Yvan Loubier

[Budget Implementation Act, 1996, April 25th, 1996]

Madam Speaker, my colleague is being a bit facetious in asking such a question. Harmonizing taxes, reducing the paper burden and simplifying the administration of taxes are all good things. Nobody said they were not. This is in fact what Quebec has understood and has been doing since 1991. We harmonized the federal tax and the Quebec sales tax, but not at a cost of $1 billion. Not at all.

We harmonized the bases gradually, through discussion, through an administrative agreement, the kind you are so fond of. You are always advocating administrative agreements, everyone's full understanding and participation by all the provinces. And what are you handing us this week-a slapdash agreement with three of the four maritime provinces.

Without consulting any government in any province of Canada, least of all Quebec, you announce that from now on this will be the basis of discussions. And then you bring out this agreement, which will cost $961 million over the next four years over and above the equalization payments, which will take over. And now we have to pay. Button it and pay up is what you are telling the governments of Ontario, Quebec, Alberta, Saskatchewan, Manitoba and British Columbia.

This is not how it was in Quebec. There, we could see the advantage of harmonizing and of simplifying the administration. We could also see that the more we simplified and cut back administration, the better our economic performance. But we never asked for anything. The only money the federal government gives the Government of Quebec is for services rendered, because it administers the federal government's GST. And that is what is not right.

Furthermore, I do not think we are alone. Some may call us evil separatists and perpetual federalism bashers, but it is not true. See how rational, very rational we were with the GST, unemotional even. In Quebec we harmonized it. Not only are we criticizing this ridiculous agreement, but like the rest of Canada, we in Quebec find this whole business unacceptable. It is not right that the rest of Canada should pay for an agreement that is going to allow people in the maritimes to save 4 per cent in provincial tax.

If it were an equalization adjustment, it would be a completely different matter. Let us not mix apples and oranges as the Minister of Finance is so good at doing in order to confuse Canadians. That is not right. Do not forget-and my colleague knows it full well because he sits on the finance committee-that when a tax base in a province or a group of provinces is reduced from 19 per cent to 15 per cent, as is the case with the new consumption tax, the new hidden GST, and the federal government pays out $961 million in compensation, the federal equalization formula must kick in.

Whether we like it or not, it is automatic. Put a 15 per cent consumption tax base in the equalization formula, a reduced base, and after the fourth year or maybe after the third year or maybe immediately-we do not yet know the specifics of the political deal signed between the Minister of Finance and the three maritime provinces-given the equalization formula, Canadians will necessarily have to pay, not for four years, but ad vitam aeternam, as long as the principle of equalization is in effect in this country.

This is a bad deal. Because we are making people aware of this bad deal, because we are bringing to their attention your poor management, political deals made to give the impression that the government is acting on the Prime Minister's commitment to eliminate the GST, we are being gagged. It is not right to deal with such important matters in this manner.

I would be very careful if I were you because, when you go back to your ridings this weekend or the next, you may find that some of your constituents are disgruntled. During the 1993 election campaign, some people thought: "Wow, this will be a good government. It will abolish the GST, scrap it. We will vote for them".

But the situation has changed since Monday. The Minister of Finance admitted he cannot keep that promise, while the Prime Minister told us they had kept it. Who should we believe? I think we must trust the intelligence of Canadians. They know perfectly well that the GST is there and for a long time, but that it will be hidden from now on.

So I think a lot of your constituents will be waiting for you with two messages by next week: you did not keep your promises and the government acted hypocritically.

[Budget Implementation Act, 1996, April 25th, 1996]

Madam Speaker, I am pleased to rise on Bill C-31, a bill recently introduced by the Minister of Finance, which not only implements several budgetary provisions but also adds to the provisions of the latest budget brought down by the Minister of Finance some elements of the agreement on the GST reached the day before yesterday between the Minister of Finance of Canada and three of the four maritime provinces.

My argument will focus on two major aspects of the bill: first, the part dealing with certain provisions of the Unemployment Insurance Act and, second, certain provisions of the agreement on the GST, and those calling for the outrageous amount of $961 million to be paid out in compensation to the maritime provinces.

