Jim Silye

[Excise Tax Act, February 10th, 1997]

Mr. Speaker, I rise on this set of motions to add a few more arguments to this debate.

I understand the member who just spoke is the vice-chairman of the finance committee and does a good job chairing the committee meetings. However, I do sometimes question the ideas and philosophy he supports because I do disagree with him.

First he says that if it is good enough for Quebec, it should be good enough for the rest of the country. Let us put the Quebec issue in perspective. With everything the federal government seems to do and wants to run as a federal government, the provincial governments of Quebec have always said: "No, no, no. We will do it. We will handle it. We can do it better than the federal government. We will look after our own pensions. We will look after our own sales tax and harmonization. We will do it ourselves". Quebec implemented a harmonized system right from day one. Whether or not that tax is popular in that province I will leave for Quebecers to decide.

One thing the members of the Bloc Quebecois are doing right now in objecting to this bill is they are saying loud and clear that the Bloc Quebecois representing Quebecers objects to the fact that the Atlantic provinces received a lump sum payment of $964 million or $971 million, somewhere in there. Let us round it up to $1 billion because by the time they exchange all these cheques that is what it is going to cost. These three Atlantic provinces received a $1 billion lump sum payment. Why? The government says it is in order to make up for the shortfall in revenues the provincial governments will have. Who pays for it? All taxpayers. And the majority of taxes are paid outside those three Atlantic provinces.

Some people call it a bribe. I myself call it a bribe, an inducement or an enticement to participate in something that looks good on paper: "We can lower your taxes from 18 or 19 per cent down to 15 per cent and for the loss in revenue we will supply you with $971 million to do that. You are in, you look great. How can you argue against lower taxes? It is going to help your economy. Harmonization, what a wonderful word. Everybody will be co-operating. We will harmonize and have one tax. It will be easy to administer. It will be a lower cost. It will just be wonderful. You guys will be elected for years. You will be heroes. And you are helping us as the federal government to keep our election promise to abolish the GST. You will be helping us to keep our election promise in the red book because we went door to door and said we would harmonize the sales tax".

The Liberals said they would get rid of the GST. They said they would not take money out of the back pockets of Canadians with the GST but out of their pockets with a harmonized sales tax. At the door, the Liberals said that if in any province the combined tax was higher than the 15 per cent, or whatever the combined tax rate is, they would give them a lump sum to make up for that lost revenue.

Every Liberal in Ontario said they would do that. I know because I have friends who live in Ontario. They know that the Liberals promised to replace the GST with a harmonized sales tax and to give lump sum payments to provinces to induce them to participate. I know they said that. That is exactly what they said and what they promised.

The Quebec representatives in the federal House here, the Bloc Quebecois, are angry and upset. They are demanding their chunk of the money that was given to the Atlantic provinces. Therefore, do not stand here and tell us, as the member on the Standing Committee of Finance just did, that if it is good enough for Quebec it is good enough for everybody.

We have heard a number of times where the Reform Party supported harmonization. Let us put this into context. This party likes to have quotes in context. It does not like to have things piecemeal, ad hoc and out of sync. When the Liberals said that we supported harmonization, we were on a big committee reviewing how to help this government get rid of the GST. We were actually trying to help it keep a promise. We listened to all the people and a lot of suggestions were made.

The first thing this government wanted to do was to bring in a shoe box business transfer tax. That is what it was supporting. It then came around to this other form of tax. It talked about a national sales tax. In this context of a national sales tax, it does not mean three provinces out of ten; that is not national but regional. A national sales tax is where we could have just one tax at the lowest possible rate. Yes, we do support that and every one of the Reformers who are here today would support that.

Anytime we can eliminate taxes, get rid of one set of taxes and replace it with another, especially if we replace it with one that is lower, you bet we would support that. That is what is in our minority report. If we had one blended sales tax, if it was a national sales tax and not a regional piecemeal, ad hoc tax like this one, we would support it. If it had the lowest single possible rate-single possible rate, we were hinting at 9 per cent or 10 per cent-we would support it, but not 15 per cent.

I was taunting the Liberals earlier today about why the Ontario government is not supporting it. It is so obvious. For Ontario a 15 per cent combined sales tax, the GST and PST, would be revenue neutral. Why would Ontario not support it? One tax, harmonized and blended. Call it the HST or the BST, it does not matter. It has to be good for Ontario business people. It has to be good for Ontario because it will simplify the tax system.

Why are all those arguments not being bought? It is quite obvious. First of all, just to get the Atlantic provinces to play the game it is going to cost Ontario taxpayers $400 million, their share of the $1 billion bribe.

Second, yes you are making it easier for retailers. Yes, you are making it a little bit easier for consumers not to get that shock price at the wicket. But what you are doing is transferring the costs that will now be on the goods and services that were not there before with the provincial sales tax, on to the GST along with it. Now the price of some goods and services will be raised that were only taxed at 8 per cent. Now they will be taxed at 15 per cent. Transferring that cost to the consumers of Ontario according to their finance minister will cost $2 billion to $3 billion. That is what is not in the cards for Ontario and that is what members of this Liberal government cannot get through their thick heads as to why Ontario will not take it.

