Jim Silye

[Finance, December 9th, 1996]

Mr. Speaker, I have not abandoned the dream of a simplified tax system that would feature a single or a dual rate. It would generate more money than what this current government with its complicated, convoluted, complex tax system has in place and which is too stubborn to try to change. I have not abandoned that but each speech has its time and we have to stick to the topic at hand.

He does not agree with my statistics about year ending in 1996 or 1997, that the debt as a percentage of GDP will be 74 per cent or 75 per cent but that it is going down in 1998 to 74 per cent. Shame. That is unacceptable. When this government came in it was 71 per cent and it is going to brag about reducing it to 74 per cent? That is the hypocrisy and the master of myth at work at its best. We need a debt to GDP ratio of under 50 per cent, and the member knows it.

There is this business about how they have made way more cuts outside of the transfers to provinces. The figures say to me that for the year ending 1998, governments do not figure. The total cuts will be $18 billion and $7.5 of that will be on the backs of the provinces for health care, education and welfare. Shame on the Liberal government that would do that when a Reform government in those three categories would have cut only $3.5 billion.

The member asked why the government should not take credit for the decline in interest rates. Because his government is not responsible for the low interest rates in this country. It is not sound fiscal management for the government to spend $20 billion more than it brings in. The first year that we had $15 billion more than we brought in, everybody was all upset. So to brag about a $20 billion deficit is not good enough.

The interest rates are low because of the monetary policy of the Bank of Canada under John Crow which has been continued under the current governor of the Bank of Canada to keep inflation low. It is low inflation that allows for the lowering of interest rates. Inflation is low when the demand for supplies and services goes down. Then the banks have to do something. To encourage people to incur debt and borrow more money banks have to lower their interest rates because of what is happening in the economy. It is kind of a diabolical situation. Banks lower interest rates when things are not moving.

Lower interest rates lead to increased work in housing and housing related products and services. Big ticket items should start to move now based on lower interest rates. I agree with the hon. member on that point, but to take credit for it, no. I still say the government is taking credit for something it does not deserve to take credit for. Low interest rates are not a function of the government's sound fiscal policy. It is not sound to be adding to the problem to the tune of $20 billion plus per year.

At another point in time I will elaborate on the simplified tax system featuring a dual rate, which is in the best interest of Canada and will lead to the number of jobs the government has failed to deliver.

[Finance, December 9th, 1996]

Mr. Speaker, I have a couple of things to add to the issue. I would like to finish with the CPP. It is a very big issue. Currently there is $40 billion in the fund which generates $4 billion through interest on loans to provincial governments at low prevailing interest rates.

We have to fix this. The way to fix it, unlike what the government is doing by trying to treat everything separately, is to look at the economy as a whole. This is a payroll tax just as UIC is a payroll tax and so is workers compensation. When there are high payroll taxes, it is a job killer. The government should try to look at the collective package.

One thing that could be done with CPP and has even been recommended is to start working with the fund toward a greater growth investment fund rather than just a yield of low interest rates. Try to get it into a growth fund where possibly we might luck out in a couple of years and have anywhere from 15 to 30 per cent growth in it. That is what the Reform Party is recommending with its super RRSPs. It would be something which would be run by an independent fund manager to let the money grow so that we would all be guaranteed our pension benefits down the road.

We all know who creates jobs. The government's job is to create the economic environment, the right environment for the private and public sectors to create jobs. There is room for job creation in both the public and the private sector, but the public sector thinks,

feels and acts as if it is the only engine to fuel the economy. Once we balance the budget and offer across the board tax relief, not selective cuts, the government and the country will benefit from the growth in the economy. A lower overhead and lower spending will result in lower taxes which will increase disposable incomes and thus through greater demand the private sector, along with some public sector services, will create the increase in jobs that is required.

