Mr. Speaker, we have before us an extremely technical bill. It contains a whole series of measures. In terms of necessary adjustments, as well as the collection of GST and the various excise taxes, it is definitely a bill that makes sense. And this is why the Bloc Québécois will support it.
However we must say that it is not the most exciting of bills. Accordingly I found it quite characteristic, significant and symptomatic that the previous member should broach matters pertaining of course to finance, but that raise rather more issues than this necessary bill which, as I mentioned earlier, is not all that exciting.
Before going any further in describing the bill and the Bloc Québécois' assessment of it, I would point out, as the previous member did, that we in the Bloc Québécois are extremely concerned about the Conservative government’s decision to take another look at the visitor rebate program.
We know that a notice of ways and means was announced in this connection, but that it has not yet been put to a vote, which is a good thing. I hope that it is because the Conservatives have realized that they were on the wrong track, since this program is found in more or less all countries seeking to have a vibrant and productive tourism industry. It is a bit strange that the government and the Minister of Finance should want to reconsider a program that many countries are thinking about putting in place to attract, in particular, international conventions and groups coming from abroad.
So I take this opportunity to ask the Minister of Finance and the government to think carefully about what they hope to achieve by reconsidering this program. For example, when we go to Europe, everyone is very familiar with this program. Mexico is thinking of setting up an equivalent. So careful thought has to be given to the place of Canada and Quebec as tourist destinations, at a time when the Canadian dollar has risen significantly. Abolishing this program would increase the costs of large conventions in particular by 6%.
Obviously, there is probably room for improvement in this program. I hope that in the next budget, or at another time, the Conservative government will implement an effective program with the same objectives, in other words, to encourage conferences and groups of foreign tourists to come here.
There is another comment I want to make about this bill. It has to do with the fiscal imbalance and the reductions in the GST. We know full well that during the election campaign the Prime Minister announced a reduction in the GST from 7% to 6% and then from 6% to 5%. On July 1, we had the first reduction from 7% to 6% and were told that in a few years time there would be a second reduction from 6% to 5%.
I want to take this opportunity to warn the Prime Minister and the Minister of Finance against confusing the issue of resolving the fiscal imbalance with the issue of reducing the tax burden on Canadian and Quebec taxpayers.
I remember the election campaign very well. The Prime Minister was a candidate and leader of the Conservative Party and made his GST reduction announcement standing next to a cash register. In no way could this reduction be interpreted as the tax room that could have been left to the provinces who wanted it to resolve in part—since this is not enough—the fiscal imbalance.
I am therefore warning the government and the Minister of Finance not to try to have it both ways in the next budget by announcing the reduction of the GST from 6% to 5% and by announcing that the provinces, such as Quebec—perhaps—that want to recover this tax room, will be able to do so as part of a solution to the fiscal imbalance. This would be totally unacceptable. It would be unbelievably cynical. I think the public, Quebeckers in particular, would not fall for it. I prefer to let the Minister of Finance and the Prime Minister know right away that such a move would be totally unacceptable to the Bloc Québécois.
This bill has given me the opportunity to relay my two messages. I hope they will be heard.
I will now talk a little about what is in Bill C-40. This bill amends both the GST and the excise tax collection. It is comprised of four parts. First, some changes are aimed at improving and specifying certain measures pertaining to the collection of the GST. Second, the act is being changed to exempt certain goods and services from the tax, particularly medical and social services. I will get back to this. Third, the government is amending the excise tax to specify different measures concerning the taxation of wine, beer and spirits. Finally, a fourth part changes the rules pertaining to the air travellers security charge, a charge that is currently collected at different airports.
Let us start by examining in greater detail the bill as it concerns the measures affecting the GST and the harmonized sales tax. In Quebec, it is the Quebec sales tax. These measures are comprised of five distinct categories. Thus, the bill changes the rules concerning health, charities and business arrangements. These rules also affect governments, particularly municipalities. Furthermore, some provisions change the GST administration process.
Concerning health measures, the first category under the goods and services tax, the government is amending the act so that speech-language pathology services will now be tax exempted. For parents who use speech-language pathology services because their children have language difficulties, this is excellent news. This will make it easier to access these services and minimize costs. This is true for parents of children with speech problems, but also for many of our fellow citizens who have had strokes. Often, they are forced to re-learn to speak and also need speech-language pathology services. In a sense, costs will also be reduced there and access to these services will be easier.
I think it is interesting that in its bill, the government decided to exempt health-related services rendered in the practise of the profession of social work from the GST. Here too, there may be groups, institutions, families and individuals who need the expertise of a social worker. They will no longer have to pay the GST. For people who have insurance, this means their deductible will be lower. Insurance rarely covers the entire cost of social workers. This reduction would therefore apply to the cost paid by the institution, the organization or the individuals for the services of a social worker.
Next, in its bill, the government wants to zero-rate sales and importations of a product that can, to a certain extent, replace blood. This product, plasma expander, is a blood substitute that can be injected during treatment of major hemorrhaging, serious burns or open fractures. Although they do not contain the red blood cells and anticoagulants found in blood, these substitutes offer an alternative at various stages of critical intervention to save the lives of seriously injured patients. Here too, I think it is simply humane to exempt these products from the GST, an indirect taxation measure.
