Crucial Fact

  • His favourite word was budget.

Last in Parliament November 2005, as Liberal MP for Hamilton East—Stoney Creek (Ontario)

Lost his last election, in 2006, with 35% of the vote.

Statements in the House

Supply November 6th, 1997

Mr. Speaker, I cannot profess to be a rider of horses. I am not quite sure what the hon. member was talking about in terms of reins. I will put those comments aside and try to deal with the facts.

If the hon. member is saying that in Atlantic Canada the provinces are earning more revenue now that the taxes are harmonized, compared to prior to the harmonization, the Atlantic provinces would not qualify for compensation. His statement is incorrect. The provinces Atlantic Canada because of harmonization are earning less government revenues.

If the member is saying that Atlantic provinces are earning more money today because of harmonization than they were prior to harmonization, that is incorrect. The reason assistance is being provided to the Atlantic provinces is that harmonization has brought some structural change to the Atlantic provinces. As a result of that structural change they were to experience a greater than 5% reduction in the retail sales tax. That is why they are receiving assistance.

Supply November 6th, 1997

Mr. Speaker, once again the manipulation of information is becoming an art form.

Since it is a fact it should be quite clearly on record that harmonization resulted in an increase in revenues for the province of Quebec. The formula put in place that deals with structural change to a tax system speaks to giving compensation to provinces that suffer a reduction in revenue. More specifically, any province with a loss exceeding 5% because of harmonization would qualify for assistance.

Quebec revenues went up after harmonization. Essentially as part of this formula it would not qualify, as British Columbia would not qualify, as the province of Ontario would not qualify, and as the province of Alberta would not qualify. If they were to harmonize they would not qualify just as Quebec does not qualify given that they are partially harmonized and not fully harmonized.

Supply November 6th, 1997

Mr. Speaker, I am hoping after having heard the first round of debate that we can restore some clarity and context to the whole issue of the harmonized sales tax and specifically the motion before us that deals with compensation.

In order to do that I want to go back a step and focus on the early part of our mandate when the government asked the House of Commons finance committee to consider alternatives to the GST and to essentially consult broadly with Canadians on some alternatives.

The committee heard from tax experts, business people and Canadians. In fact the committee heard from nearly 500 witnesses and received over 700 briefs. It reviewed about 20 different alternatives and found that the broadest consensus by far was in favour of harmonization, replacing the current patchwork of sales tax with a single tax based on a value added system.

As you will remember, Mr. Speaker, because you were here in the last Parliament, this really became the foundation of the HST, the harmonized sales tax. It was an agreement between the federal government and three Atlantic provinces, New Brunswick, Nova Scotia and Newfoundland. Throughout this agreement which came into effect last April these provinces replaced a system which was in fact quite cumbersome, costly and complicated with one that proved to be simpler and essentially more efficient. Most important, these changes will add up to a better system that promotes a stronger economy and will result in greater job creation.

Consumers in participating provinces are benefiting in a number of important ways. Most important, there has been a reduction in the rate of tax. For Nova Scotia and for New Brunswick the combined rate of 15% represents a decrease of essentially 4 percentage points in an effective sales tax rate. In Newfoundland and Labrador the rate decrease is closer to 5%.

We heard a lot about businesses this morning in the first round. Businesses are also benefiting from the lower combined tax rate. They now have to deal with only one set of tax forms, one set of rules and one tax administration. Essentially it means lower compliance costs, and we know that translates into savings and those savings translate into the firm's own bottom line and can benefit consumers.

The Canadian Institute of Chartered Accountants estimated that if all provinces were to join in the national sales tax system Canadian business could save between $400 million and $700 million a year in administrative costs alone. I should also point out that a someone who has been part of the small business community, and Mr. Speaker, you are also part of the business community, the benefits of lower compliance costs will particularly be advantageous for the small business community. We know that the small business community also bears disproportionately the cost of dealing with two separate tax systems.

