Mr. Speaker, an important motion is being debated today in this House. I would like to remind the House of the main features of this motion.
The Bloc Québécois is asking the Conservative Party to negotiate in good faith with the Government of Quebec. There has been a dispute for the past 10 years with the National Assembly of Quebec about the harmonization of the GST and the QST.
Clearly the Conservative Party did not take the initiative on this motion. The Conservatives did not admit to Quebec that they had made promises during the last campaign. They did not apologize and say that they would like to stop fighting over this issue and, once and for all, give Quebec what it is asking for, so that the GST and the QST can be harmonized with respect for the jurisdictions of Quebec.
Quebec wants the federal government to provide it with $2.6 billion in compensation and it wants to continue administering the two taxes. The recognition of the Quebec nation should not be invoked against this motion. If we recognize the Quebec nation, it should go without saying that we recognize also that Quebec has its own way of doing things and its own jurisdictions. Why then can we not legitimize the collection and the administration of the two taxes by Quebec?
As we know, in 1997, when a Liberal government was in office, it harmonized the GST with the sales taxes of the maritime provinces, and it provided $1 billion in compensation for the losses generated by the harmonization of the two taxes. However, the Liberal government had also specified that the compensation was to be calculated when revenue losses would exceed 5%.
Then, the Conservative government got elected, and what did it do? It ignored that rule. It threw away the 5% rule and said that it no longer applied.
Such is the Conservative Party: it sings two different tunes, as a fellow Bloc member said. It would have us believe that it is flexible, that it is open towards Quebec, but it is just the opposite. So, that criterion was no longer taken into consideration by the Conservatives after they took office.
In fact, this is what led the Conservatives to provide a $4.3 billion compensation to Ontario, so that the province would harmonize its sales tax. So, we are talking about a double standard here.
The Quebec National Assembly introduced a motion dealing specifically with this request from the Quebec government, asking for a $2.6 billion compensation. Perhaps I should explain what this loss of revenues means.
The harmonization of the sales tax in 1990 was the result of an agreement between Ottawa and the Quebec government. Under that agreement, Quebec would collect not only its QST, but also the GST for the federal government. So, this is a tax on a tax. It is called a value-added tax, and it is a tax on the price of a product. In other words, a tax is collected on the product that is bought, and the GST is based on this added value to the product that is bought.
So, we are talking about a loss of $6 million in value added taxes, which is the tax on the tax, and of $500 million in QST, which medium and large businesses must pay on certain products called inputs, such as vehicles and gas. That tax is not refunded to them. That is why Quebec wants a $2.6 billion compensation. It has calculated that this loss of revenues is hurting its fiscal capacity, particularly since the province must deal with many other issues and must assume numerous responsibilities.
Our motion today has the support of the Quebec National Assembly.
Why is it that, after several years in office, the Conservative government has yet to move forward on—