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House of Commons Hansard #148 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was quebec.

Topics

Excise Tax ActGovernment Orders

1:30 p.m.

Reform

Art Hanger Reform Calgary Northeast, AB

Madam Speaker, indeed it is a privilege to debate this topic on GST, specifically the harmonization aspect.

It was a very key issue in the last election, the hated GST and what was going to happen to it. Of course there were promises made by the Liberal government to scrap the GST. We heard the government's mandate as to how it would deal with it. It has built up to this point and again, looking toward the next election, it is still an issue. In fact, it is more of an issue now for some. It will directly impact the lives of people in Atlantic Canada.

All kinds of comments have been made and studies done on this particular tax. Is it a good deal or is it a bad deal? I will take the bad deal side because it is a bad deal. I have not heard much good about it. When we consider what business has said and many of the comments made by government leaders, it is a bad deal. The resignation of Premier Savage of Nova Scotia no doubt was partially due to the harmonization fiasco. Many call it the BST or the blended sales tax. That is how it is colloquially known in many areas. It is a bad deal.

The Atlantic premiers were bribed into signing the deal with a $1 billion shot in the arm from Canadian taxpayers. The harmonized version will amount to 15 per cent as opposed to the 18 per cent which the provincial sales tax and the GST amounted to.

The tax will have a broader base. People who pay utility bills or who make any other purchases will now see the tax hit their pockets. It will cost them more. That is how it will impact on the average person. The tax will take away from their income.

We are living in an age of high taxation. In Canada there is one tax after another. The so-called harmonized tax was promoted as a tax which would alleviate problems. However, the base is so broad that it is costing taxpayers even more.

How can one justify adding another tax to the already depressed area of Atlantic Canada? The tax will not bolster its economy, it will do the opposite.

What does business say about the tax? Three major retailers in Atlantic Canada have stated that their net annual retail deficit will total $27 million once harmonization is implemented. Is that not a warning sign?

One private retailer in the Atlantic region was contemplating opening two stores in 1997 but has decided against it as a result of increased costs associated with harmonization. Instead of expanding and looking at the tax as alleviating some of the problems, that retailer is backing off.

If someone is going to invest a dollar into business, they want a return on that dollar. They want to know that the investment will yield a return. That does not seem to be happening. The message that the retailers are getting from harmonization is the opposite. They are being very cautious about expanding their operations. They are being very cautious about investing in business.

There are warning signs, but the government plods along and will impose this tax on a region which wants nothing to do with it.

Both privately owned and publicly owned, traded stores are reluctant to explain the problems they face as a result of harmonization so as not to jeopardize consumer confidence and the value of their stock.

What does that say? It says that this discussion is not as as open and as public as they would like it to be but they fear that people will withhold, that they will not patronize them, that they will not buy their product or that they will look at the operation as struggling or as having some significant problem in their affairs. That will directly impact on their profit line. It is the profit line that we talk about because businesses are only in business to make a profit; let's face it, the bottom line.

The Retail Council of Canada submitted its findings which included this statement: "By forcing stores to bury the new tax in prices, the harmonized tax regime will cost retailers at least $100 million a year".

Excise Tax ActGovernment Orders

1:40 p.m.

An hon. member

It is gone.

Excise Tax ActGovernment Orders

1:40 p.m.

Reform

Art Hanger Reform Calgary Northeast, AB

Okay, if it is gone, it is gone. These items are very important. They show there is a concern expressed by many. Of course the retail council submitted those submissions and I agree.

Excise Tax ActGovernment Orders

1:40 p.m.

An hon. member

It is happy.

Excise Tax ActGovernment Orders

1:40 p.m.

Reform

Art Hanger Reform Calgary Northeast, AB

It is not totally happy, but I agree that as a result of its pressure some things have been done. That still does not take away from the fact that the tax is hitting a broad base of goods in that region. It will impact directly on the pocketbooks of the consumer.

