Debates of April 28th, 2009

Opposition Motion—Harmonization of QST with GST

[Kevin Sorenson, Conservative, Crowfoot, AB]

Mr. Speaker, on a point of order, I have sat in the House this afternoon, and to be quite frank, I have been very disappointed with the response from the members of the Bloc and now, unfortunately, from the Liberal Party as well. I was listening to a speech by my hon. friend, who was segueing. He talked about the importance of negotiations, getting along and dealing with Quebec. Time after time he was interrupted, not because of doing something that is not commonly done in the House but rather simply for the sake of interruption.

Regarding that last hon. member who stood up raised a point of order on the question, I can tell you, Mr. Speaker, in nine years in the House I have seen a remarkable amount of latitude given to the answering of questions.

The answer our colleague gave was a good, forthright one in regard to negotiation and the direction that the other parties are taking, compared to what this party is taking, on the harmonization of taxes. I would just suggest that rather than having members of the opposition jump up time after time simply to interrupt this colleague, they apologize and give this colleague the opportunity to answer those questions.

[The Deputy Speaker, Conservative, Andrew Scheer]

I do not want to get involved in a great deal of debate on whether answers are relevant to the questions. There were some points raised about the relevance of the member's speech, and I think the member did come back to the subject that is material to the motion.

We are into questions and comments now. In my experience, the Chair usually does not decide whether the responses to questions are appropriate or not. That is for members to decide and they can ask follow-up questions if the responses are not adequate.

I will do my best to manage the time if we can come back to the member.

Continuing questions and comments.

The hon. member for Québec.

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, it is obvious that the amendment moved by a member from the Quebec City area is meant to make the motion we are debating meaningless.

Refusing to pay Quebec $2.6 billion in compensation, asking Quebec to stop collecting the QST and the GST, and wanting to have the federal government administer these taxes is contrary to the motion debated in the Quebec National Assembly. Obviously people are being deceived. The member's speech about equalization indicated some frustration. It was deceptive because the equalization issue has still not been settled.

It is easy to understand that the opposition parties are nervous because of the government's approach to the problems they are faced with. The speech made in this House is proof that the Conservative government is nowhere near ending its constitutional wrangling with Quebec.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Mr. Speaker, had the two opposition parties given me a chance to complete my speech, they would no doubt have seen what I meant and understood better. Today, they have created interference in this chamber, infringing upon my right to give a 20-minute speech in its entirety.

Despite it all, we are prepared to work with Quebec to facilitate the transition to a harmonized sales tax.

We are certainly not going to negotiate with the Bloc Québécois, but we will negotiate with the Government of Quebec, a legitimately elected government.

[Gary Goodyear, Conservative, Minister of State (Science and Technology)]

Mr. Speaker, before I ask my question I would like to premise it that the motion itself concerns harmonization of various taxes. It does in fact mention the 1990s, and the hon. members opposite did make examples of some things in the 1990s.

In the 1990s, the Liberals cut science and technology by $442 million, which in today's dollars is about $1 billion of cuts to science and technology. They also raised taxes on Canadians. The Leader of the Opposition has been cited as saying that they definitely will have to raise taxes on Canadians. I suspect that they will in fact cut and gut science and technology once again.

However, I would like to ask my hon. friend what he thinks the impact would be on Quebec of the Liberal Party's proposal to raise taxes, across the board is my guess, and whether the member has any insight as to which taxes he thinks the Liberals intend to raise on our good friends in Quebec.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Mr. Speaker, I thank my hon. colleague for his excellent question. Why is the Liberal leader intent on imposing a carbon tax and increasing the GST, taxes which would both affect disproportionately families, workers and seniors in Quebec? I would like him to tell me. When does he intend to increase our tax burden? Which taxes will he increase, and by how much? That is a legitimate question I would like the leader of the Liberal Party to answer someday.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, again, the speakers' question and answer are not relevant to the motion before us today, which deals with tax harmonization. Planted questions like the ones we just heard distract from the issue at hand which is important to Quebec. I find it unfortunate that you would allow a different topic to be raised when the topic of discussion today is tax harmonization.

