Mr. Speaker, I would like to add some comments to the debate on Bill C-24 as reported to the House by the committee.
The parliamentary secretary has just finished giving us a quick summary of some of the main points of the bill. Most of what he has said sounds pretty reasonable. What I find absolutely incredible is that he can say in such nice smooth language what the bill does not say at all. I need to reword that. He described the bill in nice, smooth language but the bill itself is convoluted legalese which I defy even an accountant to understand. It is absolutely incredible.
I have read a number of things in the bill. I will give one little example. One thing the bill does which the parliamentary secretary did not allude to is it clarifies the tax situation with respect to HST and GST when it involves barter exchange. I read it twice and I still cannot clearly understand it. I would have to get a tax lawyer to help me interpret this. I cannot understand whether bartering is out of the tax loop or in. I think it is out as a result of the bill. I will read a little bit of it because it is so incredibly interesting. It reads:
(6) For the purposes of this Part, each of the following is deemed not to be a financial service:
(a) the operation, maintenance or administration of a system of accounts, to which barter units can be credited, of members of a barter exchange network;
(b) the crediting of a barter unit to such an account;
(c) the supply, receipt or redemption of a barter unit; and
(d) the agreeing to provide, or the arranging for, anything referred to in any of paragraphs (a) to (c).
That is clear, is it not? It goes on to state that this section is is deemed to have come into force on December 10, 1998. That was a year and a half ago. It goes on:
(3) If a designation of a barter exchange network under section 181.3 of the Act, as enacted by subsection (1), takes effect on the day on which this Act is assented to, that section applies to the giving of any property, service or money at any time before that day, by a member of the network or the administrator of the network, in exchange for a barter unit that could be used as full or partial consideration for supplies of property or services between members of the network as if the designation and that section had been in effect at that time, provided that no amount was collected as or on account of tax in respect of the supply of the barter unit.
That is perfectly clear. And it goes on and on like that. It is endless.
I stand to be corrected but the bottom line is that if people arrange to have a barter unit established with an administrator, they can so register it. If they then exchange goods and services in return for these so-called barter units, which is perhaps a new currency to be introduced in Canada outside of the Bank Act, then they can exchange those barter units for other activities, services or products and they are not considered taxable.
I would venture to guess that if this is actually implemented in this way, then competing with the loonie will be the boonie, the barter unit. People will be using it in great amounts in order to avoid the GST. Why? It is very clear.
One of the things the parliamentary secretary said was that in order to encourage the use of Canadian facilities for conducting conventions and meetings of international organizations, the GST rules would be altered so there would be a GST exempt portion for those people who are from outside the country. That is a clear admission on the part of the parliamentary secretary that where GST is applied it makes Canada less competitive. The government is ready to remove the GST on that part of it in order to make it more competitive. That makes sense to me.
Generally it is true that the more an activity is taxed, the less there is of that activity. The less the government taxes it, the more it will get of that activity. If international organizations are encouraged to have their meetings here, which of course would bring a lot of money into the community and the country, then reduce the tax.
How I wish we could persuade the federal government to apply that principle to our own citizens. We are taxed to death. The GST is one of those taxes. And this bill does a lot to change the way the GST and now the GST and HST rules are applied.
It is interesting the government would choose to bring in these amendments to the GST. We know the Liberals were first elected to government primarily on the promise that they would eliminate the GST. There are a whole bunch of really good quotations by the Prime Minister when he was in opposition. He said, “I am opposed to the GST. I have always been opposed to it and I will be opposed to it always”. Back in 1990 when the GST was being introduced he said he would always be opposed to the GST. The Liberals at that time were sitting on this side of the House and the Mulroney Conservatives were on the other side and were proposing this wonderful new GST.
After all these years of GST the government in a piecemeal way, one little group at a time, is saying that it should take the GST away because it is unfair, inhibits economic activity, is bad for business, costs the government too much money, or whatever. Now it is introducing some amendments in this bill to change some of the GST rules.
