Debates of Feb. 6th, 1997

Excise Tax Act

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Mr. Speaker, I am also pleased to speak today to Bill C-70, which, among other things, makes some amendments on harmonization of the GST with the tax in the three maritimes provinces.

It will be remembered that, just before Christmas, the official opposition deplored the way in which the finance minister had tabled the documents relating to this bill. The opposition had less than 24 hours to examine a very technical bill, in which this whole reform was set out in 300 pages, without any explanatory notes.

However, in January of this year, we witnessed an even more revolting spectacle for anybody who believes in the quality of democratic life in Canada. First, the Liberals allowed only three

days of public hearings for such an important bill. And we know this bill is very important to the maritime provinces.

The opposition tabled a motion calling for an extension to consultations, and even for the committee to travel to the maritimes to listen to the people. The government wanted none of this. It is clear, therefore, that this government has no regard for democracy.

With three days of public hearings, under the pretext that complaints were made, the government moved 13 amendments. Imagine how many amendments could have been made if, for once, the government had been listening to what people had to say. The whole bill would then have ended up in the waste paper basket. It must also be said that this bill is a great source of embarrassment for the government. That is why it wants to have it rammed through.

In December, someone came to call in my region. The Prime Minister came to my riding to tell us that we had misunderstood what he had said about the GST. Millions of us were under the impression that the GST would be abolished. Do these words have a different meaning? I would like to hear the members opposite on this. What this bill does is show that promises were not kept, whether they were made in the red book, by the Prime Minister himself, by the Minister of Finance, by the Deputy Prime Minister and heritage minister or by any past or present Liberal candidate or member. Clearly, the Liberal government has lost sight of the people on behalf of whom it is supposed to govern.

During the 1993 campaign, countless statements were made about scrapping the GST entirely. The Prime Minister himself used the word "scrap". In 1994, he said the Liberals hated this tax and would kill it. A byelection was even run at taxpayers' expense on this issue. That was not so long ago. We all remember. Eliminating the GST was an election promise. But instead of being eliminated, it is being disguised, hidden. This leads us to say that, through this bill, the Liberals are doing exactly the opposite, what they had criticized.

The new GST is a hypocritical tax; from now on, it will be hidden in the cost of goods and services. However, in a report of the Standing Committee on Finance dating back to 1994, the Liberal majority said that it would be improper to hide from Canadians the amounts they paid in taxes to their governments and that making it a hidden tax undermined their ability to make the government accountable for the way these taxes were collected and, to a lesser extent, for the way moneys were spent.

The position of the Liberals on hiding the GST in the sales price used to be that, if the GST was hidden in the sales price, it would be much easier for the government to increase it later on. Yet, we know that 76 per cent of Canadian businesses are opposed to hiding the GST in the sale price of goods and services. Personally, when I pay my bills, I want to know where my money goes. I want to know how much I am paying for the goods or services, and how much I am paying to the government. And I am sure my constituents feel the same way. I sincerely believe that some members opposite should go back to their riding and talk to those who elected them.

I want to discuss another aspect of this most undemocratic bill, that is yet another infringement of the rights of Quebecers. During the referendum campaign, and even after, we were constantly told that all Canadians were equal. Why is it then that, under this bill, Quebecers are being refused the compensation awarded to the maritime provinces? Such is the kind of equality that prevails under our federal system.

Yes, Quebec did harmonize its tax with the federal one; Quebec administers that tax. Quebec acted very responsibly. So why should Quebecers not be entitled to the same compensation that the federal government is giving the maritime provinces?

The maritimes may be facing additional costs to harmonize their tax with the federal one, but so does Quebec.

If the maritimes are entitled to $1 billion in compensation, Quebec should also be entitled to a compensation. The Minister of Finance must act in a fair manner. The term "harmonization" implies that the parties get together and are, for all intents and purposes, in agreement. However, it seems that this concept takes on a different meaning with this Liberal government.

I would have liked to discuss the tax on books, but I will conclude by simply saying this: in Quebec, the provincial sales tax does not apply to books. In Quebec, we realized a long time ago that taxing books means taxing knowledge.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I am pleased to speak to this group of amendments to Bill C-70, the so-called harmonization bill.

Those who have been listening to the debate over the last couple of days will know that this bill will not lead to harmonization at all. It will mean that three provinces will live under a completely different set of rules than the rest of the country. Part of the reason for that is that the other provinces do not think it is the right thing to do and will not give the federal government their approval. We have anything but harmonization. What we have is more disunity and more divisiveness in the country as a result of this legislation.

Any amount of amendment to the bill will not fix it. The fact is that the bill will not make things better. It will not harmonize the tax across the country, it will lead to a split. It will not fulfil the

Liberal promise to get rid of the GST. Those who have been listening to the debate over the last few days will know that.