On unemployment and employment, under the section in the report that the chairman of the Finance Committee put forward, the words were carefully chosen. However carefully they were chosen, they could not hide a dismal record of achievement. The growth in unemployment barely kept pace with the increase in population, natural and through immigration. That is a sad situation. The government pins much hope on job creation by lower interest rates. That is going to create a whole bunch of jobs. We hope these expectations will be met for the sake of the large number of Canadians who are seeking work and who are ready to enter the labour force. We will need a long and prolonged period of low interest rates and a willingness for people to borrow and spend more.

There is a lack of consumer confidence for big ticket items and that is what is keeping the domestic market restrained. There would be increased confidence if income growth lowered the relative size of the debt they carry.

This fact makes income raising tax cuts even more important in the restoration of genuine prosperity.

In this prebudget fiscal plan and this report we see nothing encouraging in this account for the Canadian public. What we see is the government not even at a balanced budget, saying how it is going to spend anything it gets once it approaches.

Heaven forbid, if the finance minister ever gets up and tries to say this one more time and to hoist this on the Canadian public, that once the deficit in this country reaches single digits, $8 billion or $9 billion, then we have virtually a balanced budget and a zero deficit.

He has said this and that is not true. Just because the OECD countries have a different formula and by their standards-crap. If there is a $9 billion deficit and if that deficit is not borrowed abroad but is borrowed domestically from the public service pension fund, it is still a liability. It has to be paid back. Those funds have to be replaced even though they are borrowed from oneself. Therefore, let not the minister say ever, until he is at zero, that he has a balanced budget.

We need to work toward the debt, to use the debt as a percentage of gross domestic product as our solution. Lower taxes like in the States are the solution. That is how we will create jobs in this country. I appreciate the extra time.

[Finance, December 9th, 1996]

Mr. Speaker, I will be using my full allotted time.

The debate is about the report of the government on the prebudget consultation process. I am glad to have this opportunity to make a contribution to it and to maybe make some suggestions for the finance minister's next budget. I did not sit very much this past year on the Standing Committee of Finance, but I did in the previous two years so I do understand the process and I will make some comments about that.

This is really about spending, revenues and handling the affairs of this great corporation we call Canada. The Government of Canada is empowered to do that. Annual statements come out, as do projections from the finance minister. Let us just see where we are going. Based on the information given to us by the government, let us see if we are in fact asking the right questions, setting the right agenda in these prebudget consultations and asking for input to solve the right problem.

I maintain, and I have argued this before, we are trying to solve the wrong problem. The problem we are trying to solve is just a subset of the major problem. The subset that the government is trying to resolve and in fact was elected on is setting its spending deficit at 3 per cent of GDP. That really means telling the people of Canada that this government will only spend 3 per cent more of the gross domestic product than what it brings in.

The people of Canada said: "Boy, compared to the previous government that is a hell of an idea and we are going to let you guys go do it". The Liberals also told us they were going to create jobs, jobs, jobs with this $6 billion infrastructure program. Those were the two big promises they made.

There is no question that the government has made progress on its deficit target. It came in here at the year ending 1994 with a deficit of 5.9 per cent of the GDP. To the year ending 1996, the deficit is at about $28 billion which comes to a little over 3 per cent of GDP. Next year it is projected to be even better and the year after, although it is in fantasy land, the government estimates that it will be right down to almost 0 per cent.

I agree that the government has done well on deficit reduction. However, the bar is so low and the target so soft it is easy to do. Anybody could do it. Anybody who was finance minister could have done what this minister did. How did he do it? When he cut program spending over the two-year period from year ending 1994 to year ending 1996, projected out even to year ending 1997, the cuts he made go from $120 billion down to $109 billion. That is $11 billion in spending cuts. It sounds great. However, $7.5 billion of that was downloaded on the provinces for health care, education and welfare. That is why I have suggested anybody could do it.

We have had members of the government giving speeches about how wonderful it is to be helping the infrastructure of the mind through the science and technology development fund and how it has already spent $9.5 billion on families with children, but because it is giving another $250 million how great and wonderful it is.