[Gary Goodyear, Conservative, Cambridge, ON]

Mr. Speaker, on that point, obviously the motion deals with harmonization of taxes. The motion cites the 1990s. The Liberals themselves raised the issue of examples in the 1990s. I asked the question and I was quite happy with the answer.

The only thing is that I did not quite understand which taxes would be raised on Quebeckers. I guess that is hypothetical. But I asked the question and I was quite happy with the answer.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, on the same point, the members are maybe getting a little off the topic because the harmonization of the Quebec taxes took place in the early 1990s. That is why it is relevant. I simply want to indicate my concern as well with regard to the relevance.

If the members are spending all their time thinking about which taxes the Liberals are going to raise, all I can say is that I am delighted to know that they have already conceded the next election to the Liberal Party.

[The Deputy Speaker, Conservative, Andrew Scheer]

I think we are entering into some realms of debate here. The motion is dealing with tax policy and aspects of the GST. In my opinion, some of the remarks made by the minister of state and the parliamentary secretary were relevant to aspects of the motion.

I think we will move on.

The hon. member for Alfred-Pellan.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I will be sharing my time with the hon. member for Brome—Missisquoi.

The goal of our opposition day here today is really to allow Parliament to reach a decision on this important matter of the compensation that the government owes Quebec for the harmonization of the Quebec sales tax with the goods and services tax.

The motion reads as follows:

That, in the opinion of the House, the government should negotiate in good faith with the Government of Quebec to resolve the dispute dating back over ten years regarding the harmonization of the QST with the GST in the early 1990s and agree to provide $2.6 billion in compensation to Quebec for this harmonization, and that Quebec continue to administer these harmonized taxes.

The Bloc Québécois motion strongly emphasizes the words “negotiate in good faith”. The Conservative government has taken quite the opposite approach, despite the number of times they have talked about it in this House. With his dithering and his all too frequent objections concerning current negotiations with Quebec, the Minister of Finance has proven that he does not understand the meaning of negotiating in good faith.

Since they came to power, the Conservatives have reiterated through their finance minister their intent to continue the discussions on sales tax harmonization in all their budgets and economic statements. Over the last few weeks, though, the finance minister has demonstrated just the opposite. He has shown instead how able he is to use all possible subterfuges to try to undermine the negotiating process with the Government of Quebec.

What does the minister mean by “negotiating in good faith?” Quebec was the first province back in the 1990s to harmonize its sales tax with the federal tax and it did so by negotiating in good faith with the government of the day, as it has always done. Can the same be said of the federal government?

Last March 31, a motion was introduced in the Quebec National Assembly concerning the provision of compensation similar to what the federal government provided to Ontario. The motion was passed unanimously by all the parties in the National Assembly.

It states that Quebec was the first province to harmonize with the federal goods and services tax in the early 1990s. Since then, three Atlantic provinces harmonized with the GST in 1997 and received nearly $1 billion in compensation. The Government of Ontario announced that it would harmonize its sales tax with the GST beginning on July 1, 2010. The federal government is going to pay Ontario $4.3 billion in compensation for this, an amount that is justified in the Canada-Ontario agreement by a desire to stimulate economic growth and job creation. The federal government will administer this new provincial tax for free on Ontario’s behalf. The Ontario sales tax will be very similar to the Quebec sales tax because certain items, such as books, will be exempt. The input tax rebates in Ontario may well be identical to those in Quebec. Ontario is the fourth province to receive compensation from the federal government for the harmonization of the federal and provincial sales taxes, while Quebec has not received any compensation, even though it was the first to harmonize its sales tax.

All the parties present in the Quebec National Assembly are asking for fair, equitable treatment from the Conservative government and its Minister of Finance and want compensation similar to what was provided to Ontario.