Leading up to the last election campaign, during the election campaign and since the election, many Liberal MPs and the Prime Minister have very clearly promised to abolish, kill, scrap the GST. There is no doubt about that.

This harmonization bill is not a well thought out piece of legislation. It is a smoke screen so the Liberals can say on the campaign trail that they kept their promise to scrap the GST, but it will not sell. Those 10, 20, 30 or 40 Liberal MPs who were elected on the promise of getting rid of the GST are in danger of losing their seats on that one issue alone. No amount of amendment and certainly not the amendments in this group will solve the problem.

I want to speak to these amendments and to the so-called harmonization of the GST from another point of view. As the Reform Party critic for interprovincial trade, I want to deal with that issue and explain how this legislation clearly violates the government's agreement on internal trade. That agreement does not allow legislation such as this to apply to one part of the country and not another. This bill clearly violates the agreement. I will speak to the bill from that point of view.

Some people may not be surprised that this piece of legislation or one piece of legislation would clearly contradict legislation that was presented earlier by this government, but that does not mean it is right.

I suppose I should not be surprised that the government would break its own law, a law it has put in place, the agreement on internal trade, through the introduction of another piece of legislation. That is what it has done. I should not be surprised but I do not accept it. Many other Canadians do not accept it. Canadians expect government to honour the laws it puts in place just as they expect everyone to honour the laws that are put in place. This legislation clearly violates the government's own law.

The agreement on internal trade is falling apart. The agreement was put in place after the negotiations between the provinces and the federal government throughout 1994. After it was signed in 1995, I thought the government had made some progress on this issue. It had reached an agreement in some areas on removing barriers to interprovincial trade. In other areas it set a framework and a timeframe for removing further barriers to internal trade and the provinces had agreed in principle to removing the barriers to internal trade. I thought progress had been made.

Unfortunately very little progress has been proven over time. The set deadlines have been broken one after another to the point that British Columbia is saying that it will not even take part in the negotiations on the so-called MUSH sector, the sector that deals with procurement for municipalities, universities, schools and hospitals. British Columbia announced earlier this week that it will not even take part in negotiations to try to finish this agreement.

Deadlines have passed. The agreement never had a mechanism to ensure that the provinces and the federal government would abide by the rules of the agreement. With the formula for approving changes to the agreement, being unanimous consent, it was clear from the start that it would be very difficult to complete the agreement. And that has proven to be the case.

There are several reasons this is such an important issue, why it is so important to Canadians that these barriers to interprovincial trade be removed. First, according to the Fraser Institute, it costs the average Canadian family $3,500 a year just having these barriers to trade in place. We have a situation in Canada where it is actually more difficult for a company based in one province to do business the other provinces than it is for a company in the United States to do business with all Canadian provinces.

The barriers have created an incentive for Canadian companies to relocate into the United States so they can have open access to all Canadian provinces. This drives jobs out of the country. The Canadian Chamber of Commerce stated in a report before Christmas that just reducing internal trade barriers or increasing internal trade by 10 per cent will create 200,000 jobs in this country. That is a lot of jobs.

For a government that was elected on the promise to get rid of the GST and partly on the promise to create jobs, you would think it would be enticing to make relatively simple changes compared to some of the other changes that would have to be made to create jobs. Just increasing trade between provinces by 10 per cent would create 200,000 jobs, but the government does not seem committed to this idea.

Now with British Columbia saying that it will not even negotiate, we are left to ask whether this 1995 agreement, which I said at the time was real progress, is really going to accomplish a thing.

We have a problem that needs to be dealt with with urgency. This harmonization bill and these amendments we are debating in this House are not going to solve a problem. They are not good for business in Atlantic Canada. They are not good for the people of Atlantic Canada, as jobs will be lost because of this deal. Many businesses involved have stated this clearly.

There is a further aspect to this agreement on internal trade and the importance of the trade between provinces that has not been talked about very much. We have put the Canadian economy at risk, a risk we have put in place unnecessarily by coming to depend more and more on international trade before we have done the work

to encourage trade between provinces and to make it easier for businesses to trade between provinces. There is an increased risk.

If we have a substantial increase in our dollar we are going to have a dramatic reduction in trade and this government and this country have come to depend on trade for jobs. Any new jobs that have been created have been pretty much due to international trade. We have an increase in the dollar, our trade surplus has decreased, which happened in the third quarter of last year. Our economy goes in the tank, unemployment increases. That is why it is so important to deal with this issue.

I will certainly continue on this topic relating it to the debate in future groups of amendments.

