Mr. Speaker, the Standing Committee on Finance held three days of hearings on Bill C-70 in January. Here are some powerful examples of what was contained in the briefs. I will provide a quick overview.
For example, the Retail Council of Canada, which submitted a brief, represents over 65 per cent of all retail business in Canada. Even though this body supports the harmonization of provincial and federal sales taxes, it opposes the inclusion of the tax in the selling price in the maritimes as a policy that will drive up costs and add to the confusion among consumers.
By approving several different ways of displaying the price with the tax and by providing a number of exceptions to these rules, federal policy seriously complicates the situation. How is it possible to compare costs at two retailers that use different methods to display a price with the tax?
Consumers will be faced with different labelling within a single store. For example, some products will display the price with the tax, others without; others will have a package label without tax, but a shelf label with it and then there will be products that are tax exempt or that do not need to have the price indicated with the tax. How are we going to know the total cost of our purchases with such a system, with such confusion? A single product could have as many as four different prices on the label: the regular price with and without tax, and the discount price with and without tax.
In short, as these examples show, it will be much more difficult for the consumer to discover the price of merchandise quickly and easily.
The tax can be included in the price over a four month period, as the legislation provides. The Retail Council of Canada claims, and rightly so, that the firms including the tax in the price ahead of the others will be shooting themselves in the foot, because they will display a price on a product that will be higher than at a competitor's.
The buffer period may well be useless, because, in all likelihood, every firm will be waiting until the last minute to display prices with the tax included.
In terms of the costs involved in Bill C-70, the Retail Council of Canada estimates it will cost the retail industry $90 million in recurring annual costs and another $85 or $90 million for the initial adjustment to switch over from the old way to the new harmonized Liberal tax.
Finally, the council vehemently criticizes the fact that hearings were held on only three days in January. It also criticizes the Standing Committee on Finance for holding hearings only in Ottawa, thus preventing a multitude of small retail merchants from testifying and expressing their opinion.
The Council said, and I quote:
"These tactics leave retailers wondering whether legislators have any interest in their views whatsoever".
It should be pointed out that the Bloc Quebecois supported the Reform motion to continue hearings in the maritimes, a motion that was defeated by the Liberal majority in committee. I clearly remember that hearing day; I sat on the committee as a Bloc Quebecois member.
In its brief to the committee, and this is a second example, Sears Canada, said, and I quote: "For Canadian retailers, tax inclusive pricing in a partially harmonized system will mean higher costs and more complex systems".
Sears will produce 52 million catalogues in 1997, but the production of "harmonized" catalogues, to accommodate the standards applying to the maritimes, will cost Sears a fortune. It may also mean fewer catalogues or higher retail prices for consumers in the maritimes.
Sears also testified that, while the purpose of this legislation is not to limit product availability in harmonized provinces, this will certainly be the result". In addition, like many other large chain stores, Sears labels its products before shipping them to its stores. With Bill C-70, the company will have to keep two separate stocks, depending on whether the price includes the tax or not, with the related increase in production costs being reflected in retail prices. Goods will have to be divided in lots and stored separately before shipping, which complicates things, be it only by imposing the use of a dual stock system.
The brief submitted by Woolworth Canada Inc., a company with over 100 stores and 14,000 employees in the provinces affected by harmonization, included the following: "Given that the proposed legislation applies only to three small provinces, and given the current proposals regarding tax inclusive pricing, we believe that costs will significantly increase for retailers and consumers, and that this legislation will also result in extreme confusion".
In its brief, Canadian Tire writes the following, and I quote:
We are opposed to the piecemeal approach to the application of tax inclusive 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-for the retail industry, any benefits derived from input tax credits are more than offset by the significant cost increases resulting from tax inclusive pricing. There are no savings; in fact there are increased costs.
Here are a few excerpts taken from the Liberal minority report of November 1989 on the GST, when the Conservatives decided to introduce this consumer tax, and I quote: "The Liberal members of the finance committee maintain that the goods and services tax proposed by the Tory government is bad and that no 'repair job' of any kind will make it fair for taxpayers". You can find that quote on page 283 of the report.
What are the Liberals doing with Bill C-70, if not a repair job? Except for the fact that the tax is hidden in the price, the GST remains the same and its rate remains the same. In fact, it is the provincial tax that is being harmonized. Therefore, the Liberals are only doing a repair job on the Conservatives' GST and, if we are to believe their own words, this new HST is as bad and unfair for taxpayers as the old GST. "Moreover, if the GST is hidden in the sales price, it will be a lot easier for the government to raise it later". This is from page 298 of the same report.
