House of Commons Hansard #99 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was seniors.

Topics

Sales Tax Amendments Act, 2006Government Orders

12:45 p.m.

Bloc

Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, I would like to thank my government colleague for his presentation on Bill C-40. Given my interest in transportation, and since I am a member of the Standing Committee on Transport, I would like him to clarify for me the air travellers security charge. How will this bill truly guarantee adequate security for air transportation? Will it actually improve security or simply provide tax breaks?

Sales Tax Amendments Act, 2006Government Orders

12:45 p.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, there is no doubt that in the past there was a need to enhance security at airports which is why the security charge was introduced that all travellers pay. That definitely goes to assisting in offsetting the cost related to the increased screening that we must do at airports. The service is provided today by over 4,000 professionals who ensure that we have safe travel across the country.

The bill deals with removing that charge on the tickets that are charitably given to families who are participating in programs like the Children's Wish Foundation and living out their dreams. For that reason, it was only practical that we remove that charge to ensure that the entire cost for these kids to fulfil their fantasies is removed and that they are truly charitable from one end of the system to the other, not just from the airlines but also that it is charitable on behalf of the government.

Sales Tax Amendments Act, 2006Government Orders

12:50 p.m.

Liberal

Alan Tonks Liberal York South—Weston, ON

Mr. Speaker, I am pleased to speak today to Bill C-40, An Act to amend the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act and to make related amendments to other Acts. As the title suggests, this probably is not the most exciting or gripping topics that we have discussed in this place but it is, nonetheless, an extremely important one, as my colleague on the other side of the House has already indicated.

Much of the bill has to do with bringing previous legislation in line with the original policy intent of the government. Much of the bill has to do with implementing previously proposed legislation that, as has been indicated, required further study. This has been done in consultation with affected individuals and industries which, as I understand, was the procedure followed in this instance and most appropriately.

Bill C-40 has three main components which I will deal with separately. The first includes new measures related to the goods and services tax and the harmonized sales tax. The second part contains amendments to the Excise Act, 2001 and other acts with respect to the taxation of tobacco, spirits and wine, a subject matter that will be of interest to more than just those in the House. Finally, the bill contains measures that affect the Air Travellers Security Charge Act.

I will begin with the first part. The bill would confirm the GST-HST exemption for speech language pathology services. Speech language pathologists can include occupational therapists, physical therapists, therapist assistants, public health nurses, child psychologists and others. Typically, they provide services to young children with communication disorders and adults in rehabilitation centres.

We on this side are glad to see that this has been done. We are also glad that the Liberals' draft GST exemption for these services will be implemented. Clearly, speech language pathology services should fall under the act of GST-HST exempt health care services.

The bill also says that the sale and importation of a blood substitute, known as plasma expander, will be zero rated for GST purposes. As my colleague from the other side has pointed out, plasma expander is a blood substitute product that is used primarily to maintain circulatory blood volume during surgical procedures or trauma care. As we all know, Canadians are very generous when it comes to our health care system and donating their blood but there is also always a pressing need for more, and that is why the Liberals proposed this change in a previous budget and began consulting with affected industries.

Bill C-40 would also broaden the specially equipped vehicle GST-HST rebate so that the rebate applies to motor vehicles that have been used subsequent to being specifically equipped for use by individuals with disabilities. This would broaden the previous government's initiative which ensured that individuals and organizations, such as municipalities, non-profit or charitable organizations and school authorities, would qualify for the rebate on purchases when payment becomes due after today or when the vehicle is imported.

The bill also affects the harmonized sales tax in Nova Scotia where the government has called for the provincial tax portion of the home buyer's rebate to be limited to $1,500. It is good to see that this bill that the government has brought forward finally acknowledges the fact that a GST-HST rebate on new housing does in fact exist.

Last spring, when the Prime Minister was touring the country lauding the savings that a 1% GST reduction would provide for a new homeowner, he conveniently happened to forget that the existence of this value program already was there. As a result, I think he somewhat inflated the amount of savings a new homeowner could expect.

In Newfoundland, I believe the Prime Minister pulled out of his hat a savings figure of $2,000 on a $200,000 home. In reality, of course, the savings are some $650 less due to the GST rebate on new housing, but facts and correct figures tend to be lost on the government when it wants people to think it is lowering their income taxes when in reality it is doing just the opposite.

It would be our position that adjustment to income taxes is perhaps a more progressive way that would remove the inequities, in particular for the working poor and those on fixed incomes, other than treating the GST this way, but we also support the reductions to the GST that have been suggested.

The final Liberal budget in 2005 announced new funding over five years to enhance federal tax compliance and enforcement in the tobacco industry. We set aside new money for enhanced markings of tobacco. I am glad to see that this bill extends requirements to identify the origin of tobacco products to all products, including those for sale at duty-free shops or for export.