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Mr. Speaker, the House of Commons is dealing with a crucial bill for the province of Quebec, Bill C-70, an act to harmonize the infamous GST with the provincial sales tax in three Canadian provinces, namely New Brunswick, Nova Scotia and Newfoundland.

This harmonization is another example of discrimination against the province of Quebec, which is nothing new. As early as 1841-and this is making the members opposite smile-the union of Lower and Upper Canada brought about the harmonization of the debts of the two territories. Lower Canada, that is the province of Quebec, French Canada if you prefer, was not heavily in debt at the time, but did not have a lot of infrastructures in place. On the other hand, Upper Canada was 12 times deeper in debt, but had a lot of roads, harbours, railroads, et cetera. After the union, Quebecers had to pay for the debts of English Canada. That is how our marriage to English Canada started. The majority at the time decided to split the debts equally between the two founding nations.

In 1997 as in 1841, we have the same remedy, the same type of discrimination. Given how the GST is being harmonized in three maritime provinces, according to a simple rule of three, Quebec should get nothing less than $2 billion in compensation.

What did the federal government offer Robert Bourassa, a Liberal from Quebec, when he agreed to harmonize with Brian Mulroney's Conservative government?

Quebec was the first province in Canada to harmonize its provincial sales tax with the GST, but it did not get anything in return, except, of course, the sharing on a fifty-fifty basis of the costs associated with collecting the GST and the QST. Quebec taxpayers were even proud of this harmonization. As a farmer, I was happy too because instead of filling two forms, one for Ottawa and one for Quebec, I would have to fill only one form. So, personally, I was proud of the Quebec government at that time, even though it was headed by a Liberal, namely Robert Bourassa.

What I am driving at, Mr. Speaker, and your smile tells me you already know, is that Ottawa did not pay Quebec any compensation, and it is now ready to give these three small Atlantic provinces nothing less than a billion dollars. That is a flagrant case of injustice.

The same thing happened in 1996 when this government abolished the Western Grain Transportation Act. It released $3 billion to compensate three western provinces. It gave them $3 billion.

Last year, in 1996, as the member for Saint-Hyacinthe-Bagot knows, the same government decided to abolish subsidies to industrial milk producers. What did Quebec producers get as compensation? Nothing. That is the kind of equality that exists in our country. That is the kind of medicine Quebecers get from this Liberal government. It is not surprising, my friends, that the Liberal Party is so low in the polls in Quebec.

We cannot wait to see the result of the next election. The Prime Minister himself, in his own riding of Saint-Maurice, will-to use his own expression-take a beating. That is what he was telling us before the referendum. Well, he is the one who is going to take a beating.

It takes nothing more than the rule of three to demonstrate that this government is cheating Quebecers out of $2 billion in this harmonization deal with the maritimes.

There is another example of discrimination, this time against Quebec and Ontario. You certainly know that, in recovering the costs associated with the RCMP, the federal government recovers only 70 per cent of the real costs. Quebec and Ontario each have their own provincial police force, namely the Sûreté du Québec and the OPP.

We pay 100 per cent of the costs associated with these police services. We pay whatever these services cost. But the other provinces pay only 70 per cent of the real cost of their police services. So Quebec and Ontario both are paying 30 per cent of the costs of the police forces in the maritimes and in most of the western provinces. Where is the equity? Where is the fairness in this country? As far back as 1841 it has been the same thing, year after year.

I would like to come back to the GST. Since October 1993, or let us say November 1993, the Liberal government has been turning in an amateur performance. It has improvised every last step of the way. First of all, think back to the 1993 election campaign, in September and October. The Deputy Prime Minister, the member for Hamilton East, made a solemn promise to step down if they had not abolished the GST in the first 12 months of their mandate.

Obviously, she will say today that she kept her word. But I would remind you that, just like a mother bird pushes her chick out of the nest to teach it to fly, the opposition members had to give her a shove to get her to resign. The Deputy Prime Minister's blunder cost Canadian taxpayers no less than $500,000.

When they are reminded of these mistakes and of the fact that this government improvised and behaved like a rookie, it hurts, of course. It hurts the Liberal members.

In 1993, all members heard the Prime Minister say in caucus that he was going to abolish the GST, to scrap it. One of their own dared to vote against the finance minister's budget last year. Like a good father, the Prime Minister kicked him out. As you know, I am talking about the member for York South-Weston. In December, during a question here, he reminded the Prime Minister that on at least three occasions he had promised to abolish the GST and had not kept his promise.

In closing, I would like to remind you of the credibility we politicians have with our electorate. Yesterday, in the House, we were once again treated to the sad display of two members removing their jackets and preparing to fight it out in the House of Commons, the people's Chamber. This makes us look ridiculous.

