Mr. Speaker, I rise once again in support of Bill C-70. My remarks today will focus on an amendment that was adopted in the other place last week.
As hon. members will recall from earlier debates in the House, the purpose of Bill C-70 is to implement the harmonized sales tax in the provinces of Nova Scotia, New Brunswick, Newfoundland and Labrador. As of April 1, 1997 the harmonized tax will replace the GST and provincial retail sales taxes in those provinces.
This legislation also proposes over 100 technical amendments to the Excise Tax Act. These technical improvements will apply not only to the harmonized sales tax, but also to the GST in the rest of Canada.
A key element of the legislation that was debated by the House a few weeks ago is tax included pricing. This is the feature of Bill C-70 that the hon. senators propose to amend. Specifically, the proposal is to delay tax included pricing until such time as provinces with sales taxes that comprise at least 51 per cent of Canada's population have harmonized or otherwise adopted tax included pricing.
To repeat, the proposal is to delay tax included pricing until such time as provinces with sales taxes and that comprise at least 51 per cent of Canada's population have harmonized or have otherwise adopted tax included pricing.
I would like to make two points concerning this development.
First, in every other respect the proposed legislation that is the subject of today's debate is identical to the legislation that was passed by the House on February 11. The postponement of tax included pricing is the only change on which the hon. members will be asked to vote.
Second, the government continues to recognize the importance of tax included pricing. As I have said many times, consumers want tax included pricing. This is a policy to which the government remains committed. As more provinces harmonize in the future, we will welcome tax included pricing as the solution to the annoyance, the inconvenience and the frustration that consumers now experience at the cash checkout every day.
I would now like to explain the practical considerations that govern our approach today.
Essentially, opposition senators on the banking, trade and commerce committee gave us a choice: either postpone tax included pricing or delay passage of the bill beyond the April 1 implementation date.
Speaking for the Progressive Conservative Party, Senator Angus stated emphatically that if the pricing requirements remained in the
bill, it would not see the light of day by April. He said in no uncertain terms that his party would delay the bill regardless of the chaos and confusion that such a delay would entail for businesses and everyone else that are gearing up for harmonization to come into effect 15 days from now.
Given the potential for chaos, and given the fundamental economic benefits that harmonization will bring to the Atlantic economy, the risk of missing the April 1 deadline is a risk the government is not prepared to take.
In the course of the banking, trade and commerce committee's recent hearings on the legislation, witness after witness spoke of the real and immediate advantages of the HST. The Atlantic Provinces Economic Council argued that the harmonized sales tax will make Atlantic Canada more competitive by ridding their economy of embedded sales taxes and by bringing the relatively high sales tax rates into line with those of other provinces. They see it as a way to reduce costs for businesses and stimulate consumer spending.
The government and its provincial counterparts also see harmonization as a way to reduce administrative costs. These and many other points were eloquently endorsed by the finance ministers of the participating provinces. All three ministers took the time to appear before the Senate committee.
No matter how it is looked at, this is legislation that will work to the benefit of Newfoundlanders, Nova Scotians and New Brunswickers. That is a point these ministers came to Ottawa to make in the face of criticism from opposition parties that think they know better and that want to tell that region of the country what it should or should not do.
On balance, the gains in this legislation outweigh the postponement of tax included pricing. We accept Bill C-70 in its amended form because of the long term economic benefits it will bring to the Atlantic region.
A more immediate consideration is that April 1 is fast approaching and we must ensure the transition to a harmonized sales tax does not cause disruption and confusion for businesses and consumers.
From the time the House of Commons Standing Committee on Finance began studying options for replacing the GST three years ago, the goal of an orderly transition has been a guiding principle in developing the harmonization model that is before us today.
In its current form, Bill C-70 contains several features that will contribute to a smooth transition. The harmonized tax will have the same tax base and same basic operating rules as the GST. There will be no requirement for GST registrants to obtain new registration numbers. Most businesses already know and understand the rules for applying the GST and for claiming input tax credits. These rules will continue to apply under the harmonized sales tax.
The Atlantic business community needs certainty, a smooth and orderly transition to the harmonized system. The importance of a smooth transition is not lost on lawmakers in those provinces or on us in the House, for they have given their respective harmonization bills swift passage, something we are anxious to do as well. It is now time for hon. members to do likewise by supporting the proposed amendment to Bill C-70.