Mr. Speaker, I have been following today's debate with a lot of interest and appreciate the opportunity to respond to the Bloc motion concerning taxes, specifically the harmonization of taxes, and the province of Quebec potentially following the lead of the Atlantic provinces and Ontario to enter into a harmonized sales tax framework with the Government of Canada.
In response to some of the comments made during the debate, Quebec has not fully harmonized its sales taxes. Even the Quebec government has admitted such, recently admitting that there was a major difference between the QST and the GST and that the province was ready to agree to make the necessary adjustments for full harmonization.
Quebec currently administers the Quebec sales tax and the GST in Quebec on behalf of the federal government. The federal government compensates the Quebec government for doing this. In 2007-08, approximately $130 million was paid to Quebec to administer the GST.
On this motion, the Minister of Finance has been clear. He has spoken to Quebec's new finance minister about this issue and he is open to discussions with the new minister on this matter. As outlined in an op-ed in the Montreal Gazette, the new Quebec finance minister is “--prepared to sit down and discuss the issue”.
The previous Quebec finance minister, who recently stepped down, was also very content with the stance of the federal government on this issue. An April 2009 press release states:
The Minister of Finance and Minister responsible for Infrastructure, Monique Jérôme-Forget, welcomed the openness shown by the federal government regarding fair treatment for Québec with respect to the harmonization of sales taxes.
We notice something here, though. These negotiations will not and cannot involve the Bloc, for the Bloc, as it has shown in its nearly 20 years of perpetual opposition, cannot obtain results for Quebec or for Quebeckers, just debate. In a little over four years, our Conservative Quebec caucus has managed to do more for Quebec than the Bloc MPs ever can or ever will do.
For instance, total federal support for Quebec in 2008-09 was $16.8 billion, an increase of $4.5 billion or 37% since 2005-06 under the old Liberal government, including increased support for health care, post-secondary education and for infrastructure. In 2009-10, Quebec will receive over $8.3 billion in equalization alone. That is a huge increase of over 70% since 2005-06 levels under the old defeated Liberal government. That is nearly as much as was transferred to all provinces for the program in 2003-04.
In terms of background, the harmonized sales tax framework involves Canada and the province harmonizing its sales tax with the GST under a federal-provincial comprehensive integrated tax coordination agreement. Such an agreement would include the following key elements: the provincial portion of the harmonized sales tax being imposed under federal legislation; a tax base essentially mirroring the GST base with the provincial portion of the tax not applying to the GST; provincial revenues paid according to the HST revenue allocation framework; and finally, federal administration by the Canada Revenue Agency and the Canada Border Services Agency of the federal and provincial components of the harmonized tax.
The HST framework is simpler and less costly as it involves only one tax rate, one substantially harmonized tax base, with no need to track and report tax on a by-province basis, and one level of tax administration.
I would like to take this opportunity to congratulate the Liberal leader and the Liberal Party for finally unveiling the Liberal's very own economic action plan. While it was months after the actual budget and it only contains one idea, it is great to finally see the Liberals bringing a plan forward, and what a plan. It is a plan that really speaks to what Canadians expect of Liberals. It is a plan that speaks to the type of Liberal thinking Canadians have become all too familiar with. It is a plan that we know will be met with the reaction it so richly deserves when fully exposed to the public.
In the words of the Liberal leader, under the plan, and this is all of it, “Federal taxes must go up.... We will have to raise taxes”. I note that the early reception to the Liberal plan has not been as favourable as the Liberals would have liked. Almost everyone has suggested that this is perhaps the last thing the Canadian economy needs right now. Almost everyone agrees that the Liberal plan will only serve to stunt economic recovery or to bleed more jobs.
Unfortunately for the Liberal leader, some commentators were particularly displeased. A Windsor Star editorial noted that:
Perhaps the last thing that Canadians want to hear during a recession is a politician talking about tax increases. But [the] federal Liberal Leader...has said he won't rule out a tax hike....
Those comments should be setting off alarm bells with taxpayers.
The Canadian Taxpayers Federation said that “Canadians....find the idea of raising taxes now or after the recession subsides 'scary'”.
Even TD economist, Don Drummond, joined in on the act pointing out that:
The federal government can get back to budget balance if they apply a dose of spending restraint once the economy begins a sustained recovery. ...tax increases will not be required. Nor would they be appropriate.
Nevertheless, we understand that the Liberal leader may be providing further details about his economic action plan shortly. We understand that items under consideration include a 1% or 2% GST tax hike to ensure fixed income seniors, working families and others pay more to the government when they can afford it the least.
Furthermore, Canadians may once again feel the sting of that old favourite, the regressive carbon tax.
No wonder many Canadians are demanding more fulsome answers on what the Liberal plan actually involves. Which taxes will the Liberals raise? Will they implement the carbon tax? Will they hike the GST? Will they do both? By how much will the Liberals raise taxes and when will the taxes rise? Canadians want to know.
A recent editorial in Waterloo's The Record states:
Canadians deserve to know in clear, unambiguous language the Liberal leader's stand on a tax hike.
Again, the Liberal leader was unequivocal and clear when he unveiled his own economic action plan last week and said, “Federal taxes must go up.... We will have to raise taxes” . It sounds to me like that is plural taxes, which clearly suggests that there is more than one tax to be raised under the Liberals' economic action plan.
We already know that the GST will likely be raised under the Liberal plan from an earlier statement made by the Liberal leader when he said, “Let me be clear here...you can't exclude tax increases.... So I'm not going to take a GST hike off the table”.
Having uncovered that, we demand, on behalf of Canadians, that the Liberals reveal the details of their hidden tax-and-spend agenda.