The Liberal member from British Columbia, the member for Okanagan-Shuswap, and the Liberal member for Scarborough Centre took off their jackets, undid their shirts and got ready to fight it out-

[The Acting Speaker (Mr. Milliken)]

I am sorry, but the member's time is up. It is too bad, because as usual his remarks are very interesting.

[John Williams, Reform, St. Albert, AB]

Mr. Speaker, I am pleased to rise again to speak on Bill C-70, the harmonized sales tax, the HST or, as a friend of mine, Mr. Mike Jenkinson from the Alberta Report referred to it, the helter-skelter tax. I thought the name that he applied to it was quite appropriate in so far as we have rules that apply to eastern Canada we have different rules that apply to western Canada and we have the Minister of Finance trying to bring Ontario on side. We have, more or less, harmonization with the GST in the province of Quebec. Right across the country it appears that there are different rules in different places. Therefore the helter-skelter tax perhaps is not that inappropriate.

I want to again focus on the concept of the Liberal Party which is tax and spend at all costs. If there is an opportunity to raise taxes, it will leave no stone unturned in order to find that extra dollar which it is always looking for in order that it can develop a new program to give to Canadians in order to buy their votes. When I say give to Canadians, it seems that the government always wants to break society into its different classifications.

I happened to see in the Globe and Mail today an article regarding youth jobs plan and some side steps training, how they are moving their focus away from training to a youth jobs plan and how they are perhaps going to focus several hundred million dollars into this program.

Youth training and youth jobs are vitally important. We have here the tax and spend philosophy of the Liberal government which taxes Canadians right across the board, the GST in this case, and harmonize sales tax in Atlantic Canada. Collect all these taxes and try to provide jobs for youth and job training for youth.

I cannot speak for my friends in the Bloc who introduced some tax increase concepts yesterday, but we in the Reform Party would like to point out clearly and definitively that if we can reduce taxation, especially for employers, it is surely better than the tax and spend philosophy of a government that takes it from employers and gives it back to a few.

We heard at the last election about the jobs, jobs strategy of the federal government where it was going to spend $6 billion to renew our infrastructure. We all know how much actually went into infrastructure renewal, not an awful lot. But that is another issue.

The point we are trying to make is that while the Liberals made a great issue of spending $6 billion to revitalize the economy and restart the economy to create jobs, we have heard nothing about the deliberate policy of the Minister of Finance of maintaining employment insurance premiums far higher than we need in order to cover the cost of payouts. He has therefore built up a surplus of $5 billion, all paid for by employers and employees. It is a payroll tax that the Minister of Finance has siphoned out of the business community in the last two years and therefore has recovered every penny of his $6 billion tax and spend program which did very little to create jobs in the first place.

The myth I want to point out is that tax and spend programs do not work and tax and spend programs allow the Minister of Finance to hide these payroll taxes that are inequitable and damaging to the economy. They destroy jobs but yet provide the federal government with the excuse to come up with a youth jobs plan to put this money back into the economy. Surely it makes imminent sense to leave the money in the hands of the employers in the first instance who can decide where best that money is to be spent.

I think of the state of the union address by the President of the United States the other day. He challenged every employer in the country to create one new position; through their own efforts to build a business and create another job. That I think is a wonderful

challenge. Too bad the Minister of Finance did not think about it. Too bad the Liberals did not think about it. They are totally focused on taxing more money out of employers in order for them to come up with what they consider to be vote buying programs as they spend it back in the economy. There is a fundamental difference.

Let us look at this helter-skelter tax and at some of the rules they are going to ask business to administer. Do not tell me that they are not going to have extra costs. What about travel agents? I live in Alberta and I travel across the country as part of my position as a member of Parliament. Let us say I buy a ticket from Edmonton to Halifax. The travel agent has to charge me only the GST because the province of Alberta has no provincial sales tax, the only fortunate province in the country that gets by without one. If I ask the same travel agent in Alberta to provide me with a ticket from Halifax to Ottawa, the travel agent in Alberta has to charge the harmonized sales tax.

How is a travel agent supposed to accommodate that complexity of rules? As far as tickets are concerned the GST or the HST will apply based on the point of departure, not on the point of purchase.

The same applies to trucking and shipping goods across the country. Therefore who is going to set up a warehouse distribution system in Atlantic Canada where every shipment out of a warehouse will have a harmonized sales tax of 15 per cent when they can locate that warehouse in a different province and pay a lower GST and provincial sales tax?

These are job killing programs and the government comes out with this vote buying program such as job plans which is in the Globe and Mail today. That is an inequity on the taxation side. It is an inequity on the government spending side. That is why we say surely it makes a lot more sense to leave the money in the hands of the employer and give him the challenge of creating another job.

