".

Could it be that once in office federal Liberals realized that the commitments they made in the red book did not hold water? Could it be that, with the Liberals in office, the GST no longer deepens the recession? That it is no longer costly for small business to administer and that it is bringing in its promised revenue potential?

Moreover, if what is in the red book is true, the GST has now suddenly stopped stimulating the underground cash economy. I have a hard time believing that a miracle has happened since the Liberals, these princes of darkness, took office.

Further down on the same page of the red book, we can read: "A Liberal government will replace the GST with a system that generates equivalent revenues, is fairer to consumers and to small business, minimizes disruption to small business, and promotes federal-provincial fiscal co-operation and harmonization".

If I understand correctly, the GST is unfair for consumers and small businesses. It is also a nightmare for small and medium size businesses, and it deters federal and provincial governments from co-operating and harmonizing their policies.

All those big defects would also have, as if by chance, disappeared a few months after the Liberals came to power. Federal Liberals, by some sort of magical trick, would have toned down the GST's worst effects, and the GST would no longer hurt anyone. On the contrary, it would almost be a godsend.

After the broken promises of the red book came the promise made by the Prime Minister who, like a new messiah, stated that he would abolish the tax. Some time later, he said that he had never promised such a thing. He only said that the GST would be replaced. This is hard to believe for me as well as for my constituents and the rest of the country.

Can we believe the Prime Minister? Can we have faith in him? The Deputy Prime Minister even resigned because she had really promised to abolish the GST. But the Prime Minister always affirmed the contrary. The Deputy Prime Minister resigned, and it cost us half a million dollars to get her re-elected. What a scandal. What utter nonsense. It is another episode in the GST saga.

As for the Minister of Finance, he admits that he cannot replace the GST nor abolish it. At least he admits having made a mistake by letting people believe it was possible. The Prime Minister, on the other hand, maintains he never said he would abolish the tax.

The rest of the story is not really any rosier. Quebec, which is administered by a nasty sovereigntist government-according to the federalists-decided to harmonize that tax with its own taxation system. Aware of the extra red tape that tax represents for businesses, the government of Quebec decided to take action to help the economy.

However, it will not receive any compensation from the federal government. The only expression of thank Quebecers will get from the Minister of Finance for having saved him money will be the obligation to pay a quarter of the compensation of almost one billion dollars that was granted to the maritimes. Not only will we not receive anything but we will have to help the maritimes. This is clearly another example of the inequities of the federal system as managed by our friends across the floor.

To get out of the mess they put themselves in, the Liberals are ready to buy the concurrence by the maritimes. They will buy the tax harmonization by making taxpayers in Quebec and Canada cough up almost one billion dollars.

The Quebec government does not ask for different treatment, but only for the same treatment as the maritimes. However, the federal government does not want to give compensation because it is Quebec.

It must be said that we, Quebecers, are unfortunately used to that kind of attitude from the federal government. In research and development, you know that we never got our fair share. The history of the Canadian Confederation is full of examples of that. So, you will understand that we have had enough.

That is why Quebecers want to achieve sovereignty. We no longer want to pay federal taxes that will go directly to the maritimes. We do not want the government to play that dirty trick on us. Mind you it is not the first time.

We no longer want to pay for the errors made by the federal government, let alone for campaign promises that a party is unable to keep. We no longer want policies such as the national energy policy which, in the 70s, almost completely destroyed Quebec's petrochemical industry without any compensation for Quebec.

I am almost tempted to say thank you. Quebecers will remember that. They will not be fooled by this government in the next election. This time, we do not want to hear about jobs, jobs, jobs. Two billion dollars represent 35,000 jobs, which would lower the unemployment rate by 1 per cent in Quebec. We need these 35,000 jobs, especially in my riding of Matapédia-Matane. The government owes it to us.

We are not asking for a gift, we are simply asking to get back what we pay in taxes to the federal government.

[Sue Barnes, Liberal, Parliamentary Secretary to Minister of National Revenue]

Mr. Speaker, I was not planning to speak in this debate today and I will do so for only a few moments.

