Mr. Speaker, I can be relatively brief and concise today because I think we have gone through these matters a number of times and the situation is really very simple, that is to say, it is a matter of provincial jurisdiction. I could just sit down at this point because it is that simple, but I will speak for a little bit longer.
The bill creates the framework for Ontario and B.C. to harmonize their provincial sales taxes with the GST. Beyond that it will create a framework for any other provinces that wish to harmonize their taxes to do so as well.
There is a simple principle contained in the bill, the idea that provinces have the right to choose how they tax their citizens. Specifically, the bill creates a framework for Ontario and B.C. to harmonize their provincial sales taxes with the GST, as they have chosen to do. I do not understand why this simple point is so difficult for the NDP to understand.
This is within provincial jurisdiction. It is up to the provinces to decide how they will tax. This is not about whether or not we like the tax; it is a matter of provincial jurisdictions.
It will also create a framework for any other provinces that choose to harmonize their sales tax to do so. As we know, several Canadian provinces have already harmonized their sales tax with that of the federal government, and none of these provinces that have harmonized have ever chosen to reverse their course and de-harmonize the tax.
Nova Scotia chose to harmonize its sales tax, and the federal government allowed it to do so. At the time, the provincial NDP Party vowed that if it were ever elected to government, it would scrap the HST. Believe it or not today the NDP is the governing party in Nova Scotia, and I have not heard NDP Premier Darrell Dexter indicate in any way that his government will de-harmonize its HST. In fact, the Nova Scotia NDP wants to retain Nova Scotia's harmonized sales tax. That is the choice of the Nova Scotia NDP government and we, as federal politicians, should respect the provincial NDP's choice in this area.
This year, as we know, Ontario and British Columbia have indicated their intention to harmonize their respective sales taxes, just as other provincial governments had done during the 1990s.
Today it falls to us, as federal legislators, to decide if we will allow Ontario and British Columbia to harmonize their taxes, the same way that past Parliaments have allowed other provinces to do so. I am talking about provinces like New Brunswick where a Liberal government currently maintains an HST, like Newfoundland and Labrador where a Conservative government maintains an HST, and like Nova Scotia where an NDP government maintains an HST.
The 35th Parliament allowed these provinces to harmonize when they asked to do so. Should we, today, change course and tell other provinces that might wish to follow their lead that it is too late? Should we tell them that they cannot have an HST if they want one?
I would say the obvious answer to that question is no. We must allow them to make their own decisions, and that is why I will be supporting this legislation that allows these provinces, and other provinces in the future, to make a choice regarding what is fundamentally a matter that is inside their own jurisdiction.
Let me give a very brief description of what this bill does. The bill will add B.C. and Ontario, the two provinces that are seeking to harmonize taxes, to schedule VIII of the Excise Tax Act and will set B.C.'s portion of the HST at a rate of 7% and Ontario's at 8%. It is important to note that this is a fundamental shift from the 1990s vision of a single rate across the country, which assumed that all provinces would share an identical rate.
One important shortcoming of this legislation is that first nations in Ontario will be denied the tax exemption they currently enjoy. I have written to the finance minister on this topic, and I have asked him to negotiate a fairer arrangement with the Government of Ontario on this matter.
It is also important to note that some input tax credits will initially be denied under this bill. This denial will apply to large businesses with over $100 million in sales. The input tax credit denials will be phased out over the next five years as the HST becomes a full value-added tax.
To those Canadians who are on the opposition's side of the HST, it should be abundantly obvious that the federal Conservatives have their fingerprints all over this legislation. It was the Prime Minister and his finance minister who encouraged Ontario and British Columbia to harmonize their sales tax.
It was the federal Conservatives who noticed that the two provinces were both facing deficits due to this Canada-wide Conservative recession and who offered them billions of dollars to make the tax change. If they had not done so, perhaps Ontario and B.C. would not have decided to harmonize.
That possibility is of course strictly hypothetical, because the hard reality is that both Ontario and B.C. have in fact decided to harmonize their sales taxes and regardless of their reasons have struck and signed deals with the federal government. That is why, as I said earlier, this legislation is about whether Ottawa feels that provinces have the right to determine how they tax within their own areas of jurisdiction.
I appreciate that some in this House may not like the HST, but I would suggest that if they want to begin prohibiting provinces from working in areas of their own jurisdiction, they should resign from this House and they should run for their provincial legislatures. Otherwise, they should support this bill and its very simple principle that should not be beyond the NDP's capacity to understand, that principle being that provinces have a right to decide whether or not to have a harmonized sales tax.