The government should take a look at itself and not be so proud of having made cuts on the backs of provinces. The excuse today given in question period, "If you are mad at us for downloading, look at what those rotten, dirty guys in the provincial governments are doing. They are downloading on the municipalities even more than we are. If we are bad they are worse". Both of them are trying to justify something that is dumb.

Eliminate useless and wasteful spending and stop catering to the special interest groups. Every group that comes to the consultation process says: "Do not touch us. Our group is very important. Look at all those other people. Cut them. Find it there". If that was done, how would we ever cut? How would we ever balance a budget?

Start saying no to wasteful spending. The government does not have the guts to do it. It takes the easy way out. It cuts money to the provinces and says to the provinces: "You do it". That is what the finance minister has done. I do not compliment him for that, I criticize him for it.

The deficit is fine. It is coming down. What has the government done in terms of spending over the last three years? In the year ending 1994 the government spent $158 billion. The next year the government increased overall spending to $160.7 billion. Last year, the year ending 1996, it spent $158.9 billion. That is relatively flat in spending, yet the government is bragging about tough times and cutbacks. Why is that?

The government is adding to the big problem. It is increasing the debt. The interest cost to service the debt is increasing. Despite lower interest rates, it is still a huge megadollar expenditure for the government. What does it do about it? It keeps adding to the problem, although not as fast as the previous government. It brags about it, but it is not solving the problem. Canada is bleeding to death. Canada had a huge wound under the Conservatives but it still has a huge cut and it is still bleeding severely under the Liberal government.

The finance minister bragged a couple of months ago that he had broken the back of the deficit at $22 billion or $24 billion. That is a joke. Only a Liberal could stand and say that he has broken the back of the deficit by spending $24 billion more than the government brings in. That is not breaking its back, it is adding to the problem. It is adding to the suffering. It is adding to the hurt. That is what these financial statements show.

What should the government be doing in the consultation process? It should be asking the experts of the country, the many witnesses: What really is our problem? What will really help our economy? If we lower our deficit and spend a little bit less, if we still spend more than we bring in but not as much as the previous government, will that help? Or should we just tackle the debt?

The percentage of debt to gross domestic product is the true measurement. That is the challenge. That is the bar which the government should set. That is how it should be measured. Anybody who is in government, provincially or federally, should measure it that way. We all know in business that debt and equity are correlated items. The banks look at the debt to equity ratio. It is on that basis the banks lend money.

If the finance minister had the intestinal fortitude and truly understood economics, he would look at the debt as a percentage of GDP. What has happened in that category? What does that show us?

When we came in here the net debt was $514 billion. That was the net interest bearing debt. That has now increased to $586 billion, a $72 billion increase. The debt has gone up by $72 billion. Imagine the interest costs on that alone. The deficit has only been reduced by $13.4 billion. Half of that has come from cuts to the provinces, which have gone from $42 billion to $28 billion.

Thanks in large part to low interest rates, higher tax revenues and a $5 billion surplus in the UI fund, we have ended up with these financial statements. There has been an increase of $25 billion in revenue. I would say that $15 billion to $17 billion of that is economic growth. Not all of it is growth. About $10 billion is attributable to tax increases.

When the finance minister says, as he did today in answer to a question from a Bloc member: "We have not increased personal income taxes since we have been here", that is not true. I know I cannot use the word that starts with "l" and I will not. I will not say that he is the "l" word, but I will say that he is definitely misrepresenting the situation.

There are two ways to increase income taxes. One is by raising the rate and the other is by reducing, eliminating or tinkering with the available exemptions and deductions. For instance, there is the labour sponsored venture capital funds which he has reduced. All those people who participated, their taxes just went up, thank you very much. He did a lot with the seniors benefit and seniors pensions. He has tinkered around and he has raised personal income taxes. Personal income tax revenue has gone up by over $6 billion and not all of it is just due to a growth in the economy. This points out as far as I can surmise by my analysis of these statements that the revenue of the government has increased, the spending of this government has stayed level at $158 billion to $161 billion and its spending cuts basically match its increases.

