Madam Speaker, I crave some clarity and some objectivity in this debate. I hear references to a new tax, and the member can comment on this.
First, it is not a new tax. The GST is still there and the PST in Ontario is still there. This is a harmonized tax base, so it is not a new tax.
Second, the $4.3 billion has been called a bribe. What actually happens when there is a transition in taxation like this is all the little pieces of tax that were taxed as PST, for example in Ontario, get added into the price of the product and the manufacturer will send those tax payments to the government. In this case the tax payments will not be sent because under the harmonized sales tax these are called input tax credits. What the manufacturer would have sent in as tax, he or she will simply credit against what is owed, what is received as a credit.
Therefore, all that taxation gets stuck, buried down inside the price of the goods and it is the consumer at the end who will pay the tax, and then it is remitted. Somebody has to cover off the cost of running government over the interim. In large measure, that is what the $4.3 billion is for, to cover off the huge drop in revenue that the provinces will experience in the front end of this new tax.
Last, those members call it a new tax, but the government will to end up collecting less taxes. They should figure that one out.