The voters in my riding who have given me their majority support on three occasions are closely following the supposed good faith negotiations with the Minister of Finance.

They do not understand why the government is applying a double standard to the detriment of Quebec.

My voters have not been fooled. They have understood that, to defend their rights, they must rely on the members of the Bloc Québécois; that to defend respect for their culture, there is only the Bloc Québécois; and that to properly protect their future, there is only the Bloc Québécois. For far too long, they have understood that rhetoric is and will remain just that, rhetoric, and that only the Bloc Québécois can really defend them.

I will recall a little bit of history to corroborate what I have just said.

In 1980, Pierre Elliott Trudeau stated in Quebec that the Liberals would put their seats on the line to bring about change, leaving the impression that Quebec would receive its due. What we got was the unilateral repatriation of the Constitution, which was imposed on Quebec.

In 1984, Brian Mulroney promised that Quebec would return to the constitutional fold “with honour and enthusiasm.” What we got was the Meech Lake shipwreck.

In 1995, during the referendum campaign, Jean Chrétien promised change. What we got was the Clarity Act and the sponsorship scandal.

In 2005—closer to our time—during a speech in Quebec City, it was the turn of the current Prime Minister to try the grand seduction by promising an open federalism. What we got was a government that rejected the rights, the identity, the values and the interests of Quebec. For 25 years now, the orators have changed but Quebec is still waiting and nothing has changed.

Despite all the great promises to Quebeckers, despite the smoke and mirrors by the Conservative Prime Minister, after 31 months in office, after 31 months of speeches and promises made to Quebec, nothing has been done.

To practice open federalism, in addition to respecting the distribution of powers set out in the Constitution and ensuring that Quebec has the autonomy it needs to exercise those powers, the federal government would have had to demonstrate its openness and take into account the opinions and interests of Quebec when making decisions within its own sphere of jurisdiction.

In that respect, Quebec lost ground when the Conservatives were elected. Indeed, in areas under federal jurisdiction, the current Prime Minister demonstrates less openness than his predecessors with regard to the opinions and interests of Quebec.

In conclusion, I call on the government to recognize the longstanding injustice to Quebec of denying it compensation for harmonizing the federal and provincial sales taxes.

In particular, I call on the Conservative members from Quebec to show solidarity with Quebeckers and to support the motion introduced today by the Bloc Québécois.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the reason that the compensation issue is still outstanding is because there are some issues with regard to harmonization which have still not been resolved. The House will understand that harmonization seems to imply that all things are brought together so there are efficiencies in the system of taxation.

The first issue is that there are still two taxes on the books and that means two separate activities to be carried on by businesses.

The second one has to do with the differences in the basis on which the taxes are applied. They are not identical and therefore there are still some problems to be worked out. There were exemptions in certain cases in Ontario.

The third area has to do with the system of tax credits where they are not the same under the two existing Quebec taxes.

The fourth issue is the collection of taxes and whether it would be Quebec or the Canada Revenue Agency.

The final issue to be resolved has to do with the application of Quebec sales tax on the GST, or a tax on a tax.

These matters are to be discussed. The Liberal position is that there are no major items here that cannot be resolved through good faith discussions and negotiation.

I am wondering whether the member would be prepared to indicate whether he believes any of these items are not touchable in terms of negotiation pursuant to receiving compensation.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I thank the hon. member for his question.

Indeed, there are details to be worked out regarding the points that he mentioned in the harmonization process. These issues are not impossible challenges. The Quebec government is open to changes, just like Ontario is doing right now. However, the collection of that harmonized tax is a major issue. Since the early 1990s, Quebec has been collecting both the GST and the QST, and it sends the money generated by the GST to the federal government. Things are working just fine, and there has not been any complaint on the part of the federal government. That system is particular to Quebec.