I submit to the hon. members opposite, please question me on this when I am done. Are we really solving the problem or are we just attacking a subset of the problem? It is a disease but if it grows then one will end up getting really sick and then will die. The real problem is the debt. The deficit is a subset of that. Yes, we have to eliminate the deficit but the Reform Party would do it sooner. We would get there quicker and we would offer some tax relief to the Canadian public a lot sooner than what these financial statements show.

As further proof and as my last comment on this topic, it is important for Canadians to understand that the debt as a percentage of GDP has gone up since we have been here. It has gone from 71 per cent to 74.2 per cent. It is going in the wrong direction. Our problem is increasing.

The Liberals, as wonderful as they think they are, as high as they are in the polls and who love to rub it in our faces, are not solving the problem. In the long run they are going to pay for it because they have had a window of opportunity to do something. We have been here advising them on how to do it. Even in the book Double Vision we are given credit and the finance minister gives us credit behind closed doors for encouraging and pushing because we are in tune with Canadians and we know what they want.

Just as with Canadian Airlines, the Reform Party knew that the tax fuels were too high. Our critic recommended a reduction. We knew that the flight attendants and the ticket agents wanted to vote in support of a pay cut, even though those who were making only $20,000 to $30,000 should not take a pay cut, but they were willing to because they loved their jobs. We said to let it go to a direct vote and they said no but we forced them to. Now who gets the credit? They do.

Whoever this Angus Reid is, and whatever poll is saying that the Liberals are in touch with the people, crap. They are in touch with us. They listen to us and they take our suggestions and then they take the credit, but that is okay. As long as it is good for all Canadians, I am very, very happy.

I do not like the budget consultation process if there is not a consensus and they only listen to those they want to listen to. I accuse the chairman and his committee of selective hearing. In his speech this morning the chairman mentioned that he had heard evidence that in the United States the income taxes are 30 per cent lower than here and the unemployment rate is 5 per cent. Our taxes are 30 per cent higher and our unemployment rate is 10 per cent. Does that not tell us something? Lower taxes mean more jobs. Lower taxes mean lower unemployment. It should be obvious.

Then what did the chairman of the finance committee do? He went to great lengths and I think he spent more time than he wanted to in saying that in Canada our payroll taxes are lower than in the United States and it is proof that lower taxes do not necessarily work. I do not see the connection. It does not make any sense to me at all.

It is sad for me to see the government members and especially the frontbenchers take credit for the low interest rates and low inflation rate in Canada. How sad to try to take credit for something that the Liberals criticized when they were on this side of the House. I am not saying that they criticized lower interest rates, but they criticized the monetary policy of John Crow. I can find in Hansard what the Minister of Finance said. He said it was totally wrong. He said it was totally inappropriate. Now the Liberals are reaping the benefits of it and are trying to take credit for it by saying that the government is responsible for the low interest rates. Bull. Bull. It is sad to see someone try to take credit for somebody else's hard work and effort, especially when one is hypocritical and contradicts oneself.

It is also sad when we look at the big problem, which is the debt and the high interest costs to service that debt. There are all the areas where there is still a huge waste in government spending, the billions for business program is what I call it. The government will not do anything about that. There are regional development programs where it could save some money. There is the size and waste in the public service and what they could do to solve that. It is a shame that even on criminal justice, young offenders, and all those areas the government still continues to use nickel and dime solutions to thousand dollar problems. That is the sad part.

Eventually the economy is going to turn around. My learned friend from Capilano-Howe Sound knows and he pointed out that the economy is a cycle. We all know that. What goes around comes around. It goes up and down. We are going to hit a period of high inflation again. We are going to hit a period of high interest rates again. Sure as all of us are in this room, before we pass away we will see double digit interest rates again. Even though the rates are down at 4 and 5 per cent, they are going to come back. Now we have the opportunity to do something about it.