I think when we hear incorrect information we are responsible to correct it as soon as possible. The Reform member who spoke before the last member opposite, the member for Yellowhead, was talking about criminal penalties on pricing. He said that if we do not have tax in pricing there would be a criminal penalty. I think that is unfortunate because it is misinformation. I want to be very clear that this is not a criminal offence. At one point there was something in the legislation. However, we all know that in Parliament we have a process for bills, a process of working through this House and through the committees of Parliament legislation so it can be accurate and responsive.

There is a ticketing offence, if one wishes to call it an offence, under the Contraventions Act. This is similar to a driving fine. However, that is a far cry from a criminal offence. Basically that section the member was referring to, in the process that finished a couple of weeks ago when the finance committee met for a review of this bill, that section was taken out of the bill. It will actually end up in some regulation.

I think it is inappropriate to stand in this House and do some scaremongering and fearmongering. Criminal Code offences are a far different thing. We do not have Criminal Code situations here. This is misinformation. Those are the types of situations, when we see a bill and know the work that has gone into it, we know that not everybody does the same amount of homework before they stand up in this House, so I just wanted to correct the misinformation spread.

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

Mr. Speaker, it is amazing, the Liberals stand up here and talk about scaremongering and fearmongering but they are the experts at it. That is exactly what they are doing right now to the hardworking Canadian taxpayers out there who are scared to death of another tax coming down the tube from this Liberal government. That is scaremongering.

Canadians are afraid to plan their futures. They are afraid to plan their children's education because they may not be able to afford it. They are afraid of losing their job. They are afraid of not being able to afford the next tax levy that comes down from this Liberal government. They are afraid to make any long term financial commitments because of this Liberal government's tax policies. That is real fearmongering. That is scaremongering at the highest level.

There is a whole larger issue at stake here with Bill C-70. This is just one small symptom of the big issue. That big issue can be addressed by asking when is a promise made a promise to be kept? When is a promise a promise? I would suggest that a promise is a promise only when it is not made verbally by a Liberal candidate in a federal election. That is the root of this issue.

Verbal promises have been tested in the highest courts of this land and have been found to be legally binding. But that does not matter to Liberal candidates who campaigned door to door in the 1993 election. They went door to door, meeting to meeting and verbally-they are very careful-said to the Canadian people "We hate the GST, we will scrap it, we will abolish it. We have always said that we hated the GST and when we get to be government, it will be gone. We will kill it".

That is what they said as they went from door to door, house to house, meeting to meeting, coffee party to coffee party. They made that verbal promise to the Canadian people, a type of promise which they do not recognize as being legally binding as it has been legally binding for decades in the highest courts of this land.

By contrast, when Reformers went from door to door, coffee party to coffee party, house to house, meeting to meeting, we promised the Canadian people that we would do our utmost to protect them from the Liberal tax and spend policies, and that is exactly what we do in this House on a daily basis. That is a promise kept. We made it verbally, we put it in writing and we are keeping that promise. We have the guts to do that, unlike this Liberal Party, which will say one thing from the mouth and put another thing on paper. That is the big issue here, integrity and honesty in this government, of which there is none.

When the government members sat in the benches over here as opposition to the Tory Party, which brought in this hated tax in the first place, they railed against it: "How could you do this to the Canadian people?" They called the Mulroney government every name in the book for bringing in this regressive and devastating tax. They were very vocal against it.

When they campaigned in 1993, the Liberals said to the Canadian people "Trust us, we're not like the Tories. First, we are telling you the truth and you must trust us. We will kill, scrap, abolish this dreaded Tory GST". That is what they said.

The Prime Minister said "we hate it and we will kill it". He said it on a radio program which he conveniently forgot, just as he completely forgot his imaginary friend. He said that he would kill the GST and when he was questioned by a member of the audience he asked "what radio station, where did I say it, come on?"

