Debates of March 20th, 1997

Excise Tax Act

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, I want to touch on the issue of the CPP as a tax increase. We all know we are talking about semantics. Generically we refer to deductions on someone's paycheque as payroll taxes.

As a chartered accountant I look at the income statement or the revenue and expenses of a government. If Canada pension plan contributions by employees and employers are collected by the government, why it is that those premiums do not get added to government revenues?

Let us look at the definition of a tax. A tax is something that increases government revenues. The member will well know Canada pension plan premiums do not increase government revenue. They go into an investment fund for the future benefit of those contributing to the Canada pension plan.

In order to sustain the Canada pension plan program for all Canadians and put it on a stable footing forever premiums have to go up. Today's pensioners are getting about $8 for every $1 going in. If the premiums go up for individuals, all other things remaining equal, it is a greater deduction on their personal tax returns. This means they will pay less tax on the same level of income, which again reduces government revenue.

Even corporations that have to match the employee's contribution to CPP will be paying a little more over the years as the premiums increase to make sure those benefits can be provided. That means the deductions for businesses on employee benefits will go up. Corporations will pay a little less income tax than they otherwise would, all other things remaining equal.

On balance, we know the CPP premiums do not go into revenue. We also know that individuals and corporations are paying less tax because of the CPP increases, which means that the deficit actually has increased for the Government of Canada simply by raising CPP premiums.

The irony, though, is simply that CPP premiums do not go to government revenue and do not reduce the deficit. I ask the member to answer this question. If it does not go to government revenue and it does not reduce the deficit, how can we call it a tax?

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

Madam Speaker, I am very glad my hon. friend actually agrees with me that CPP is a payroll tax.

By an extension of his argument he would also have to agree that employment insurance is a tax and employment insurance is running a $6 billion surplus.

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

That goes into government revenues.

[Keith Martin, Reform, Esquimalt—Juan de Fuca, BC]

That goes into government revenues. The member cannot have it both ways. Where the money is going is not the issue. The fact is that this money has been yanked out of the pockets of individuals and companies. It is a price they must pay.

Interestingly enough this is not the end of it. The chief actuary has said that the CPP is actuarially unsound. This increase is not the end. As the baby boomers start to retire it is quite likely it will increase from 10 per cent to 14 per cent. As I said, it is money that comes out of the pockets of individuals and companies.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Madam Speaker, I too am pleased to speak to Bill C-70, the Senate amendment and the government's response to this Senate amendment, on which we are being asked to vote.

At this stage of the game regarding Bill C-70, the GST bill, it may be useful to review a bit of the history of the bill, so that our listeners know exactly where things stand.

First of all, one must realize that Bill C-70, together with the Senate amendment and the positive response from the government, is the result of an election promise. That is how the GST bill got its start.

In the March 11, 1996 edition of the Globe and Mail , the Deputy Prime Minister was quoted as saying:

"I have already said personally and very directly that if the GST is not abolished I will resign".

We will recall that the Deputy Prime Minister made that commitment precisely because a promise had been made to kill the GST. The cost of this empty promise, at least inasmuch as it relates to the Deputy Prime Minister's decision: $500,000. That is how much the byelection in the riding of Hamilton East cost. Strangely enough, although the Deputy Prime Minister had made a promise to all Canadians and Quebecers, she let the people of Hamilton East settle the issue on behalf of all Canadians.

During the 1993 election campaign, the current Prime Minister said, and I quote: "We will scrap the GST". To scrap means to kill, to eliminate, not replace the tax with more of the same, just by changing the name of the tax, to make it look like the election promise was kept.

On May 2, 1994, the Prime Minister made the following statement about the GST: "We hate it and we will kill it". On the basis of this election promise, as we know, the Deputy Prime Minister was later forced to resign and run in a byelection.

The Minister of Finance has said openly both in this House and outside: "We should never have made such a promise. It was a mistake".

As for the Prime Minister, he maintains he never promised any such thing. We have the videos, and the press clippings, in French and in English, to prove he did, but he still maintains he never said it. We now know what people think of this unfulfilled promise about the GST. In fact, there are many unfulfilled commitments made by the Liberals, including: tearing up the free trade agreement that was signed; recognizing Quebec as a distinct society and giving it a veto, something that was never done, as Quebecers know; deprivatizing Pearson airport, and we are all aware that this issue has become a real mess; creating jobs, but the number of unemployed is just as high as it was when the Liberals took office, while there are an additional 500,000 children living in poverty.

These were promises made during the election campaign. I remember taking part in a debate, in my riding of Anjou-Rivière-des-Prairies, with my opponents of the time. People asked each and everyone of us what we would do with the GST.

I remember that the Liberal candidate of the time, Normand Biron, said the GST would be abolished, which was his party's official position.

I have no grudge against Mr. Biron, who is an excellent person. He is also a good, intelligent and strong candidate, who is familiar with the issues and who is very involved in the local community. Strangely enough though, the Liberals are trying to get rid of him. They have chosen someone from Quebec City to run againstMr. Biron for the Liberal nomination. That person will have to resign in Quebec City to run against Mr. Biron. I find it sad that the higher ups in the Liberal Party are trying to get rid of one of their best people.

What did the Liberals have to say about the GST when the Conservatives were trying to put it in place, and when they formed the opposition? Here are some excerpts from the November 1989 Liberal minority report on the GST. These comments were made when the Liberals formed the opposition. On page 283, and again these remarks are from Liberal members, we find the following: "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".