The Halifax Chamber of Commerce had meetings with the committee. It made predictions. One of its predictions was that the tax would push up new house prices by 5.5 per cent as well as force municipalities to raise property taxes. If the chamber is saying that in Halifax obviously that view will be shared by other regions of Atlantic Canada. It will impact directly on housing costs and lead to increased taxes which will be imposed on the consumer.

As this effort continues to impact on the consumer, where is that going to put him? Is it going to create more jobs if housing goes down? Is it going to encourage those who have finances to go and spend? No, it is not. He will have less money to spend in the first place because his taxes are going up and house prices will definitely impact in that same region.

The Canadian Real Estate Association says that harmonization will increase the cost of a new house by $4,000 in Nova Scotia and in Newfoundland to the tune of $3,374, and in New Brunswick. As any family would desire in terms of its own comfort to have a house, the opportunities will be slim because $4,000 is a lot. It will impact on the down payment. Regardless of how low interest rates are the cost of this is impacting right at the consumer level. It is just as I mentioned earlier. When you pay your utilities you will see that extra hit right there, a broad based tax that did not exist before.

The GST harmonization is responsible for the closure of five Greenberg stores and the loss of 79 jobs in approximately five different locations. There are closures. This will not be the only hit in that region but it is one. Woolworth Canada also estimates that because of the tax inclusive pricing it might consider closing 126 stores in the Atlantic region, which means a loss of approximately 300 jobs.

Another smaller but just as significant retail business, Carleton Cards, predicts that it will close 19 of its 37 stores in the region, throwing approximately 116 people out of work.

It is government's business not to create jobs in the sense that they have to be government jobs. It should certainly create jobs by creating an atmosphere so business in turn can create jobs. The small businessman is the job creator and the engine in society that should be creating the jobs. I do not think this is the mandate of the government. The harmonization aspect of this tax is yielding other concerns. It will certainly impact directly on the whole job market.

Management of Carleton Cards also indicates that there is a 50:50 chance of further store closures and a loss of 71 jobs in eight different cities across Atlantic Canada.

I have a question for the Liberal government. Why have these concerns not been addressed directly? Why have the fears of the

business community not been put at ease by the government saying this is not happening and the information is to the opposite effect?

The bottom line is that consumers will pay more for funeral services. They will pay more for children's clothing. They will pay more for books, auto repairs, electricity, gasoline, home heating fuel, haircuts and myriad other things.

In closing, this tax will certainly impact directly on the consumer. We are now looking at unemployment rates that are unacceptable. They will be a lot higher.

Excise Tax ActGovernment Orders

1:45 p.m.

Liberal

Julian Reed Liberal Halton—Peel, ON

Madam Speaker, I want to point out one small matter and ask my friend a question as well.

The debate over burying the tax in the shelf price or not is by no means unanimous. In the riding I serve a large number of retailers have begged us to proceed with harmonization. They actually want the tax buried in the sticker price and shown on the cash register receipt. The member should be aware that this is not unanimous.

If a harmonized sales tax is such a bad deal, why are chambers of commerce coming to me asking why it is not in Ontario, when it is coming and who is holding it up? I have to explain to them the offer is open to Ontario to harmonize at any time. The provincial governments held harmonization in great favour before the were elected have since reversed themselves and are not proceeding with the harmonization the business community really wants.

If the business community wants it, why is it such a bad deal?

Excise Tax ActGovernment Orders

1:45 p.m.

Reform

Art Hanger Reform Calgary Northeast, AB

Madam Speaker, there may be some that seek it in the business community. I have heard that reflected from my colleagues during the debate. The bottom line is whether consumers want the harmonized tax and how it will impact on them. That is the important issue. The big retailers certainly do not want it.

The member keeps speaking about Ontario businessmen running to him wanting to know when it is coming into Ontario. Alberta, Ontario and British Columbia are not even willing to discuss this federal proposal. They know they will have to pay the shot for the provinces that cannot make up the difference like Saskatchewan, Manitoba and Prince Edward Island. They know they will bear the brunt of the difference when it comes to supporting weaker provinces.

Excise Tax ActGovernment Orders

1:50 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

Is the House ready for the question?

