House of Commons Hansard #47 of the 40th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was tax.

Topics

The House resumed consideration of the motion.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:10 p.m.

Liberal

The Speaker Liberal Peter Milliken

Before question period, the hon. member for Québec had the floor. She has five minutes remaining for her remarks.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:10 p.m.

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, I do indeed have five minutes left for arguments to convince the Conservative government to vote in favour of the Bloc Québécois motion. In fact, in response to questions from the Bloc on harmonization with the GST, the minister and member from the south shore indicated that the Government of Quebec wanted to reach agreement with the Conservative government. Would that mean that the Government of Quebec would just give up? Yet there was a motion adopted by the National Assembly. Would Quebec give up its demand for the $2.6 billion and the right to collect and administer the two taxes?

The Quebec National Assembly called—in a motion from all members—for the Conservative government to recognize Quebec's jurisdiction over taxation. I doubt that the Conservative Party would consent to that. Promises were made to us, but this would not be the first broken promise by one government after another. The Liberals too had made promises to us, promises that were broken once they were elected. Now it is the Conservatives' turn. Just think of Mr. Trudeau and his statement in 1980 that Quebec would stand to gain: what we got was the patriation of the Constitution. In 1984, Mr. Mulroney promised Quebec that he would bring it back into the constitutional fold with honour and enthusiasm; we came up against a wall and what Quebeckers got was a watered down Meech Lake accord.

Then the Liberals came back to power with other promises. Jean Chrétien promised lots of changes: what we got was the Clarity Act and the muzzling of Quebec as far as determination of its desire for sovereignty was concerned. They wanted to determine the question in Quebec's stead, Then the Liberals tried to buy us with the sponsorship scandal. Now we can see how the Conservatives are approaching the celebration of Canada in Quebec. Pretty much the same way the Liberals did. The Conservatives have no qualms about giving away the taxpayers' dollars. They are giving Quebec 85% of the total envelope earmarked for Canada Day. On the other hand, when they are asked to give Quebec its fair share, whether in connection with equalization or for Quebec's forest companies, the Conservatives do not have the same propensity to understand the realities of Quebec.

The Conservatives promised us great, open federalism, but we see clearly that this ship has sprung a leak. They said they would put an end to disputes between the federal and provincial governments. Yet, during the last election campaign, we saw that all those disputes continued. They have disregarded the various motions we present here in this Parliament, motions adopted by the Quebec National Assembly. Yet, it can be said that the members of the Quebec National Assembly are not all sovereignists.

Once again, we see clearly that almost the same thing always happens with a federalist party. When it comes time to recognize Quebec’s determination to collects its own taxes, the federal government, all federalist parties included, have about the same attitude, because to do otherwise would upset the rest of Canada. We can understand their logic. They are far from willing to recognize Quebec's different responsibilities in constitutional matters. They are very far from willing.

We would have wished that the Conservative government would change its mind today and recognize that, as part of the harmonization of the GST in the Atlantic provinces and Ontario, there was compensation of $1 billion for each of the three Atlantic provinces, and a bit more than $4 billion for Ontario.

We know that they gave compensation to Ontario, which is, after all, a double standard. Why Ontario but not Quebec? They say that Quebec can no longer collect its own tax and the federal tax.

Today, they dared to answer a question from the Bloc Québécois by saying that Quebec has been compensated because it receives $1 billion a year for administering what the federal government gives free of charge to the other provinces. Officials are on the job to do what the federal government was supposed to do; however, it had been agreed that in Quebec, it was the Government of Quebec that would be responsible for administration.

Now, we are hearing a different tune. The Conservatives have changed their position. Compensation was based on a collection system that included losses. If those losses exceeded 5%, compensation was provided. However, when the Conservatives came to power, they disregarded that and took a new approach, which gives them the right to negotiate with the other provinces as if they wished to be harmonized; but not Quebec. It is the members from Quebec—

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:20 p.m.

Liberal

The Speaker Liberal Peter Milliken

The hon. member's time has expired.

The hon. member for Alfred-Pellan has the floor for questions or comments.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:20 p.m.