What are the Liberals doing with Bill C-70, if not a repair job? The GST remains the same and its rate remains the same. In fact, it is the provincial tax that is being harmonized. The Liberals are only doing a repair job on the Conservatives' GST and, if we are to believe their own words, given that only the name of that tax was changed, this new HST is as bad and unfair for taxpayers as the old GST.

Here is another excerpt from the Liberal minority report of the time. This one is from page 300, and I quote: "Sales tax reform cannot be undertaken independent from income tax reform, corpo-

rate tax reform, social welfare reform or independently of the other levels of government. Canada is in need of an overall tax reform that encompasses all forms of taxation and all levels of government".

The fact is that no tax reform took place. The Bloc Quebecois is the only party that tabled a comprehensive study on tax reform, for both corporations and individuals, which is a first in Canadian history. The fact is that on certain occasions governments have proposed tax reforms, but it has never happened, in the whole history of Canada, that an official opposition party has proposed these reforms to the government, after studying them with the resources available to the opposition for research, resources that are meagre compared to the absolutely enormous resources available to governments.

After these broken election promises, Bill C-70 was introduced in the House, went to second reading, to committee, and then to third reading, as a cover-up for the unkept promises. We know that in many other cases, cover-ups have been the standard procedure.

There is the tainted blood inquiry, the Krever inquiry. There is the Airbus affair, where top-ranking government officials sent letters incriminating Mr. Mulroney, treating him like a criminal, to Europe, when it is common knowledge that Canada has a very strict law known as the presumption of innocence. This law says that people are officially innocent-in the best sense of the word of course-until proven guilty.

But these laws were ignored. In official letters from the government, outside Canada, Mr. Mulroney was called a criminal. There was the Somalia inquiry, which they are now gagging, while the judge in charge of the inquiry says himself that they will never get to the bottom of things if they are prevented from investigating further.

The minister tells us that this inquiry has already been granted two extensions and that they want to wrap things up. They were nice, they allowed more time. But let it not be forgotten that the reason a little more time was needed for this inquiry, or for those conducting it, was precisely because for months and months and months the army concealed documents that were being looked for everywhere. If extra time was needed at one point, it was not because the government was being nice, but because the documents were not available because the army had hidden them.

Bill C-70 contains the amendments allowing harmonization of the GST with three maritime provinces, and of course this is a cover-up to help the pill go down more easily. They are sending a billion dollars to the maritimes.

What is the government's motivation in doing so? We know very well. The Liberal government is, of course, embarrassed that the Prime Minister and the Minister of Canadian Heritage broke their promise to scrap the GST, the tax they claim to hate.

So, in order to have more than just excuses when questioned on this broken promise when the election comes, the Liberals want at all costs to reach an agreement with the maritimes, in order to give the impression that they have tried to do something about keeping that promise. Even if this bad promise will cost Quebecers and Canadians close to $1 billion, what counts for the Liberals is to get the fat out of the fire, and to do so as promptly as possible.

This new harmonized sales tax, the HST, will be included in the price, or at least that is what the government was proposing before the Senate returned the bill with an amendment that states otherwise.

To return to the 1989 Liberal minority report, what did the Liberals have to say about this suggestion to include the GST in the price? On page 298 they state as follows: "If the GST is camouflaged in the price, it will be far easier for the government to raise it later on". They put a serious damper on the idea of including the tax in the price. Until just recently, they wanted to do exactly the opposite of what they claimed in 1989 was not a good idea.

What is more, some years ago the Minister of Finance was saying the exact opposite of what he has done in his bill. The new GST is hypocritical, because it is camouflaged in the price of goods and services. On this subject, the 1994 Liberal majority report stated, and I quote: "It would simply be improper to "hide" from Canadians the amount of tax they pay to their governments, and hiding the tax interferes with the ability of taxpayers to make government accountable for the taxes it levies and, to a lesser degree, for how it spends the revenues". That is what the latest Liberal report said, yet they are about to do just the opposite.

In 1994, the Chamber of Commerce of Canada surveyed its members, 70 per cent of whom were opposed to the idea of hiding the tax in the sales price. This survey is still valid today. In February 1996, the Chamber of Commerce conducted the same survey again, just to realize that 76 per cent of its members now held that opinion.

Through all the stages-second reading, committee study, third reading-the Bloc Quebecois expressed a number of concerns about this bill. We suggested the government should meet with the people of the maritimes before imposing a harmonization they clearly did not want. In spite of the work done in committee, and repeated requests from the Bloc Quebecois, all our arguments fell on deaf ears.

The Bloc also recommended that the HST not be included in the sales price. This is another point made by the Bloc that the government ignored until the Senate came up with this proposal to

delay tax included pricing until 51 per cent of Canada's population agrees to include the GST in pricing.

The changes proposed by the Senate are identical to those previously proposed by the Bloc Quebecois and rejected by the government. How will the government respond to the Senate? This is what the motion before us today is all about. It reads as follows:

That this House, while disapproving of any infraction of its privileges or rights by the other House, in this case waives its claim to insist upon such rights and privileges, but the waiver of said rights and privileges is not to be drawn into a precedent-

They disapprove, but agree just the same.

So, the government made sure to tell the senators: "We accept your amendment, even though we rejected the same amendment when it was proposed by the Bloc Quebecois. We accept it, provided you will not see this as a precedent". But, as was pointed out by my colleagues, it is very disturbing to see the government accept a legislative amendment from a House whose members were not elected, after rejecting the same amendment when it was proposed by elected members of this House.