The Canadian public is ready for cuts, ready to go through the pain, but it has to be done quickly. We have to do the surgery and then let the patient recover. By continually operating and tinkering with all different parts of the body the poor patient feels like he will never get better. He feels like Frankenstein. Quite frankly, that is how I would analyse this financial policy of the government, Frankenstein.

Even the Organization for Economic Cooperation and Development countries in their annual report did a study of Canada. They blamed the high unemployment rate. Nobody over there can figure out why we still have double digit unemployment with this wonderful package they have offered the Canadian public over three years. The reason is high tax rates.

We have the highest tax rates going. On tax rates as a percentage of GDP, if we look at where Canada is on a chart, all taxes, corporate and individual, are about 35 per cent as a percentage of GDP. Compare that to those countries at 24 per cent or 30 per cent and we will see the unemployment rate. We will see the correlation. That is what this government will not listen to or look at.

There are also our generous unemployment and welfare benefits. How can we have a welfare program which pays somebody just as

much to stay at home, able bodied people who can work, as somebody would get by working for minimum wage? It does not make sense. Instead of doing something about that, the government ignores it.

On unionization, I believe in unions. I believe that employees of any corporation or any company should have the right to unionize and get together and collectively negotiate against an employer, public or private. At the same time both public and private employer should have the opportunity to replace those workers. But no, the government is going to put Bill C-66 through here. It is going to screw up, meddle and make it a mess so that nobody knows what a replacement worker is and whether or not they qualify. It is going to be a joke and this red tape is costing this country billions of dollars.

Across the board tax cuts are what is needed once we have a balanced budget. That will kick start the economy, not the selective cuts like five cents off per hundred dollars in UI as the finance minister is doing now.

The objective of this country's fiscal policy should be a virtuous cycle of lower debt servicing cost. Imagine what this country would be like if every year instead of our interest costs going from $40 billion when we first came here when we were paying $38 billion to where we are now paying in excess of $48 billion to $50 billion and it is going to go up even more, that they would be going down. The interest costs would be going down, not just the deficit but the interest costs. That would be solving the problem. Then I would say the finance minister deserves all these credits those backbenchers are giving him.

We need to generate a surplus. Then we can offer tax relief and then we can pay down some of the debt as well. That is how we develop, and this phrase was coined by my colleague from Capilano-Howe Sound, a virtuous cycle of lower debt service costs. That should be the objective of the finance committee. That is what I would empower it to do. Find us a way to get interest costs to go down. Give us the suggestions on how to do that and then we would be solving the problem and not tinkering around with nickel and dime solutions for thousand dollar problems.

Get the fundamentals right. The finance minister brags about how he gets the fundamentals right. He does not have them right. He will not give us a target for a balanced budget, just that we will get there someday. He does not attack the debt. He is just on the deficit. He will not reduce UI like everybody else said in the Standing Committee on Finance. I was there for a couple of meetings this year and it was the same old story: reduce the UIC. It is a killer of jobs. Reduce it not by 5 cents, reduce it by 60 cents, 20 or 30 per cent. The Reform Party is suggesting that and we are in tune with the Canadian public, but the government will not listen. Make it a true insurance policy.

CPP is going to have to go up. People are worried about that. So CPP will be raised, but UIC will not be lowered. There is a $5 billion surplus in the fund and it is just being used to pay the deficit. That is not right. If CPP is going to be increased at all, it has to be offset with a decrease in the UIC so that psychologically employees and employers know that overall it is not going up, it is just being adjusted to account for the needs and the demands of the Canadian public.

That is was we have to do. That is how we will create jobs in this country if we get the fundamentals right. Those are some of the fundamentals and some solutions I see the country needs.

Is my time up, Mr. Speaker? Will you give me five more minutes?

[Finance, December 9th, 1996]

Mr. Speaker, with reference to the questions we ask the finance minister in question period with respect to helping low income families and addressing the issue of child poverty, there is a difference of opinion here. Yes, the child supplement can be increased, as the member pointed out in her speech. That has been recommended and it will help families to the tune of another $250 million. That is nice and that is good. But that is not enough and it does not go far enough.

