Jim Silye

[Excise Tax Act, February 11th, 1997]

Mr. Speaker, in the rest of my speech there is no reference to any form of inducement. I will not be using that word any more.

[Excise Tax Act, February 11th, 1997]

Mr. Speaker, I am surprised that the Liberal member for St. Boniface, who has proven to be very aware, intelligent and with it, was not on the issue that the government has already given $1 billion to three of the Atlantic provinces for harmonization. In fact, the payment was made out of last year's funds. The payment was criticized by no less than the auditor general because a final agreement had not been signed. It was only a letter of intent. The auditor general said it was a very dangerous precedent to be set by a finance minister for future years. It is on the borderline and is construed and believed by a lot of people to be against generally accepted accounting principles.

The member for St. Boniface just proved by his speech and lack of knowledge what the first speaker from our party, the member for Medicine Hat, pointed out earlier, that the Liberal members of Parliament are being duped by the government and by the finance minister on this issue.

Here we have the situation in Atlantic Canada. Canadian taxpayers have already spent $1 billion to get rid of this GST. To help the Liberals keep their promise we have now paid $1 billion to three Atlantic provinces. Retailers and businesses estimate they are going to spend upwards of $100 million. They presented these numbers to the Standing Committee on Finance. This is not a number I am making up, nor am I exaggerating, it is their number.

Third, starting April 1, 1997 the consumers of Atlantic Canada are going to see how this affects their pocketbook. I do hope the Prime Minister does call an election for June because after three months of paying at the tills and seeing how this whole fiasco affects them, there will be a groundswell against the Liberal Party. It will have overestimated its popularity in the polls. There will be a new groundswell for a party that does offer a true alternative, a true choice and a fresh start for Canadians.

With that introduction let me get into some of the main elements of Bill C-70 at third reading. In direct contradiction of Liberal Party members who have their speeches written by spin doctors that we support this harmonized sales tax, let me point out that the minority report of the Reform Party on replacing the GST clearly stated otherwise in its executive summary.

On page 113, for the record, accurately, in context it states:

The majority finance committee report on the replacement of the GST cannot be fully endorsed by the Reform Party. While the replacement goes part of the way in

responding to concerns presented to the committee, many of the concerns will only be addressed by future negotiations with the provinces.

I did not realize at the time that meant bribing them.

The majority report recommendation merely tinkers with the current GST and does not live up to the Liberal promise to "Scrap the GST".

After all, this is what it is all about.

We are of the view that value added taxes are incapable of responding to a significant portion of the concerns raised during our hearings.

The Reform Party recommends that spending cuts be the government's first priority. As well the entire current system personal, corporate and value added taxes should be replaced by a simple, visible and proportional system of taxation that incorporates the principles of fairness and the lowest rate possible. In the interim, the party will support reforms to the current regime that move in this direction.

After all, we do want what is in the best interests of all Canadians.

While harmonization does simplify the tax system it makes no sense to do it in a piecemeal, ad hoc fashion because it simply increases the confusion, the cost and the resentment across the country.

Liberal members yesterday and today said they do not understand why the costs are going to go up. The costs are going to go down because the provincial sales tax will be treated like the GST. There will be input cost recoveries by the businesses lowering the costs. Let me tell these members why the cost goes up.

It goes up because the base on which this new combined tax will be applied has become broader. It will be applied to more goods and services. Previous speakers have pointed out, from clothes to housing, where this tax will apply. Because of that broader base the new harmonized sales tax or blended sales tax, HST or BST, will cost consumers more money.

In the ninth report of the Standing Committee on Finance the government wrote:

The GST is collected at each stage of the production and distribution process. However, since each business collecting the tax also receives input tax credits for the GST it has paid out, it is the final consumer who ultimately pays the tax.

It is the final consumer who ultimately pays the tax. As Liberal members try to defend this HST in terms of cost savings, they must not forget that yes, it is a savings for businesses after they pay the initial outlay of $100 million to conform their point of sale material, but it is the consumer who will ultimately pay a higher tax.

This is why other provinces like Ontario, Saskatchewan and British Columbia which have provincial sales tax are against it. It will shift the tax burden from businesses to consumers and that is what is bad about this particular bill. In effect it is an 8 per cent increase on those particular goods and services that were strictly on the PST and not on the GST. The GST has a broader base than the PST. That is a simple fact and simple arithmetic and should be enough proof for the Liberal members as to why this will be an increase in costs to consumers.

The purpose should be to eliminate dual tax regimes, but this version retains it for national firms. Somebody operating outside those three Atlantic provinces will have to have tax included pricing there, not tax included pricing elsewhere.