Unfortunately, the senators did not do as we did in this matter. We in the Bloc Quebecois also demanded that the government pay-and yesterday again we asked questions on this issue to the Minister of Finance and to the Prime Minister-$2 billion in compensation to Quebec for having harmonized its own tax with the GST, long before any other province. In so doing, Quebec showed that it was perfectly able to get along with the federal government, in fact more so than the other provinces. Yet, the maritimes received $1 billion, while Quebec got nothing at all. We are owed $2 billion, and the hon. member for Chambly clearly explained why Quebec is justified in making that claim.

In the end, what was the cost, to Quebecers, of this whole operation to cover up unfulfilled promises? Again, let us look only at the costs which can actually be estimated. First, the re-election of the Deputy Prime Minister cost $500,000. As you know, Madam Speaker, 25 per cent of Canada's revenues come from Quebec, which means that 25 per cent of federal spending in Canada is paid by Quebecers. Therefore, the re-election of the Deputy Prime Minister, who was forced to resign as a result of an unfulfilled promise, cost Quebecers $125,000.

Let me explain, for those who are listening to us. We understand what $25 represents. Billions of dollars is a lot of money: one billion dollars is equal to 1,000 million dollars. So, 2,000 million dollars is owed to Quebec for having harmonized its tax with the GST, but it will not get one penny. So, $125,000 to elect the Deputy Prime Minister, 2,000 million dollars that should come our way for the GST, plus the $1 billion they are giving to the maritimes. Once again, I repeat that 25 per cent of everything Canada pays out comes from Quebec; of the $1 billion going to the maritimes, $250 million comes from Quebec.

This is common knowledge. It has come up in oral question period. It is still getting a lot of coverage in the newspapers. What is Mr. McKenna doing in Quebec? He is wooing away our own businesses with money we provided that was transferred to New Brunswick.

So, the total cost of this operation, of this broken promise to scrap the GST, leaving us with a botched Bill C-70, is $125,000 to elect the Deputy Prime Minister; 2,000 million dollars due Quebec that it will probably not receive; and $250 million of Quebecers' money going to the maritimes. All so that the maritimes can conduct their corporate raiding in Quebec.

In the case of all bills tabled in the House, the Bloc Quebecois has done the work it was elected to do, which was to defend Quebec's interests ahead of all else.

It is extremely tiring in the long run to defend oneself daily, to go after dribs and drabs of rights and powers, or to try to hang on to dribs and drabs of rights and powers, when the only way out, for Quebecers, is to have full rights and powers. For this to be possible, we must become a country.

Each of the bills introduced here in the House-

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

You lost the referendum.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

I will come back to that. That is what I was going to reply to my colleague.

In fact, we lost the last referendum and I have often heard my colleagues in the Reform Party wondering why we did not respect the decision of Quebecers.

The Bloc Quebecois and the Parti Quebecois are political parties advocating the sovereignty of Quebec. We are not the ones who decide, of course; that is up to the people of Quebec. To this end, we must hold referendums in Quebec. We cannot, however, hold referendums unless we have been elected to do so. In the end, therefore, it is the people of Quebec themselves who decide whether or not they want referendums by electing or by not electing the Parti Quebecois, which alone, of course, can make this proposal.

We therefore have great reservations about this bill, another promise not kept.

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

Madam Speaker, the Bloc separatists keep saying that the people of Quebec want all

these things, that they want to separate, but they did lose the referendum. The people in Quebec said they do not want to separate. If this government had done its job, of course the margin would have been far greater than it actually was; however, we will leave that debate for another day.

They always seem to get back to the issue of money and how they have missed out on the billion dollars that has been given to Atlantic Canadians by the Minister of Finance. They feel that they are entitled to the same or more because they are in Quebec and have harmonized voluntarily with the GST. They feel that shucks, why do they not get money as well?

Let us look at it. The Prime Minister signed an agreement with the province of British Columbia a few weeks ago to pay it more money for immigration. I do not exactly have my numbers right but I understand a lot more new immigrants are going to British Columbia than are going to the province of Quebec. However, the province of Quebec is getting a lot more money to handle immigration than the province of British Columbia. I do not hear Quebec members saying that it seems they are getting too much money and maybe they should give some of that money back. We do not hear that.

The great equalization program has been part of our Canadian way of working with the provinces and has been around for about 40 years. The provinces that are more prosperous pay money to those which are less affluent. As Reformers we do not disagree with that philosophy.

The province of Quebec has always been one of the have not provinces and the money has been flowing to it. The have provinces are primarily Ontario, Alberta and British Columbia. Quebec and Ontario are right next to a fabulous market with 100 million people on the eastern seaboard of the United States. Across the Atlantic, there are 250 million people in Europe, a phenomenal market for the manufactured goods of the provinces of Quebec and Ontario. Markets are opening up around the world but Quebec is still a have not province. It is a perennial have not province.

The politicians in Quebec should say that they want to be part of this great country Canada and that they want to play their part in creating jobs for the people of Quebec and trade with the eastern seaboard of the United States through the free trade agreement. They should say that they want to trade with the rest of Canada and bring down the barriers that have been built between provinces, so that they can expand jobs, create jobs, create wealth, create opportunity and create hope for their children, rather than just saying that they want a subsidy too.

When will the Bloc and the separatists start to see that there are far greater opportunities within Canada through participating in economic development rather than keeping the old, old story that they have been hard done by and please send them more money. That story will not work. I think the people in Quebec and the rest of the country want jobs, an opportunity and an education. They want to prosper. That is what they want.

[Roger Pomerleau, Bloc, Anjou—Rivière-Des-Prairies, QC]

Madam Speaker, first I would like to say to my colleague that we are not the only province, we are not alone in asking for compensation, since three provinces agree with us on this, and the BC premier acknowledges that Quebec should be compensated.

