Mr. Speaker, on behalf of the constituents of Surrey Central, I am pleased to participate in the debate today on Bill C-13, the sales tax and excise tax amendments.
Mr. Speaker, I point out that I will be sharing my time with the hon. member for Richmond.
The bill we are debating today has been before committee and is now going through its final debate in the House. The purpose of the bill is to simplify the tax code, but probably not to the extent Canadians would like. The measures are aimed principally at improving the operation and fairness of the GST or HST in affected areas and ensuring the legislation accords with the policy intent.
Bill C-13 implements two amendments to the Excise Tax Act. The first clarifies the deferral of tax on various automobiles and car products to the time of sale or importation to a manufacturer. The amendment is made to clarify the deferral of existing excise taxes on air conditioners, for example, installed in automobiles and on new heavy automobiles at the time of importation by a licensed manufacturer or sale to a licensed manufacturer.
The second amendment provides the Minister of National Revenue with he discretionary power to waive or cancel interest and/or penalties. The second amendment provides discretionary power to the minister, as I have said, to cancel penalties calculated in the same manner as interest under the excise tax system, which is consistent with the discretion already provided to the minister in relation to the sales tax and income tax systems.
The primary goal of the bill is therefore to correct some administrative oversights in the February 2000 budget concerning the application of the GST and HST. The bill is technical amending legislation. The official opposition therefore supports the bill, but we believe the government could have done more to address other pertinent issues relating to taxes.
There are a number of GST and HST measures in the bill. I will briefly describe them. The export distribution centre and export trading house programs amendment would implement new rules that ensure the GST and HST do not impede North American distribution centres in Canada. Businesses would be able to purchase or import inventory and customer goods on a tax-free basis rather than having to pay the tax and later claim a refund. This might help combat fraud, which is unfortunately part of the system.
The non-residents and cross-border transactions amendment ensures that no tax is payable on goods imported solely as replacements under warranty. It also ensures there is no tax on the service of storing goods for a non-resident business.
Another point is that the real property amendment implements the new residential rental property rebate, which is a partial rebate of GST on newly constructed or substantially renovated long term residential rental accommodation. I see many such accommodations in my constituency of Surrey Central. The builders or the people involved in that kind of construction will feel some relief in that area.
That is important because it permits a credit for work done on a new home used primarily as a place of residence or as short term public accommodation, for example a bed and breakfast establishment. Such establishments will get some sort of relief. That is particularly important because the previous rules disallowed homeowners the credit if they ran small businesses out of their homes.
There are other amendments. The health amendment continues to be in force. There are GST and HST exemptions for speech therapy services that are billed by individual practitioners and not covered by the applicable provincial health care plan. The bill will provide some relief for people who use such therapies.
The education amendment ensures that similar vocational training across the country is provided the same exempt treatment, regardless of how vocational schools are regulated in each province.
The electronic filing amendment removes the requirement to apply to the Minister of National Revenue for permission to file GST or HST returns electronically over the telephone or Internet. Canadians are busy preparing their tax returns. If the bill is put into place it will probably give relief to people who must seek such permission. It allows anyone to file taxes that way, provided they meet the criteria set out by the minister.
Finally, there are miscellaneous amendments which correct ambiguities in existing provisions consistent with current industry practice, administrative interpretation and the underlying policy intent. These are some of the areas the bill focuses on.
For those who are watching I will quote from the Canadian Alliance policy, which is the grassroots members' policy.
We will restore public confidence in the fairness of the Canadian tax system by reducing its complexity. We will restore indexation and move towards a simpler tax system, built around a single rate of taxation to ensure lower taxes for all Canadians. We believe that all Canadians above a minimum income level should share in the cost of the services provided by government, which benefit us all.
There are other areas of concern. I was talking with my constituents during the two week break. They are concerned about gas prices because there are taxes on taxes on taxes. I regret that the sharp spike in the price of home heating oil and gasoline, which has hit us all so hard, is not addressed in the bill.
Canadians suffered this winter in the cold climate. The Liberals did not foresee or prevent the 70% hike in natural gas prices, which they should have if they had prudent practices in place. They did nothing about it except send out cheques for a couple of hundred dollars. The government completely missed the target. Instead of sending cheques to those most in need of assistance it sent them to people who probably do not pay heating bills such as students, prisoners and even deceased Canadians.
The Liberal finance minister has no sympathy for our seniors or for persons on fixed incomes. These people have so little money that they must choose between filling prescriptions, buying food or paying for heat. It is the Liberal government's fault because the government keeps our taxes high and our dollar weak. We are being hurt twice.
It is the tax on gas which has driven the price upward. The price we pay at the gas pumps includes a tremendous amount of tax. The price of crude gas is something like 29 cents, but these days we are paying 74 cents or so at the pumps.
That is why when the price of gas or oil on the world market is hiked we feel it more. Not only is the price hiked but the taxes go up accordingly. That exacerbates the increase in the wholesale price.
First, we have the federal excise and sales tax on gas. On top of that we have a provincial excise tax. On top of that we have a provincial sales tax. On top of all that we have the 7% GST. In other words, we are paying GST on the taxes as well which is wrong. We have a tax on a tax on tax on a tax. That is the kind of system we have in gas pricing and that is very unfair.
My province of British Columbia gets less than 5% of the amount of federal taxes paid on gas for transportation and infrastructure development. The federal Liberals rake in about $700 million a year in fuel taxes from British Columbia alone, and this is the only province that does not have any four lane highways. We cannot even buy enough street lamps with the 5% the federal Liberals are returning to us for transportation and infrastructure development. That is the kind of situation we are facing with respect to that particular area.
However, we support this bill but we again urge the government to lower taxes for Canadian families, consumers and small businesses. Those lower taxes will help boost our economy. We want lower taxes and a simplified tax code. Our tax code is very complicated, probably one of the most complicated of any country which I have visited or heard about.
The clarifications in Bill C-13 should only be a temporary measure on the road to tax reform. The steps are in the right direction but they are baby steps.
The provisions of Bill C-13 enact corrections to last year's budget and the fall mini budget. The government should be moving toward simplifying and broadening the base of the tax code. If the tax code was simplified, endless exemptions and further clarifications would not be necessary. There may not be any need to do what we are doing today.
From this point, lowering the taxes of all Canadians will have a far more positive impact for everyone. With the exception of the new residential rental property debate, the amendments will have little impact on the government's revenue. Expected costs for the new residential rental property rebate are estimated at $15 million for 2000-01, $40 million for 2001-02 and $45 million for subsequent years.
In conclusion, we will support the bill but we remind the government that it should lower taxes for Canadians and simplify the tax code. I believe Canada can be a competitive leader in the global economy of the future and I believe Canadians can enjoy a higher standard of living and a better quality of life.
However to get there we must blaze a trail of tax relief and debt reduction. We need to lower taxes such as payroll taxes. We need to cut the tax on investing. We should not be penalizing those investors who invest in Canada, who boost our economy and who help create jobs.
We should cut the taxes on high tech businesses. It is time these businesses be promoted. That is where our future lies. That is where more jobs will be created. However the government does not realize that we have to cut taxes for high tech businesses as well as small businesses. Ninety-six per cent of jobs are created by small businesses.
These are some of the points I wanted to add to this debate.