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.