Fortunately the CBC was mad at the government at that time about the cuts to the CBC, which is another promise that was talked about by the minister of heritage. So the CBC decided to run some

tape which would show the Prime Minister for what he is, a person who does not believe a verbal promise is legally binding.

The Minister of Finance said "I would abolish the GST", which does not sound anything like "I would harmonize the GST. I would bury it in with some other tax". The minister of defence said "the GST is a regressive tax; it has to be scrapped and when we get to be government we will scrap it". That is what he said.

The bottom line is that the Liberals misled Canadians on their GST promise. To them a promise is not a promise. They misled Atlantic Canadians. Taxpayers across the country are going to pay for that broken promise and they are going to pay over and over again. It will hurt every taxpayer because in order to get the Atlantic provinces to agree to this harmonization scam, the Liberals are going to give them a cash payment to make up for the shortfall. Talk about a buyout. Talk about a buyout to try to somehow justify this Liberal broken promise once again.

This payment is estimated to be as high as $1 billion to Atlantic Canada and taxpayers in every other region of Canada are going to pay it. Tax relief is important but it has to be across the board if it is going to be tax relief. Canadians in certain regions of the country should not be asked to subsidize a tax cut for the maritimes. In all it is not a tax cut really.

The Liberals are using $1 billion from taxpayer money to buy a buried GST in Atlantic Canada so they can say their election promise slate is not as dirty as it has proven to be. This is truly despicable and Canadians are not missing this one. Believe me, they are not missing this Liberal broken promise.

They did not miss it on the national town hall meeting where the Prime Minister was caught red handed in a Liberal broken promise, a promise that his candidates from the Liberal Party told hundreds of thousands of Canadians, millions of Canadians in the 1993 election. He was caught in his own broken promise on videotape. Tapes do not lie. Videotapes do not lie.

It is interesting that Atlantic Canadians will also suffer because while they pay a lower tax rate, they will pay taxes on a larger variety of goods and services. In fact, a seemingly lower tax rate really does not mean necessarily a lower tax rate because you will be paying a seemingly lower rate but on a huge variety of goods and services. The tax base has been expanded. A neat Liberal trick.

It is nice that the government talks about child poverty. The harmonized tax will apply to children's clothing. Does that figure somewhere in child poverty? I understand children who are living in poverty do need cloths. They probably do not need a tax on those clothes.

It will apply to books. I understand that education helps to get children into a position where they will not have to live in poverty anymore. It will apply to haircuts. Even poor kids need a haircut.

It will apply to funeral services and heating oil. Heating oil is a major expenditure to families that live at the poverty level. Now the government is going to put a tax on heating oil. So much for its concern about the poorer Canadians of our society.

It will apply to gasoline. Poor Canadians in our society still have to go out and try to look for a job or ways to increase and improve their lot in life. Now the government is going to charge more gasoline taxes. And it will apply to new homes.

By the way, where have all the MPs from Atlantic Canada been in this debate? Where are all the MPs sent here from Atlantic Canada to protect the interests of the Atlantic Canadians, the maritimes? Where are they? They are sitting in their seats silent because they have been told to do so. "Don't you stand up and defend your constituents. This is a government bill and, by golly, if you dare speak against it you are going to be disciplined".

Where is the member from the Conservative Party? Where is she speaking on this? She is from Atlantic Canada, the maritimes.

This is a regressive tax. It is going to hurt Canadians. It is going to hurt the poorest of Canadians. How on earth could a Liberal government that promises to have the best interests of Canadians, the best interests of the poorest people in our society at heart, even conceive of putting such a regressive and hurtful tax on Canadians in this country?

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Mr. Speaker, it is a pleasure to rise on Bill C-70. I say this for the benefit of our viewers, this bill is a collection of amendments to the GST.

The group of motions we are dealing with contains among other things amendments aimed at harmonizing the GST with the sales tax in three maritime provinces. The amendments brought forward by the Bloc with regard to those motions are basically aimed at withdrawing any legislation on harmonization and compensation. There are several reasons for this.

This bill is flawed, based exclusively on political and electoral considerations, since everything suggests that we are about to have an election. It is poorly drafted and flawed.

