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.