As I mentioned earlier, and members are all aware of that, Quebec is recognized as a nation. Quebeckers also have a status that is different from that of all Canadians. Only in Quebec do taxpayers have to complete a separate provincial tax return, in addition to the federal one. Everything is working just fine and there are no problems in that respect. This is why Quebec absolutely wants to keep collecting this harmonized tax, because this way of doing things has always worked. This is something that is not negotiable for the Quebec government, and the federal government should accept that in good faith.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I want to congratulate the hon. member for Alfred-Pellan.

For the past few years, he has been the deputy finance critic for the Bloc Québécois. He is also our revenue critic. Therefore, he knows first-hand that the Quebec government—and even the National Assembly as a whole—regularly adopts motions, including as regards this issue. It is very obvious that, in Quebec, there is a will to harmonize the GST.

However, there are also other issues—and that is why I referred to my colleague's responsibilities within the Bloc Québécois—concerning which the federal government, whether Liberal or Conservative, is simply thumbing its nose at Quebec by refusing to give our province what is owed to it. It is our tax money that is in Ottawa's coffers, but it is always extremely complicated to get our due, particularly when it comes to the equalization program. There is still some money that has yet to be paid for the ice storm.

I wonder if my colleague could tell us about other instances where the Conservative government, and even the previous Liberal government, did not respect the rights of Quebec.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I thank my colleague for this excellent question.

I would not want to elaborate too much on other issues besides harmonization, because we blamed other members for doing the same thing earlier.

The harmonization issue is a classic example of bad faith on the part of the current Conservative government. It is as if the government had abandoned Quebec. It cuts Quebec's revenues and finances everywhere it can, even if it affects our identity and culture. The government seems to really enjoy cutting in that area. This is unacceptable for members of the Bloc Québécois. Indeed, as we all know, our main focus is to defend the interests of Quebeckers.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, it is with pleasure that I rise today to speak to this motion regarding tax harmonization.

Many members seem to fail to understand what tax harmonization means. The Minister of Finance wrote a letter that was published in the newspapers. In it, he says that Quebec's harmonization model was one to follow. It seems the Conservatives have forgotten it, even though the letter is fairly recent. I think we will hear this often during debate this afternoon.

We have heard some very peculiar things. The parliamentary secretary said that he wanted to deal with legitimately elected people. It just so happens that we too are legitimately elected, even if it is not up to us, but to the provincial government, to negotiate in this case. The Bloc Québécois cannot solve this problem, but if it were not for us, the matter would probably never have been raised in this place. It is thanks to the Bloc Québécois members, and not the Conservative members from Quebec, that this debate is being held today. I wanted to underscore this because I think it is very important.

As my colleague said earlier, does open federalism mean refusing to give Quebec what it is entitled to? Every time an issue has to do with Quebec, we come up against a brick wall with the Conservative government, and every time, we raise the issue again. We have to fight, insist and repeat that all we want is justice within this Canadian confederation. As my colleague said, we must not forget that our taxes are paying for this compensation. Quebec is paying a little more than $1 billion of the $4.3 billion in compensation for Ontario. That money is coming from all over. If we are paying some of it, then we would like to have the right to the same treatment as the other provinces, like Ontario.

Currently, there is no major obstacle to compensating Quebec. There is no more obstacle to compensating Quebec than there was to compensating Ontario. The government wasted no time in giving Ontario $4.3 billion. Now, it is trying to tell us that there are major obstacles, because we are trying to gain political advantage. That is only reason the government is refusing to treat Quebec in the same way as Ontario.

Certainly, Ontario had further to go in harmonizing its taxes. Quebec can do so easily by making the few adjustments that have been requested.

But what does harmonizing taxes mean?

