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".