I was listening to a colleague before me say, in response or in a question to another member who spoke before me, that the Reform Party's position is that the maritimes should never have been compensated.

Had the maritimes not had any compensation, Quebec would not be asking for any. What we want is fairness. If a thousand million dollars are sent to the maritimes, we in Quebec are entitled to ask for the $2 billion due us, which the Liberal Party is denying us.

As far as the sovereignist movement is concerned, I would remind my colleague that Quebec's demands have been known, clear and simple for 40 years. All Quebec politicians, whatever their party, have said the same thing. In the mid-1950s, Mr. Duplessis demanded his share of the spoils. Mr. Duplessis was a member of the Union Nationale party.

He was followed by Mr. Lesage, a Liberal and a federalist, who talked of Quebecers being masters in their own home. Next came someone else from the Union Nationale, Daniel Johnson Sr., who called for "equality or independence". Then came René Lévesque, who said: "We cannot go on fighting endlessly like this for 30 years; what we want is Quebec's sovereignty".

Through all these movements and all these premiers, Quebec continued to make the same clear and simple demand. These people were federalists. Quebec has always asked to be recognized for what it is-a nation-with certain privileges in the Constitution enabling it to defend itself as a nation. Nothing more, nothing less.

The refusal by the Canadian government and the Canadian establishment to accept this fact will mean that Quebec will become a country, in the long term. A look at the sovereignty movement in Quebec leaves no doubt that it is a growing movement. The Parti Quebecois was born in 1968. There were hardly any sovereignists in the early 1960s in Quebec. In 1968, the PQ was born. That was less than 30 years ago.

In 1976, the Parti Quebecois was elected for the first time and formed the government in the National Assembly. Three referendums were held. In the first, in 1980, the no vote was 60 per cent and the yes vote, 40 per cent. In the Charlottetown referendum, it was the reverse: 60 per cent voted against the Charlottetown accord. Canadians voted against the accord too, for reasons differ-

ent from ours: they thought we had too much already. In the last referendum, it was 50-50. So it is clear that the sovereignist movement has grown in the past 28 or 29 years.

The government could stop this movement tomorrow, if it wanted. It would be very easy to do, by recognizing in the Constitution that the people of Quebec form a nation and, therefore, have the right to protect themselves and this concept of a nation.

That is all Quebecers are asking for. Not me. Personally, I am an unconditional sovereignist, in that I fail to see any point in a nation living as a minority within another nation, because as a minority, you then have to do as you are told; you do what they want, when they want.

I want to be independent. I want to make my own choices, speak on my own behalf and take my own responsibilities. That is how it should be.

But that, we will never get from Canada. I will never be a true federalist, but if this kind of recognition was included in the Constitution, most Quebecers would go for it. They would sign the Constitution they have never signed, and I would democratically fall in with the people's will and stop fighting for sovereignty. But that will never happen because this Prime Minister and his predecessors have never stopped attacking Quebec.

Remember the long knives stuck in the back of René Lévesque by Trudeau and the little guy from Shawinigan, who will soon be calling an election and whom we will beat in his own riding.

[Ted White, Reform, North Vancouver, BC]

Madam Speaker, the member from the Bloc moved this debate into a very interesting area but not entirely on topic since we are discussing Bill C-70, the HST tax proposed by the Liberal government.

I would like to say a kind word about the member. I noticed he is wearing a daffodil on his jacket. I want to mention, and I will be mentioning again later today, that the daffodils come compliments of CKNW-98, a radio station in Vancouver. This is a tradition it does every year at this time for the first day of spring. I thank the member for wearing that daffodil. I notice a few other members have them as well. They are set out nicely in vases in our lobbies as well.

I would like to refer back to a government member who gave a speech approximately an hour ago. I had wanted to question him but unfortunately we ran out of time. During his speech he said what a wonderful job the Liberal government had done. He mentioned that exports were at record highs. He forgot to mention of course that is due to NAFTA which was one of those things the Liberals said they would oppose. They were going to renegotiate NAFTA, scrap it if necessary and here they are now trying to claim credit for something they did not want anything to do with.

In addition, we have low interest rates that they constantly claim credit for and what a wonderful thing it is. And yet it was the low inflation policies of the Bank of Canada that gave us low interest rates, not the Liberals. They are very happy to take credit for all these things that they did not do and that they have even opposed. When they were in opposition they opposed the interest rate policy of the Bank of Canada and now here they are wanting to take credit for it.

Through all of that they will not take any credit for the unemployment figures or that for their entire time in office the unemployment levels have remained at unacceptably high levels, 10 per cent to 11 per cent through their entire mandate, making 77 straight months now of unemployment levels, as high as the last depression.

When we question them in question period the finance minister gets up, takes his glasses off and says "we have the lowest interest rates in the whole world and it is wonderful and people are saving so much money on their mortgage". Of course that is Liberal thinking. In order to get a benefit you have to borrow money.

What happens to people who do not have a mortgage and are struggling to actually get into a house? What happens to the people who do not have a car and are struggling to get a car or other things? According to the Liberals the only way to save money is to actually borrow money and that is typical Liberal tax and spend type thinking which put us in the problems we are in today where we need a GST and now some sort of HST in order to help pay for all these bad decisions of the past, mostly by Liberal governments where they have borrowed, taxed and spent trying to make Canada prosperous. All they achieved in the end was a lot of misery and terrible problems we are facing now and trying to deal with in the budgets that come before the House.

The HST we are debating today would not even be necessary if this government had followed Reform's zero in three plan that was proposed in 1993. We would be spending surpluses instead of still discussing these massive deficits.