Bloc

Robert Carrier Bloc Alfred-Pellan, QC

Mr. Speaker, I want to congratulate my hon. colleague from Québec on her excellent presentation. I would like her to comment on the statements by the current Minister of Finance and his government to the effect that the government is prepared to negotiate in good faith. We are hearing that over and over on a daily basis in the House.

What does good faith mean for this government? This is the government that recognized the Quebec people as a nation. What meaning does it give to good faith? What might it mean ultimately, given that Quebeckers form a nation?

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:20 p.m.

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, clearly, the words “in good faith” mean nothing to them; they do not have deep meaning for them. The fact of the matter is that negotiating in good faith means going along the lines of the motion passed by the National Assembly of Quebec, calling on the government to compensate the Government of Quebec to the tune of $2.6 billion for harmonizing the QST with the GST. It also means accepting that Quebec continue to collect and administer the harmonized QST and GST.

It is clear that the government does not want to support this motion. It wants to give the impression that it is prepared to negotiate and that the others are acting in bad faith. Anyone who has been following this issue understands that there is no good faith in the Conservatives' attitude with respect to harmonization with the GST. One would have expected the Conservatives to act on Quebec's request immediately upon taking office. But no, they have been dragging their feet.

In addition, Ms. Jérôme-Forget, who was a Liberal minister in Quebec, agreed to make some changes at the request of the Conservative government, which just keeps making people go through more hoops.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:20 p.m.

Lotbinière—Chutes-de-la-Chaudière Québec

Conservative

Jacques Gourde ConservativeParliamentary Secretary to the Minister of Public Works and Government Services and to the Minister of National Revenue

Mr. Speaker, it is very wrong to claim that our government has failed to honour its commitments to the people of Quebec. I would therefore like to take the opportunity I have been offered to set the record straight.

In my speech today I would like to look at the exceptional results of our Conservative government’s commitment to restoring the fiscal balance for the benefit of Quebec, and in fact for the benefit of all the provinces and territories. Nothing less will do, to ensure that there is full and balanced debate on this issue.

There is a huge range of programs that illustrate our government’s commitment, in particular when it comes to levelling the playing field throughout Canada through the equalization program.

Those payments mean that all provinces are able to provide a reasonably comparable level of service at reasonably comparable levels of taxation.

Equalization is designed to help the less well-off provinces and it must be fairly dynamic in order to adapt to changing economic circumstances.

Our government not only places great priority on preserving and strengthening programs, it also focuses on the future. Ensuring that the equalization program is sustainable is crucial to Canadians as well as to our government.

Equalization payments have risen by 56% since 2003-2004. The government has taken steps to ensure that equalization payments will rise at a viable pace.

Last fall, the unprecedented volatility in international financial markets and natural resource prices called for us to take firm and decisive action. The government responded quickly to mitigate the impact of the global credit crisis on Canadian financial institutions.

As well, the equalization program has to adapt to new developments that no one could have foreseen, in particular the extreme volatility of natural resource prices, which has put intolerable pressure on the program.

For example, at the meeting of finance ministers held on November 3, 2008, the provinces were informed of upcoming changes to the equalization program, and we told them in advance what the amounts would be for payments to be made in 2009-2010, to facilitate their budget planning.

At the November meetings, the government announced that because Ontario had become an equalization-recipient province, the baseline fiscal capacity for the new equalization program would correspond to the average fiscal capacity of the recipient provinces.

That was the explanation for the projected increase, based on a three-year moving average, along with the new ceiling, which was based on the average fiscal capacity after equalization of the provinces that receive payments under the program.

The detailed calculations, including the impact on each of the provinces, were presented on November 13.

On November 21, the provinces were made aware of the proposed legislative approach to be incorporated in the bill to give effect to the changes. The changes were again explained and justified in the economic and fiscal statement presented by the Minister of Finance on November 27, 2008.

In addition, the provinces were informed of the projected impact of the changes over five years at the December meeting of finance ministers.

The equalization changes that were discussed in November were confirmed in the 2009 budget that was introduced in January.

At that time, the government reaffirmed the commitment it had made, in the context of restoring fiscal balance, to offering growing, long-term transfers to the provinces and territories.