Excise Tax ActGovernment Orders

1:50 p.m.

Some hon. members

Question.

Excise Tax ActGovernment Orders

1:50 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

Excise Tax ActGovernment Orders

1:50 p.m.

Some hon. members

Agreed.

Excise Tax ActGovernment Orders

1:50 p.m.

Some hon. members

No.

Excise Tax ActGovernment Orders

1:50 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

All those in favour of the amendment will please say yea.

Excise Tax ActGovernment Orders

1:50 p.m.

Some hon. members

Yea.

Excise Tax ActGovernment Orders

1:50 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

All those opposed will please say nay.

Excise Tax ActGovernment Orders

1:50 p.m.

Some hon. members

Nay.

Excise Tax ActGovernment Orders

1:50 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

In my opinion the nays have it.

And more than five members having risen:

Excise Tax ActGovernment Orders

1:50 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

Call in the members.

Excise Tax ActGovernment Orders

1:50 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

The recorded division stands deferred until 5 p.m. this afternoon.

Excise Tax ActGovernment Orders

1:50 p.m.

Liberal

Bob Kilger Liberal Stormont—Dundas, ON

Madam Speaker, would seek unanimous consent of the House to suspend until the call of the Chair at 2 p.m.?

Excise Tax ActGovernment Orders

1:50 p.m.

The Acting Speaker (Mrs. Ringuette-Maltais)

Is it agreed?

Excise Tax ActGovernment Orders

1:50 p.m.

Some hon. members

Agreed.

(The sitting of the House was suspended at 1.56 p.m.)

(The House resumed at 2 p.m.)

HealthStatements By Members

March 20th, 1997 / 1:50 p.m.

Reform

Grant Hill Reform Macleod, AB

Mr. Speaker, preventive medicine is very popular in Canada these days. With many acute care facilities closing it makes only good sense to do what we can to stop disease before it starts. Health foods, vitamins, nutritional supplements and alternative medical practices are tools to prevent disease. These are employed by many thoughtful citizens.

The health protection branch and international Codex proposals threaten those choices in Canada. For example, melatonin has now been banned. Is there any proven harm? No. Is there any proven side effect? No. Is there any proven impurity? No.

Reform's position on this issue is clear. An informed consumer is a far better judge of their health care needs than some distant bureaucrat in Ottawa. Our message is also clear to the health protection branch and to Codex. Get out of our faces.

Stephan ZbikowskiStatements By Members

1:50 p.m.

Bloc

Stéphane Bergeron Bloc Verchères, QC

Mr. Speaker, in December 1994, Stephan Zbikowski, a Canadian citizen, was arrested for drug trafficking and is still in jail, in Tocyito, Venezuela. This maximum security penitentiary houses the country's most dangerous criminals, which raises concerns about the personal safety of Mr. Zbikowski, who has no criminal record in Canada. Moreover, no guilty verdict has yet been rendered in Venezuela.

Close to 2,500 people signed a petition asking the Prime Minister and the Minister of Foreign Affairs to make representations to Venezuelan authorities, so as to bring this most preoccupying situation to a positive conclusion. At the request of Mr. Zbikowski's mother, I sent the petition to the Prime Minister's office.

We do hope that, given the concrete support shown by all these signatures, the Prime Minister will give this issue all the attention it deserves.

Middle ClassStatements By Members

1:50 p.m.

NDP

Chris Axworthy NDP Saskatoon—Clark's Crossing, SK

Mr. Speaker, the endangered species legislation is currently being studied by Parliament but there is one endangered species that is being ignored, the Canadian middle class.

First, more and more Canadian families are slipping into poverty and more families cannot escape poverty.

Second, wages have stagnated or declined in Canada over the last two decades at the same time as taxes have been consistently raised. Wealth and income in Canada has become increasingly concentrated in the hands of fewer and fewer people and the gap between rich and poor is at 19th century levels. In other words, the middle class has all but disappeared.

I urge the government to include the Canadian middle class as an endangered species in the legislation currently before Parliament. Maybe if we can do that we can save the middle class from going the way of the dodo bird.