Two months ago I was dialling into the Internet via Sympatico, the service I use in B.C. It has an introduction page when you first dial in and it said: "Question of the day: Now that the government has its deficit down to an excellent $19 billion should it begin spending again?"

I almost blew a gasket. Excellent $19 billion deficit? A $19 billion deficit is not excellent. A $19 billion surplus would be

excellent but a $19 billion deficit, excellent it is not. You can be sure I very quickly put my comments on that chat line.

If we had been following Reform's zero in three plan, we would be like New Zealand is today. It is running massive surpluses and it is able to give people terrific tax cuts instead of trying to introduce an HST, hiding the government's tax grab in a newly constructed tax that was only obtained by bribing Atlantic premiers with $1 billion taken from other taxpayers throughout the country to subsidize the people in Atlantic Canada with this new HST which will end up being the worst tax of their lives. If we think the GST was bad, wait until they experience the HST.

I mentioned that New Zealand is running surpluses. Many members know I am originally from New Zealand. I have watched with interest some of the developments there because New Zealanders have been through many of the fiscal problems that Canada still has to face. For the past three years New Zealand has run very healthy surpluses. Remember its economy is only about the size of British Columbia's economy, but this past year it ran an $8 billion surplus. As a result of that, the New Zealand government was able to give the average wage earner in New Zealand a tax decrease of $200 a month.

Imagine if Canadians were offered today a $200 a month tax break instead of a new HST which would strip them of tax money. Think of the boost that would be to the economy. Think of the jobs it would create if people in Atlantic Canada had an additional $200 a month in their pockets to spend instead of another tax grab of HST.

This government should be ashamed of itself. We know that what we are going through today is a big hurry up on this bill to try to force it through by April 1 because it is the deadline. The government is trying to ram this bill through against the wishes of many retail groups that have already said that the HST will result in lost jobs because of closed businesses right across the province.

The Retail Council Canada, independent retailers and many large national companies have complained that the tax inclusive provision of the legislation would create confusion and add additional costs. For example, Woolworth Canada estimated that it would consider closing one-quarter of its 126 stores with a resulting loss of 300 jobs.

We have consistently heard from the finance minister who admits that high taxes kill jobs. So it is reasonable to ask, if that admission is there, why are we not working to get rid of the GST, as was promised by this government. There is a whole list of ministers and members on that side of the House who made the promises during the election campaign that the GST would be gone, history, toast. The most hated tax would be gone. They used the emotion of the GST to win power in this place and then let people down by breaking the promises.

There is a court challenge going on in British Columbia against the NDP government for breaking its promises. The court challenge is going ahead and will be heard very soon. If the government there is found guilty of deceiving the voters by breaking its promises, by telling lies in effect, it will be thrown out of office and the election declared void.

What a healthy thing it would be if we could have similar provisions at the federal level. This would force these people to tell the truth in their election campaigns. Then they would not say they will scrap, abolish, make the GST history, toast, gone forever in order to get elected. They would not fiddle around and change the rules and say "all we really meant was to harmonize, to change it, not to give any tax relief to Canadians at all, not one cent of tax relief, but simply to increase taxes and invent this HST", the horrible sales tax. That is exactly what it is. It is a horrible sales tax. It is worse than the GST that preceded it. Certainly constituents in my area of the country are very unhappy their tax dollars are being used to subsidize this change in the taxation process.

In terms of harmonizing and tax inclusive pricing, the average person by having a tax inclusive price loses the ability to see what portion of that price is government taxation. That is a very serious problem. Although it may be printed on the cash register tape, it requires a person to examine the printout to see what the taxes are. Maybe it will be printed there. That is fine. However when people look at the price of an item on the shelf, go to the cash register, hand the money over, accept the receipt, put it in their pockets and throw it away with the garbage later, they are not concentrating on what portion of the price is actually sales tax.

It is very important for them to see when they are actually hit with the sales tax at the cash register which takes the price up from maybe $320 to $395 what the government is taking out of their pockets.

For taxation to be fair it should be visible. People should know what they are paying to the government in terms of taxation. It is a bad precedent to have harmonized sales tax that hides the GST in tax inclusive pricing.

Many retailers and small businesses are very upset that anything like this could be proposed. There has been a lot of opposition to the bill. Many groups are opposed to it.

The Reform Party did a minority report as a result of the finance committee hearings on GST harmonization. They were the usual type of sham as most committee hearings are, dare I say all committee hearings are. Just like debates and votes in this place, we know before committee hearings start exactly what the outcome will be. That is a very unfortunate fact of life.

Recently I was visiting New Zealand where there have been some quite dramatic parliamentary reforms which make it more democratic to work in its house. All committees of the New Zealand parliament must report back within six months on every piece of business that goes before them. They are not allowed to do what happened with the private members' bill that went through this place to get rid of section 745. That cannot happen under the revised rules in New Zealand. It would have to be reported back to the House and action would have to be taken.

In addition, every private members bill is votable. The assumption is made that if people are intelligent enough or responsible enough to be members of the House they should be trusted to be able to bring forward pieces of legislation that would be voted on. If they have made an error in judgment and introduced a stupid piece of legislation, it will be cut down in the vote.

Combined with that, there is now proxy voting for members in New Zealand. Members who are legitimately in their ridings on riding business or away on committees or other legitimate business associated with their activities as members of Parliament may vote by proxy. They call in their votes to the party whip who during the vote in the House stands and says that there are x number of proxy votes for or against an issue. That is a very civilized way to conduct business.