What is more, in order to convince the three maritime provinces, which did not expect it, the federal government had to promise political compensation of close to one billion dollars, while it has

systematically refused to pay Quebec the two billion dollars it lost by harmonizing its provincial sales tax with the GST in 1991.

Quebec is often pictured as the black sheep or the spoilsport of the system. We have here the best example of this. Quebec was the first province to support harmonization with the federal tax and now they are going to make the province pay for that.

My colleagues will further develop each and every point I have raised,to put them in their proper perspective. They have already begun. Several have already spoken and they will be followed by others. For my part, I would like to underscore the fact that this bill is first and foremost a symbol.

It is a symbol that makes three things very clear. First, it shows the present government's lack of transparency. Second, it points to the fact that, in the Canadian Confederation, Quebec constantly ends up on the losing side, economically speaking. I should use the term "federation", because Canada stopped being a confederation long ago. In fact, Quebec does not receive its fair share of spinoffs from its investments in Canada, amounting to 25 per cent of Canada's revenues. Third, this bill also shows that any member from Quebec elected in Ottawa as a Liberal or a Conservative always ends up taking Ottawa's side against Quebec.

The government's lack of transparency has been plain to see throughout its mandate, during this legislature, since 1993. This bill is in keeping with this lack of transparency. It is the last chapter before the election, it is the icing on the cake.

Some recent events are clear indications of the government's lack of transparency. I will try to go fast, but there are many of them. There is the tainted blood issue. While the Prime Minister claims to want the entire situation brought to light-that is what he says all the time-he refuses to initiate the process of giving Mr. Justice Krever access to the documents that would allow him to get at the truth. This morning, we learned that the RCMP was looking for related documents that are said to have disappeared. Where is the transparency?

There is also the Somalia inquiry. While promising once again to get at the truth, the Prime Minister has refused the extension requested by the inquiry and its chairman. We know for a fact that, if this commission needs a extension, it is only because the Canadian army hid documents. Months were lost tracking them down.

The Airbus affair was another example of lack of transparency. The previous Prime Minister, Mr. Mulroney, was pronounced guilty in advance, almost under criminal charges. We know full well that this is contrary to Canadian law and yet nobody is responsible.

Etymologically the word responsible refers to the person who is able to provide a response. When we ask questions in the House, we never get any response, which means that nobody is responsible. Somebody else is, the system is or some other thing. There is not one minister who is responsible.

Here are a few blatant examples of broken promises and lack of transparency on the part of the government: it promised to tear up the free trade agreement, and yet it signed it; it promised to deprivatize the Pearson airport, but the issue has not been settled yet and has been handled in such a way that it might cost taxpayers tens of millions of dollars.

Remember the commitment to Quebec during the referendum to recognize the concept of distinct society and give Quebec its veto back? Another broken promise. Every Quebecer remembers it. Remember the promise to create jobs, jobs, jobs?

In his last budget, not the forthcoming one, the one he tabled before, the finance minister told us: "The government's role is not to create jobs, we are going to create the right environment for corporations to create jobs". When we look at major corporations posting record breaking profits, starting with the banks, we see that they are all laying off people.

One has to wonder who in Canada is creating jobs these days, but not why 1.5 million Canadians are unemployed. "Jobs, jobs, jobs", another broken promise. And now the ultimate one, the one that tops them all, the one we are dealing with today. They were going to scrap the GST. Instead they are talking about changing the GST harmonization standards.

This promise was heard on every radio and TV station, and the Prime Minister told us on May 2, 1994: "We hate this tax, we will do away with it". The hated tax did not disappear, so they are trying to hide it. The finance minister apologized, saying that they should not have made such a promise. The Deputy Prime Minister resigned, and the Prime Minister still insists he never said anything of the kind.

I am sure you have read the Toronto newspapers; they were hard enough on the Prime Minister. I will not repeat in the House what the journalists wrote because it would be unparliamentary. It is easy to see there is no transparency there.