I can tell members that, from comments made by those who have discussed this issue with me, tobacco contraband needs to be addressed in a serious fashion. That is why we allocated $8 million to fight tobacco contraband two years ago. I certainly hope that the current government will take up that very cause.

The final part of the bill also focuses on an initiative announced by the previous Liberal government and confirmed in this bill. It will ensure that certain air travel donated to charities through air carriers is not subject to the air travellers security charge. I think it is worthwhile to repeat what has been said previously in explanation of this by my colleague.

In the months following 9/11, the previous Liberal government jumped into action with a series of measures to improve public safety, secure our borders and ensure that the lives of Canadians and Canadian businesses could go on with as little disruption to daily life as possible. As a result, the government of that day strengthened Canada's borders dramatically. We increased security at Canadian airports with as little disruption to passengers as possible.

The air travellers security charge was levied to help pay for these upgrades. While no one particularly enjoys a new tax, I think most Canadians would agree that in February 2002 we did the right thing by instituting the air travellers security charge in order to protect Canadians.

As a side note, the current government, which at the time was comprised mostly of the Canadian Alliance Party, voted against the security charge and in fact against the creation of the Canadian Air Transport Security Authority. Liberals, however, did believe that Canadians would be willing to pay a little more to ensure that air travel in Canada was as safe as possible. As a result, I am proud to say that Canadians are in fact safer.

Furthermore, as new technology was installed at airports across Canada and new security procedures created, the cost of the program diminished as time went on. Accordingly, the Liberals used their last three budgets to lower the air travellers security charge three times so that Canadians would need to pay only what was necessary to ensure their safety on flights.

As was mentioned, this was another initiative that was started by the previous government. Lowering barriers such as the travellers security charge on donated seats, then, is an excellent way to ensure that businesses such as airlines can help charities carry out their excellent work. In Canada, there are currently over 80,000 registered charities, the vast majority of which are honest and hard-working organizations that provide valuable services for Canadians.

I am sure that Canadians were dismayed this fall when the current government chose to eliminate the charities advisory committee. The committee was comprised of members of the charitable community as well as Canada Revenue Agency employees. Together they worked to ensure that charities were aware of their obligations under the Income Tax Act. They worked to ensure that Canadians could be confident that when they donate their hard-earned money to a charitable cause, the bulk of that donation actually goes toward the cause.

Furthermore, the charities advisory committee proposed new and interesting changes to Canada's tax laws, such as eliminating the air travellers security charge when an airline donates a seat to a registered charity. I cannot recall if this proposal came from that committee, but I do know that committee members had many proposals such as this one before them and made recommendations to that effect. I do not believe that the saving of a few thousand dollars by the government in eliminating the committee is in the best interests of our charitable sector or Canadians at large.

As I said at the beginning of my remarks, this may not be the most exciting or glamorous fare that the House has had to discuss, but as we can see from what has been said thus far, these measures are all very vital and important. The vast majority of these initiatives are either a result of the consultation process set up by the previous government or a direct result of funding provided by us.

Accordingly, I am happy to support the bill, as my party will be, at second reading and further study it when it arrives at the finance committee.

Sales Tax Amendments Act, 2006Government Orders

1 p.m.

Liberal

Larry Bagnell Liberal Yukon, YT

Mr. Speaker, I have one comment on the excellent speech by my colleague. I understood from his speech that the government was in favour of reducing housing costs for Canadians, which is very admirable, but of course that is what the EnerGuide program did. The Conservatives cancelled that program and then brought it back with a smaller amount of money, so that does not help Canadians. More important, the government brought it back without the special provision and program for low income people. I would like to ask my colleague if he believes that makes any sense.

Sales Tax Amendments Act, 2006Government Orders

1 p.m.

Liberal

Alan Tonks Liberal York South—Weston, ON

Mr. Speaker, one of the areas that I also wanted to mention but had not was the provision with respect to HST-related rules. The government of Nova Scotia limits the availability of the current Nova Scotia first time buyers' rebate. I know that my colleague was not referring to this, but this is an incentive within the bill that will be targeted at low income wage earners.

To get to the point of the question, it is a question of equity. It is a question of what will be an incentive to those who need it most. The EnerGuide program was one that under the previous Liberal regime in fact was targeted. In its implementation, it was taken up by thousands of Canadians who fell within those income brackets. This was an incentive for them to purchase green products and to renovate and upgrade the standards of equipment in their homes, from furnaces through to laundry machines and so on.

The member is right in the inference that he draws. There still is a lot of work to be done with respect to the EnerGuide type of approach and trying to focus it on wage earners in this country who most need the incentives.

Sales Tax Amendments Act, 2006Government Orders

1 p.m.

Liberal

Brian Murphy Liberal Moncton—Riverview—Dieppe, NB

Mr. Speaker, while the hon. member may be correct in saying that this is not the most exciting or glamorous topic to come to the chamber of recent date, his elocution and delivery bordered on glamorous. I want to compliment him for that delivery.