But before I go on, I must say that I deplore the fact that the government does not like to be told the truth, to hear certain facts about the unemployment insurance system, the GST or the outrageous agreement entered into with the maritime provinces. Instead of responding to these statements and debating the issues in public, in front of the people, the government chooses to hide behind a wall of silence, stifling debate with a gag order not once but twice today. This is a shame and a disgrace.

Regarding the unemployment insurance system, I would like to start by commending my colleagues, particularly the hon. member for Mercier, the hon. member for Kamouraska-Rivière-du-Loup, the hon. member for Lévis, and all those who have supported them in literally besieging the human resources development committee, whose members were once again trying to limit debate, something we will not abide. The real issues must be raised. I congratulate my colleagues on doing just that and we will keep on fighting with their support.

Our position on unemployment insurance is clear and, regardless of the gag put on us and the government's attitude in trying to hide the truth from the people who elected it, we will press on. The only thing that this bill is good for is to be tossed out. This is the only way the unemployment insurance system can be properly reformed today.

Let me restate our main reasons for opposing this reform. First, the proposed reform is unfair, because it will be harder to qualify and two categories of unemployed will be created, depending on how frequently they are unemployed. Second, this is a regressive reform, because there will be a single rate of contribution and the maximum insurance earnings will be reduced to $39,000.

Third, by lowering the maximimum to $39,000, the Liberal Party of Canada is doing a favour to large corporations, since those that can afford to pay insurable gains totalling $39,000 annually are precisely the big corporations that contribute to the Liberal Party's coffers.

Fourth, the reform is detrimental to job creation, since the new contributions structure favours capital intensive industries, at the expense of labour intensive industries.

Fifth, the reform will generate poverty, because it lowers the rate of benefits while taxing workers from the very first hour of work.

This debate on Bill C-31 gives me an opportunity to reiterate the position of the Bloc Quebecois regarding this issue. The proposed unemployment insurance reform is not agreeable to Quebecers and Canadians as a whole. The government must withdraw its bill and start the whole exercise all over, do some real thinking, and come up with a real unemployment insurance program that will help the poor in our society, instead of hitting them hard with cruel measures.

As regards the GST, there are many things we could say and repeat to the Minister of Finance. There are many things we could say and repeat to the Prime Minister, now and then. There are many things we could say and repeat to all government members regarding the numerous promises they made concerning this tax.

Why did the government, this morning, limit to only one day, or 100 minutes for the official opposition, the debate on the new agreement reached between the maritime provinces and the federal government concerning the GST? Why did it do that? I will tell you why. It is because this government is ashamed of the Liberal Party's promises that have not been kept. This government is ashamed of the attitude of its Prime Minister, who reneges on his commitments. This government is ashamed of the attitude of the Deputy Prime Minister, who said she would resign if the GST was not abolished. We are being gagged because the Prime Minister failed to meet his commitments. This is why.

Not that long ago, the government made very clear statements. We have recordings, newspaper articles and even videos of that, just as in the case of the numerous scandals involving the Department of National Defence. Prominent members of this government have made a formal commitment to Quebecers and Canadians, especially during the election campaign. They have made a promise. This Prime Minister stated in a CBC interview in 1993: "We will scrap the GST".

What is the Prime Minister saying now? He keeps repeating we should read the red book. But what did he say personally? He indulged in petty politics by promising Quebecers and Canadians that he would eliminate the GST. We have his commitment on tape. It was recorded. And that has nothing to do with the red book. He promised that he would kill the GST. And what is he doing now? He is breaking his promise.

On October 18, 1993, on the CBC, the Deputy Prime Minister made a statement that is just fine when you want to entice voters during an election campaign:

"I have already said personally and very directly that if the GST is not abolished I will resign".

So, she promised to resign if the GST was not eliminated.

What is she doing now? She is laughing at us. She is laughing at Quebecers and Canadians with her broken promises. Shame on her. We would have thought that, as it was said during an election campaign, they would stop saying they would if they did not really mean it. But that was not to be. On May 2, 1994, about six months after coming to power, the Prime Minister repeated: "We hate this tax, and we are going to eliminate it".

How can they take such an attitude now? How can they try to hide behind an agreement with the maritimes, an agreement that not only leaves the GST in place throughout Canada, but also buries it in the price?