Many of us in these modern days of easy travel and communications have to be away from this place doing other official duties that prevent us from being present on every vote. We are always following the debate because we have access to television and news wherever we are. It would certainly be very civilized to be able to call in a proxy vote on issues of importance to us and to our constituents.

In addition the committees of the house in New Zealand, ones like the one that considered the HST, are structured to be much more democratic. Approximately 10 per cent of all chairs are selected from opposition parties based on a free vote. The vice-chairs of all the committees are selected from the opposition parties in proportion to the number of seats they have. That division of vice-chairs is arranged between the opposition parties according to the particular committees they would like to be vice-chairs of.

There have been a lot of changes to the rules in that house that have made it much more democratic. Cross party voting is actually encouraged and not frowned upon at all. On a regular basis members vote with the other side.

What a tremendous, refreshing thing it would be if we could see those sorts of reforms in this place. Then we would not be facing the situation we are today with time allocation. A bill is being rammed through this place. Our debating time is being cut off. That would not be happening if this place was more democratic.

If the government side was responsive to the input, if it truly cared about the feedback it was getting and if it allowed its members the freedom to truly vote according to the representations in front of them, we would not be faced with the time allocation problem we are faced with today.

Some of the points that were made by our minority committee relating to the debate on legislation to harmonize and streamline the GST concerned integrity. The member for York-South Weston who was responsible for the private member's bill on section 745 of the Criminal Code was banished from the Liberal Party caucus by the Prime Minister for voting on a matter of principle, on a matter of integrity, on a matter of promising to get rid of the GST.

What a terrible shame to see such an infringement upon democracy. Members are not free to represent their constituents, to truly represent them or to vote on principle without suffering total banishment from his caucus. Their riding associations are stripped of money and virtually put out of party business. It is an awful thing to happen. It leads to the situation of today where members are afraid to vote against the government, if they are on the government side. They are afraid they will lose the nomination, lose all their funding, lose their riding association and somebody will be parachuted in to take their place.

What an appalling comment on how our system is run. It has degenerated from the original idea of what Parliament should be. It should be a place where people come to debate and discuss the issues, come to a conclusion and tell cabinet what it will do. It has degenerated to a house of the parties, a place for fulfilling the party agenda. The government side of the House thinks that it owns the chairs we sit upon, that it owns the desks we sit at and that it can dictate to us how we vote.

My constituents can be sure that the chair I sit upon and the desk I sit at belongs to them. They pay my salary in the House. They are entitled to have me represent them. Whenever they can show me they have a majority position that is against my party, against my personal beliefs or agrees with the government, they can be sure I will vote to represent them. I have proven that on three separate occasions when I voted against my party line. Once I voted against my own beliefs to represent my constituents.

I did not get thrown out of my caucus. I did not get my riding association banished from the face of the earth. Democracy prevailed. In the event it is clear a majority of my constituents want me to vote in a certain manner I am obliged to do so by the constitution of the Reform Party. It actually requires me to do that.

That is a major break for democracy which I hope will gradually spread to other areas of the House.

I realize that my time has run out at this stage so I will deign to sit down. This was my first opportunity to speak to Bill C-70. I look forward to hearing more speeches later in the debate.

[Bob Kilger, Liberal, Stormont—Dundas, ON]

Madam Speaker, on a point of order. There have been discussions among the parties, which have agreed to let the Minister responsible for Francophonie make a ministerial statement on this day celebrating la Francophonie known as the Jounée internationale de la Francophonie, followed by the hon. member for Verchères, speaking on behalf of the Bloc Quebecois, and the hon. member for Swift Current-Maple Creek-Assiniboia, on behalf of the Reform Party.

So, if you were to seek it, I believe you would find unanimous consent.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Is that agreed?

[Some hon. members]

Agreed.

[Ted White, Reform, North Vancouver, BC]

Madam Speaker, I rise on a point of order. Normally my speech would be followed by a short question and comments period. Will that be taken after the question period today?

[The Acting Speaker (Mrs. Ringuette-Maltais)]

The hon. member will have 10 minutes of questions and comments.

Journée Internationale De La Francophonie

[Don Boudria, Liberal, Minister for International Cooperation and Minister responsible for Francophonie]

It is an honour for me as Minister responsible for Francophonie and as a French Canadian from eastern Ontario to address the House in order to call attention today to the Journée internationale de la Francophonie.

This event is celebrated today in the prolific web of 49 countries and governments that share the use of French.

We know that La Francophonie is very much alive in Canada, but it is as well in Eastern and Western Europe, Africa the Middle East, Asia, the Indian Ocean region and the West Indies.

The Government of Canada has participated in La Francophonie since the outset, thereby saluting the importance of the French fact in Canada. For this reason, it makes the international francophone community an integral and essential part of its foreign policy. We wish to demonstrate in this way our desire to highlight the contribution of the various Canadian francophone cultures in our great country. Whether in Moncton, St. Boniface, Hawkesbury, in my riding, or Ste. Marie de Beauce, in Quebec, French is alive and well in Canada.

Canada is also a member of La Francophonie because it believes in the virtues of multilateral relations based on cooperation and exchanges. It is no accident that Canada belongs to a great many multilateral organizations; from the G7 to the Asia-Pacific Forum, from NATO to the Organization of American States, from La Francophonie to the Commonwealth, Canada's geography and linguistic make-up virtually invite such participation.

There are other reasons as well for Canada's very active role in La Francophonie; the participating government status enjoyed by the provinces of Quebec and New Brunswick enables them to share fully in the activities of the francophone world and provides them with a way exhibiting their vitality and expertise.