Secondly, as this bill shows clearly, Quebec is always the loser within the Canadian Confederation because it never receives its fair share. Since we have been here, we have held numerous debates in the House to explain how Quebec never gets its share of structuring expenditures, of job creating expenditures. We have often given the example of research and development as an area where Quebec gets nothing, where it never gets its share of expenditures.

This GST case is just one more example. The maritimes will receive a billion dollars for the harmonization whereas Quebec got absolutely nothing for harmonizing its QST with the GST. What does this mean? Since Quebecers make up one quarter of Canada's revenues, it means that the federal government is taking $250

million away from Quebecers to send it to the maritimes while Quebec is receiving nothing at all.

We all know what the people over there will do with that money. Mr. McKenna for one is raiding Quebec to attract Quebec businesses. We are paying people for them to come here and compete with us. That is the kind of system we live in. The GST situation shows that clearly.

Finally, the third point this bill proves is that a liberal member from Quebec, when he is in Ottawa, will always take Ottawa's side against Quebec.

Mr. Speaker, your are telling me I have only one minute left, so I will try to conclude swiftly. Where are the Quebec members when the government refuses to pay Quebec and takes $250 million from Quebecers to send it to the maritimes, with nothing in return? Liberal members from Quebec are saying nothing and are nowhere to be seen.

Where were the Liberal members from Quebec when the government seized from the unemployment insurance fund $5 billion that collectively belonged to the workers? Mum was the word. They were nowhere to be seen. Where were the Liberal members from Quebec when family trusts moved to the United States without paying some $500 million in taxes? They were nowhere to be seen and did not say a word.

To conclude, Quebecers now know, thanks to this bill, that is no use sending a René Lévesque to Quebec City and a Pierre Trudeau to Ottawa, a Lucien Bouchard to Quebec City and a little guy from Shawinigan to Ottawa. Quebecers now know that Canada is not, as the Deputy Prime Minister was saying, a tower of Babel that works. It is a tower of Pisa, a tower that leans to one side: Ottawa.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it is a pleasure to speak on Bill C-70 which harmonizes the sales taxes in the maritimes.

The object of the bill is an attempt to create jobs, to simplify the tax system and to stimulate the economy. This attempt by the government to harmonize the sales tax will do exactly the opposite. It is an example of an ill-advised taxation initiative which will put people out of work, increase the underground economy, drive companies into bankruptcy. Let me give some examples.

The business community has cried out against the present form of this tax. The Retail Council of Canada said that it will cost retailers at least $100 million per year. It will not only cost the retailers, obviously it will cost those who pay for it in the end, the taxpayers. The Halifax Chamber of Commerce said that the sales tax will push up the cost of new houses by 5.5 per cent. This is in an area of the country where people are finding it increasingly difficult to purchase homes.

Consumers are going to pay more for children's clothing, books, gasoline, heating fuel: the essentials. In fact, it will hurt those who are least able to afford it. The government should be embarrassed about doing that to the people of Atlantic Canada.

The intent, though, is sensible. Having a harmonized sales tax is actually a good thing but it has to occur in a different number of ways. It has to be one tax for the entire country applied across the board. The rate has to be lower than what it is now. We need one auditing procedure and it has to be simpler and easier to understand. It has to have one single remittance and one set of rules.

The system that is proposed by the government does not do that at all. It just increases the complexity. Furthermore, it asks Canadians outside the provinces in the maritimes to fund this project by shunting money from the west to the maritimes. For the moment, the west does not mind providing for provinces that are less able to afford things. However, to ingrain this harmonized sales is doing a disservice to all Canadians. This tax will affect over 50 per cent of businesses in the maritimes in a massively negative way. This is information from the business community in the maritimes.

There are ways to get around this. There are ways to provide a sales tax that will be better and therefore stimulate the economy. There are ways to get people back to work but the government has just nibbled around the edges for the last three years that we have been here. It has done very little to help the 10 per cent of Canadians who are unemployed and the nearly 20 per cent of Canadians who are under employed.