We hear about discrimination at every turn. We hear about discrimination about older people who find it so dreadfully difficult to get back into the workforce. Right now it is more appealing for this government to focus on the youth and it ignores the older people who want to return to the workforce.

I can expect on February 18 we are going to see some kind of program focused at them as well when surely it would have been so much better had the government lived up to its first election promise to axe, scrap and abolish the entire thing.

[The Acting Speaker (Mr. Chrétien (Frontenac))]

Resuming debate, the hon. member for Calgary North.

[Diane Ablonczy, Reform, Calgary North, AB]

Mr. Speaker, I must say you are much better looking than I expected to see in the chair.

I am really happy to speak on this bill. The bill we are debating is Bill C-70. Bill C-70 is a very clumsy attempt by this Liberal government to harmonize the goods and services tax with the provincial sales taxes in three Atlantic provinces.

Another little wrinkle now which the Liberals have thrown into this mess is to hide the new harmonized sales tax from consumers by requiring the sticker price to include tax. In addition to some of the objections that I mentioned to this bill when I spoke on it before, we now have a situation where it is even worse than it was when I last spoke. Perhaps if I point out some of the difficulties to this government it will pay close attention and it will be happy to change the parts of the bill that are inadequate and inappropriate.

This tax inclusive pricing should be changed, should be abandoned, should be scrapped, a good Liberal word. for four reasons. One is that tax inclusive pricing kills jobs, the jobs, jobs, jobs that the Liberals promised us faithfully in the last election that they were going to create. It kills jobs because it hits business right between the eyes and takes away profits and resources that could have been used to expand business and hire more people.

The second reason this tax inclusive pricing is bad is it makes us pay more for what we buy. Goodness knows, with this government's sucking $24 billion more out of our pockets every year than it did when it took office, we can ill afford to have increased costs.

The third reason tax inclusive pricing should be scrapped is that it is clearly nothing more than a clumsy, shoddy attempt to hide the fact that the Liberals have broken another key election promise, which was to get rid of the GST.

The fourth reason to get rid of tax inclusive pricing is that it is a big example of how we are losing democracy in this country, how we are losing the ability of the people to have a say in things that affect them. That is perhaps the most serious problem of all.

I want the Liberals to know that I am going to agree with the Liberal finance minister, Paul Martin. The Liberal finance minister, Paul Martin, said on November 28, 1989: "The goods and services tax is a stupid, inept and incompetent tax". I agree with that statement. I agree that it is a tax which has caused nothing but headaches and grief to Canadians. I am sure all members of the House have had constituents in their offices who were absolutely beside themselves because the way the tax is administered, it is nearly impossible for them to know what the expectations are, what kind of rules and regulations they have to meet and what the true impact on their businesses will be.

The Liberal finance minister, Paul Martin, said-

[The Acting Speaker (Mr. Milliken)]

Order. I know that the Minister of Finance would appreciate the hon. member's agreement, but she must know that under the rules of the House she may not refer to him by name but only by his title. I would invite her to restrain herself in that regard.

[Diane Ablonczy, Reform, Calgary North, AB]

Thank you, Mr. Speaker. I will certainly respect that direction from the Chair.

In April 1990 the Liberal finance minister, whose name is well known to all Canadians, said this: "I would abolish the GST. The manufacturers sales tax is a bad tax and there is no excuse to repeal one bad thing by bringing in another one". I consider those words to be words of wisdom. One has to question why a bad tax like the GST is now being replaced by another even worse tax, the HST, in three of our provinces.

Those two statements by the Liberal finance minister were made while he was in opposition. Here is a statement which he made while he was the finance minister on June 21, 1994. Again this is a statement which I would agree with very strongly: "It is almost impossible to design a tax that is more costly and more inefficient than the GST".

The finance minister has certainly outdone himself. He has now brought in the HST with TIP, which is more costly and more inefficient, if that is possible, than the GST.

This is not just something for political rhetoric and political points. These taxes affect things which are very important to Canadians. In particular they affect jobs.

Bill C-70 as now constituted will increase costs to retail business and result in a net loss of jobs, particularly in Atlantic Canada. Perhaps I should repeat that for the benefit of members who represent Canadians in the three Atlantic provinces. They are supposed to be their voice but we have heard precious little from the members of Parliament from the Atlantic region. They should be sticking up and standing up for the interests of their constituents. For their benefit, perhaps they need to be reminded that Bill C-70 in its present form will increase the cost of doing business in the three Atlantic provinces. It will create confusion among consumers when shopping. It will decrease retail sales and will cost many, many Atlantic Canadians their jobs.