Here is a quotation from the individual who is now the Deputy Prime Minister. On December 21, 1992, he said “The thinking is that we want to get rid of the GST”.
A little less than a year before the 1993 federal election when the present Prime Minister was leader of the opposition he said “We will replace it. No doubt about it”. In retrospect I guess he has a bit of doubt. He also said “We will replace the tax. This is a commitment. You will judge me by that. If the GST is not gone, I will have a tough time in the election after that”.
He further said “The only specific promise I am going to make is to replace the GST”. I guess we have it replaced all right. It is now the GST-HST in those provinces that have bought into it. Instead of being 7% it is 15%. Yes, it was replaced. Was that a great commitment?
Interestingly just weeks after the 1993 election when asked by a reporter what he would do about the GST because of his election promise, the Prime Minister said “It will be gone in two years”. That was 1993. According to very simple arithmetic, much beyond the ken of mathematicians on Liberal side, two years after 1993 is 1995. We would have expected by 1995 that the GST would be gone. Is it gone? I do not think so. It is still here. It is as big as ever.
Let me refer to the Prime Minister speaking in the House Commons. We can look it up in Hansard . In 1994, again just six months after the election, he said “We hate it and we will kill it”. That is what he said in the House of Commons, still thinking about his election campaign, but he never really did it.
Here we are some six and a half years after that election and the Prime Minister and the Liberals have done nothing to change their so-called election promise to get rid of the GST but they are removing it.
How can I stand in the House and either speak or vote against a reduction of GST as applied to vehicles needed by people who are handicapped? One would have to be very thoughtless to say no. If someone is handicapped and needs a special vehicle to haul them around, it would be wrong to say that we think the federal government should get some GST money out of that vehicle or the extra fittings required to make it work for them.
I will have a little dilemma because I will vote against the bill due to all its flaws. Despite that, it is like eating tapioca pudding that has some gravel in it. In this case some of the good tasting parts are the reduction of the GST for people who have special needs because they have disabilities. To exempt them from GST is the right thing to do, but how about all the other people who have needs?
How about students who have to pay GST on books? To add insult to injury, they are now paying it two, three and four times. Let us take a look at our pages in the House, young people who are students. When they buy a used book they end up paying GST on a book that has already had GST paid on it. I know all of them would love to keep the books they used when they were students in their youth as an ongoing building of their personal libraries. However they will not be able to because of the high cost of education. They will put their books up for sale. Those books, which have had the GST paid on them when they were new and first bought, will have the GST paid on them again the third time, the fourth time and however many times they are recycled.
If students who are trying to obtain an education are charged GST on books every time the books are moved from one owner to the other, the word I use is greed. It was invented by the Prime Minister. It was used by him just a couple of weeks ago. He talked about people who want to keep some of their own earnings as being greedy.
I say it is a greedy government that does not have consideration for young people trying to get an education. It insists on taxing them to death on their earnings and then when they use the earnings that are left over for the books they need for their education they are charged GST on them. There is nothing in the bill about reducing the GST to zero on reading materials and on books. To me that is a huge flaw. That alone is a good reason to vote against the bill. It is totally inadequate in that regard.
A number of other things in the bill are commendable and a number of them are very questionable. As legislators in the country we have an obligation to stop the huge tax bite. The little things that the government does from time to time by changing a little tax rule here and a little tax rule there do not make it any simpler. In fact it greatly increases the complexity. It does not relieve Canadian taxpayers of their crushing tax burden in any substantial way. It is just a little dithering and nothing substantial happening.
I cannot stand in the House to talk about a budget implementation bill, some of which goes all the way back to 1990, believe it or not, without also mentioning that the Canadian Alliance has a very good tax plan that has the approval of many Canadians and many notable economists including Dr. Mundell, a Nobel Prize winner. He said that our plan was workable, that it would give a substantial kick to the economy and that it would give real tax relief to Canadian families who are struggling to make ends meet. That is the type of tax overhaul the country needs.