How did we get from a formal commitment to some kind of political hybrid that makes the Minister of Finance look good and gives the Prime Minister the opportunity to say: "Look, we have done something about the GST", when what he promised was not to do something about the GST, but to scrap it? How can a government deceive the voters this way? It is unacceptable. It is so totally unacceptable that there is a general outcry in Quebec and in Canada.

About the hidden tax, for instance, let me remind the House that, as early as 1994, the Canadian Chamber of Commerce made a survey and concluded that 70 per cent of its members were opposed to a sales tax, the new GST or any new value added tax, being hidden in the price of goods. Seventy per cent of its members were against such a measure in 1994. The Canadian Chamber of Commerce carried out another survey not so long ago, last February in fact, and realized not only that the situation had not reversed, but, quite the opposite. There are now 76 per cent of Canadian businesses that are opposed to the new GST being hidden in the price of goods.

When there is almost unanimous consent within the Chamber of Commerce on this issue, why should the government come up with such a hypocritical initiative? The Canadian Taxpayers' Association, through its president, also reacted strongly against a hidden GST. Why? First, because it allows the government to conceal what the real financial situation is in Canada. It also allows the federal government to conceal its mismanagement of public funds and the fact that it is standing on the brink of a financial abyss, with an accumulated debt of over $550 billion. That is the first reason.

The second reason is that by hiding the tax-as the Minister of Finance has done in the agreement reached with the three maritime provinces and which he would like to extend to the rest of Canada-the government has found a roundabout way to increase the tax, year after year, without the consumers in Quebec and the rest of Canada knowing about it.

In fact, while in opposition, the Liberals vigorously attacked the previous government on the GST and emphasized the very same things we just mentioned. In 1989, the Liberal opposition minority report said: "Moreover, if the GST is hidden in the sales price, it will be a lot easier for the government to raise it later". This is what was said in the Liberal minority report of 1989. It also said: "Nothing will prevent the government from regularly raising the GST." This is still according to the 1989 Liberal minority report.

This is what the Liberal Party was saying then. I find it peculiar that they should do a complete turnaround a few years down the road. How can the people of Quebec and Canada trust a government like that?

As such, the agreement is a bad deal. Why? Because not only is the problem of the hated GST not solved, not only is this tax hidden and there is no national reform, since this is restricted to the maritimes only, but this will cost Quebecers and Canadians outside the maritimes at least $961 million over the next four years to compensate the maritime provinces for the revenue loss they will experience after replacing the actual federal and provincial taxes-totalling some 19 per cent in the maritimes-by a single federal tax of 15 per cent.

This is a $961 million political compensation that has nothing to do with federal compensations like, for example, the one that followed the abolition of the Crow's Nest rate for the transportation of western grain. They said then that economic distortions were created.

These economic distortions are being eliminated, but there must be compensation for those who, since 1897, benefited from this preferential transportation rate. That is not the same thing. That was an economic compensation. This compensation is political. We are supposed to believe that the government is doing something about the GST, that it wants to harmonize the consumer tax collected by the federal government and the provinces, when in reality this accord is a smokescreen for a broken promise and an outrageous expenditure of $961 million over the next four years.

This is a lot to pay so that the Liberal government can pull the wool over our eyes, to the tune of almost $1 billion over the next four years. This is not right.

Not only that, but the finance minister is keeping something else from us about this agreement, and that is that in four years, when the $961 million have been paid, equalization payments will kick in. It is not just $961 million. After the fourth year, we will continue to pay, on average, approximately $250 million annually to the maritimes for this bad deal, this political deal that the finance minister signed this week.

The new deal between the federal government and the maritimes will cost $1 billion to Quebecers and Canadians outside the maritimes. It is a high price to pay for Canadians for a bad deal, a political deal, which maintains the GST.

It is not the only price. After four years Canadians will continue to pay compensation to the maritimes by equalization payments. When one reduces the taxation base, as in the proposal of the Minister of Finance, equalization increases automatically.

In Quebec we realized harmonization for five years without any cost to the federal government, without any cost to Canadians in other parts of Canada. Why is it not possible for the Liberal government to do the same thing in all territories of Canada? Why is it not possible to avoid paying $1 billion to the maritimes?