A further benefit to businesses in the participating provinces will be the recovery of the HST payable on inputs, something that was not being done before the implementation of the HST. In fact, harmonization will eliminate over $700 million in hidden sales taxes on business inputs in the three Atlantic provinces. This will in fact reduce the cost of Atlantic exports and essentially eliminate the unintentional competitive advantages that imports currently enjoy in the Atlantic provinces. The HST adds up essentially to a simpler, fairer system and really a stronger economy.

Let me now turn to what is really the aspect of this legislation that has too often been attacked, including today's motion, and essentially attacked by those who placed partisan politics and narrow regionalism ahead of clear objective thought. This of course is the decision by the government to provide a formula for short term adjustment assistance to provinces when they face significant structural costs to participate in a new and integrated system.

Under this legislation adjustment assistance is available to provinces which experience a revenue shortfall in excess of 5% of their current retail sales tax receipts by moving to a single harmonized sales tax system at a combined rate of 14% or 15%. It is important that we emphasize that this is also a short term measure limited to a period of significant transition that these provinces will be going through. It will end after four years. It is not an ongoing program which some of the members have alluded to in this House as being a subsidy. It will end after four years and it provides provinces with sufficient time to adjust to a harmonized system.

It is also important to note that it is truly a joint program. Under the formula there is near equal sharing between the federal government and qualifying provinces of the adjustment costs that harmonization would entail over a four year period, but what I find disappointing is that there are some Canadians who have attacked the entire concept of adjustment assistance.

This mindset essentially ignores history. It misreads the present and quite frankly it lacks the vision for the future. Canadian history makes it very clear that government has played an essential role in our economic evolution and adjustment.

There were tax and land grant support for a national rail system, the development of the St. Lawrence seaway, megaprojects from Lloydminster to Hibernia, special tax concessions for oil and gas development, for research and development, and for small business. I could go on and on. The list is long and quite honourable.

These government investments respond to opportunities. There is a long and proud list of federal assistance for sectors and regions that face economic difficulties and dislocations or must in fact confront some core structural change.

Equalization payments are an essential part of our constitutional framework. They recognize that all of Canada is stronger as a society and as a marketplace when we help less affluent provinces to provide a basic level of public service and support.

Perhaps some members are not aware of this, but back in 1972, when the federal government instituted income tax reform, every single province received adjustment assistance totalling more than $2.7 billion over a seven year period.

More recently the federal government provided assistance to farmers following the collapse of world grain prices. Now they are being compensated for the elimination of the Crow rate.

We have provided bottom line support for maritime fishers who were confronted by a tragedy of decimated fish stocks.

We equally shared in the cost of solving the problem of tobacco smuggling in Ontario and Quebec.

These actions were not charity. They were not partisan politics. They were essentially a reflection of the contract Canadians have struck with themselves, a nation building contract which says that there is a critical role for government and that critical role is to help when help is truly needed and where it can in fact be truly effective.

That takes me to the present. Today more than ever we must manage assistance with much more rigour, innovation and insight. The world of global competition for trade, investment, business opportunities and jobs demands that government remain constantly conscience of the bottom line.

We all know that a government which squanders resources imposes on the nation the costs of high deficits, high taxes and even higher interest rates. These we all know are job killers and investment killers. More important, they are future killers and they are hope destroyers.

This same challenging competitive environment also demands that government continue to play a role in helping its citizens, sectors and regions to meet the global challenge. That is exactly what we are doing with the adjustment assistance for the sales tax harmonization.

Assistance is a necessary investment in making Canada stronger, through helping disadvantaged regions move to a modern tax system to meet the modern challenges of today. It is a 21st century type of investment. It reflects the fact that government must change how it involves itself in economic development.

The assistance formula which we have developed applies equally to every province. There is no discrimination. There is no favouritism. More important, let me state very clear that there is no bribery involved, as was mentioned earlier by a number of members.

Any province in the country which faces a transitional revenue loss exceeding 5% because of harmonization qualifies for assistance. I cannot make it much clearer than that. It is pretty straightforward. After four years it is on its own. It is a transitional measure.