Therefore when they report their taxable income, they will need two different forms. This is an increased cost for businesses which then, in turn, looking at the bottom line, eventually will pass along this cost to the consumer. Once again it hits the consumer where it hurts the most, right in the pocketbook.

This billion dollar bribe or transitional payment to the three provinces, the cost of reducing the sales taxes in the harmonized provinces, is being paid for by all the taxpayers.

The deal will increase the complexity of the tax system for all businesses in Canada with operations in the Atlantic provinces. It does not just affect those three provinces. It is not just a deal for those three provinces.

National retailers have said that tax inclusive pricing in a partially harmonized system will lead to increased cost. If done nationally it would be a much simpler solution due to separate packaging requirements for harmonized provinces.

In response to these concerns, the federal government and the participating governments announced changes on January 17, 1997-

[Excise Tax Act, February 11th, 1997]

Mr. Speaker, I have a brief question for the hon. member of the Bloc. If the Government of Canada were to offer Quebec a billion dollars would it then agree to drop its plans to secede from the union and stay in Confederation?

[Excise Tax Act, February 11th, 1997]

Mr. Speaker, I would like to ask the hon. member from the Bloc to tell the House what he thinks about the comment of the member for St. Paul's who also wants to ask a question. Earlier today and also yesterday, in defence of the harmonization or blended sales tax, BST, the member for St. Paul's used Quebec as an example and said that if it is good enough for Quebec it should be good enough for the rest of Canada.

I would like to know what is the Bloc's response to that kind of justification for the rest of Canada and all taxpayers to spend a billion dollars just in three provinces. How and in what way would he react?

[Excise Tax Act, February 11th, 1997]

Mr. Speaker, as a business man it would be improper for anybody to load up front a billion dollars in any business venture before the whole deal takes place.

This has cost the Canadian taxpayers one billion dollars already. Now it is going to cost corporations the transitional cost for their computers, their point of sale equipment. I am glad he is getting coached by the member from the finance committee because he is going to need it.

The business aspect of this deal is that now that the taxpayers have paid up front, front end loaded a billion dollars, the retailers and the businesses will have to pay to change their computers and to change all this mixed up tax included pricing. After that is all in place, then guess who will have to pay some more after that in a year or two, starting in April. The consumers will have to pay more on goods and services that the GST never applied to. There will be three people paying a lot.

As a business person I would never have entered into this kind of arrangement. It is piecemeal, ad hoc and irresponsible.

[Excise Tax Act, February 11th, 1997]

Mr. Speaker, the hon. member refers to this billion dollar payment, or $961 million, as supposedly spent. The proof is that it is in the public accounts for last year. The money has been spent. The finance minister included it, against generally accepted accounting principles I might add, in last year's expenditures. It is there. The money has been given to those three provinces. For what? Why? The bill does not even come into effect until April 1. The finance minister is borderline on breaking conventional accounting practices and that is my proof.

[Excise Tax Act, February 11th, 1997]

Mr. Speaker, I do not mean to interfere in the debate but the member will get his chance and so will we.

I would like to ask the hon. member from the Liberal Party who just gave his speech to comment on a couple of things within his speech.

First, I would like to comment that members of the Liberal government, including the Prime Minister, always say that they are number one and that by a number of different lists they are number one. Do you not think, Mr. Speaker, that anybody could be number one in any profession, in any business, if they could borrow for 30 years and just let that debt continue to grow and invest anywhere in the world and let that debt continue to grow and be number one in anything?

The government fails to recognize that the real problem is the debt which we are not making any payments toward. This government is adding to the problem a little more slowly than the previous government, but it is still adding to the problem. That is what I have to say about this number one issue.

Back to the debate on Bill C-70. The member referred to two things, one was that this bill is imperfect. I would like him to outline where he feels this bill is imperfect. It is his responsibility to tell the people of Canada where he as a member of the government side thinks this bill is imperfect.

I would also like him to comment on the justification for already spending a billion dollars on this movement. The bill does not even come into effect until April 1, 1997, yet this government with last year's revenues has already dished out, paid under the guise of transitional costs although it has not even transitionalized-if that is a word-close to a billion dollars.

I would like the member to comment on where this bill is imperfect and the transitional cost of a billion dollars.

[Excise Tax Act, February 11th, 1997]

Mr. Speaker, under orders of the day it says that after three speakers, one from each party, we go to questions and comments after 20 minute interventions.

[Excise Tax Act, February 11th, 1997]

No, Mr. Speaker, I just wanted to ask a question. Are we not under questions and comments? When does that kick in?

[Excise Tax Act, February 11th, 1997]

Point of order, Mr. Speaker.