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]