Talk about something new and talk about something that is despicable as far as I am concerned what frustrates me is they introduce it at the last minute through their regulations. They have this white paper and they introduce changes. It is always an excise book, an excise act. It looks something like this one which relates to alcohol and tobacco products. They have it for the GST. In the fine print they put in that tax inclusive pricing is mandatory. Then they say how and where it has to be done.

I am sure the committee went through hell. We read about it in the newspaper all through January. There were complaints from the Atlantic region and all these people who supported them. The Canadian Federation of Independent Business and the retailers association, they all turned on them and turned against them because they did not want this tax included pricing the way the Liberals wanted it. It hurts the most now.

I do not know if Canadians know this but every related agency that gives a service from the federal government all across Canada is going to have tax included pricing. This is going to confuse airline tickets. It is going to confuse a lot of financial services although they do not have much, just safety deposit boxes.

It is ridiculous to make all these businesses go through the high cost of changing computers in order to have two prices all across Canada, one in Atlantic Canada, especially national retailers such as Eaton's or companies like Carleton Cards. They came before the committee and said: "We are going to lose money. It is going to cost millions of dollars. We are not sure if we can pass along these costs for this product because all we sell are cards".

The government is not listening. For some strange reason the Liberals insist on proceeding. They believe that if they get Atlantic Canada to use the harmonized blended sales tax for a couple of years-and this is where they are going to find it wrong-they think that by forcing all government related agencies to also include this tax included pricing across Canada, they will embarrass, force, coerce or browbeat everybody into participating with our own money, with our own tax dollars and then they will have kept their promise to eliminate the GST.

What they have done is entrenched the GST according to the finance minister, the master of myth, the minister who said one thing on this side. He lost some integrity when he walked across to the other side and now is saying another thing.

It is like the infrastructure spending. There is only one taxpayer and darn it and damn it we are paying for everything all across this country. For programs they say that this is federal and this is provincial and it is not. Infrastructure comes out of our pockets. It is ridiculous.

Even if the premiers of Alberta and Ontario, these people who are in control of their budgets, support infrastructure-Alberta just signed on-it is absolutely ridiculous. Alberta is making a mistake because if Alberta with a surplus wants to improve its infrastructure it has the money to do it. Taxpayers across this country could be saved some money but no. It is all a fight over budgets: "This comes out of the federal budget, so we will take some. This comes out of our budget and this comes out of the municipal budget. Let us go one-third, one-third, one-third".

We have to stop this kind of extravagance which is at the expense of taxpayers.

[Excise Tax Act, February 10th, 1997]

I'll bet you liked that.

[Excise Tax Act, February 10th, 1997]

Tell us about Carleton Cards.

[Excise Tax Act, February 10th, 1997]

A blended sales tax.

[Excise Tax Act, February 10th, 1997]

It is going to cost $90 million.

[Excise Tax Act, February 10th, 1997]

No subsidization in three provinces.

[Excise Tax Act, February 10th, 1997]

At least this party does not go along like a herd of sheep and follow the democratic dictatorship that we have elected. When the backbenchers of this Liberal government go back and face their constituents they will have to answer why they are bringing in more taxes, new taxes in a region that is subsidized by the rest of Canada after the finance minister calls it pan-Canadian. We will see how pan-Canadian it is after this is fleshed is out in about 10 or 12 months after this tax has been in place.

Companies will have to develop dual inventory. They will have to have two pricing systems, computer and advertising systems in order to accommodate this change. It will be confusing and it will be costly. It is a shame that a government cannot look at a plan and implement it all across Canada rather than just doing it piecemeal in one part of the country only.

In addition to the direct costs there is the cost of lost jobs. A card company and Woolworth, as my colleague has previously mentioned, will be forced to lay off hundreds of people with this increase in costs or pass it on to consumers. That is what we have been arguing all along.

It makes no matter if someone can deduct this as input costs. It is a 15 per cent deduction. Come and create the jobs. What matters is whether this benefits the Canadian taxpayer, the Canadian consumer. The answer is unequivocally no. Take a look at what is being done here.

A tax is being increased on a lot of goods and services in these provinces. Yes, the overall combined tax is lower in those provinces, but Canadians have to pay $974 million to do that. It is a prepayment to get a tax reduction in one part of the country at the expense of the other part of the country. Then what happens to the people in that part of the country?

Are they going to be better off at the end of the day? I submit no, because when they buy their goods and services they will be paying 15 per cent on a lot of goods and services they were not paying on before. Their out of pocket costs will go up and when those consumers find out, the premiers, the politicians in those provinces are going to be in deep goo-goo, sticking to the g alliteration.

The final word I have to say is cover-up. Hiding the HST and BST will allow Ottawa to cover-up future rate hikes. That is the danger in this legislation. Other countries have combined a value added tax with a local sales tax to have just one tax. Governments then go on and raise it from 5 per cent to 10, from 10 to 15, from 15 to 18. It just gets easier and easier to raise the tax.