I know that many others who have spoken on this bill have been very clear about the concerns that have been raised by retailers who do business in the Atlantic provinces. The bottom line is that these business people, these job creators, these people who pay the wages of real Canadians in those three Atlantic provinces estimate that they will lose at least $100 million because of this foolish proposal by the Liberal government to hide its tax in the sticker price in those three Atlantic provinces only.

When these things happen, the bottom line is that Canadians themselves have to pay the costs which costs Canadians more money. In addition to the fact that our taxes have been increased by this government by at least $24 billion every single year since it took over our affairs, it is now increasing costs by attempting to pretend it has kept a key election promise.

It is important to emphasize that democracy itself is at stake when we talk about the way our taxes are structured. There are two elements in the way the provisions of this bill have been brought forward which I think Canadians, particularly Canadians in the affected Atlantic provinces, should be concerned about.

One is that I did not see one single member from those provinces who represent thousands of Canadians whose jobs, incomes and spending discretion is going to be affected. I would also say that with closure being brought in, the concerns that they have are being stifled and cut off in this House.

I see I am also being cut off because my time is finished. Thank you, Mr. Speaker, for giving me the opportunity to make these remarks on this bill. I urge this House to reject it.

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

Mr. Speaker, on a point of order. I believe I heard the hon. member opposite say that this government has imposed closure. That is untrue. Nothing of the sort has been done. I would like the record to be corrected.

[The Acting Speaker (Mr. Milliken)]

I think that is a matter for debate. I do not think it is a point of order. The hon. member in her remarks did not say that it had been applied on this bill. She was careful to avoid suggesting any such thing. She said that the government has used closure. Clearly members disagree but I think the record is clear.

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Mr. Milliken)]

The question is on Motion No. 3. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. Milliken)]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. Milliken)]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker (Mr. Milliken)]

In my opinion the nays have it.

And more than five members having risen:

[The Acting Speaker (Mr. Milliken)]

The recorded division on the motion stands deferred.

The recorded division will also apply to Motions Nos. 6 to 14 inclusive, Motions Nos. 16 to 53 inclusive, Motions Nos. 55 to 59 inclusive, Motion No. 61, Motions Nos. 64 to 100 inclusive, Motions Nos. 102 to 113 inclusive, Motions Nos. 115 and 117.

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

moved:

Motion No. 118

That Bill C-70 be amended by deleting Clause 261.

Motion No. 119

That Bill C-70 be amended by deleting Clause 262.

[Raymond Chan, Liberal, for the Minister of Finance]

moved:

Motion No. 120

That Bill C-70, in Clause 262, be amended by a ) replacing lines 11 and 12 on page 359 with the following:

"province out of amounts received in a fiscal year under Part IX of the Excise Tax Act" b ) replacing line 30 on page 359 with the following:

"of amounts received in a fiscal year under Part IX of the Excise Tax Act to a person" c ) replacing line 41 on page 359 with the following:

"advance out of amounts received in a fiscal year under Part IX of the Excise Tax Act"

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

moved:

Motion No. 121

That Bill C-70 be amended by deleting Clause 263.

Motion No. 122

That Bill C-70 be amended by deleting Clause 264.

Motion No. 123

That Bill C-70 be amended by deleting Clause 265.

Motion No. 124

That Bill C-70 be amended by deleting Clause 266.

Mr. Speaker, it is a pleasure to speak to the third group of motions regarding Bill C-70 and the so-called harmonization agreement between the federal government and three Maritime provinces, and I am referring to the harmonization of federal and provincial sales tax.

When we talk about harmonization, the subject of this third group of motions, we think about harmony, which means everything is all right and unfolding as it should. It "flies through the air with the greatest of ease", but that is certainly not the case with this bill.

In January, when many of my Liberal colleagues were still on the slopes, the finance committee was sitting, and for three days, only three days, it invited representatives from the Maritimes to appear before Liberal, Bloc and Reform members. The government wanted to rush this bill through. It wanted to silence the opposition. I must say that in three days we got a very interesting sample of opposition, even from the Maritimes, to the proposed harmonization of the GST.

One major witness, the Retail Council of Canada, whose members are responsible for 65 per cent of the retail trade, told us that this policy, this Bill C-70, should be scrapped.

They were not against harmonization, far from it. In Quebec, we saw the advantages as far back as 1991, when we harmonized the sales tax with the federal GST, and since Quebec administers the GST on behalf of the federal government, we can hardly be against harmonization. We are in favour. However, the bill before the House today creates almost insurmountable problems for business.

One of those problems is including the tax in the price of the product. The provisions of the bill allow merchants some latitude on whether they want to include the tax or indicate it separately, include it directly or only on certain products, and there are any number of exceptions.