Not only is this agreement costing us dearly, not only does it solve nothing, not only is it a smokescreen for the Liberal Party's broken promises, but in addition there is a danger that it will set a precedent of interfering in the fiscal autonomy of the provinces.

I would like to tell you what the deputy premier of Quebec said when he heard about this agreement, because there are fears in Quebec about the agreement. He said, and I quote: "Certain conditions cannot be gotten around, including full fiscal autonomy for Quebec, which must retain full flexibility to set the base and the rate".

His concerns are not without foundation, because in the paper tabled Monday at the same time as the agreement, it is clearly mentioned that the new Canada revenue commission, the one which was announced in the speech from the throne and which came up again in the last budget speech, will be responsible, in place of the provinces, for managing the new tax, the Liberal government's new hidden and hypocritical GST.

As this paper points out, if application of this agreement between the federal government and the maritime provinces is to be expanded to all of Canada, over the next few months there will be many approaches made to the various provinces to get them, Quebec in particular, to give up their taxation autonomy, administration of the sales tax, the right to set the level of their own taxes-something Quebec is totally free to do today-and particularly the right to determine which goods and services are to be taxed. This is what lies hidden behind the agreement reached between the maritime provinces and the Minister of Finance.

We can but regret this agreement, this political agreement, this bribery of the maritime provinces, aimed at getting what the Minister of Finance and the Prime Minister want. We can but regret, as well, what occurred here yesterday at 5.21 p.m. Since I saw it as a tragic moment for Canadian parliamentary history, I took note of the exact time the Minister of Industry tabled a notice of motion to gag us in the debate on Bill C-31, as well as on the outrageous agreement between him and the maritime provinces.

This agreement will be terribly costly for us. A minimum of $1 billion over the next four years, $250 million from the tax dollars of Quebecers to foot the bill for a political agreement entered into with the maritimes. This agreement will serve to increase competition between Quebec businesses and those in other provinces, New Brunswick, for example.

Such a situation is not right, particularly since we in Quebec have come to an agreement with the federal government, have made an incredible effort to harmonize the tax, have defined highly efficient mechanisms for its application and administration, and now are rewarded for our efforts by the federal government's presenting us with an agreement that has been thrown together, a political agreement that will cost Quebec $250 million, and the rest of Canada some $750 million.

I can understand why Quebec is starting to rise up, and the other provinces as well. It is not right for a federation to be administered the way the federal government is administering this one. Nor it is right for it to renege on its commitments, as the Prime Minister and the Minister of Finance are doing.

[Budget Implementation Bill, 1996, April 24th, 1996]

Madam Speaker, I was listening earlier to my Liberal colleague talk about the new GST agreement between the federal government and the maritime provinces. He forgot to mention that this agreement requires the federal government to pay close to $1 billion to the maritime provinces, a political compensation, as this billion dollars was used to pay off those provinces to accept a proposal that does not kill the GST.

On the contrary, this proposal maintains the GST but makes the Minister of Finance look good by allowing him to say he took some action in this matter. It is Canadians from the other provinces and Quebecers who will have to pay for this $1 billion in political compensation. But it is not the only cost; by reducing the combined sales taxes-the provincial sales tax plus the GST-in the maritimes from around 19 to 15 per cent, the Minister of Finance has paved the way for an increase in equalization payments to the maritimes over the next three or four years. That is what will happen.

So the price to be paid by Canadians from the other provinces and by Quebecers is not only $1 billion; it is not true, as the Minister of Finance claims, that this will end after four years. In fact, the formula for calculating equalization payments to the maritimes shows that we will be paying more and more for this bad agreement that the Minister of Finance signed on our behalf.

The new deal between the federal government and the maritimes will cost Quebecers and Canadians outside the maritimes $1 billion. It is a high price for Canadians to pay for a bad deal, a political deal which maintains the GST. However, it is not the only

price. After four years Canadians will continue to pay compensation to the maritimes through equalization payments. When the taxation base is reduced, like the Minister of Finance's proposal, equalization payments intervene automatically.

Why did the Minister of Finance and the government not do with the maritimes what they have done with Quebec since 1991, that is to say, really harmonizing both taxes without it costing a penny to any Canadian? Why did they approve such an agreement? Why did they agree to take $1 billion from the pockets of taxpayers in Quebec and Canada outside the maritimes to pay for this agreement, which is not even a harmonization agreement, which does not even keep the original Liberal promise to kill the GST? Why? My question is directed to my colleague.