However, I felt that because of time and because of the many details of this bill, he glossed over something. He started to talk about it but did not elaborate upon it. It is simply the idea that this is a very detailed bill on housekeeping, on matters of direct taxation, non-progressive taxation, which we know as the sales tax in general, and yet we on this side, along with the previous government, would certainly have preferred to concentrate on cuts to income taxes.

Could the member elaborate upon the point he started to make, which was essentially that it is much fairer to Canadians to concentrate on cutting income tax, which is levied on increased income, rather than on the HST, GST and other matters, notwithstanding his positive comments about this bill?

Sales Tax Amendments Act, 2006Government Orders

1:05 p.m.

Liberal

Alan Tonks Liberal York South—Weston, ON

Mr. Speaker, the whole notion of ad valorem taxes as they compare with progressive improvements to be made to an income tax regime have been with us as long as I can remember. One is caught in a trap if one starts to argue the qualities of one over the other, when in fact I think Canadians generally would accept the assumption that a tax that is progressive to the extent that it is aimed at and works for those wage earners and salary brackets in the lower income percentages is one that works for them.

While I did not have time to go on with respect to the comparison of the GST ad valorem approach as opposed to income tax, I think my colleague can certainly draw the inference that I particularly, and I think our party, support the fairness with respect to using the income tax as the basis for equity for and fairness to Canadians. That is not to say that the GST or ad valorem taxes do not have their place, but we should remember that the very people for whom we propose to use the funds that come from that source are the ones who will be harmed by it in the end. They are the ones who are least able to afford the luxury goods and the big ticket items that, for example, the GST as a tax is aimed at. It is counterproductive.

However, that is not to say, and it is certainly not to detract from this, that all governments should not be attempting to reduce the burden. I personally and our party, I know, favour using the income tax as the most fair and equitable way to achieve that end.

Sales Tax Amendments Act, 2006Government Orders

1:05 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, given that this is my first opportunity to address the House since the holidays, I would like to start by wishing you a happy 2007.

I would also like to wish my honourable colleagues and the citizens of my riding a happy and profitable new year.

I would now like to give an overview of Bill C-40, which is now before this House. I will first summarize the main reasons why the Bloc Québécois supports Bill C-40.

This bill addresses shortcomings associated with the GST and the excise tax. Bill C-40 removes taxes from certain medical services, which facilitates access to these services. The bill reduces the burden of taxation on charities. It also contains measures that help small wine producers. It tightens legislative provisions surrounding the sale and production of tobacco in an effort to counter smuggling. Bill C-40 reduces the air travellers security charge and will reflect the Quebec situation. That was required. For all these reasons, we will support this bill.

To briefly put things into context, this bill is divided into three large parts. It is aimed, first, at instituting corrective steps to improve and specify certain measures having to do with the collection of the GST. It also amends the act in order to zero-rate particular products and services. It turns then to the excise tax, laying out certain measures related to the taxation of wine, beer and spirits. Finally, it amends the rules on the air travellers security charge.

In the first part or the GST-HST-related measures, we find five categories or broadly distinct measures. The bill amends the rules on health, charities, business arrangements, and governments and contains certain provisions changing the way in which the GST is applied.

The first of these measures has to due with health-related rules. The bill amends the act so that speech-language pathology services are henceforth effectively zero-rated. This change confirms the tax-exempt status of these services. It will make it easier for young people with language problems to access such services.

This change will also help older people who have suffered strokes to access services that enable them to continue living in dignity.

In this same measure, the government also exempts health-related services provided in the practice of the profession of social work. This too will make it easier to access private social work services and permit people who have the means or have insurance not to pay taxes any more when they purchase the services of social workers.

Then the government zero-rates sales and importations of a product that can be used to some extent as a blood-substitute. Plasma expander makes it possible, for example, to inject a blood substitute during treatment for severe hemorrhaging, very serious burns or open fractures. Although it does not contain any red blood cells or the anticoagulants found in bagged blood, it provides an alternative during crucial treatments for seriously injured patients.

The government is also going to restore the zero-rated status of a group of drugs collectively known as benzodiazepines. These include medications such as Valium, Ativan and other similar drugs. They are used primarily to treat anxiety, for alcohol withdrawal or as a preanaesthetic medication.

Lastly, the government will offer a GST rebate on motor vehicles that have been used after being specially equipped for use by individuals with disabilities.

The second principal measure, which forms part of the same group, concerns charities. Some amendments will ensure that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied with such real property. This will mean less financial pressure on charities as they carry out their social mission.

The third measure concerns business arrangements. The amendment to the GST legislation provides transitional GST/HST relief on the initial asset transfer by a foreign bank that restructures its Canadian subsidiary into a Canadian branch. This measure will act as an incentive to foreign banks in Canada to restructure their subsidiaries as Canadian branches, which will promote more competition in the Canadian banking sector.

