Mr. Speaker, I am extremely pleased to take part in this debate. Once again I feel that the Bloc Québécois and its members are playing their role masterfully in defending without compromise the interests and values of the Quebec nation. I will read today's motion again for the benefit of those who are watching us:
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.
This motion is simply aimed at giving Quebec its due since it was the first province to harmonize its sales tax with the GST. I remember clearly the debates that went on at that time. Harmonizing its sales tax with the GST was not easy for Quebec. When the federal government eliminated the manufacturing sales tax and introduced the goods and services tax, that gave rise to an extremely important debate in Canada and in Quebec. People were wondering about the possible harmful effects of this tax since it is an indirect tax that is applied in the same fashion regardless of income, as is the case with any consumption tax. So there was an extremely important debate and the federal government amended its plan to ensure, through a tax credit, that families would not be penalized by the introduction of the GST, which is a value added tax.
In this context, in the early 1990s, the Government of Quebec, a Liberal government, decided to follow suit. The debate on QST and GST harmonization was not easy in Quebec. In hindsight, I must admit, the premier at the time, Robert Bourassa, showed a great deal of courage by raising and beginning this debate. Harmonizing the QST and the GST was not an easy thing to do.
One might have expected the federal government to strongly emphasize Quebec's leadership in promoting economic efficiency. We agree that two sales taxes of this kind should be harmonized as much as possible. Clearly, as we can imagine, certain choices involve greater flexibility. For instance, in Quebec, there is no sales tax on books and on culture, although the federal government continues to tax culture and books with the GST. In that case, one would have expected the federal government to harmonize its tax with the Quebec tax.
Therefore we might have expected the federal government not only to harmonize its tax with Quebec when it comes to GST on books, but also to emphasize Quebec's leadership in terms of economic efficiency. Clearly, it will be much simpler when Quebec becomes a sovereign country. Then there will be only one sales tax, which we will administer based on our values and our preferences. In the meantime, we must try to make the most of the situation. It is unfortunate that members from Quebec who belong to the other parties of this House are not defending the interests and values of Quebeckers. However, I am not worried. In the next election, which will be held soon, the people of Saguenay—Lac-Saint-Jean will solve the problem of the Conservative members who are totally ineffective when it comes to defending Quebec's interests.
I will get back to the QST and GST, which were harmonized in 1990. When three of the Atlantic provinces decided to harmonize their own sales taxes with the GST, the federal government offered compensation of approximately $1 billion. Up to that point, there had been no compensation for provinces that harmonized their taxes. When the federal government decided to compensate the Atlantic provinces for harmonizing their tax with the GST, it would have been quite normal for the government at that time, which was Liberal, and finance minister Paul Martin, to compensate Quebec.
But, no. I will read the very revealing answer given then by Mr. Martin to my colleague Yvan Loubier:
Mr. Speaker, there is a formula to compensate provinces that will lose more than 5% of their sales tax revenues. This is not the case for Ontario, British Columbia, or Alberta. It is not currently the case for Quebec either, and it was not in 1990 when it signed the harmonization agreement.
First of all, the then finance minister, Paul Martin, and the Liberal Party, acknowledged that Quebec's sales tax had been harmonized. I shudder with indignation. Their excuse was that Quebec was not entitled to compensation because it was not losing 5% of its revenues by harmonizing its sales tax with the GST. Such was the excuse of the Liberal federal government in 1996.
Now that the Conservative government and the current Minister of Finance have agreed to compensate Ontario for harmonizing its tax with the GST, the government has come up with a new excuse. The 5%, which was the Liberals' excuse for not compensating Quebec in 1996, is no longer the norm. Now, the excuse is that the federal government does not collect this tax.
Yesterday, the Minister of Finance told us that he was not setting any preconditions for negotiating with Quebec. Yet we can read the article he published in La Presse.
I want to take this opportunity to tell the Conservatives from Quebec who say that this should not be negotiated in the public arena that the positions of the Conservative federal finance minister have been made public. Everyone who bought La Presse that day could read the finance minister's conditions.
The article that ran in La Presse clearly states that, in the finance minister's opinion, there is no harmonization of Quebec's sales tax with the federal GST unless the federal government collects the tax. That is a condition, and it appears in the article published in La Presse.
Contrary to what the finance minister said yesterday, there is a precondition, which is a fabrication. As my colleague from La Pointe-de-l'Île said earlier, the government came up with a new criterion to make sure that Quebec would not be entitled to compensation.
Now to get back to the present Minister of Finance. I will read an excerpt from the Conservative budget of 2006.
Harmonized value-added taxes are now in place in Newfoundland and Labrador, Nova Scotia and New Brunswick—and Quebec administers a provincial value-added tax, as well as collecting the goods and services tax on behalf of the federal government.
At that time, in 2006, the Minister of Finance did not seem much bothered by this, nor the Conservative government, nor the Quebec Conservatives either.
But separate provincial retail sales taxes continue to be collected in five provinces.... Provincial retail sales taxes also substantially increase the effective tax rate—.
He names the five provinces and Quebec is not one of them. This means that, in 2006, the Conservative Minister of Finance, the Quebec Conservative members, the Conservative government, the Conservative Prime Minister, considered that Quebec was not among the provinces that had not harmonized their taxes—because it had. In the meantime, an agreement has been signed with Ontario. By harmonizing its tax, Ontario does not lose 5% of its revenue. So now a new pretext had to be invented in order to not compensate Quebec. That pretext was the collection by the federal government of the harmonized sales tax, whether GST or QST. That is totally unacceptable for Quebec.
The Quebec National Assembly has said so. And even if it had not, even if we do not consider the key issue in the debate, there is a certain inconsistency here, just from the administrative point of view. Imagine, in a period of economic crisis, wanting to change the whole system of collecting the QST and the GST just to please the Conservative Prime Minister and his Conservative members. Imagine the costs that represents, both for the Quebec state, and for the federal state, along with all Quebec businesses. It is suicidal! The Conservative position deserves to be defeated, while our motion deserves to be adopted.