Based on the Liberal logic, one can conclude that the Minister of Finance will certainly increase the GST in the maritimes in his next budget, since he is in the process of hiding that tax in the sales price. In 1989, the Liberals condemned the idea of hiding the GST in the price. However, in 1997, they are doing just that, on the false pretence that this is what consumers want.
Consumers want the Liberal government to fulfil its commitments, including the promise to scrap the GST; they do not want the government to hide it in the price or partially harmonize it.
Why, then, have the Liberals systematically refused, since they have formed the government, to carry out such a total reform of the Canadian taxation system?
Even though this ill advised promise will cost Quebecers and other Canadians close to $1 billion, all the Liberals can think about is getting out of the mess at any cost and as quickly as possible. Just as they did with the Airbus affair, Pearson and the Somalia inquiry.
This is therefore not the first time the Liberals have made colossal errors that will cost taxpayers hundreds of millions of dollars but not taken any responsibility for their actions. Even in
the case of the GST, the Liberal government showed its contempt for democracy by preventing opposition members from doing their job.
Yet the Liberals came up with 13 important amendments, those were their words, to Bill C-70, the very evening of the third and final day of public consultation, claiming that these amendments were a response to the complaints heard during the three days of hearings. If it was possible to find 13 amendments in three days, imagine how many we would have had if we had been able to extend the public hearings by one or two weeks.
In their haste to leave behind the embarrassing issue of the GST, the Liberals do not want to hear what people have to say; they are afraid that people in the maritimes will tell them the plain truth: Bill C-70 is a botched job, a very bad bill. The Liberals are standing in the way of democracy by preventing citizens from expressing their views during the legislative process, and by moving full steam ahead, worrying more about their electoral agenda than about doing a good job of serving the citizens who will pay for this new tax, and who, in the meantime, are paying their salaries.
That is why the Bloc Quebecois is opposed as a block to this bill to harmonize the GST in the maritimes. This is a botched bill. It is based purely on political and electoral considerations. It is badly written. People have pointed out all sorts of shortcomings that the government does not even want to hear about. It is not the harmonization model that maritimers deserve and are calling for.
What is more, in order to convince the three maritime provinces in question, the federal government had to promise political compensation of $1 billion, while it has systematically refused to pay Quebec, in all fairness, the $2 billion it lost by harmonizing its provincial sales tax with the GST in 1991.
If the federal government is able to come up with $1 billion for the maritimes, let it also find a way to come up with the $2 billion owing Quebec. Otherwise, everyone should receive the same treatment and the federal government should stop subsidizing New Brunswick's corporate raiding in Quebec using Quebecers' tax money.
For these reasons, the Bloc Quebecois is calling upon the government to go back to the drawing board, to start from scratch with a new bill on its plan to harmonize the GST, this time taking the time required to present a serious bill, and particularly taking the time to listen to what people have to say.
The Liberal government had winning votes in mind when it spoke out against the partial removal of the tax from books. Only educational and literacy institutions will pay no GST on books purchased, while what I would call the normal taxpayer, the person who buys books at the neighbourhood bookstore, will continue to pay it. No doubt what the Liberals want is to be able to say, during the next campaign which is almost upon us, that they have taken the GST off books. But that is not true.
In conclusion, I would like to say that, with the Senate amendment to Bill C-70, there will be no further reference to including the GST in the price as long as a minimum of 51 per cent of the population of Canada does not have a provincial sales tax system harmonized with the federal sales tax. During all of the House debates on Bill C-70, the Bloc Quebecois spoke out against the government's haste to get rid of the GST business before the election.
The Bloc Quebecois spoke out against, and voted against, Bill C-70, asking the government, as I have said, to go back to the drawing board, to propose another model for harmonizing the sales tax, since this one was full of defects.
Unfortunately, the Liberals would not listen to us. But now we have the Senate proposing an amendment to Bill C-70 which is, basically, along the same lines as what we were finding fault with in the bill, and the Liberals are preparing to adopt it.
I would therefore like to say in closing that the Minister of Finance has stated, on a number of occasions, that Bill C-70 would introduce inclusion of the GST in the price in response to the wishes of the people. Now that they are preparing to remove inclusion of the tax in the price from Bill C-70, what is left of Bill C-70? Nothing. The GST is still the GST. What is being harmonized is the provincial tax, not vice versa, despite what they are trying to make us believe. And for that they are going to pay the maritimes $1 billion, while Quebec gets turned down when it asks, in all fairness, for $2 billion for having done the same.