[Budget Implementation Bill, 1996, April 24th, 1996]

Bloc members do.

[Goods And Services Tax, April 23rd, 1996]

Mr. Speaker, on the bill or not, the Prime Minister's commitment, the Minister of Finance's commitment, their party's commitment, was to abolish the GST. The Deputy Prime Minister even laid her seat on the line, as did some other Liberals at election time or shortly thereafter.

Will the minister admit that what he is proposing at last to the people of Quebec and of Canada is what he condemned loudly not so very long ago, disguising the GST in the price, where it will be far easier for the government to raise it from time to time without the public's noticing?

[Goods And Services Tax, April 23rd, 1996]

Mr. Speaker, if the Minister of Finance has any reason to excuse himself to the people of Canada, on behalf of his party, it will be for having made political hay by promising abolition of the GST and then not making good on the promise. That is what he ought to do.

This morning, the government decided to disguise the sales tax by hiding it in the price of goods and services. Yet, while in opposition, the Liberals stated in the dissenting report of 1989 that "if the GST is camouflaged in the price, it will be far easier for the government to raise it later on".

My question is for the Minister of Finance. Does the minister acknowledge that, through his operation this morning, all that he has done to make people think that he was eliminating the GST was to hide it in the price of goods and services.

[Sales Tax, April 23rd, 1996]

Mr. Speaker, I must first of all deplore the way the Minister of Finance tabled documents this morning, an hour and a half before his presentation in the House, without our hearing from him in the past three days about his intentions regarding the GST. If this is not a way to circumvent democratic principles, I wonder what it is, especially when such an important issue is at stake.

What strikes me about the finance minister's speech is that we could have taken his old speeches from 1990, for example-the old speeches made by members of the Liberal Party of Canada-and turned them completely around to arrive at this morning's speech. A few years ago, the Minister of Finance was saying the exact opposite of what he said in his speech this morning.

All those who expected the GST to disappear, to be scrapped-as many in Canada and Quebec did and as many Liberal members had been promising for three or four years-will be sorely disappointed. The GST is staying; it is not being scrapped but replaced by another kind of GST. This is in total contradiction with the many oral and written promises made by members of the Liberal Party of Canada.

Allow me to quote just a few of them. On March 11, 1996-not so long ago-the Globe and Mail reprinted this quote by the Deputy Prime Minister:

"I have already said personally and very directly that if the GST is not abolished I will resign".

That is what the Deputy Prime Minister herself said on October 18, 1993.

My second quote, which dates back to the 1993 election campaign, comes from the Prime Minister:

"We will scrap the GST".

To scrap means to eliminate; therefore the GST was to be eliminated, not replaced by another kind of GST to give the appearance of keeping an election promise.

I could give you any number of quotes but I will make do with a last one. On May 2, 1994-not so long ago-the Prime Minister said this: "We hate this tax and we will make it disappear". The GST is staying; the only disappearance is in the price of the product.

The finance minister's new measure is hiding two important things. First of all, some of the figures in the finance minister's speech this morning are hidden; one figure is real, however: the cost of harmonization with the maritime provinces. It is the cost of buying an election promise that was not kept.

The Minister of Finance has paid off the maritimes so that they would help him keep an election promise through shameless window dressing, as we saw this morning. A total cost of $1 billion has not been denied so far. One billion dollars is what Quebecers and Canadians from the other provinces will have to pay for an election promise that was not kept by the Minister of Finance and the Prime Minister. One billion dollars is what this measure is really costing us.

But there is more. It will cost more than the $1 billion they said it will cost us in the next four years. I do not know if the Minister of Finance and his Liberal colleagues have realized this-there are many things they fail to realize-but reducing consumption taxes from 19 to 15 per cent will force all Quebecers and all Canadians from the other provinces to pay more in equalization to the maritime provinces in the future. Did he realize this? No, or if he did, he is hiding this additional cost from the people.

Are these increased equalization costs, which all taxpayers in Quebec and Canada must pay in addition to the $1 billion the Minister of Finance promised the governments of the maritime provinces in the short term, acceptable? Are they acceptable, when we compare this harmonization process, this buy-off of the maritime provinces, to Quebec's treatment in recent years?