The bill removes technical impediments that hinder the use of existing group relief provisions under the GST/HST. This amendment simply clarifies the rules of application of the legislation that are already in effect. In addition, the bill simplifies compliance by excluding beverage container deposits that are refundable to the consumer from the GST/HST base. This will make it easier for businesses to manage collection and will lighten the regulatory burden associated with deposits, with a view to promoting more recycling and environmental protection.

This is not a very impressive measure from the current government, but it is a step in the right direction for the environment. We hope that this government will go a bit further and take a more serious approach to the environment. On the whole, this seems promising.

On a more technical level, the bill permits an agent to claim a GST/HST deduction for bad debts, and to claim adjustments or refunds of tax, in respect of sales made on behalf of a principal where the agent collects and reports tax.

Another measure extends the existing agent rules under the GST/HST legislation to persons acting only as billing agents for vendors.

Another measure will better accommodate special import arrangements between businesses in certain situations where goods are supplied outside Canada to a Canadian customer. We will also ensure that GST/HST group relief rules cannot be used to exempt from GST/HST otherwise taxable clearing services that are provided by a group member to a closely related financial institution who will then re-supply those services on an exempt basis to a third-party purchaser outside the group.

The measure also clarifies the treatment of the right to use certain types of amusement or entertainment devices, such as the playing of a game, when it is provided through the operation of a mechanical coin-operated device that can accept only a single coin of twenty-five cents or less as the total consideration for the supply. Finally, it confirms the policy intent and Canada Revenue Agency’s existing practice that no GST/HST or provincial sales taxes on a passenger vehicle are included in calculating the maximum allowable value for input tax credit purposes.

The fourth measure relates to governments. First, it will exempt a supply of a right to file or retrieve a document or information stored in an electronic official registry. That will thus allow municipalities and government agencies to supply information to citizens at a better cost, which in turn will increase access to information.

The new legislation will also ensure that a small supplier division of a municipality is treated in the same manner as a municipality that is a small supplier. Thus, the fairness of treatment will be respected.

The fifth measure, always in the same group, deals with the change in the implementation processes of the legislation. First, the bill will provide the Minister of National Revenue with the discretionary power to accept late-filed applications for the GST new housing rebate and the Nova Scotia HST new housing rebate for owner-built homes, where exceptional circumstances have prevented an application from meeting the normal filing deadline. Second, the Minister of National Revenue will have the discretionary power to accept late-filed elections between closely related financial institutions for adjustments that they are required to make for the provincial component of the HST.

As for the exchange of information, the bill authorizes the Minister of National Revenue to exchange GST-HST information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters. Thus, the government will be better able to fight tax evasion.

Finally, the bill gives the Chief Statistician of Canada the discretionary power to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act. This new power will give provinces a better access to income statistics, which will allow them to better focus their public policies. This is the first group, which is quite technical, as is the bill as a whole.

Part two of the bill contains a series of measures dealing with excise taxes. Those measures amend the Excise Act 2001 to implement minor refinements that will improve the operation of the act and more accurately reflect current industry and administrative practices. They also implement related and consequential amendments to the Access to Information Act, the Customs Act, the Customs Tariff and the Excise Tax Act.

Since it is very technical and we do not have a lot of time, I will not go into detail. The first of the principal measures deals with tobacco and seeks to give greater precision to certain provisions contained in the Excise Tax Act in order to better defend against the smuggling of tobacco products and facilitate collection of taxes on tobacco. The bill includes measures to extend the requirement to identify the origin of tobacco products to all products, including those sold at duty-free shops or for export, consistent with the Framework Convention on Tobacco Control, an international agreement. It also specifies that cigarettes, tobacco sticks, fine-cut tobacco or cigars, but not packaged raw leaf tobacco, may be supplied to the export market or the domestic duty-free market.

The second measure concerns alcohol. The bill has two main objectives. First, it authorizes provincial liquor boards and vintners to possess a still or similar equipment, for the purpose of analyzing substances containing ethyl alcohol without holding a spirits licence. This measure aims to avoid the administrative burden and cost of requiring provincial liquor boards and vintners to obtain a permit. In addition, to encourage the growth of the wine industry in Canada, the government will defer payment of duty by small vintners who sell wine on consignment in retail stores operated by an association of vintners until the wine is sold. As a result, when small producers offer their products in a store operated by a producers’ association, they will not have to pay GST until the product is sold. This measure encourages our home-grown industry and the Bloc Québécois is very happy about that.

I would like to make a small aside concerning the wine industry in Quebec. That industry is represented by the Association des Vignerons du Québec. In 2006, the association was made up of 42 wine growers operating in the regions of Québec, de Lanaudière, the Eastern Townships, Montérégie and the Basses-Laurentides.

Unfortunately, as you can well imagine, no Quebec wine is produced in Montreal, in the region where I live and where my riding is located. To make up for it, we enjoy these Quebec wines that keep on getting better year after year. In any event, I try to do my part.