Harmonizing provincial sales tax means adopting the same taxation mechanism as the GST. We all agree on that. In other words, a harmonized tax system is a system where the federal and provincial components of the tax apply in the same way to the same goods. Quebec already does that. Harmonizing Ontario's tax with the GST will mean that there will be no tax on goods used by companies, but hydro bills, for example, will be taxed. It is simple. The idea is not to have absolutely the same taxes, as several people have said. The idea is for the taxes to be identical.

Why should we move to a harmonized system?

Non-harmonized taxes apply to commodities that companies use to make manufactured goods. This type of tax adds to companies' production costs. By moving to a harmonized system where there is no tax on commodities companies use, we reduce production costs and improve productivity.

In other words, we are going from a tax system that imposes a tax on every stage of production to a system that only taxes the finished product. Adopting a single tax mechanism reduces the administrative costs of the tax system for business and government.

I will speak to another point, that of harmonizing the sales tax in Ontario. Earlier, it was mentioned that things were done. In its 2009 budget, the Ontario government announced that it would receive compensation. To our surprise, the federal government was going to provide $4.3 billion over two years in compensation to cover the cost of the transition to this harmonized system. That is exactly what Quebec did. It paid and therefore is entitled to expect compensation.

In what way is the QST not perfectly harmonized with the GST? That is an excellent question. There is a minute difference in the refund of QST on inputs for large businesses. That is why, in order to completely harmonize the QST and GST, Ms. Jérôme-Forget, Quebec's finance minister up until a few days ago, announced on March 31, 2009 that she would establish a QST credit for large businesses, as Ottawa is doing. Given that we are prepared to do that, there should be no further disputes or misunderstandings on the part of the Conservative government.

When did the province of Quebec harmonize its sales tax? In July 1992, or 17 years ago. Quebec did not receive any financial compensation from the federal government. For that reason, we now want compensation. Quebec has requested that it be responsible for PST administration on behalf of the federal government. Thus, the GST will be administered by Revenu Québec, which will forward the monies to the federal government. In exchange for this service, the Government of Quebec wants financial compensation. This type of compensation is not unique.

In response to a question, earlier, a claim was made to the effect that the government has been giving Quebec money for years and that the total amount paid in compensation could be as high as $7.5 or $7.6 billion. That is not putting it quite right. The money is not simply given, it is payment for a service. That is different. Such compensation is not unique. The provinces for which the federal government administers income tax also have to compensate the government for its services, and there is no confusion about what that compensation is all about. They are simply paying for a service.

Which provinces received federal assistance for the tax harmonization process? On April 1, 1997, the provinces of Newfoundland, New Brunswick and Nova Scotia received a first $250 million installment for harmonizing their sales taxes. Ontario will receive $4.3 billion from the federal government to harmonize its sales tax. Quebec, however, received no compensation. In other words, Quebec is the only province that has not received any compensation for harmonizing its sales tax.

On what rules was the federal government's refusal to compensate Quebec based? The federal government allowed quite a while ago the Atlantic provinces to benefit from $1 billion over four years in compensation for harmonizing their sales taxes, all the while arguing that Quebec, as well as Ontario and British Columbia, would not be entitled to compensation because having harmonized taxes would not make their sales tax revenue drop by more than 5%.

Time is flying. I wish I had time to get into the differences between the various provinces. At any rate, Quebec will have to pay one quarter of the $2.6 billion in compensation. After all, part of the money will be coming from our own taxes.

It would only be fair and reasonable, if every other province received compensation, that Quebec also receive compensation for having harmonized its sales tax.

I hope that all members from Quebec, Conservative or not, will vote in favour of this motion.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Mr. Speaker, first of all, I want to congratulate my colleague from Brome—Missisquoi for his speech, which was really enlightening in terms of the motion before us. I would like to give the member the opportunity to elaborate on the gap or the differences between provinces regarding harmonization.

I would also like to know what he thinks about the following. It seems to me that the federal government, in this matter with Quebec, has enjoyed a certain privilege because Quebec was the first province, in the early 1990s, to harmonize its tax with the federal GST.