That means that British Columbia, Alberta and Ontario would not meet the threshold. They will not lose money on harmonization, just like Quebec did not lose any money when it partially harmonized.

Let us go directly to the heart of today's motion by the Bloc. There is simply no truth to the fiction that Quebec incurred revenue losses under harmonization with the GST. That means that there are no grounds for its claim that it is being shortchanged.

Let us go with the facts. After beginning its phased in harmonization in 1991-92 and 1992-93, Quebec sales tax revenues were 20% and 17% higher in each fiscal year, respectively. These figures are not based on my documents. They are not based on the documents of the national government. They are based on Quebec documents.

It is a fact that annual Quebec sales tax revenues over the 1990-91 to 1995-96 fiscal years were on average 12% higher than the province's preharmonization revenue in 1989-90.

I can go further. It is a fact that when we draw the analogy with the other provinces over that same period, Ontario with a retail tax system similar to the one Quebec replaced had an average annual sales tax revenue drop of 3% below 1989-90 levels. In other words, when you make the comparison of where Quebec was with harmonization, the improvement we saw in Quebec, and look in that same period at the experience of Ontario, which has a similar retail sales tax system, we see that harmonization was a winner for Quebec.

Let me again be very clear. It is a fact that compensation is available for those provinces that fully harmonize with the GST. Let me explain that. Full harmonization with the GST means that you have the same tax base, the same rate and that members of the HST, provinces and the national government, would move in concert if we see a rise in rates, a reduction in rates or an expansion of the tax base.

The second point is that the revenue loss because of harmonization be significant. Quebec is not fully harmonized. It is partially harmonized. Quebec's revenues went up after harmonization.

The other point that was brought forward this morning by an hon. member from the Bloc was that the premiers across this country supported Mr. Bouchard when he said they are entitled to $2 billion of compensation. That was the message from St. Andrews.

Let me clarify what the premiers said in St. Andrews. What they said is that all provinces should be treated equally. Quebec in this instance has been treated like all other provinces that do not suffer a decrease in revenue due to harmonization.

Let us talk about who would have qualified for compensation under the HST in 1996 since the emphasis has been on the Atlantic provinces and that the deal was made with the Atlantic provinces, and solely with the Atlantic provinces.

Under the formula Manitoba would have qualified for compensation in 1996 had it decided to participate in the harmonized sales tax. I do not recall there being a Liberal government in Manitoba in 1996. I believe it was a Conservative government and still is a Conservative government.

Saskatchewan would have qualified in 1996 for compensation under this formula had it decided to participate in the HST. The last time I checked Mr. Romanow was still the premier of Saskatchewan, the leader of the New Democratic Party.

It is not a deal that was struck solely because we have a number of Liberal governments in the Atlantic provinces. The Atlantic provinces saw merit in participating in the harmonized sales tax. They recognized the efficiency it would provide for their business community and the fact that it would make them more competitive and improve their exports.

Let me go to another fact. André Bourbeau, former Quebec finance minister, declared earlier this year that Quebec did not lose money by harmonizing its tax rates with the GST. To the contrary, he said that the operation has generated hundreds of millions of extra dollars to the Quebec treasury.

A comment was made earlier about the fact that because Quebec did not receive compensation for this harmonization it was forced to increase corporate tax rates to make up for that compensation.

I cannot make it any clearer than that. Harmonization occurred and revenues went up. If there were any increase in tax rates for corporations in Quebec it was solely because of the decision made by the Quebec government at the time. It had nothing to do with whether or not Quebec qualified for compensation. Any linkage to that is truly false.

For the three Atlantic provinces, with their less developed economies and such problems as fish stocks, harmonization carries a painful interim cost. There is no denying that. That is why we developed this compensation formula and why they will receive about $960 million of assistance over four years to deal with the structural adjustment they are required to make as a result of harmonization.

It is surprising and quite frankly frustrating that our approach has been turned into a political football. There is tragic cynicism at work here, the type of cynicism that always knows the price of everything but the value of nothing.