More than 100 hectares of vines are harvested annually. Nearly 300,000 bottles of wine are produced every year. The main products are white wine, ice wine and fortified wine.

As far as the application of the bill is concerned, as in the previous section, the new legislation permits the Minister of National Revenue to exchange excise tax information with foreign governments that are signatories to the Convention on Mutual Administrative Assistance in Tax Matters. The bill also adds a discretionary power for the Chief Statistician of Canada to provide statistical information concerning business activities to the provinces similar to an existing provision in the Income Tax Act.

Finally, the third part includes measures on the air travellers security charge. These were implemented a few years ago after the unfortunate events of September 11. These measures have to do with the air travellers security charge and are in part 3 of the bill. They include the announced relief measures and minor changes to the Air Travellers Security Charge Act.

There are two main measures. The first is tax relief. The bill relieves, in particular circumstances, the air travellers security charge in respect of air travel sold by resellers or donated by air carriers. From an administrative point of view, the bill provides authority for the Governor in Council to add, delete or vary by regulation the schedule of listed airports. Thus, the bill will change the status of three of Quebec's airports in order to ensure that standards meet market demand.

So the bill is going to remove La Grande-3 and La Grande-4, in Northern Quebec, from the list of airports subject to the surtax arising from the Air Travellers Security Charge Act. This measure reflects the very special nature of these airports. However, the amazing increase in air traffic at the Mont-Tremblant airport has meant that the minister has decided to include it in the list of airports now subject to the Air Travellers Security Charge.

This is a very technical bill and the Bloc Québécois supports its principles because of the various measures it contains. We are also glad that some measures concerning the GST act have not been included. These are some of the measures announced by the government concerning its intention to abolish GST refunds for foreign visitors. I have to say that we are very pleased that this is not included in this bill because we think that it is a bad measure and that it would punish the tourism industry in Quebec unduly. We hope that the government will have the wisdom to forget this measure entirely and that we never have to debate it in this House. It would be a huge problem.

I would like to end simply by saying that we are going to support this bill because it is designed to correct the technical shortcomings and differences pertaining to other laws, including the GST act and the one on Excise Tax. The tax is going to be removed from certain medial services so as to facilitate access to them and lighten the tax burden for charitable organizations.

There will be measures to support small wine producers; to tighten up legislation on the sale of tobacco products with a view to counteracting smuggling; and to adjust the Air Travellers Security Charge to the situation in Quebec.

Sales Tax Amendments Act, 2006Government Orders

1:25 p.m.

Bloc

Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, I would like to congratulate my college from Jeanne-Le Ber on his excellent speech. We can see the great experience that he has gained as deputy critic for finance.

It seems obvious to me that this is an interesting bill that responds to many demands. However, concerning the provision dealing with vintners, which simply defers a goods and services tax until the wine is sold, when products are on consignment in stores operated by an association, does he not think that the bill could go further in order to encourage our local wine producers, who bring so much to our country 8and who also create jobs?

Would it be possible to look at a GST exemption for the production of these wines?

Sales Tax Amendments Act, 2006Government Orders

1:25 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, I would like to thank the hon. member for his excellent question.

It is clear that we could do more to support the small wine producers in Quebec. Nonetheless, this is a measure that goes in the right direction.

For the small producer, the stock that is sometimes divided among several outlets can be a major burden. Not having to pay the tax in advance on the products in stock is certainly an advantage, but the situation could be further improved.

In another bill, the government answered a longstanding demand from the Bloc by changing the excise tax regime for microbreweries and wine producers. We think that measure will help microbreweries and wine producers in Quebec.

Of course, the Bloc Quebecois will continue to put propositions forward and we hope that the government will continue to implement them for the benefit of Quebeckers.

Sales Tax Amendments Act, 2006Government Orders

1:30 p.m.

Liberal

Larry Bagnell Liberal Yukon, YT

Mr. Speaker, the member is the critic for finance and is doing an excellent job. Does he believe the government should reinstate the rebate of GST for travellers from overseas who come to Canada to attend conferences?

My riding may perhaps be the only one in the country where the biggest private sector employer is tourism. Getting rid of the exemption for the GST has certainly hurt the tourism industry across Canada. An extensive study has been done on that. At the same time, the government cut marketing for tourism and money for museums, which is very important for tourism.

Does the member agree with those cuts and should they have perhaps been reinstated in this bill?

Sales Tax Amendments Act, 2006Government Orders

1:30 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, much of my answer was already in my speech. This measure was announced, but so far no legislation has been passed. That is why I said in my speech I was happy to see that it was not included in the bill. I hope that it will never be introduced in the House. I do not think that it is good to eliminate the exemption for tourists who come and purchase products here and then take them back to their country of origin.