Everyone here knows that Quebec's sales tax has been harmonized with the federal sales tax. Quebec is administering this federal tax. Quebec has been a good boy, a good corporate citizen in not demanding any compensation for this harmonization.

Why is Quebec's effort in that area not recognized now? Why is the federal government now dipping in the pockets of Quebecers and Canadians to give $1 billion in compensation to the governments of the maritime provinces, but not to the Quebec government? We were good boys and good girls in harmonizing our tax with the federal sales tax and not asking for any compensation so far. Is that what they call managing the Canadian federation? There is something wrong here.

The new GST is a sneaky tax. It is sneaky because it is hidden in the price of goods and services. I listened to the Minister of Finance who said earlier that, in 1994 and even in 1995 and after, representations had been made to the finance committee by many people who told committee members that they were irritated and upset as consumers to see the GST added to their purchases.

Others warned them against changing four quarters for a buck and hiding taxes.

Let me read what the Liberal majority wrote in 1994 in its report. They said: "It would just not be appropriate to hide from Canadians how much they pay in taxes to their government, and creating a hidden tax would affect their ability to force the government to account for how these taxes are collected and, to a lesser extent, for the use made of public funds".

That is the kind of representations that were made to the finance committee. Most witnesses told us: "First, abolish the GST, and if it absolutely has to be replaced by something else, make sure it not hidden from the public. Let it also be obvious that the federal government is unable to manage public finance properly, which explains why it has to keep dipping deeper and deeper in the pockets of taxpayers in Quebec and Canada". That is what people were telling us. "Show us the true face of public finance".

Instead, the Minister of Finance is proposing a hidden tax. Worse yet, in 1989, in its minority report on the GST, the Liberal minority, which was the official opposition then, wrote that, if the GST were hidden in the sales price, it would make it that much easier for the government to raise it later.

This is what the Liberals held as true in 1989, but now that they are in power, the tax is not supposed to go up? We will have a hidden tax and it will not go up, contrary to what the Liberals held as true in 1989. It is a disgrace to change one's mind so radically and suddenly, at the expense of Canadians.

Even back when they were in better frame of mind and did not have an election promise made by he Prime Minister to keep, Liberals were not the only ones to say that the GST should not be hidden. In 1994, a survey conducted among its members by the Canadian Chamber of Commerce showed that 70 per cent of Canadian businesses were opposed to a hidden tax. That is 70 per cent. If that is not a majority, I wonder what is.

Recently, in February 1996, the Canadian Chamber of Commerce conducted the same survey again, just to realize not only that its members' opposition was holding strong, but also that the percentage of those opposed to hiding the tax in the sales price had

risen from 70 per cent to 76 per cent. Could the message be any clearer? I do not think so. This is hypocrisy on the part of a government that is not able to call things by their rightful name and to show the Canadian reality as it is.

There is a lot of hope in that document. It refers to an agreement reached between the federal government and the three maritime provinces, which account for roughly 15 per cent of the Canadian population, and points out that the idea is to apply these precepts to all provinces. I have some news for the Minister of Finance. A vast majority of Canadians are opposed to the minister's project to establish a single 15 per cent tax to be managed by the Canada revenue commission, which would bump the provinces. This would mean that, in Ontario for example, the tax burden would increase, while in Alberta the commodity tax would go up from 7 per cent to 15 per cent. Canadians unanimously believe that the Minister of Finance is mistaken if he thinks that other provinces will go along with his project.

This unanimity exists particularly in Quebec where, for several years now, Quebecers have been working hard to harmonize the two tax bases and to manage them. Indeed, Quebec looks after the collection and the administration of the GST on behalf of the federal government. So, we worked very hard to achieve harmonization at no additional costs.

The minister was too quick to dismiss the case of Quebec by saying, in his document Towards Replacing the Goods and Services Tax , that: ``Since the harmonization process with the province of Quebec will be completed this year, the government will now work with the other provinces to extend the system to the whole country''. The minister was too quick to dismiss the case of Quebec, because it is one thing to harmonize tax bases, as Quebec is doing, with the project being about 95 per cent completed, but it is quite another to endorse the minister's project to impose a single 15 per cent tax, while the GST and the TVQ together amount to 14 per cent. This project would result in a one per cent tax increase and would push Quebec aside by giving the Canada revenue commission the mandate to administer the new 15 per cent GST. Indeed, there is a difference between the current harmonization process and the finance minister's project.