Of course we have critics who say a flat tax is only a tax cut for the rich. They try to make political hay out of that. I do not apologize for the fact that under our plan everyone pays less taxes. The fact of the matter is that the Liberals always misrepresent this aspect of our plan incorrectly. The Minister of Finance particularly loves to talk about it. He gives a totally false message that it is for rich people only.
Contrary to the Liberals, we would take some two million Canadian taxpayers off the tax rolls completely, those people who make less than $20,000 for their families per year and are deprived of at least $6 billion of their earnings by this government. Six billion dollars of tax revenue comes from Canadian families whose family income is less than $20,000 a year. It is shameful, absolutely shameful.
Our tax plan would give them a 100% tax break. It is true that when people earn more money they would pay the same rate of tax on all their earnings. That does not mean that people who make more money pay less. They pay proportionately more. It is a truly progressive system. Anyone who says otherwise is not staying with the facts but is distorting them.
I emphasize that this is the way to go. It has the approval of no less than the WEFA group, which has done financial studies for the Department of Finance and the Minister of Finance in the production of his budget and his income projections for the government. By using that same model and running our proposal we showed that every year tax revenue to the government would go up. That is even before we take into account the boost that a massive tax break would give to our economy.
Government revenue would go up. There would be more money available for health care and education. There would be less money under our plan for boondoggles and for building fountains in Shawinigan. The money would dry up for fountains very quickly if we were in power because we simply do not believe it is correct to use the hard earned money of long suffering taxpayers to try to bolster the re-election chances of anyone including the Prime Minister.
We would straighten all those things out. With us at the helm of government, Canadians would find some real tax changes and changes to the system, not just the tinkering around the government is prone to doing. It sort of dilly-dallies and never really gets around to doing anything substantial.
I would like to say a little about some of the other matters that are involved. There is a whole bunch of provisions in the bill on changing different things including charities. The parliamentary secretary alluded to that point, but there is one that is really interesting. It would exempt second language training in French or English from the GST if that training were provided by vocational schools or individual contractors.
That is a step in the right direction, but once again the Liberals are guilty of tinkering. What they have done is said that students studying math or science have to pay the GST on that. However, French speaking people learning English or English speaking people learning French will be exempt from GST on that. They just cannot do that. They cannot just pepper away—I guess the Prime Minister likes pepper—at wee spots in the Income Tax Act and exempt this group, exempt that group and double the tax on this group and so on.
We need a massive overhaul, one that is consistent, one that is logical, one that makes sense, one that helps the economy, one that leaves more of the money people have earned in their own pockets and puts the country at a competitive edge such that it has never seen.
I would like to see the country run ahead in terms of its economic activity per capita vis-à-vis the United States and other G-7 countries and our trading partners. We have the potential to achieve that. We have a vigorous, well trained population. We have a wealth of resources unmatched in the world.
Despite the fact that Liberal members are all sort of shaking in their pants these days, we have a relatively stable political country. Our political regime is relatively stable. We change our governments by election. I always say we do it with ballots instead of with bullets. That is something we want to preserve in Canada.
We have all these positive things going for us, but what do we have? We have a country that is struggling, a country where our young people find it impossible to get jobs. They are lured to the United States because of lower taxes and higher salary offers. We keep on struggling in this country because of our excessive tax regime. I think we need to pay attention to the facts here and not put our heads in the sand any longer.
I know there are many Liberals in the House who would just love for me to carry on for a long time, but I will have to disappoint the vast majority over there. I will stop at this stage and say that I will be voting against this bill for the reasons I have mentioned. I will also continue to press forward for a new system, a new regime in this country, a system that is fair, that bolsters our economy and that leaves more of the people's hard earned money in their pockets so they can provide for their own needs and the needs of their families.