What is particularly striking in this government proposal is that it is based on unreliable data. They say that the program is ineffective because—if memory serves—only 4% of travellers make use of it. Obviously, though, this is not the right way to assess the program’s effectiveness. We have to do our calculations properly.

First, when a group of people travel together, usually only one person claims the credit. When a family of four buys a certain number of items, they obviously do not fill out four applications when they reach the border, just one. The government’s figures are therefore wrong.

Second, we need to compare the amount of the credit that is requested in dollars with what travellers are actually entitled to request in dollars. If a tourist comes to Canada to spend a weekend in Montreal and returns to the United States without having purchased any goods, he will obviously not apply for a credit to which he is not entitled. This does not mean, though, that the program was ineffective. We would have to be able to make the comparison in dollar terms to assess the effectiveness of the program, and we would also have to discuss it at the Standing Committee on Finance.

Third, there is the entire marketing aspect of this provision. Companies rely on it a lot. For example, they use the postal rebate.

Companies that offer a postal rebate know very well that there will always be a large number of consumers who never claim it. They buy the product because they are entitled to a postal rebate, but then forget to claim it. This does not mean that the marketing strategy was unsuccessful. The same applies to the GST visitor rebate: the fact that people do not claim it does not mean that the program did not work.

Sales Tax Amendments Act, 2006Government Orders

1:30 p.m.

NDP

David Christopherson NDP Hamilton Centre, ON

Mr. Speaker, I appreciate the opportunity to join in the debate.

Let me begin by saying that we have a lot of paperwork here. It is a big bill. There is the bill itself and the explanatory notes that go with it. The bottom line is, though, that most of this is indeed housekeeping. It happens in all parliaments and all governments that from time to time there is a need to bring things up to speed, to perhaps reflect an unfairness that has been identified that does justify its own bill. Often it is a matter of other changes that have been made and now we are catching up with the legislation, either with numbers or words. Primarily, that is what we found here.

Once we get into committee, we reserve the right to acknowledge that there may be problems that have not come to our attention. Certainly, we would encourage anybody impacted, any industry, any business, any individual anywhere who is affected by this in a negative way that we have not yet sussed out, by all means to give us a shout. It will go to committee and we will get a chance to deal with it there.

It would seem on the surface, as my colleague from the Bloc has pointed out, that this is indeed a housekeeping bill and by rights should not warrant us all getting ourselves twisted up in this minority government. We have bigger fish to fry and more important things to deal with. However, it does give us an opportunity to speak to what has happened so far.

I agree with much of what my colleague from the Bloc had to say. We view it very similarly in that some of the best things about it is what is not in there. The whole notion of cutting the rebate for tourists coming here and allowing them to apply for the GST rebate was a foolish suggestion, absolutely foolish. It is amazing it got as far as being announced in the throne speech that it would be put in the original budget document. It is a really dumb idea.

Number one, it is not that much money, and second, as has already been pointed out, not everybody applies for it. It is more a matter of being a selling point to say that it is available to people, particularly when conferences, conventions, trade associations meet with local officials to determine where they can get the best deal. If we are comparing Canada to any other country, this is an opportunity for our competitor countries to point out quietly that Canada used to be pretty good, but look at some of the things it has done now. That hurts. It hurts more than the reality of the money that is lost, actually.

Conversely, it has the ability to be used as a marketing tool to say to the world that we have a beautiful country, we are very fortunate, we are blessed, and we offer the world to come and enjoy. People should come and visit with their families. Whether it is for business, pleasure or a combination, Canada is a place that should be on the short list of convention destinations. Leaving the rebate in place is a part of being able to sell Canada around the world.

We should make no mistake, to a community like my home town of Hamilton, conventions are a huge part of our local economy, more than people might think. Again, it is because of the proximity to Toronto. I have nothing to say against our good friends in Toronto, but costs are a little higher there and we are able to provide some things that Toronto cannot at a lower price. It still provides us with access to Niagara Falls, a world renowned beauty, as well as all the media centre that exists in Toronto, so there are a lot of good reasons why Hamilton is an important destination, usually for medium sized conventions and conferences. For the truly large ones, it makes sense they would go to the larger capitals of the country.

However, it is important to Hamilton and it is important to Canada. It is good that it is not in here. Let us hope we never hear from it again. We do not want to hear about it because it is a bad idea.

It is interesting, when we look at the website of the hon. the House leader of the government, there is a news release dated September 6, 2005, which of course was before the election. I would just take a moment to point out that the government of the day, the Conservatives, had a lot to say when they were in opposition about taxes in terms of gasoline, stating all they would do, rightly pointing out that the Liberals were not doing anything, but making all kinds of commitments.

I will read it in part. It states:

Part of the gas price is a series of provincial and Federal taxes. Two components of the Federal Government’s taxes on gas are actually quite offensive. For some time, we have been calling on them to be eliminated. The first is best described as a “tax on a tax”. The feds impose both an excise tax (the gas tax) and they also impose the GST, just like they do on everything else. Fair enough, so far. But unbelievably, the Feds actually charge the GST on the excise tax portion of the gas price, as well as on the commodity. You actually pay the GST on the provincial and federal excise tax as part of the gas price, a tax on a tax.