Who can argue with the value of helping provinces to provide the environment to industry to help it thrive, not just one sector or two sectors but all businesses in the region? It is particularly true for the Atlantic region, which is why it has moved to accept the harmonized approach.

By what illogical leap can it be suggested that because some provinces qualify for assistance it should then be provided to every province, even to those who will not suffer major losses?

I will return to my example of 1971 when changes were made to the income tax system and every province received compensation because they were adversely affected. That was not a prescription. It is a comment we cannot agree with.

Since I only have a couple of minutes left, let me close by saying that I reject the competing point of view so often expressed by the Bloc and in effect by the official opposition that opposes any compensation. It ignores the obligation framed by 130 years of Canadian history to help disadvantaged regions become equal partners in a strong, vibrant and growing country.

Customs Tariff October 24th, 1997

Madam Speaker, we are drifting away somewhat from the legislation. I am perfectly willing to respond to the intervention.

As far as I understand it, the participants at the conference were the premiers of the Atlantic provinces. The last time I checked those premiers were elected by the constituents of the Atlantic provinces. They were there to make representations with respect to developing that economic vision.

As a member of the finance committee, and I would welcome the presence of the hon. member, I want to assure her that we were in Atlantic Canada this past week. We heard from Atlantic Canadians on what to do with the fiscal dividend, and to ensure that Atlantic Canadians had an opportunity for input. The chair of the finance committee has requested an assurance that Atlantic Canadians, as well as all members of the House, have the opportunity to hold town hall meetings, to hear from their constituents and to bring the message back to the House of Commons.

Customs Tariff October 24th, 1997

Madam Speaker, the only comment I have is that there was a conference held in the Atlantic provinces to deal with the future and the vision of Atlantic Canada. It was partly funded by Industry Canada to ensure that Atlantic Canada has an opportunity to express and build its own economic future. There was representation from various ministries along with the premiers and other stakeholders in Atlantic Canada.

The government is very committed to ensuring that all regions of Canada have an opportunity to grow and develop. We will participate, as we have in the past, in ensuring that Atlantic Canada is a strong participant in this great country.

Customs Tariff October 24th, 1997

Madam Speaker, I thank the member for the intervention and the question.

The intention of the government with this legislation, as it is with other legislation, is to work closely with all Canadians. We do not want, as a government, to start pitting worker against worker, Mexico against Canada.

We want the entire global economy to become consumers of Canadian products. We want the entire global economy to benefit and grow in its capabilities and become consumers for Canada. Canada's economy is based on exports and exports are an area of our economy which has driven the growth in the economy over the last little while and it will continue to do so.

The proposals that we see before us are proposals that deal with the competitiveness of the Canadian industry, which translates into greater opportunity for Canadians in employment and into lower prices for Canadian consumers. That is what this bill is all about. I again thank the hon. member for the intervention.

Customs Tariff October 24th, 1997

Madam Speaker, I want to take this opportunity to summarize the interventions heard on Bill C-11.

For the record, the bill is intended to improve the competitiveness of Canadian companies and industry and to lessen the regulatory burden on industry and government. It is a bill that has received broad support from Canadian industry. It has been developed in close consultation with Canadian stakeholders over a three-year period.

No new commitments are being implemented in this bill. It is really the elimination of nuisance rates, rates that would benefit Canadian manufacturers, as it mostly affects goods that are used in inputs for Canadian manufacturers. This should help Canadian industry to be more competitive. Certainly in the end it should benefit Canadian consumers.

Comments were made earlier today with respect to the timing of this initiative. For the record I want to state that since April when the initial notice of ways and means was tabled in the House, Revenue Canada and Statistics Canada have been undergoing extensive outreach campaigns to alert those who could potentially be affected by the legislation with respect to the proposed changes. Officials from the finance department have also met with industry and trade associations and participated in customs conferences to inform interested parties of the developments in preparing the legislation.