Today, Quebec is penalized, on the one hand, regardless of the efforts it made in the past and, on the other hand, because the Minister of Finance, every time he talks about negotiating, changes the terms of this harmonization. I would like to hear the member's thoughts on that.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, I find that question very pertinent and I thank my colleague from Chambly—Borduas for giving me a chance to elaborate a bit on the subject.

Indeed, the federal government had an advantage in the 90s because since 1992, it could count on Quebec, which had harmonized its tax and was collecting it for Ottawa. That was very efficient and the federal government noticed it. It said that the Quebec government was showing remarkable clarity and efficiency in collecting the tax.

Everybody benefited. That meant that everybody was on the same level playing field as far as paying taxes was concerned. I remember that at that time the question of clarity in the payment of the tax was discussed. The federal government often held Quebec up as an example of the tax collection techniques to be used.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, in March the Minister of Finance indicated that this would not happen unless the areas of differences in the harmonization details were resolved. However, he subsequently said that he would be willing to provide $2.6 billion of compensation if Quebec fully harmonized its sales taxes, and he suggested that this would include two major steps. The first was to stop applying the provincial sales tax on top of the GST, the tax on the tax. The second was to allow the Canada Revenue Agency, not Revenue Quebec, to collect both taxes.

If that is the conditions under which the finance minister is prepared to provide compensation of $2.6 billion, would those two conditions be acceptable to the Bloc Québécois?

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, I do not think that we should change the system right now. I thank the member for his excellent question.

I just underlined how efficient Quebec is in the collection of provincial as well as federal taxes. Why change something that is working very well just to give Ottawa even more powers over the provinces? There is no point in changing that right now. On the contrary, Quebec is doing a good job. Since, as is seldom the case, there is no duplication between the federal and provincial governments and there is only one government acting for both levels of government, we should keep it that way.

As for the other aspect, I do not think that the tax on tax is a major problem. That could easily be harmonized.

[The Deputy Speaker, Conservative, Andrew Scheer]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Labrador, Equalization Payments; the hon. member for Willowdale, The Environment.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I am pleased to address the Bloc Québécois' motion today.

My party, the New Democratic Party, intends to support this motion. We agree in principle with a number of points in this motion. First, the provinces should be compensated fairly, regardless of the issue involved. Here, we are talking about the harmonization of taxes and the fact that Quebec should have been compensated a decade ago for the arrangement that it made with the federal government. Also, we note that the federal government has reached agreements with other regions, such as Ontario, without respecting the situation of Quebec.

The first reason to support this motion is that we must absolutely recognize that the federal government has a responsibility to compensate each province fairly.

It is truly a matter of fairness, and a province should not be treated differently than another in such cases. What happened in the past must be recognized, and we must ensure that, in the future, agreements with the other provinces will be respected.

The second reason to support this motion is that it says that the federal government claimed to be prepared to find a solution, but only if the administration of taxes was transferred to it. We have a problem with that, since Quebec has been administering the tax system for several years already. Therefore, there is no reason for the federal government to now change what Quebec has been doing. We do not think this is appropriate.

In the end, whether it is harmonization or another issue, we must ensure that Canadian consumers and families are not punished. Regardless of the decision we make on harmonization, we should keep in mind the current reality of Canadians, and also how the regulations and the legislation voted in this House affect them.

Every day, our party comes to the House to talk about the issues and challenges facing Canadians, and to reflect on the fact that we, as their representatives, have a responsibility to help them.

Of course, the government has more than one responsibility. It should, in every case, think about what is best for Canadians. We find that some aspects of harmonization pose a problem. We note that in Ontario harmonization will adversely affect consumers and their families. New taxes will be imposed on goods that have never been taxed. This is very problematic, because these goods are basic necessities of life. People's well-being should be the priority, and these goods should not be taxed.

What is even more important is that we should think about the reality that Canadians must face right now. In a period of economic crisis, very large numbers of jobs are lost in many regions of the country, as is the case in Ontario and in Quebec.