In addition, next May 19 to 21, an important conference on information highways will bring together in Montreal all the ministers of La Francophonie responsible for the information high way. This conference, jointly organized by the Agence de la Francophonie, the Government of Quebec and the Government of Canada, bears witness to the desire to enable the developing countries to participate in the modern world by putting the means of communication at their service.

The Prime Minister of Canada, the Right Hon. Jean Chrétien, will go to Vietnam next November to participate in the Hanoi Summit and to help make La Francophonie an increasingly integrated community. It should not be forgotten that Canada hosted the 1987 Summit in Quebec City.

Need I add, especially in your presence, Madam Speaker, that in Hanoi, we will once again put forward our candidacy to host the Eighth Summit in 1999, this time on Acadian soil in Moncton, New Brunswick, a part of the country you know well.

I would like to conclude by wishing the 8.5 million francophones and all the francophiles from one end of Canada to the other a happy Journée internationale de la Francophonie.

I must also ask to be excused-I apologize to my hon. colleagues across the way-because, as they know, as we speak, there is a reception under way for key figures of the Canadian and international francophone community, which I am hosting.

My hon. colleagues are invited of course, when their duties in the House of Commons permit, to join me there so that we can celebrate all together this great day, not only for the Canadian Francophonie, but for all of Canada and all Canadians.

[Stéphane Bergeron, Bloc, Verchères, QC]

Madam Speaker, I would like to assure the minister that I gladly excuse him, on behalf of the political formation I represent here in the House of Commons. I understand his obligations, and I certainly have no objections, since I know he will read our speeches carefully when he gets back to his office a bit later on.

First of all, I would like to thank all of my House colleagues for allowing us to have this exchange on the Journée internationale de la Francophonie. It would, I think, have been terribly unfortunate if we were to let the day go by without marking the Journée internationale de la Francophonie.

I am also extremely pleased to speak in this House today on the occasion of the Journée internationale de la Francophonie. To begin with, however, I would like to qualify what the minister has just said. Quebec was the one to initially show interest in the Francophonie, in the early 1960s, via its special relationship with France and its subsequent membership in 1971 in ACCT, the Agence de coopération culturelle et technique. Moreover, it managed to become a full-fledged member of ACCT as a participating government only after a great struggle with Ottawa.

The federal government then thought up ways to trivialize Quebec's presence within the institutions of the Francophonie, going so far as to fund New Brunswick's participation in order to show the international community that Canada's membership in the Francophonie was not solely related to the French character of Quebec.

Be that as it may, the Francophonie has undergone numerous major changes in recent years. The last was in 1996, when the ACCT finally became the Agence de la Francophonie. From that moment on, the Francophonie became a political body, with a Secretary General to be appointed at the Hanoi Summit later this year. In this connection, the name of former UN Secretary-General Boutros Boutros-Ghali is being circulated at the moment as the potential first secretary of the Agence de la Francophonie.

This political tack which the Francophonie has taken shows how it has matured politically into an internationally recognized forum whose membership discusses vital issues. This new vocation also requires of us a greater solidarity, cemented together by language and culture.

At the very moment we are celebrating the great francophone family, I find it hard to understand the government's guilty silence concerning the catastrophic situation that currently prevails in Zaire, where civilian populations are the primary victims of the raging conflict. How can we celebrate this day joyfully, when the values which we hold dear and defend, the respect of human rights, democracy and of the rule of law, are being trampled upon daily in a number of the member countries of the Francophonie?

Next fall, the Sommet de la Francophonie will be held in Vietnam. Canada has always given precedence to multilateral approaches for advancing causes it holds dear. Will it take advantage of this important occasion to raise certain points, including human rights, child labour and excessive defence spending in developing countries?

Canada could also easily raise the case of Trân Triêu Quân, the Canadian citizen who has been unjustly imprisoned in that country for far too long already. Like the Commonwealth, the Francophonie is an important tool with which we can make the world a fairer and a safer place.

[Lee Morrison, Reform, Swift Current—Maple Creek—Assiniboia, SK]

Madam Speaker, it is an honour for me, as Canadian, to address this House on the Journée internationale de la Francophonie.

I would like to say a word on the importance of multilateral relations. The benefits of such relations are the reasons why Canada belongs to a number of international organizations. The G7, NATO and the Commonwealth are all important structures for the promotion of our foreign policy. The Francophonie includes 45 countries and a few other entities, including Quebec, for example, which have in common the use of the French language.

Membership in international organizations should be based on enlightened self-interest. It is to our benefit to help maintain international stability, but I have some fear that our financial contributions through CIDA to certain members of la Francophonie represent a disproportionate share of our foreign aid budget. Historically we have helped to prop up some very nasty and corrupt regimes for no apparent reason other than that the recipients speak French. We should perhaps be more careful with our national chequebook.

Since 1970, Canada has been a leader in the development of the Francophonie. It is also a founding member of the Agence de coopération culturelle et technique. Thursday, March 20, is the Journée internationale de la Francophonie. Happy Journée internationale de la Francophonie to all francophones and francophiles who have made Canada a better place.

The House resumed consideration of the motion and of the amendment.

Excise Tax Act

[The Acting Speaker (Mrs. Ringuette-Maltais)]

We will now resume from where we left off with questions and comments with regard to the speech made by the member for North Vancouver.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, the member was talking about his birthplace of New Zealand and all the wonderful things that have been done there.

My recollection of the New Zealand situation after it virtually went bankrupt was that it brought in a harmonized consumption tax. I believe it was 12 per cent and was applied to all goods and services, including food and prescription drugs, absolutely everything. I am also aware that some changes were made to the income tax structure as well which amounted to massive tax reductions to high income earners in New Zealand and shifted the burden of tax down to the low and middle income earners.

