Mr. Speaker, I welcome this opportunity to speak at second reading of Bill C-24.
I think most hon. members would agree that few issues are more timely and few areas of action more compelling than taxation. The operation of our federal tax system affects virtually every Canadian and every family, each company and organization. It impacts our standard of living as individuals and our ability to compete and grow as a nation.
That is the reason why, having put the country's financial house in order and eliminated the deficit, our government adopted concrete measures to start reducing the personal tax burden of Canadians.
Broad based income tax reduction is not and cannot be the only arena for action. From the start of our first mandate, this government has been active in ensuring that we provide a tax system which is fair, a system which eliminates unnecessary loopholes and confusion, and a system which provides targeted assistance to sectors and groups, such as charities and persons with disabilities, that deserve our assistance.
These are the goals and opportunities underlying the legislation before us to make our tax system more simple and fair not only for individual Canadians but for Canadian businesses as well. Another goal we have consistently pursued is to sustain and enhance our federal tax system in a manner which promotes federal-provincial co-operation and harmonization. This bill does just that.
Hon. members will recall that when the harmonized sales tax, the HST, was implemented in 1997 with three Atlantic provinces, Nova Scotia, New Brunswick, and Newfoundland and Labrador, it was a successful example of federal-provincial co-operation. It also presented creative solutions to some of the challenges that we as Canadians will face together as we head into a new century. This bill builds on the spirit of that initiative.
Even if this bill is specifically designed to improve the GST, the goods and services tax, and the HST, it also contains important proposals concerning the tax on certain products.
In this regard Bill C-24 contains measures with respect to the taxation of tobacco products.
I trust that hon. members are aware of the government's commitment to reduce smoking rates, particularly among younger Canadians. One of the concrete planks in this commitment has been the national action plan to combat smuggling which we launched in 1994. This plan has had a significant impact on contraband such that we have been able to increase taxes on tobacco products in 1995, 1996 and 1998 in co-operation with the participating provinces of Ontario, Quebec, New Brunswick, Nova Scotia, and Prince Edward Island.
Today's legislation puts in place another increase of 60 cents in federal excise taxes per carton of 200 cigarettes for sale in Ontario, Quebec, Nova Scotia, New Brunswick and Prince Edward Island, the five provinces that are action plan partners. These provinces are also increasing their taxes on cigarettes by comparable amounts.
Excise taxes on tobacco sticks will also be increased in Ontario, Quebec, New Brunswick and Prince Edward Island, re-establishing a uniform national tax rate on tobacco sticks for sale in all provinces and the territories. Furthermore, the bill proposes to make permanent the current 40% surtax on the profits of tobacco manufacturers.
In a related matter, as it was mentioned in the federal budget of February 1999, Bill C-24 contains measures intended to implement a reduction of the tobacco export tax exemption.
The intent of this measure is to reduce the supply of Canadian made tobacco products intended for export but which are potentially available to smugglers.
The proposals contained in the bill relating to the taxation of tobacco products reaffirm the government's commitment to reduce tobacco consumption in Canada while maintaining vigilance in combatting the level of contraband.
An important component of Bill C-24 is that it reflects the government's responsiveness to the health and social needs of Canadians. For example, the government recognizes that many Canadians are providing care for family members, very often an elderly parent or disabled child.
Bill C-24 proposes an exemption from sales tax for these respite care services. This would mean that services—care and supervision—for persons who have limited capacity for self-supervision and self-care due to disability would be exempted
This proposal will enhance federal support for those Canadians who are striving to meet the growing demands of caring for family members with an infirmity or disability.
With respect to individuals with disabilities, I trust that hon. members would agree that these Canadians face many challenges. In past budgets the government has introduced numerous measures to assist these individuals. The bill builds on such actions and the significant level of tax assistance that is already available.
The proposals contained in Bill C-24 extend sales tax relief to the purchase of specially equipped motor vehicles for transporting individuals with disabilities. The proposed sales tax rebate will ensure that all individuals and organizations get tax relief on the additional cost of purchasing vehicles that meet their special needs.
Other measures in the area of health care that are contained in the bill include the continuation of the goods and services tax and the harmonized sales tax exemption for speech therapy services. Under the GST and HST, harmonized sales tax, the list of exempt health care providers is limited to those regulated as a health care profession in at least five provinces. The proposals contained in the bill will allow the speech therapy profession more time to meet the eligibility requirements for the provision of tax exempt services.
The bill also ensures that providers of osteopathic services are exempt from sales tax. In addition, Bill C-24 corrects an inequity with respect to providers of psychological services by ensuring that the sales tax does not discriminate against duly qualified psychologists.
As I indicated in my introduction, the government is committed to making the taxation system more equitable for Canadians. Bill C-24 shows that commitment in a number of different areas.
In recognizing the important role played by charitable organizations in assisting Canadians and enriching our communities, the bill addresses the special circumstances faced by designated charities whose main purpose include the provision of care, employment, employment training or employment placement services for individuals with disabilities. Specifically the bill provides these charities the capacity to compete on an equal footing when selling goods or services to GST registered businesses.