Those changes are an important aspect of Canada’s economic action plan, which will enable us to meet the exceptional challenges of our times. Viable growth in the equalization program is now assured, in line with the economy.

I would like to quickly highlight a few of the most significant measures our government has adopted in this important area. The 2007 budget, which was supported by the party of our colleague who has presented this motion today, provided for the renewal and strengthening of equalization by including a principle-based approach and long-term fair, growing funding.

We made adjustments to the equalization program consistent with the O’Brien recommendations and within the principle-based structure set out in the 2007 budget, which provide for long-term funding growth. Specifically, equalization will grow in line with the economy. The growth provision will also act as a floor to protect provinces against reductions in overall equalization.

The growth path will reflect a three-year moving average of nominal gross domestic product growth, which will help to ensure stability and predictability for both orders of government while still being responsive to changes in economic conditions.

The government periodically consults all the territories and provinces, and we adopt measures to maintain sustainable, fair growth in the equalization program.

I would now like to take a few minutes to show how our government has succeeded in meeting its two key commitments, starting with the commitment to fairness. Until 2008-2009, the fiscal capacity of the lowest non-receiving province was used as the measure to ensure fairness and provide stability. However, if the number of receiving provinces expands to cover roughly two-thirds of the Canadian economy, a new measure is required to both ensure fairness and that provinces continue to receive a meaningful and stable net fiscal benefit from resources.

The new ceiling has been set to reflect the average post-equalization fiscal capacity of those provinces receiving equalization. The result is that receiving provinces will get a net fiscal benefit from their resources equivalent to half the per capita resource revenues of the receiving provinces.

In keeping with the fiscal balance approach, the government is providing transition payments for 2009-2010, to ensure that a province that receives equalization in that year will receive no less than its payments for 2008-2009. Overall, equalization will continue to be fair as a result of these changes.

Mr. Speaker—

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:30 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, on a point of order, first of all, excuse me for interrupting, but I sat here listening to this debate with great interest and I would just ask the hon. parliamentary secretary if he could talk a little bit about the motion in terms of harmonization as opposed to equalization. That is what I am trying to pick up on. Could I just hear a few comments about that?

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:30 p.m.

Liberal

The Speaker Liberal Peter Milliken

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:30 p.m.

Conservative

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

Mr. Speaker, if I can just finish my speech, my colleague will get all of the information he is looking for.

In keeping with its approach to fiscal balance, the government will make interim payments in 2009-10 to ensure that the provinces' equalization payments for this year will not be less than those for 2008-09. Overall, equalization will remain fair thanks to these changes.

I would like to mention a few important numbers to back that up. In 2009-10, principal transfer payments will amount to $49.1 billion—the highest ever. In 2009-10, under the equalization program, the provinces will receive $14.2 billion compared to $13.5 billion in 2008-09. Besides the additional $723 million—

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:30 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

Order. The hon. member for Québec on a point of order.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:30 p.m.

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, I am not sure how long the member from the south shore opposite Quebec City has been talking, but not once has he mentioned GST harmonization. We are supposed to be debating the motion. Even if he manages to mention it at the end of his speech, I have to point out that he has been talking for at least five minutes without mentioning the motion before us today.

He said that he wanted to set the record straight, so I would like him to set the record straight about his government and its approach to GST harmonization.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:30 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

I would remind the members that the rule about relevance is important. It would be best if the parliamentary secretary were to talk about the motion.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:35 p.m.

Conservative

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

Mr. Speaker, I was getting to that. If I can get to the end of my remarks, my colleague will hear what I have to say, and what I have to say is important.

Besides the additional $723 million in equalization in 2009-10, the increasing transfers include the following: the Canada health transfer, $24 billion in 2009-10, an increase of $1.4 billion; the Canada social transfer, $10.9 billion, an increase of—

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:35 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

The hon. member for Laval on a point of order.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:35 p.m.

Bloc

Nicole Demers Bloc Laval, QC

Mr. Speaker, my colleague paid absolutely no attention to what you told him. I would appreciate it if you could ensure that he addresses the motion we are supposed to be discussing today or else sits down.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:35 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

The hon. parliamentary secretary is avoiding the issue. I know it is possible to talk about other things that are relevant to the motion, but the House wants to hear his opinion on the motion.