According to the Retail Council of Canada, we could have a situation where we would have four different ways of labelling the same product. How is the consumer supposed to find his way through this maze?

Furthermore, people may be completely confused as to the actual price of a product while the new system is being phased in by the three Maritime provinces, where merchants will have four months to comply with the new sales tax legislation.

I think that anyone would be foolish to include the tax in his prices, because these prices will not look very competitive. There are quite a few problems here.

According to the Retail Council of Canada, phasing in the new system will cost about $100 million. That is not exactly peanuts for merchants in the three Maritime provinces. It will cost merchants $100 million for additional adjustments and $90 million annually to administer the new price structure, the new system that will be applied in these three provinces.

During those three days, we heard some highly interesting testimony from representatives of companies, not small ones, but

very big Canadian companies which do business in all of the provinces. Sears Canada, for example, made the following comment on this bill: "The use of prices which incorporate the tax in a partially harmonized system will mean higher costs and more complex systems for Canadian retailers".

Sears has a catalogue shopping system, as you probably know. It will produce 52 million catalogues in 1997. The production of "harmonized" catalogues, to fit in with the so-called harmonized system in the Maritimes, will cost Sears a fortune.

We heard from other witnesses such as Canadian Tire, and I shall take the liberty of quoting their opposition to the government's plan and to the terrible complications imposed on them when it comes to pricing and stock management. To quote Canadian Tire:

"We are opposed to the piecemeal approach to the application of tax included pricing as part of the introduction of the new HST. This would create very significant ongoing costs as well as extreme confusion to our customers. There are no savings. In fact, there are increased costs".

This is a quote from Canadian Tire's brief. There are companies like Canadian Tire and Sears Canada, and other major companies, which do business everywhere in Canada and have to prepare shipments of products to branch stores from a centralized product source. They will have terrible problems in managing various products that will then need to be shipped out to branches.

Canadian Tire, for example, will be forced to divide its huge central warehouse into two parts: one for the products destined for the three Maritime provinces where harmonization is planned and one for those destined for the rest of Canada, as the price labels will be different. Products will have to be stocked specifically for the three Maritime provinces, where an agreement has been signed which makes no sense.

Imagine, companies already find it complicated and expensive enough to handle their stocks, and now they are going to have a dual stock system imposed upon them, for goods to be shipped to the Maritimes and goods shipped to other provinces, a dual pricing and labelling system and, what is more, the three Maritime provinces will have complete leeway in the way they do their price labelling. Let me tell you, we are not out of the woods yet.

That is why these major companies have made representations to the finance committee. Others could have as well, but could not afford to come to Ottawa. There are other small businesses opposed to this bill. They have asked that application of the bill be deferred, because it is not manageable, is more costly to businesses, and is a complex system such as has never been seen anywhere else in the world. What is more, instead of making consumers' lives easier, it makes the system more confusing. We are no longer in the good old days at the beginning of this century.

Why do the members of the government not recognize that to err is human and that they may have made a mistake in this agreement with the maritimes? When they realize they made a mistake-this is what we teach young children when they start to understand common sense-we are prepared to forgive them. But they have to take the agreement, tear it up and stop muddling things up with their total incompetence. It makes no sense.

Even in the maritimes, even with a gift of $1 billion, they oppose it. They totally disagree with this way of handling the GST where $1 billion of their tax money is spent to compensate the governments of the three maritime provinces in order to make the Minister of Finance look good and to get the government out of a mess. When we get to the point where, even with a gift like this, the people in the maritimes are saying that the bill is stupid, we have to listen to them.

It is not only the nasty separatists, as the slugs opposite keep saying daily, it is a matter of common sense and good economic management, of giving business every opportunity to perform in an increasingly competitive world and, above all, of making consumers' lives easier. Although this bill is supposed to simplify their lives, it shamelessly complicates them.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, it is a pleasure to rise once again and speak to Bill C-70. We continue to have grave concerns about Bill C-70, and I, once again, will run through some of those major concerns.

The reason it is important that the Reform Party take time to run through some of the great concerns Canadians have about Bill C-70 is because the Liberal Party representatives from Atlantic Canada have failed to rise to their feet to defend the people of Atlantic Canada. As I pointed out before, this whole thing came about with the understanding that the GST would be eliminated, that we would not have a GST once the Liberals came to power.

Although the Prime Minister and the Deputy Prime Minister denied it after they made the promises, unfortunately for them, television cameras do not lie, videotape does not lie and they were found out. They were revealed to have made promises to get rid of the GST. They had to concoct a wild scheme to try to convince Canadians that the GST was going to disappear. All they did, as members well know, is come up with a billion dollars to bribe Liberal Atlantic Canadian premiers to come on board.