I have read analyses of the impact in New Zealand. That scorch and burn approach used in New Zealand seems to be the kind of approach the Reform Party has been proposing in its budgets and in its false start program. It is the same kind of thing where the road kill of its citizens is increased poverty, poorer health care or quality of health care, poorer social services, higher suicide rates and higher family breakdown, all as a result of what the member describes as progressive government. Would the member like to reassess his position on the wonderful actions in New Zealand and maybe recant here and now?

[Ted White, Reform, North Vancouver, BC]

Madam Speaker, I can tell by the comments from the hon. member that he has not visited New Zealand because if he had, he would know how foolish his comments are. Unfortunately, he has been listening too much to Maude Barlow who also has not made any logical analysis of what has happened in New Zealand. I can understand why she is opposed to it; her special interests are greatly threatened by the things that have taken place in New Zealand.

In any debate on this issue I always say to people that if they can afford to go, please visit New Zealand. When they come back I know they will say to me that I was telling the truth and that those on the other side who have discredited it really were not.

The member mentions such things as a higher teenage suicide rate. It is wonderful how figures can lie and liars can figure all of that stuff. I am not applying that to the member; I am applying it to the people who have used these figures.

In one year in New Zealand a mass suicide took place in a Maori community. They were sniffing some sort of petroleum product. That bumped the suicide rate so high for one year because New Zealand has a relatively low suicide rate among youngsters. It was used as a basis for claiming that the suicide rate had gone up in New Zealand. It is a massive distortion.

In addition, there are the crime rate statistics that are used by people like Maude Barlow. If the New Zealand police are asked about it they say the reason for it is that they changed the computer system and the way crimes were reported. Everything that comes over on the phone lines is now reported rather than under the old manual system when only actual convictions were reported. It looks as if there has been a crime rate increase, but there are many other things there.

The hon. member mentioned the GST in New Zealand. It is true that when New Zealand went bankrupt a GST was introduced. That had to be done because it was an emergency situation. The International Monetary Fund was controlling things.

I have had the benefit of sitting down for an hour and a half with former prime minister David Lange who was the labour prime minister at the time New Zealand went bankrupt. He was gracious enough to give me some of his time about two years ago. I never thought that I would have deep respect for somebody who was a labour prime minister.

It was a very interesting and quite impressive discussion. He described how his philosophy took a 180 degree turn. He had to make a 180 degree turn with respect to what he had believed all of his life in terms of socialism. He came to the position that without a robust, healthy investor and private sector you cannot have social programs. What you end up doing is destroying your country. What a massive turnaround that was for him.

He told me that once they began the cuts in New Zealand the people were so solidly behind them because just like here, they had seen the government waste for so long. They could not believe the government was actually doing something. It gave such tremendous impetus that the government went faster and faster. It got the job done so very quickly that very rapidly the recovery began.

I was down in New Zealand about a month ago. Unfortunately it was not on pleasant circumstances because my mother-in-law had had a heart attack. I can assure this House that had any members been down there with me they would have been really impressed with the feeling of vibrancy, the really good feelings that are there.

People feel good about what has happened to their country. It has become competitive internationally. Certainly there was a GST introduced and it is still there today.

What has happened is that there is a consumption tax. That GST is a consumption tax, which is very easy to do in a country that is isolated from other countries.

In terms of income tax, there have been massive reductions in income tax in New Zealand. It should be across the board because New Zealand has recognized something that these members opposite do not recognize. It is the successful people who create the jobs and create the wealth for the country. If they are taxed to the point that they leave, their country is destroyed, their jobs are destroyed along with everything they stand for.

I welcome the question. I am very pleased to have replied. Perhaps I was a little harsh on him at the beginning by saying he was foolish. That was unfair. I voluntarily retract that even though he has not asked me to.

I would invite him any time to take a trip to New Zealand, hopefully not with a committee because that really is not fair. Sometime he should pay for his own trip to New Zealand. There are some wonderful deals to go there. Take a look for himself.

As soon as he gets back, he can pick up the phone, call Maude Barlow and tell her she is completely out of line.

[Art Hanger, Reform, Calgary Northeast, AB]

Madam Speaker, I listened enthusiastically to the member's statement. I was in the lobby for part of it. Then I came into the House and listened to the rest here. It is interesting to hear the New Zealand experience. It is important to express that time and time again.

It is really interesting to see how this whole business of harmonization came about. I want to put this to the member for North Vancouver to address. It is a series of defaults on the part of the Liberal government that led up to this point of harmonization.

The Liberal government was put into a corner, if you will. It started out in part by the heritage minister when she was forced to resign and seek re-election at a cost of over $500,000 to the taxpayer. It is all over this GST issue.

The second point is the finance minister publicly begged forgiveness in his statement "we made a mistake for misleading Canadians on the Liberal GST policy".

Then there was another row when the member for York South-Weston resigned. I should say he was banished from the Liberal caucus. Then the member for Broadview-Greenwood temporarily went into self-exile. All this happened over the GST issue.

I would like to put this forward to the member and seek his comments.

[Ted White, Reform, North Vancouver, BC]

Madam Speaker, before I make comments about the defaults on the part of the Liberal government, while my colleague was speaking a member opposite was yelling out that the Deputy Prime Minister was not forced to resign, that she did it herself.

As soon as my colleague said that it cost $500,000, the very same member yelled out: "That was your fault. You forced her to resign". They cannot have it both ways.

[The Acting Speaker (Mrs. Ringuette-Maltais)]

I wish to inform the House that, because of the ministerial statement, Government Orders will be extended by 11 minutes.