In my region, there have been all time highs in job losses in the forestry and mining sectors as well as in a number of service industries that depend on those industries, which are truly crucial to our region. I feel it is extremely important for us as members to reach decisions on bills that consider the reality of Canadians and do nothing to penalize them when they are already in difficulty.

I believe it is somewhat problematic when not only does this request have to be made in connection with harmonization, but also in terms of other rulings and decisions by this government. For example, the decision concerning employment insurance. Our leader, the member for Toronto—Danforth, has spoken about employment insurance and the fact that the changes made by the government did not benefit the bulk of those in need of it.

Because of my committee work, I realize the difficulties women face, especially those who wish to have access to employment insurance and cannot because of the regulations concerning the number of hours worked and the type of work they do. The few changes that have been made do nothing to support Canadians who have lost their jobs and are trying to benefit from a program into which they have paid for years. We can see what an extremely difficult situation they are in.

There is also a lack of leadership as far as supporting Canadians rather than penalizing them is concerned. As for the motion which we introduced and which was passed by the House last week, this was a motion moved by my colleague, the hon. member for Sudbury. It had the support of the three opposition parties and we are really proud of it. It had to do with credit cards and the role the government should play in regulating the credit companies in order to really protect Canadians who find themselves in quite difficult financial straits. Many of them tend to make greater and greater use of their credit cards.

We believe that the credit card companies continue to abuse their position rather than adopting measures like those that the Bank of Canada has adopted to reduce interest rates. We can see that this is a problematic situation. In fact, even if the House of Commons voted in favour of that motion as well as the one concerning changes in employment insurance, we can see that the government does not respect those results. In the end, Canadians are the ones who will bear the consequences, Canadians who are already in really difficult situations.

I would also like to describe in more detail the difficult situation prevailing in my region. I am here to speak not only as a member of Parliament concerned by this question of tax harmonization, but also as a member of Parliament who sees this issue and the fair treatment of provinces as being directly related to my region, northern Manitoba.

Many of the challenges Canadians are faced with every day are to be found in my region. For example, a large majority of the people from the riding I represent come from one of more than 30 first nations. Many of them do not see the realities of the employment situation as conclusive. There is a lack of economic development which penalizes those people.

It is also directly related to the taxation system. Of course, we know that, traditionally, people from the first nations do not pay taxes in their own region, but when they go out in the urban areas, the reality is not the same. When they come, for example, in my community of Thompson—the business centre in our region—, and they go shopping, they must pay taxes. And, for many of them who suffer from a low rate of employability, since many are unemployed or in quite difficult situations, the idea of paying taxes when outside of their community is difficult to bear.

Generally speaking, the tax situation in Manitoba is a bit different, because we have our own provincial tax. It must also be acknowledged that, in addition to the taxation problem, there are problems relating to plant closures or layoffs, which result in these industries paying less tax to the urban communities they are located in, and of course also to the federal government. This is fairly problematic for our communities, which most of the time depend on a single industry and on the provincial tax to invest in our services: recreation, infrastructure, water. It is the entire community that suffers in such situations.

It must also be acknowledged that, when we speak of taxes here, we are speaking of the Bloc Québécois motion, the Quebec reality and the necessity to respect its situation. It must also be acknowledged that, when we speak of taxes, decisions must be reached that encompass not only the well-being of individuals, of each Canadian, but also that of our communities and our regions which are at present experiencing some unfortunate and historic circumstances because of the economic crisis.

I will make another point: the reference in the Bloc Québécois motion that “the government should negotiate in good faith with the Government of Quebec”. We believe that the two words “good faith” are really the focal point of this motion, the idea of the need to negotiate with our provinces on an equal footing and to really recognize the matter of equity here. This matter of good faith does not apply solely to negotiations with Quebec. It is important, of course, because that is what we are talking about today. But this matter of good faith also applies as a general rule to the discussions we have in this House and with our provinces.