The government will also zero-rate a group of drugs known as benzodiazepines, which includes Valium, Ativan and other similar drugs.
These drugs are used to treat anxiety, for example, during withdrawal in cases of detox, and as preanaesthetic medication. Once again, it is simply of question of humanity to not tax these products, which are used in extremely difficult situations and when there is no other choice. It is not a matter of saying: “Should I take this or not?” The patient has no choice but to use these products.
Lastly, the government is going to rebate the GST on motor vehicles that have been used subsequent to being specially equipped for use by individuals with disabilities. We see a number of amendments on the health side that are most welcome, that are not likely to be the subject of any history classes in the future, but that are certainly consistent with common sense.
As for charities, that is the second category regarding the GST and other sales tax. These amendments will ensure that the exemption of supplies by charities of real property under short-term leases and licences extends to any goods supplied together with such real property. For example, a charity leases a building and, at the same time, leases a photocopier, phone service and computer system. At present, those products must be supplied not only at a cost, but taxes must also be paid on those goods and services. Charities will be able to use the same supplies without paying the GST. Obviously, anything that can help reduce the operating costs of charities is most welcome. In that sense, this is also a step in the right direction. A step, once again, that will not answer all of the funding problems facing charities in terms of the support they need from our government, but at least some openness has been shown in this regard. Let us hope that the government will take such steps even further in the future.
As for business arrangements, I think there are some good changes. A foreign bank that has a subsidiary in Canada will now be able to restructure it into a Canadian branch in its own right and enjoy GST relief during a transitional period.
The Finance Committee, this House and the various governments we have witnessed recently have all tried to foster competition in the financial institution sector and especially among banks. Unfortunately, though, there is still not enough competition for us to really speak of a marketplace where supply and demand play a key role. We know very well—and have had recurrent debates about it—that many of the bank fees added over the last few years are due to the fact we have oligopolistic competition, that is to say, just a few big players, especially five large Canadian banks. Despite the legislative changes made over the years to encourage the establishment of banks or foreign banks to move to Canada, there is still not enough competition to generate sufficient pressure to ensure that consumers get their money’s worth. There are certain other group relief provisions as well, but I will not get into that.
In another area, the bill simplifies the application of the GST to beverage container deposits refundable to the consumer because this was a rather bureaucratic obstacle to recycling and the collection of the tax on these cans. This measure excludes the container deposit from the GST and will thereby facilitate recycling, the protection of the environment, and the lives of all the small retailers who now handle these deposit returns.
There are a few other technical measures as well. For example, there are provisions on agents who sell products and have bad debts that they cannot recover. When this happens, they will have GST deductions.
The same applies to persons acting as billing agents—they are not the ones who will have to pay the GST—and for special arrangements between businesses in certain situations where goods are supplied outside Canada to Canadian customers. Things will be made simpler in this case also.
The bill also ensures that GST group relief rules cannot be used to exempt from the GST otherwise taxable clearing services that are provided by a group member to another in order to avoid a situation where a third-party purchaser outside the group would benefit from the GST exemption even though the services were provided by one member to another.
It also confirms the policy intent and Canada Revenue Agency’s existing practice that no GST or provincial sales taxes on a passenger vehicle are included in calculating the maximum allowable value for input tax credit purposes.
In the case of governments, the bill will exempt a supply of a right to file or retrieve a document or information stored in an electronic official registry. This means that the GST will not apply, which will facilitate the transfer of a certain amount of information by municipalities and government agencies. In some way, this is what the bill is all about. It will facilitate the flow of information. It will also ensure that a small supplier of a municipality is treated in the same manner as a small municipality.
Other amendments deal with the application of the law with regard to the GST. For example, the bill adds a discretionary power for the Minister of National Revenue to accept late-filed applications for the GST new housing rebate and the Nova Scotia HST new housing rebate in exceptional circumstances.
A number of measures such as these give some latitude to the Minister of National Revenue as well as to the revenue agency to take into account exceptional circumstances.
A number of amendments were made with regard to the excise tax. For example, the rules pertaining to tobacco were tightened. Everyone here will agree it is very important to tighten the rules because of smuggling. There will have to be greater compliance in terms of the origin of tobacco products and their source, in particular for duty free shops.
In the case of alcohol, the bill contains measures to support the development of the Canadian wine industry. This industry is flourishing, particularly in Île Ronde in the Lanaudière region, which is producing wines comparable to those being imported. Once again, this measure will help this increasingly important and high-end industry—associated with regions such as Lanaudière—to develop.
I would like to close by saying that there has been some relief with respect to the air travellers security charge. Under this legislation, airports that should not have been included, in our opinion, on the lists have been removed from them. For example, La Grande III airport and La Grande IV are not commercial or tourist airports. Some tourists use them, but the majority of users are workers.
In conclusion, although this bill does not represent a tax revolution, it is moving in the direction of common sense. The Bloc Québécois will support this bill because it corrects certain shortcomings, reduces the cost of access to some medical services, reduces the tax burden on charities, assists small producers of wine, tightens provisions pertaining to the sale and production of tobacco in order to help the fight against smuggling, and adjusts the air travellers security charge to reflect reality, particularly that in Quebec. We are therefore pleased, not in the name of revolution but rather in the name of common sense, to support this bill.