Madam Speaker, far be it for me to refocus the Reform Party on its actual motion, but the motion that is before us is with respect to the impact of the proposed 10% tax on municipalities.
The beauty of this motion is that it attempts to focus the activities of a municipality.
A municipality, by definition, occupies a particular geographical area. By definition it is to provide services to its constituents where the constituents are in need of garbage services, education services or services of that nature. Those are public services. Those are services which are supplied at cost and for which people are not expecting the entity that supplies the service to be making a profit.
I understand that all municipalities are in this hunt for revenue. All governments in all countries are in a hunt for revenue. But this is a proposal which attempts to refocus and rebalance that concept. Municipalities should not be hunting for revenue by supplying services where other entities in our society supply those services.
If any motion prevailed with respect to the law of unintended consequences, this is it. May I suggest that there are a number of very significant unintended consequences that will result from the hon. member's motion.
The first unintended consequence is that municipality will be set up against municipality to supply services in order to be able to generate the most revenue. In other words, it will not have to go to its tax base, it will go to other forms of revenue. We will have, for instance, the municipality of Hamilton competing with the municipality of Kingston to supply service x at the cheapest and lowest cost. Therefore, whichever municipality gets to supply that service will not have to go to its tax base to generate revenue. Some of that is happening.
The beauty of the proposal by the government is that it will cut the matter off at 10%. After 10% of its gross revenues the municipality will not have the incentive to seek to augment its income in that manner.
Similarly, it will set up the unintended consequence of a private corporation competing with the municipality to supply a service. That is quite bizarre because the Reform Party's motivation, raison d'être, is to enhance and encourage the private sector. We will have this bizarre experience of a municipality competing with the private sector over the same service. With the huge advantages of a municipality, the private sector will not be able to supply the service.
Second, a municipality, again by definition, has an enormous infrastructure. It has secretaries, it has telephones systems, it has buildings, et cetera. It could in a number of instances undercut the private sector by a means which the hon. member might not have thought his way through.
The third and beautiful unintended consequence is that it provides a huge benefit to my municipality of Toronto. Most Canadians, from my experience in travelling across the country, do not think that Toronto should receive very many benefits at all. It is a national pastime to hate Toronto. There are some members here who would agree with that.
I might point out to the hon. member that Toronto is the seventh largest entity in Canada. It ranks ahead of a number of provinces. If this motion goes through it will provide to Toronto an enormous advantage because there will be an enormous incentive on the part of Mr. Lastman and his staff to create services to augment revenue, to knock the private sector out of the game. I do not know whether the hon. member wants to create a situation such as that, but that is a very real possibility and again follows through with the law of unintended consequences.
If the hon. member wishes to set up conflicts between municipalities, if he wants to set up conflicts between the private sector and municipalities, if he wants to benefit Toronto in particular but large municipalities in general, then we should probably stand aside and let this motion pass. However, I believe that the government's direction is far wiser. It is saying to municipalities generally that they can generate revenue and, yes, they will be allowed a certain amount of activity outside their municipal sphere.
However, once they go beyond 10% of their revenues being generated outside their geographical area or municipal sphere, then they will be taxed like any other entity. As with all governments, that achieves a balance which is a good balance and is healthy for this country.
I hope it also addresses the issue of the balancing of revenues among all three levels of government.