From that sorry beginning, we are once again in a situation where the people of Atlantic Canada are being denied the chance to hold Liberal members of Parliament accountable for a promise. I want to touch on that in a little more detail.

During the finance committee hearings, witnesses came from across the country but in particular from Atlantic Canada. Those witnesses asked why the hearings could not be held in Atlantic Canada. As this legislation has such a profound effect on Atlantic Canada, why did the finance committee not take the time to go to Atlantic Canada to hear from real live Atlantic Canadians?

A handful of people did come from Atlantic Canada, but not everybody can give up a day to come to Ottawa to tell the government their story. These people made the point rather well that in a democracy, people should have the right to representation before taxation, at least the right to consultation before the government bulldozes ahead and implements a taxation system that nobody asked for and nobody wanted. That is a basic right.

It was not very long ago that all kinds of GST rallies were held across the country, where people were protesting the imposition of the GST. Maybe Mr. Speaker was involved in them at one time. I have no idea. People across the country were very upset and protested what the Tories were doing. Indeed, the Liberals made tremendous gains by saying that they would never, ever bring in a tax of that kind that nobody wants. And the people said with one voice: "Don't you dare do that".

Part of the reason that the Tories disappeared off the political landscape was because they brought in a tax that nobody wanted, that people did not ask for. The people felt they were not being represented. Consequently, the Tories were reduced to a mere two seats in the House of Commons.

As Yogi Berra would say: "It is deja vu all over again". The Liberals are bringing in a tax they said they hated, that they would scrap and kill. They have thrown $1 billion at the problem to try and fix it. That did not work. Now we are in a situation where they are denying the people of Atlantic Canada the right to have a say on a tax that will fundamentally affect them.

During the hearings a number of provincial politicians appeared before us. Members would acknowledge that it is really quite unusual to have a number of provincial politicians appear before a committee to protest something that is going to take place in their regions. They had to come to Ottawa was because the Liberals would not allow hearings in Atlantic Canada on a tax that is going to affect those people. The fact that these prominent citizens took the time and effort to come to Atlantic Canada speaks volumes. It says something about the lack of representation that the people of Atlantic Canada are getting from their Liberal MPs. They would not be forced to send provincial representatives to Ottawa if the MPs in Ottawa would stand up for them. But they are completely silent.

In Atlantic Canada where unemployment is a curse that has plagued that region for a generation, we heard witness after witness say that the new harmonization legislation was going force businesses to close.

One gentleman came before us and said that he had already closed eight or nine stores in New Brunswick at a cost of approximately 72 jobs. A witness representing Carleton Cards said 19 stores would be closed. He did not put any caveat on it. If this legislation came in, 19 stores would be closed, again affecting a number of jobs.

We heard from a gentleman from Woolworths Canada that has 125 stores in Atlantic Canada who told us Woolworths could possibly close as many as 30 stores in Atlantic Canada if the legislation came in.

Unbelievably, these people had to come to Ottawa. They could not talk to their local representatives. They could not talk to the Liberal MPs because the MPs could not talk to the finance minister. They could not get their message across. In other words, they were not doing their jobs. To date I have yet to hear one Liberal MP from Atlantic Canada stand and list the concerns of Atlantic Canadians with respect to the harmonization legislation.

If anyone had sat in on the meetings of the finance committee two weeks ago they would know that there are tremendous concerns with this legislation. People are concerned it will kill jobs, close down businesses, create higher prices, less selection for the people of Atlantic Canada. This legislation will have a profound impact on people with low or fixed incomes.

A great debate is raging in the country about child poverty and the government is proposing to put through legislation that will drive up costs on items like gasoline, home heating fuel and utilities. The poorest people in Atlantic Canada simply cannot afford to bear the disproportionate burden that the HST will mean to them when the legislation is implemented.

The point again is that there has been a profound lack of representation from Liberal MPs for people in Atlantic Canada. It has been a dereliction of duty. There have been a number of editorials written in Atlantic Canadian newspapers about the fact that there were not hearings there and that Atlantic Canadian MPs have not been standing up for their constituents.

I just hope that over the course of this debate Liberal MPs across the way have gotten the point, that when they come to Ottawa they are not given their $63,000 so they can sit across the way and shout names, but that they have a job to do. They have a job to do in terms of representing their constituents, to go out and hear what they have to say in the first place and to encourage the finance committee and other committees to visit there when there are bills which

concern that area, and finally to deliver the message to their own government.

We do not come to this place just to collect our salaries, or in the case of the Liberals their MP pensions. We come to the House of Commons to represent our constituents, something the Liberal MPs have completely failed to do with respect to the harmonization legislation.