We must recognize that Canada is in a rather unique position in the world as a federation and that, in the past, certain provinces had considerable control over their own regions. The federal government must really work in partnership with the provinces in all areas in order to be able to improve the lives of Canadians, whether in Manitoba, Quebec, the Yukon or Prince Edward Island.

No matter where one lives, one must recognize that Canada is a federation. We must negotiate in good faith on all kinds of matters. For instance, equalization is still being discussed. The government made a number of promises in that regard, but later broke them, especially concerning Newfoundland and Labrador. It is extremely problematic. As politicians, we all know it is extremely important to keep our promises, but even more so, we all know the consequences of breaking our promises. We saw what happened concerning equalization and the frustration expressed by the people of Atlantic Canada.

We also now recognize Quebec's frustration regarding the agreement it reached with the federal government several years ago. That agreement must be respected. If we are going to talk about compensation, we must respect the fact that Quebec has been administering the tax system for several years.

I will conclude today with the following message. We hope that good faith and the well-being of Canadians will remain in the forefront. Canadians must not be penalized by new taxes, credit card problems or employment insurance. As leaders and representatives in this House, we must help them. This is an important message, which will guide us in our decision making, and all of Canada will benefit as a result. In this case, we are talking about Quebec, but all of Canada will benefit.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I would like to ask my hon. colleague a few things.

During economic hard times, those who are most vulnerable are even made more vulnerable. I will provide a couple of solutions that may be of benefit and I would like to know her opinion on them.

First, does she not think it offensive that people who make less than $20,000 a year have to pay taxes? One cannot live on that amount. The government could institute a tax policy that if the gross income of people was $20,000 or less, they would not pay federal taxes.

For first nations communities, the government under funds first nation schools at a level of at least $3,000 to $6,000 less per child and that needs to be rectified immediately. How on earth can children acquire the skills training they need to be gainfully employed in the future. Does she agree with that?

Does the member not think an early learning head start program for children would be one of the most effective things the government could implement with the provinces so children would have a head start on life and would give them the best opportunities to be an integrated member of society as an adult?

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, my colleague raised the reality faced by low income Canadians. Canada is one of the best countries in the world in which to live. The extent to which Canadians face rates of poverty is shameful.

Time and time again we have heard that as the economy gets worse, these people will suffer the most. People will be now bounced into that reality as a result of losing their jobs, as a result of not being able to access employment insurance, as a result of not being able to get back on their feet. We are dealing right now with a historic economic crisis. We should be looking at making our taxation system responsive to that reality. That is also what we are talking about today in the context of the motion.

I appreciate the reference to first nations and education, a reality that is very urgent and in need of great attention in my region, which represents over 30 first nations. We need a number of schools in areas such as St. Theresa Point, Nelson House, God's Lake Narrows, God's River. Not only do we need schools, but we need the federal government to invest in that education. We see an alarming gap between the amount of money provinces pay per student compared to what the federal government pays for first nations students.

We need to see the federal government apply some leadership in these realities. There has been commitment to education, but we need a great deal in order to create a more just situation for first nations children in our country.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, I would like to congratulate my NDP colleague for being well informed on the subject and for having made a very clear presentation. I would also like to congratulate her on the quality of her French. She makes great efforts. She speaks French well and I congratulate her for the quality of her French.

I would also like to congratulate her for speaking of good faith, and that is the subject of my question. Good faith is important. Does she think that the Conservative government is acting in good faith when it insists on taking over a service already well delivered by Quebec—I am talking about the collection of the taxes—or does she think that the government is doing so out of pettiness or partisanship?

Let us not forget that those people have 17 years of work experience. They started somewhere else and gradually acquired experience. Finally, now that the system is running smoothly, we will start all over from scratch. I would like to know if my colleague thinks the Conservatives are acting in good faith when they say that.