The Reform platform would offer more. But it is not tomorrow, not now. It would have to come when the budget is balanced and we all have to work toward that. The government could do a lot more

by making a lot of cuts, which I will talk about in my speech. The government could offer the relief, which can be offered at that time, to over 1.9 million lower income families across the board. That will truly help lower income people. That will truly help to eliminate child poverty because it will be leaving the money in the hands of those people who need it the most, those who make the least. We are still taxing people who make $12,000 a year to the tune of $1,200.

If we can target it to those families who are in need and increase it, that will help. But it does not help across the board. That is the direction we are trying to go in with that issue. That may give the impression that we are saying immediate tax cuts now. What we are saying is let us look at the fiscal policy of the government, rethink it and apply it to help the greatest majority of lower income people.

[Finance, December 9th, 1996]

Mr. Speaker, I have a comment on the speech given by the hon. member. She said that she conducted a survey in her riding or had access to a survey that talked about the impact of immediate tax cuts at this time. She indicated that was part of the Reform and Conservative platforms.

In case she is interested, our platform does not state that. If I were to answer that survey I would probably be part of the majority that says "immediate tax cuts at this time are not the proper thing to do". First, we have to create a surplus in the budget. At minimum we must balance the budget before across the board tax cuts. That is what we are recommending.

The only selective tax cut in our fresh start platform is that which pertains to the UIC fund. It has a huge surplus and the minister has room at this point in time-this is after all the prebudget consultation period-to listen to those who suggest that it is a payroll tax that could be reduced because of the surplus.

I want to make sure the member understands our platform. Members opposite continually say that we are in favour of immediate tax cuts. This is the second time today we have been misquoted. A member even said that in a statement today. That view is not accurate. I have already explained our policy on that issue. I hope the member will remember that in her future references to the Reform platform on tax cuts.

[Finance, December 9th, 1996]

Their taxes are 30 per cent lower.

[Excise Tax Act, December 5th, 1996]

A point of order, Mr. Speaker. If the hon. members from the government side are not ready and prepared when they should be, why should we be allowing them to speak? They should wait for us for 10 minutes.

[Excise Tax Act, December 3rd, 1996]

Mr. Speaker, I would like to thank the member for Halifax for her intervention on this issue. I am glad to hear somebody from Nova Scotia get up and talk about it and defend it, defend it to the degree and with the passion that she has.

Let me clarify a few things she said in her comments. In no way during my speech was I trying to lecture to Nova Scotians and to tell them what was right for them or what was better for them. In no way was I giving a lecture. I was criticizing the method with which this government is implementing a harmonized sales tax. I was criticizing the government in its implementation.

It is not a question of knowing better. I am not saying I know any better. I am here to give some suggestions and some ideas and that is all I have been trying to do. Doing what is right is important. In the Standing Committee on Finance when we looked at replacements for the GST there were a lot of alternatives looked at. The Liberal government had a lot of options and a lot of choices. It hung its hat on replacing the GST with a harmonized sales tax but it did it piecemeal. It is doing it ad hoc. It is doing it at a high cost.

Let me point out to the hon. member where the high cost is. First of all, to reduce the combined current rate in those three provinces of 19 per cent down to 15 per cent. Obviously it is a loss of revenue to them. Call it a transfer payment. Let us not get into partisan politics for a minute. Let us call it a transition cost from one regime to another of $1 billion. That is $1 billion of expense that need not happen if they would have taken the full report and looked at the Reform recommendations in the minority report.

Reform said it would not solve the problems because this is just entrenching the GST. The Liberal Party wants to replace the GST. In other words, get a system of taxation that is revenue neutral that is not this confusing, complicated, bureaucratic, red tape system of taxation.

Reform said if it were going to do it and look at it, look at an integrated system with those provinces that have provincial sales tax. Given that it wanted to look at it, here are some recommendations Reform has. Make it integrated. Make it the broadest possible base, the widest base. Let us tax everything, groceries, prescription drugs. Tax everything. That way there would be the lowest rate and we would not have this billion dollar cost to make up for lost revenues in certain provinces.