Here are a few constructive suggestions that I challenge the government to take up. First, the debt and the deficit. Get the deficit down to zero and decrease the debt. Second, instead of having the HST that the government is proposing, let us have a sensible harmonized sales tax that has one tax, a lower rate applicable across the country, that is simpler, with one reporting procedure per year, one auditing procedure that is easier to understand.

Better, of course, would be to scrap the tax altogether. A few years ago when the government of the day decided to lower taxes, what happened? More money came into the government coffers, more money was in the pockets of Canadians and the economy was stimulated. What did that government do? The Conservative government of the day started to tax wildly. That did the exact opposite of stimulating the economy and revenues to the public purse went down.

We need to flatten the tax system. My colleagues in the Reform Party have proposed some sensible solutions for flattening the tax procedure for all Canadians. It is a simple tax that does not defeat the intent of working harder to earn more for ourselves and our families. It provides for a greater minimum exclusion for those in the lower socioeconomic groups so those who are poor in our society pay little or no tax at all. It is a win-win situation.

Interprovincial trade barriers have to go. I do not know if the Canadian public realizes it but there are more barriers to trade east-west across our country than there are north-south. That is an embarrassment. The government has had opportunity after opportunity to deal with this but it has not.

We have serious problems in education in our country. There is a dislocation between the needs of the private sector and the initiatives of the education system. If we want to build a stronger Canada, if we want to build a nation where we can compete with countries from around the world, if we want to become one of the new tigers in the economy of the Asia-Pacific countries, then we have to invest in education.

We have to determine what will be the needs of the private sector in the 21st century. We have develop co-operative initiatives between the education system and the private sector to enable the students of today and tomorrow to develop the skills that will enable them to become employable in the future. That is not happening right now. I challenge the government to work with their provincial counterparts to do just that.

Number four is skills training. It is an embarrassment to us that we are one of the nations of the world with the lowest investment in skills and labour training in the developing world. How can we be competitive in the global economy if we do not invest in skills and labour training for our workers? That is absolutely essential if we are going to compete in the future.

We also need to reinvest in research and technology. The government is pulling money out of research and technology. It is doing the same thing with education. The government ripped some $7 billion from transfer payments for education, health and welfare and claimed it was balancing the budget. All the government is doing is balancing its budget on the backs of taxpayers. At the end of the day it is the taxpayer who pays for everything.

We have to capitalize on foreign markets. We heard that we should be reinvesting in north-south trade. Thirty years ago trade in Asia represented 5 per cent of the world's gross national product. Today it is 30 per cent and growing. We are uniquely positioned to take advantage of this in my province of British Columbia. We have the geography, we have the people, we have the opportunity for skills development, not only for points east in Asia-Pacific but also as a conduit and as a channel for points in Europe and points south. Very few nations, in fact no nation, can boast the ideal position that we have today.

I challenge the people of Canada to realize that our system of governance today is not a democracy at all. It operates more like a fiefdom. Democracy has very little to do with what takes place within our nation today. In fact, most of the important decisions made are made by a group of non-elected, unaccountable officials that the public never sees. That is where the legislative initiatives occur. They are made not to make this country a better place, but purely for the maintenance and acquisition of power.

If the Canadian public wants to see radical, fundamental, positive social and economic change, then they will have to get angry and put pressure on all of their elected officials to demand the changes in governance that we will require if we are going to be an aggressive player in the economy of the 21st century.

We also need strong leadership that demonstrates and expresses a vision of the country that is going to lead us into the 21st century where we will be able to demonstrate strength and compassion. Right now, that does not occur.

We need to build a nation where all able-bodied individuals can develop the skills training they require. And it is an obligation for all able-bodied individuals to capitalize on those opportunities. We also need to fulfil our obligation to those individuals who cannot take care of themselves and ensure that our social programs are placed on a sustainable footing.

If we can see that leadership in this nation, we will be able to lead our people into a stronger and brighter future in the 21st century. Failure to do that will mean terrible social and economic consequences in the future and we will only be a shadow of what we can be in Canada.