Mr. Speaker, it is a privilege to stand before this House today as a
member from the Atlantic region to talk about the Atlantic region. I wish to clarify the point that some of the members from the third party have referred to it as the maritime region when in fact we are talking about the Atlantic region of Canada. The harmonized sales tax is indeed an issue for intelligent discussion in this House.
The member indicated that members of the finance committee did not go to the Atlantic region because we were afraid to hear what the people might have had to say. That is not the case. We were in the Atlantic region in November. We held hearings across the country on the GST and we had open discussions. We even had political leaders from other parties attend our hearings here in Ottawa. It was the generous availability and the invitation of members of the finance committee that brought them to Ottawa.
Some key points in the harmonized sales tax that are being missed are really valuable. A point of fact is that on average, a Canadian consumer and in fact a consumer in the Atlantic region visits the grocery store approximately two times each week. In the items the average consumer will buy, approximately 40 per cent of them are taxable. What this means in the Atlantic region is a reduction of that tax through a harmonized process. In Nova Scotia alone that reduction is almost four percentage points. In the other Atlantic provinces, such as Newfoundland, it goes down even much further. In fact consumers at the grocery store will see a benefit in a reduced tax of up to four percentage points at the minimum in buying approximately 40 per cent of their goods on average twice a week in the average consumer pattern.
There is another important point. I talked to farmers in Atlantic Canada this very morning. The Nova Scotia Federation of Agriculture and the Canadian Federation of Agriculture are very pleased with what this tax will do in the farm sector. Barns and new silos are being built across my constituency already. This is in the event that when the tax comes into place on April 1 these farmers will get a rebate of 15 per cent on all capital expenditures.
Let me tell this House that Ontario farmers are now saying: "Why can't we have this in Ontario?". That is the message which is coming from the farm sector in this country. They want what Nova Scotia, Newfoundland and New Brunswick are getting in the farm sector. This 15 per cent tax credit looks a heck of a lot better to the average farmer than does a 7 per cent GST rebate.
When we talk about the input tax credit, the 15 per cent input tax credit that is available to all manufacturing sectors in the harmonized zone is a benefit to the Atlantic region. Why is it a benefit? Because it will sustain those who are manufacturing and creating long term jobs in our area.
This is the real benefit to our harmonized tax and the single tax system. Why is it a benefit? People have been asking us what to do in terms of simplifying tax. We have heard the hon. member speak about a flat tax here today. This is not about a flat tax and this is not part of this reform. It is about a harmonized tax.
In the Standing Committee on Finance we had companies in Ontario that manufacture goods for this nation say to our committee: "We will be looking at the harmonized zone. There is an incentive in that for us to even look at relocating to a harmonized zone because a simplification of a single tax, no tax on tax, is beneficial to the manufacturing sector and to the long term sustainable sector of our society that will keep our economy employing young people and generating an economy that will sustain us as we move into the 21st century".
A controversial point in this whole debate is a tax in pricing. Those who are making the most noise regarding tax in pricing are the multinationals and the internationals. When they come to Atlantic Canada they have told us that they do not benefit from the 15 per cent input tax credit because they do very little infrastructure in the harmonized zone. They have cashiers and people who work at the front line who stock shelves but the money for the most part is simply in employment wages and it leaves the region in the benefits from the sales. My invitation to the multinationals, if they really wanted to get the maximum benefits from the harmonized sales tax, was to come to the Atlantic region, to the harmonized tax zone and set up basic infrastructure, develop the long term sustainable businesses that will generate our economy.
For several decades now, maybe even a century, we have lost a large part of our economy. We have been an underprivileged region accepting large transfer payments. That is not because we want to, that is not because we are hard workers and that we do not have large numbers of entrepreneurs. I can give the history of my own businesses. We had put money where our mouth was and started a scientific company that has since went on to the stock exchange to become a very successful international company. We wanted to manufacture in the Atlantic region. We wanted to hire young scientists to create jobs and to be sustainable so that we would not have to be that have not province and have to take those transfer payments that we have depended for so long.
Some of the hon. members are advocating that this is not good news for the Atlantic region because they would like to continue for us to be that transfer receiving province and dependent on the provinces that are more sustainable economically. This is a chance for us to change that pattern.
There are comments from APEC, the Atlantic Provinces Economic Council, that this harmonized tax is good news for the Atlantic region. There are comments from the CIBC this morning saying the Nova Scotia resale sector was strong in 1996 and the introduction of the harmonized sales tax is expected to further increase sales.
The harmonized tax does many things for our region but above all it allows us as Atlantic Canadians to have a stronger resource sector, a stronger manufacturing sector and to develop those jobs that can be sustained through a modern global competitive economy, and that is what we want. There will be some costs associated with the transfer of new cash registers or change over but these are minimal to the benefits of the overall 15 per cent harmonized tax and that 15 per cent input tax credit.
I could go through sector by sector, whether it is fishing, farming or manufacturing, but all those sectors in our economy, the building supply sector, the grocery store sector, have invited us to push forward with this harmonized tax and to make it forceful and make it strong. As I indicated moments ago, talking to our farmers this morning from the Nova Scotia Federation of Agriculture, they are pleased with this. They are being told from the Ontario farmers they would like to have the same thing. I expect that farmers in Ontario, a strong, vibrant part of our economy, will put the push on the government there that it join in and get a harmonized tax as well.
To display some of the myths about this whole tax is that it is a two package deal. It is a harmonized tax at the manufacturing and business level and it is a tax in pricing at the consumer level. The reason it is a package deal is want the consumers of the Atlantic Canada and of our nation to eventually receive this through put in the reduction of prices of a tax in pricing. When we see a commodity on a shelf, whether cat food, dog food, lumbering supplies or whatever, we will know that the price which is marked on the shelf is the price we will pay when we go through the cash and exit the store. That is the benefit-