Given Quebec's history of struggles to achieve autonomy in the field of taxation, particularly since the sixties with Jean Lesage, I can assure you that it will never agree to such a taxation system.

Far from promoting tax harmonization, this project could well undermine efforts made in Quebec over a period of several years to achieve that result. Let us not forget that this harmonization project was implemented with the agreement of both parties and with a lot of goodwill. Today, the Minister of Finance is trying to fulfil an election commitment-but fails to do so because he does not abolish the GST. He comes barging in and says: "We will replace all that; we will ensure that, from now on, the federal government will be the one to manage this tax".

As a Quebecer, I would tell myself that it is not really worth co-operating with the federal government, since we are not paid to do that, nor are we compensated like the maritime provinces, who were paid off. Next time, we will say no and there will be no harmonization process. Quebec will say no. We will not get into a system whereby Quebec will lose its authority to set its own tax rate. Worse still, the federal government will raise the tax rate by one percentage point while the premier of Quebec has been doing everything he can, since he came into office, to avoid increasing Quebec's sales tax by one point, and even by half a point.

We cut where we can. We put a lot into streamlining and consultation, and we should let the federal government interfere and increase the sales tax by one percentage point? No way. Quebec will say no. We should lose the capability to fix our own rate? Quebec will say no. We should allow a federal agency to come in and make decisions on behalf of the Government of Quebec? There is no way Quebec will agree to that. You can expect tension between the federal government and Quebec to build up, when things were going so well as regards the consumption tax.

Why are they acting this way? Merely to get votes and to look as if they are fulfilling their promise, an election commitment the Prime Minister himself-and we have it on tape, as I said yesterday-is unable to keep.

With an election coming up, it is sad to see how the government is describing this election measure, because that is what it truly is, and the whole situation. The government is trying to deceive the population by saying that the GST has been eliminated-poof, as my hon. colleague from Rimouski-Témiscouata would put it-when in fact it is making a big deal out of a minor agreement reached with three maritime provinces and takes this opportunity to say: "As you can see, we can keep our promises". The fact is that they have done nothing to keep their promise. The GST is still here, there is still some friction between the federal government, Ontario and Alberta, and the expected friction with the Quebec government bodes no good.

We find this measure unfortunate. We also disapprove of the way the Minister of Finance and the Liberal government have dealt with this issue.

[Goods And Services Tax, April 22nd, 1996]

Mr. Speaker, I would like to refresh the Prime Minister's memory ever so slightly. He said, during the 1995 election campaign, that he would abolish the GST. He made a solemn promise to abolish the GST and, as with the numerous defence department scandals, we have it on tape.

Not only is the Prime Minister telling us that he will not abolish the GST, but he is confirming that by hiding the new GST in the price of goods, the federal government will more easily be able to increase it, unbeknownst to the public. Is that correct?

[Goods And Services Tax, April 22nd, 1996]

Mr. Speaker, last week the Minister of Finance did not deny that replacing provincial sales taxes and the GST with a new GST hidden in the sales price would involve federal compensation of $1 billion to the Atlantic provinces, to come out of the pockets of all Canadians.

My question is for the Prime Minister. Does the Prime Minister confirm that the agreement his government is preparing to announce with the Atlantic provinces does not constitute the removal of the GST as he had promised, but an expensive camouflage of a new 15 per cent GST in the price of goods and services?

[Goods And Services Tax, April 19th, 1996]

Mr. Speaker, the minister is mixing applies and oranges. If he wants to have an equalization formula with his new GST reform, let him say so. We are talking of two totally different things.

The GST and the provincial sales tax have already been harmonized in Quebec. There was no negotiation on compensation. Do you know what kind of a message that sends to Quebec? That any time you co-operate with the federal government, you end up paying for it. If there is a $1 billion compensation payment to the maritime provinces, that means Quebecers will be paying $250 million to the governments of the maritime provinces, to their treasuries, as compensation for those governments' lower tax receipts. Where is the logic in that?