It is also important to note that we have received letters from various associations in support of this legislation that call for its swift passage through Parliament to ensure the business community has a wider window of opportunity to prepare businesses for the competition they face in the global marketplace. Letters have been received from the Canadian Importers Association Inc., the Canadian Chamber of Commerce and other types of associations calling for passage of this bill in order to deal with some areas that lack efficiency within this climate.

The current tariff provisions are being consolidated into a single tariff schedule that will be simpler to read and will provide greater flexibility.

The measures, as I said earlier, will enhance industry competitiveness. When industry competitiveness is enhanced, it allows greater opportunity of employment for Canadians.

We are just as sympathetic as all other members toward unemployment. The NDP made reference to that in their speeches today and I congratulate them and thank them for their intervention. It is important to make the point and they made it very eloquently. We must ensure that what we do in enhancing the competitiveness for industry translates into greater opportunities for Canadians in allowing them those employment opportunities.

We hope the simplified customs tariff meets its objectives of improving the competitive position of Canadian industry while going forward and providing a very transparent and predictable regime that lessens the regulatory burden and reduces the business costs that companies face.

We set out to improve the competitiveness and efficiency of our industries. The review was launched over three years ago. We believe, with the help and support of the House, companies will benefit, which will translate to greater competitiveness and employment opportunities. I thank all members for the time that they have taken to participate in today's debate.

Supply October 21st, 1997

Mr. Speaker, I want to make reference to the comment made by the member for Vancouver East that a representative from her community came before the finance committee in Vancouver and made a very effective and very real and significant presentation. I want the hon. member to understand that there was no one around that table who did not empathize with what was going on. The message came through loud and clear.

I also want to correct some information that was put forward in the speech. It was stated that the jobs created in this country were all part time jobs. The majority of the 279,000 net new jobs that have been created in this country are full time jobs. Although the unemployment rate for young people is still excessively high, I want the hon. member to acknowledge that those with a post-secondary education have an unemployment rate below the national average. Our focus must continue to be on education. The finance minister in Vancouver did indicate that there would be additional focus and emphasis on education now that the books are very close to being in order.

I want the hon. member to understand that the cuts or anything that went on in British Columbia cannot always be pointed back to the national government. The transfer cuts that took place in British Columbia amount to 1% of the total B.C. revenues. British Columbia will receive over $3 billion under the Canada health and social transfer this year alone. With the increase to $12.5 billion as the cash floor, British Columbia will receive an additional $800 million through the Canada health and social transfer. It will receive and has received $1.3 billion over five years to fund training initiatives for the unemployed.

This national government is doing things for Canadians. I refer to what we have done for the province of British Columbia.

Supply October 21st, 1997

Mr. Speaker, I could not sit by and let those last comments be made without clearing the record for Canadians. I will speak slowly so the hon. member will understand me.

The premiums that are paid by Canadians into the Canada pension plan do not flow to consolidated revenues of the Government of Canada. Taxes flow to consolidated revenues of the Government of Canada. CPP premiums flow to the Canada pension plan fund.

In fact after a year and a half of consultations with the provinces of this country, an agreement was signed to establish an investment fund which would provide Canadians a better rate of return on their retirement income. The easiest thing for us would have been to do nothing, which the prior administration decided to do. But we are doing this so there will be a Canada pension plan in this country, not to engage in the kind of political rhetoric we just heard. That is a point of clarification for Canadians.

Supply October 21st, 1997

Mr. Speaker, I thank the hon. member for the question. With reference to his comments about the EI fund, it is a question that has been asked over and over again in the House. I will repeat the answer for the benefit of the member. I hope I can be very clear.

Since 1986 the auditor general has made the request that the government include the EI fund in consolidated revenues. I am not sure where the member pulled his figures from when he talked about a $10 billion surplus. We do not have a surplus in any fund. Any changes in the EI program would deal with the bottom line of government.

Since we have taken office we have provided a cumulative reduction in employment insurance of $4 billion. The government recognizes that employment insurance premiums should not be going up but should be going down.

We have dealt with the issue of employment insurance and we will see a continued reduction in premium rates.