He still has about eight minutes for his speech.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:35 p.m.

Conservative

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

Mr. Speaker, the government has been active on a number of fronts to provide the provinces and territories with more support in these trying times. We will increase and accelerate the funding for infrastructure projects all across Canada.

In conclusion, I want to remind the House that our government will protect the equitable, viable support we are providing to all the provinces, including Quebec. New Brunswick, Nova Scotia, Newfoundland and Labrador, and Ontario have all made the transition to a fully harmonized sales tax system and have benefited as a result. This is a matter of equity and give and take.

If Quebec wants to take the same path, it can expect to be treated in the same way. The Government of Canada will be happy to discuss the possibility of Quebec joining the harmonized federal sales tax system. As for the other harmonized provinces, that will mean the following. The provincial share of the harmonized sales tax is levied under the federal legislation. The tax base is essentially the same as for the federal GST. In addition, the federal and provincial components of the harmonized sales tax are administered by the Canada Revenue Agency. The provincial revenues are paid out in accordance with the framework for the distribution of harmonized sales tax revenues following the signature of a comprehensive integrated tax coordination agreement.

Under the terms of this agreement, companies that collect the harmonized sales tax deal with only one tax authority, regardless of where their offices are located. This obviates overlap and bureaucratic inefficiencies. It also has the effect of lowering costs for both the government authorities and taxpayers and, by the same token, makes us more attractive to investors, which is good for Quebec and good for Canada as a whole.

Our government has made a firm commitment to the provinces to ensure that the stability and predictability of the program is adapted to economic growth. Like all the provinces in our great country, Quebec will be able to continue counting on long-term, targeted assistance from our government based on a cooperative approach.

In conclusion, I would like to propose an amendment, namely that the motion be changed by striking out all the words after “in the early 1990s”.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:35 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, first, thank you for trying to get the parliamentary secretary on track to talk about GST and QST harmonization. I know he was not a member then, but under the Jean Chrétien government and former minister of finance Paul Martin, there was a proposal for Ontario at that time to harmonize, which is what is being proposed today.

The current Minister of Finance was adamant, should it happen, it was no good.

Ontario has lost hundreds of thousands of jobs. The economy is not good. People are very concerned. At least the economy was good then. I would like him to tell me and my constituents—

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:40 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

I apologize to the hon. member for Scarborough Centre and to the House.

The hon. parliamentary secretary has moved an amendment. I forgot to submit it to the House. I am doing it now. I have to inform hon. members that an amendment to an opposition motion can only be moved with the consent of the mover. If the mover is absent, the deputy leader, the whip or the deputy whip of the mover’s party can give or refuse consent on behalf of the mover.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:40 p.m.

Bloc

Christiane Gagnon Bloc Québec, QC

M. Speaker, we are against the amendment moved by the member opposite. It would render the motion meaningless. We are against this amendment.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:40 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

There is no consent for the amendment.

The hon. member for Scarborough Centre can continue.

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:40 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, I will finish. The question I have for the parliamentary secretary is this: When Ontario and the country as a whole are hurting, why do they think it is good today to harmonize? His Minister of Finance, the then finance minister in Ontario, the member for Whitby—Oshawa, thinks it is good today and it was not good then.

Could he explain that for us?

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:40 p.m.

Conservative

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

Mr. Speaker, I would like to remind my colleague that facts are facts. It is obvious that the Liberal leader favours increasing the tax burden. The Liberal leader has said so. He said we should raise taxes. In a period of global recession when so many families have a very tight budget, the Liberal leader must speak the truth to Canadians. His agenda includes more taxes and more spending. Why does he want--

Opposition Motion—Harmonization of QST with GSTBusiness of SupplyGovernment Orders

3:40 p.m.

Liberal

John Cannis Liberal Scarborough Centre, ON

Mr. Speaker, I rise on a point of order. With all due respect to the House and civility, the member must be on a different planet. I am asking him a question and he is going off in a totally different direction. I would ask him to be professional and answer my question.