Second, for those low income people who are affected, we currently have a system of rebate and this national integrated sales tax could then adjust to the fact that certain people who are the lower income level would get a bigger rebate than they currently get and we have taken care of those in society we have an obligation to take care of.

These were legitimate recommendations. The reason I am so vehemently opposed to the current botched up mess the government has is that it is not doing it right. It is being done wrong. It is not getting all the provinces to agree. The Liberals quote Mike Harris of Ontario. Mike Harris would love to co-operate if everybody else across the country were coming into the deal at the same time, on a level playing field. Okay, so we would have to compensate, but the finance minister did not do that.

I just want to clarify for the member for Halifax and give her enough time to respond that it was never my intention to lecture. It was never my intention to stand here and say that I know better. If the Liberals would just read that full minority report, we did make some recommendations which the government has not listened to. It is being done piecemeal and that is not right. Let us do it right.

[Excise Tax Act, December 3rd, 1996]

Mr. Speaker, I would like to further add, so that the member does truly understand, we would eliminate the GST unlike his government. Given, however, that the GST is going to be around for another three years or so, if it is possible to improve the

tax regime and eliminate and simplify and reduce taxes, then we would support the government in measures like that.

But as an overall philosophy this party does not and will not support the harmonized sales tax in the present form that this government has put forward.

[Excise Tax Act, December 3rd, 1996]

No, that is not poppycock. That is exactly what has happened and that is what the auditor general is making us aware of. We should be aware of it so that this kind of stuff will not be allowed to happen.

I am not misleading. I acknowledge that there was not a reservation. I just did not put it in my speech. Am I misleading by saying it is not revenue neutral? I accept the claim that it will generate the same amount of money as is currently being generated by the GST but there is a cost to setting up this new system.

When the Liberal red book stated that they would replace the GST with something revenue neutral, they did not say at a cost of $1 billion or $2 billion or $100 million. There was no cost to it. I assumed and I think most Canadians assumed that they would replace it with something that does the same. If it was supposed to save money in administration and in efficiency and if it saved money for businesses and governments, it should not cost us a billion dollars. We know why it cost us a billion dollars. It was either a bribe, an enticement or a transitionary cost. Any one of those three can be picked. I know the government will take the transitionary cost.

We have never supported harmonization. He and I were on the committee. The minority report of the Reform Party on replacing the GST clearly stated in its executive summary, right from the beginning to the end, that: "Harmonization cannot be fully endorsed. 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". That is what the government is doing.

The purpose is to eliminate dual tax regimes but this version retains it for national firms. The Reform Party opposes tax inclusive pricing. This practice violates the principle of open taxation which is essential to efficient functioning of open democracies. The disclosure of taxes paid on cash register receipts preserves an element of openness in taxation but as the experience in Europe has shown, it eventually results in strongly diminished public awareness of the tax.

The Reform Party sees the GST as an unnecessary temporary tax which does not belong in the federal domain, but inasmuch as the tax will exist temporarily, then the Reform Party encourages the government to streamline taxation, remove as many of the significant problems that exist until such time as a much wider tax reform that provides both tax relief and tax simplification can be implemented.

If the government presented a national integrated sales tax with the lowest possible rate on the broadest possible base, the Reform Party would seriously consider looking at such a proposal. However, the government is not doing that. This is a piecemeal, ad hoc presentation. This would be only conditional consideration because the Reform Party's final solution to the GST, as I mentioned earlier, would be to eliminate the GST after the budget is balanced, incorporate the net revenue required into a simplified tax system featuring a dual rate.

I think I have addressed the issues of the hon. member of being misleading and hypocritical. I welcome that. If I challenge them for being misleading and hypocritical they have the right to accuse me of the same. I have, unlike the government, addressed each of those items and have given my answers. I would now like the hon. member, if there is a minute left, to tell me if I am still misleading and hypocritical in light of my answers.