Bill C-24 also refines the rules for the streamlined accounting method for charities. In addition, it implements the decision by the Government of Newfoundland and Labrador to extend the 50% rebate of the provincial portion of the harmonized sales tax, which is already available to charities in that province and to certain public service bodies such as hospitals that are also charities. The extended rebate would be available to those entities in relation to the activities undertaken in their capacity as charities.
Thus, a hospital board in Newfoundland, operating as a charitable institution, might also manage a care home. The proposed amendment would enable them to apply for a 50% rebate of the HST paid on expenditures relating to the care home.
A number of the amendments proposed in Bill C-24 are aimed at clarifying and enhancing application of our sales tax systems.
For example, the bill contains amendments aimed at clarifying the sales tax treatment of transactions between natural resource producers and exploration companies. Amendments such as these will ensure consistency and fairness in the application of the goods and services tax and harmonized sales tax in a number of key areas.
I should like to take a moment to point out that the amendments in the proposed legislation were developed in response to representations from tax professionals, business communities and Canadians. As I mentioned earlier, this reflects the government's ongoing commitment to making the tax system fairer, more efficient and easier for businesses to comply with.
As a result of the collaborative process between the federal government and businesses in the energy sector, the bill proposes a number of changes which streamline the operation of the goods and services tax and the harmonized sales tax in that sector.
For example, the measures proposed facilitate export transactions which involve exchanges of gas and oil between Canadian and foreign suppliers.
These changes will help to ensure that Canadian businesses remain competitive in the international marketplace. With respect to other international commercial transactions, the bill also proposes to make air navigation services provided to carriers tax-free in relation to international flights and refine the rules for exports of goods by common carriers.
I would like to take this opportunity to state that the federal government acknowledges the importance of the travel and tourism industry to the Canadian economy.
The government has contributed to promoting Canada as a tourist destination and to supporting the tourist industry as a source of employment.
Hon. members are no doubt aware that the federal government provides rebates of the goods and services tax and harmonized sales tax to non-residents on eligible goods exported from Canada, short term accommodation and certain goods and services used in the conduct of a foreign convention.
In consultation with the tourism industry the visitors rebate program was reviewed. These consultations highlighted the fact that the program is generally seen as an important tool in promoting tourism, in particular the accommodation and convention measures.
As a result of the review the 1998 budget contained several proposals to improve the visitors rebate program. Bill C-24 proposes further enhancements to the design and delivery of the visitors rebate program to better promote Canada as a destination for tourists and a site for conventions, for example by reducing the the GST and HST costs associated with providing conventions to non-residents.
On the subject of tourism the bill also proposes changes aimed at providing consistent tax treatment between tax-free international transportation services and various separate charges that relate to such transportation.
Another change will eliminate the requirement that payment for air travel from the United States to Canada be tendered outside Canada for the transportation service to be tax free.
I emphasize that the federal government will continue to consult with the business community to improve the operation of our sales tax system.
In that regard Bill C-24 contains a number of proposals to improve the rules relating to certain business arrangements and ensure that the legislation is consistent with the policy intent. As well as clarifying certain sales tax issues in the area of financial services, Bill C-24 provides a more level playing field in the retail debt sector by repealing bad debt relief for closely related financing companies.
In response to industry concerns, the bill also proposes an important measure that will correct an inequity with respect to multi-employer pension plans. The bill proposes that a rebate be provided to trusts governed by such pension plans, which will place them on a comparable footing with single employer pension plans in relation to the sales tax they bear.
Our government is continuing as well to improve the administration and application of our sales tax system. Bill C-24 amends a number of provisions in these areas to ensure their conformity with existing administrative practices.
In addition, the bill proposes greater harmonization between certain administrative and application provisions in the various laws on taxes and charges.
It also contains proposals to improve the efficiency and effectiveness of the assessment, appeals and corrections provisions overall.
I mentioned earlier that Bill C-24 contains measures relating to other specific levies on certain products. In accordance with the 1997 decision of the World Trade Organization, the bill contains the amendment that repeals the provisions relating to the excise tax on split-run editions of periodicals.
With respect to customs tariffs the bill implements proposals to increase certain duty and tax exemptions for persons returning to Canada after a minimum period abroad. These proposals will make it more convenient for travellers to clear Canadian customs. This is just another example of the steps we have taken to improve service for visitors and for Canadians returning to Canada.
The government remains committed to enhancing aboriginal self-government and has often reiterated its willingness to put into effect taxation arrangements with first nations interested in exercising tax powers. In this context through the budget implementation acts of 1997, 1998 and 1999 the government introduced legislation enabling certain first nations to impose GST-like taxes on specific products such as alcoholic beverages, fuel and tobacco.
This bill proposes that technical amendments be made to the laws I have just mentioned to increase the harmonization of the sales tax of first nations with the GST and to ensure the definitions in these laws are consistent with the definitions used in other federal laws.
In closing, the measures contained in Bill C-24 I have outlined today propose to refine, streamline and clarify the application of our tax system.
This bill also tackles social issues that are important to Canadians.
I therefore urge hon. members to consider the bill and give it their full support.