It goes on and on. It makes another point about the evils of what is in place right now. It condemns the Liberals further for doing nothing, which is accurate, and then it goes on to say all the great things a Conservative government would do. Well, they are not in here. The Conservatives are good at the promises when it comes to gas and taxes, and like usual, they make a much better argument on paper than they do in law and this is another reflection of that.

I might also add that the big economic move, the last big real supposedly huge change that the government made was to cut the GST. The Conservatives are going to talk about that in the upcoming election, whenever that is. They are going to go on and on, but what is surprising for the average Canadian is that it cost us almost $5 billion a year. A tax cut is a tax expenditure. When we make a choice to have a tax cut, it is exactly the same as saying we could spend the $4.5 billion on health care, on child care or cleaning up the environment.

When we put a tax cut in place, it is a trade-off for a whole host of things that would impact Canadians' lives. That is not going to happen. I ask any Canadian watching to think about how many times in his or her life since that change was made has the reduction in the GST made a noticeable difference in his or her disposable income. I would say that for the most part, unless one made a really big major purchase, one is not going to see it.

If one is in the position to make a purchase like that it is not for the most part where we need the stimulation in the economy. That is certainly not where we need extra money. We need more money in the hands of ordinary working Canadians. Those who do not have jobs need some means of having money in their pockets to survive.

The close to $5 billion could have been far better spent on investments that would really improve the quality of life for all Canadians, not just the select few who are going out to replace their 50-foot yacht with a 60-foot yacht.

When the government talks about planning to do that again, I remind colleagues in the House that they are planning to do another cut sometime. Just remember, that as appealing as it might sound at first, taxpayers should ask themselves as citizens whether that last tax cut really improved life in any noticeable way, put any extra money in their pockets or allowed parents to give their kids a little extra money for what they need. These are the priorities for Canadians.

The next time we start talking about the second round, we intend in the NDP to ensure that we talk about not just how much it costs for this GST tax cut that is supposed to be coming but to also put beside that the alternative of what could be done with $4 billion to $5 billion a year at a time when so many Canadians are facing so many challenges. That money could be much better spent, much more along the lines of the NDP budget that we brought in a year and a half ago where we diverted money from profit-making corporations into investments in housing, education and in terms of environmental cleanup. Those are the priorities.

When we talk about this innocuous bill, it is important to talk about what is not in it that is both good and bad unless and until we get into committee and somebody points out to us a huge problem that we have not yet identified. And that could be, I say that very openly. Unless that happens for the most part, we have a bill that need not tie up this minority government and keep us away from the priorities that we have all identified, not the least of which is cleaning up the environment in Canada and ensuring that we have a national agenda that addresses properly greenhouse gas emissions.

Those are the priorities. The government has our support in principle at this point. However, on the notion of another GST cut, if there is $4 billion or $5 billion available in the budget, that money can go to more important priorities than just making sure that the very well off in the country get yet another tax cut.

That is not what is needed. What is needed is investment in the areas that we have responsibility for that can actually improve the lives of Canadians from coast to coast to coast. That should be the priority of the House. To that degree, we intend to move forward with that understanding on Bill C-40, unless of course things should change. As we all know, in a minority Parliament they could.

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Blackstrap Saskatchewan

Conservative

Lynne Yelich ConservativeParliamentary Secretary to the Minister of Human Resources and Social Development

Mr. Speaker, when the member talks about how little the two cent cut was in GST, I would like him to come to Saskatchewan and tell our premier that. His gift to the taxpayers of Saskatchewan was to close hospitals and shut down schools, and the roads are turning into prairie trails. What did our premier do? He took two cents off the sales tax and never made investments back into our province.

While our population is declining and our producers are having a difficult time with some of the difficulties with our agriculture safety nets, our premier does nothing but take two cents off the PST, the provincial sales tax. How does that square up with the member's philosophy?

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NDP

David Christopherson NDP Hamilton Centre, ON

Mr. Speaker, inasmuch as she might like to have a provincial debate on Saskatchewan here on the floor of the House of Commons, that is not going to happen. The reality is that the governments in the provinces will govern as they deem in the best interests of their citizens.

However, let me say two things. First, it does not change one bit the fact that in our opinion, as the national NDP caucus, if we had up to $5 billion to invest, it would not be in a GST tax cut. That would not be our priority. There are other priorities for Canadians. Second, in terms of the agenda of the Government of Saskatchewan versus the agenda of the Conservatives of Canada, I will take the NDP agenda in Saskatchewan 10 times out of 10 over this agenda.

