Madam Speaker, I was in the middle of an exciting discourse when we were interrupted for members' statements and questions and all that other exciting part of the day. I was in the middle of telling the story about how taxation policy affects behaviour.
My colleague from Calgary spoke about the fact that rich people being taxed on the size of their windows put very small windows in their houses in order to reduce taxation. The tudor type of architecture with the small windows was the result of a taxation policy many years ago.
I was in the middle of relating the fact that my father, who bought a new car every three or four years, thought about buying a new car in 1991 when the GST came in. He went to the dealer and found one he liked. He was ready to buy it until he looked at the bill. It had a huge amount for GST. My dad said that he had already paid income tax on the money he had earned and that the government now wanted him to pay what was left on the GST. He decided not to buy the car. He walked away from the dealership. He did not close the deal. He said that he would keep his old car.
The local dealership lost business, the salesman lost his commission and the owner did not make a profit on the sale of the car. The result of that, I believe, ripples down through the whole economy. My dad, being a frugal person who spent his money wisely over the years, made that decision because of the GST. I believe hundreds and probably thousands more Canadians postponed purchasing decisions based on the GST. The GST thereby has had a huge effect on the economy of the country. Taxation has a huge effect on the economy.
We are here today discussing the GST. We are making small changes to it in order to improve it. I believe to this very day that there is a lot of anger out there about this most hated tax.
There are businesses in Edmonton close to where I live that advertise sales in the papers that are called GST events. They do this today, 10 years after the tax was imposed. Just about every week one of the furniture companies or car dealerships will have a GST sale. In smaller letters, the ads say that the company will pick up the GST.
Companies could simply say that they will give buyers a 7% discount. Some people will show up and pay attention to it. However, when a great big sign says “We will pay the GST”, even though it is only 7%, people will go to the sales. It makes them feel good when they do not have to pay that hated tax.
I come from the province of Alberta where we had no sales tax until the GST. It was wonderful. If an item was marked $4.99, we would pay with a five dollar bill and get a penny back. It was very healthy for our economy. Why is it that Alberta is a province which is so well off compared to some of the others? I contend that one of the reasons is that over the years Alberta has had a much more rational and less offensive tax policy.
It affects me to this day as I spend approximately half of my time in Ottawa as a member of parliament and the other half in other parts of the country, most of it back home in Alberta. Perhaps I should not say this, but whenever I need to buy something I buy it in Alberta and bring it back here.
I do not usually have time during the day to go to the stores around here, but even if I did I would postpone it. Not long ago I needed some videotapes in my office to record one of my colleagues giving a speech in the House. I bought them in Alberta because I did not have to pay a provincial sales tax. The provincial government may look at all the money it gets from this tax, but we should look at all the money it avoided.
A number of years ago the provincial government of Saskatchewan imposed a tax on fuel. It then made a rule that every farmer and every businessman who submitted their receipts at the end of the year could get a rebate of that tax. In other words, the purpose of the tax was simply to tax people from out of the province.
I and hundreds of other people responded to that. My family still lives in Saskatchewan. I go to visit them. What did I do? I used to drive from my home to Swift Current where my family lives. I would visit with them, fill up and drive home again. After this tax was brought in I drove to the last gas station at the Alberta border. I filled up, drove to Saskatchewan to visit my family, drove back to that town in Alberta and filled up there in order to avoid this tax.
Introducing that tax did nothing for Saskatchewan. The numbers show that its revenue went down as a result. Meanwhile it had a huge administrative boondoggle, taking money and giving it back. How am I relating this to the GST? Let me just finish the Saskatchewan example.
Its revenue went down and its local businesses lost business. A local business used to sell me a tank of fuel every time I went down there. After the tax was brought in, and in fact I do not know if it still has this tax, I got into the habit of filling up in the last town in Alberta, whether it was Wainwright or Provost; driving to Saskatchewan; and making sure to get back there before I was out of fuel.
I did not give them the business any more so they lost the profit. They could have made some profit from me, but they lost it because of their government's tax policy.
The GST does the same. I do not know whether Canadians are aware that the GST brings in approximately $50 billion a year of gross revenue. Members will be amazed when I tell them that approximately $25 billion of it is sent back in refunds and rebates. That is absurd. Why have a system where the money just spins in circles in a huge centrifuge? The only thing we are supporting by it is a huge army of government bureaucrats whose only job is to process the payments of people who have put money into a pot when in fact they will get it back.
Not long ago a lady in my riding phoned me and said that her small business was in trouble. It had a couple of gravel trucks to haul snow in the winter and to help with road construction projects in the summer. Its old trucks were just about worn out.
If that small business were to buy a new truck, the value of the truck could be depreciated over time, but when it is purchased the GST must be paid in full upfront, even though it was entitled to some of it back in terms of the way this money goes swishing around. It is a terribly silly, useless, ill conceived and badly administered tax. It was then and it is now.
I am sorry that I have to end my remarks. Maybe I should ask for unanimous consent since no one else seems eager to speak. May I have another five minutes? I would love that.