This Liberal government, should it be so lucky to enforce a harmonized sales tax all across Canada, will then be in a position to raise this tax forever.

This cover-up is nothing more than trying to keep a promise that it never intended to keep in the first place. Those members said they would scrap the GST, abolish the GST, and now they have done the very thing that they argued against in this House of Commons when they were in opposition.

This is not about money. This is not about creating jobs. This is about integrity and honesty in politics. I am embarrassed to have to say the politicians on that side, now in government, especially the cabinet ministers, are now saying things opposite to what they did over here.

When the minister of defence was on this side he said the GST should not be tax included, that tax should always be obvious and clear. Now he is favouring a hidden tax.

When the finance minister was on this side he said if you combine a provincial sales tax with a goods and services tax, you will entrench the GST forever. For a party and two people who ran on the platform to scrap, abolish and get rid of the GST, to entrench it in our lives forever, to guarantee that it stays with us forever, is hypocritical, duplicitous and is not serving the general public.

They should be ashamed of changing their minds and doing exactly the opposite once they get over on the other side. This piecemeal, ad hoc legislation is not good for Canada. It is not the solution. If we are going to do something and we want to have one tax, then let us just have one tax but have it as low as possible, have it all across Canada and not force companies, businesses and consumers to listen to this confusion all the time.

We oppose this legislation because it is being done for the wrong reasons. It is being done just to keep a promise that has been long broken and should be buried. The minister of heritage quit over this. She admitted that the promise was broken. The finance minister admitted the Liberals broke their GST promise. It is only the Prime Minister who will not admit he broke his promise to abolish the GST.

For political and not economic reasons the Liberal Party should reconsider this bill. It should look at it and say: "We should not go ahead. Tax inclusive pricing is divisive, there is a lot confusion. Let's back off on this. Let's wait and see if we can convince all the other provinces to come on board".

I will leave the government and the Liberal backbenchers with this thought. Answer this question: If the HST is so good, why have the other provinces not jumped on board and proclaimed the wonderful advantages and benefits of this ridiculous Bill C-70?

[Excise Tax Act, February 10th, 1997]

-the original price with the tax, the original price without the tax, the sales price with the tax and the sales price without. The next point is cost.

[Excise Tax Act, February 10th, 1997]

Mr. Speaker, I rise today to address Bill C-70.

However, I would like to make a correction on the facts that were just presented by the member from Cumberland-Colchester. She indicated that the HST-BST committee had gone to Atlantic Canada, when in fact it is not true. That was a prebudget consultation hearing that went to Atlantic Canada. For her sake and the sake of my colleague I would like to clarify that the Reform Party member was correct when he said that the committee did not go to Atlantic Canada, nor did it receive people from there at the hearings.

I would like to refer to a document I got permission to quote quite liberally, from Mr. Mitchel Gray who writes for the Canada Taxpayers Federation, Alberta division. He calls this weekly commentary paper "Let's Talk Taxes".

It is ironic that my little newsletter that I put out through the House of Commons two or three times a year is called "Let's Talk". I like the title. I will stray from time to time but I will give him credit for the gist of the commentary on this issue.

The same people who told us they would scrap, kill and abolish the GST are bringing in legislation now to harmonize the GST, to include the GST in our lives forever with this harmonization in three provinces of Atlantic Canada.

Harmonize is a nice word. Aside from its soothing musical connotation it implies a sense of unity, togetherness and co-operation. When applied to the GST, however, harmonization means coercion, confusion, cost and cover-up. Here is how Mitchel Gray describes these four words, and I concur with his views.

Coercion. Part of the harmonization plan would force businesses to hide the new harmonized sales tax, HST, which our party prefers to call the blended sales tax, the BST, in a price of the product or services being sold.

Shopkeepers who make a mistake and sell a product without including the tax in the price would face fines, jail sentences or a permanent criminal record. That is right. It is off to the gulag. With all these g words these days, between gonads and gulag, we are getting an education in this House.

It is off to the gulag for those brave souls who would reveal how much tax Canadian consumers are paying. When I say gulag I am not kidding. While rapists and robbers can be granted conditional or absolute discharge by a judge under sections 763 and 737 of the Criminal Code, pops down at the corner store will be excluded under these sections and will rot in jail for not including the HST/BST in the price of a chocolate bar. We will need a magnifying glass in case the tax inclusive price is not the right size it is supposed to be. This gets very confusing.

Confusion. It is probably confusing enough to have a combined provincial-federal sales tax in three of Canada's provinces, two separate sales taxes in six provinces and one sales tax in one province.

If members need more confusion, how about this. The HST/BST legislation will exempt some items from the hidden tax rule and allow businesses to show both the tax inclusive and tax exclusive prices as long as the former is displayed. I think people are confused already. I will go real slow in the next part.

Shoppers could conceivably be faced with four different prices for the same marked down item. I will go real slow for the Liberal members because I know this is intended to simplify, clarify and make it a lot easier for people to understand-

[Public Service, February 10th, 1997]

Mr. Speaker, my point of order would be a matter of debate, and so I will sit down.