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Liberal

Larry Bagnell Liberal Yukon, YT

Mr. Speaker, the member mentioned the GST and I would like to ask him a short question. When the 1% cut in GST came in for low income people who could not afford to spend money on things to reap that benefit, it was not that helpful. However, the day the GST cut came in the income tax went up for low income people from 12% to 12.5%. I would like to ask the member, does he think that was fair, was that in the spirit of the generosity of Canada, and was that was good public policy?

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NDP

David Christopherson NDP Hamilton Centre, ON

Mr. Speaker, I would agree with the member that if we look at what has happened overall in Canada in the last 10 to 15 years, there was a major article over the weekend either in Maclean's or the Toronto Star. It might have been by Thomas Walkom. It was really good and talked about--

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Some hon. members

Oh, oh!

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NDP

David Christopherson NDP Hamilton Centre, ON

Mr. Speaker, some of the government members are laughing and they would when these sort of things come up and we talk about unfairness because, quite frankly, if I were on the side that had everything, I would laugh if I heard someone representing the other side because we would not want it to take hold would we? The reality is that in Canada under the Conservatives and the Liberals, the old adage--and it is old--still rings true: the poor are getting poorer and there are more of them, and the rich are getting a lot richer.

The tax cuts that have taken place in the last decade in most governments have benefited the very wealthy far more than they have benefited the poor. When the government talks about tax cuts, nine times out of ten the real benefit is for those who already have. It is so tough for an ordinary working family, let alone someone who is in poverty, who cannot find employment, who cannot find hope anywhere, to have a voice in this place other than the odd little crumb that gets tossed overboard and the government says, “See? We care about the poor”.

What we really need is fundamental change in terms of fairness. The question is, is everybody in Canada being treated fairly by our tax system? The answer is no.

As we see the Conservative government's agenda so far and its plans going into the future, I say to the hon. member who asked me the question that they are not going to change. They are not going to benefit the very people he was asking about, but indeed, the government will take care of its Conservative friends. It will make them very happy and will help them to continue putting money into their war chest and hence the laughter and hence the Conservative agenda.

The poor are not served well--

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Conservative

The Acting Speaker Conservative Andrew Scheer

Order. Questions and comments. The hon. Parliamentary Secretary to the Minister of Public Works.

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Port Moody—Westwood—Port Coquitlam B.C.

Conservative

James Moore ConservativeParliamentary Secretary to the Minister of Public Works and Government Services and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics

Mr. Speaker, I believe that in 2007 the NDP is going to celebrate the 75th anniversary of the creation of the CCF and the NDP. I want to congratulate the member for Hamilton Centre for giving a speech demonstrating why in 75 years the NDP has never formed the government of this country.

He mentioned the fact that in our budget we cut the GST. We did and we are proud and we are going to do it again.

In our budget we cut taxes 29 times, and it was not just cutting the GST. We did help families, the very people that he brags and talks about, people who need help and who need support from the government. We are standing up for them.

I know for a fact that my sister and my little niece, Abby, love the fact that our government is giving her $1,200 a year. Our family loves the fact that they are going to get $500 to alleviate the costs of amateur sport. Businesses in my riding love the fact that they are going to get the tax credit necessary to help trades.

We had 29 tax cuts to help small businesses, to help families, to help kids, and to do the things that this country needs to keep moving in the right direction.

In 75 years the NDP has been wrong in every major economic decision in this country. The NDP was on the wrong side of the free trade agreement, the wrong side of NAFTA, the wrong side of this budget, the wrong side of tax policy. I congratulate the NDP for pointing that out so those members can stay in that little corner over there for 75 more years.

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NDP

David Christopherson NDP Hamilton Centre, ON

Mr. Speaker, that is interesting and it is fun and I appreciate the time that the parliamentary secretary has taken, but there are a couple of things.

First of all, your $1,200 a year, sure, who is not going to be happy if they get a cheque for 1,200 bucks a year, $100 a month? Are people going to say no? But that does not address the need that hundreds of thousands if not millions of women in particular are facing in terms of trying to find adequate, healthy child care that is affordable so they can go on and build the kind of life that you already have. Your $1,200 was a buy-off. It was not a child care system.

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Conservative

The Acting Speaker Conservative Andrew Scheer

I remind the hon. member that it was not my $1,200. The member should address his comments through the Chair and refer to the hon. parliamentary secretary by either his title or by his riding name.

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NDP

David Christopherson NDP Hamilton Centre, ON

Thank you, Mr. Speaker, I am sliding back into Queen's Park ways. I apologize and will try to be more vigilant.

The member talked about the fact that he is pleased we are over here and that we have not formed the government. We would have liked that opportunity and we still strive toward that, but were it not for a small and sometimes smaller NDP caucus in this House, were it not for the fact that the NDP and the CCF were here, we would not have the Canada pension plan. We would not have our universal health care plan. We would not have an employment insurance system that is meant to help unemployed workers.

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Some hon. members

Oh, oh!