Mr. Speaker, I believe I have some 15 minutes left in my time but I am not going to take all that time.
When we broke for members' statements and question period I was reviewing the importance of a government not making tax policy on the run and not making tax policy in a vacuum. I had made reference to the miscue in the government's announcement that it would revise the GST rebate for visitors, in fact the broken promise of the government in flagrantly going back on its commitment not to revise the trust unit taxation regime which affected thousands and thousands of Canadian trust unit holders, and the political desire of the government to extend a GST 1% tax reduction which affects big spenders.
If we do the math, when a big spender spends $10,000, there is a $100 tax reduction if there is a 1% reduction in the GST. However, for persons of very modest means who have to spend most of their money on rent and food which are either tax exempt or zero rated, there is virtually no tax reduction. As I said in my remarks, 1% of nothing is nothing if one is a poor person.
That particular tax reduction, in my view, is conspicuously manifestly regressive, not helpful, other than in terms of politics. It remains to be seen just how Canadians will view that.
This particular bill then, while I am not saying it is a shotgun blast without any strategic goals, I do say that Parliament has an obligation to look at every tax bill carefully to make sure that the tax objectives are strategic, useful and fit within our fiscal framework.
I am going to quickly refer to two or three of the components of this amendment bill because I think the provisions are useful. They are not major tax changes but they reflect a responsibility to execute a tax policy that is sensitive to different sectors of Canadian society. The first has to do with the extension or creation of exemptions in the health care area involving social work, speech language pathology, and the zero rating of plasma blood substitutes.
In another area, and I think this is quite an interesting tax change, occasionally a foreign bank which maintains a fully owned subsidiary in Canada will wish to Canadianize the branch and Canadianize the banking arrangement. In so doing, there are often potential tax implications to make the transfer; to make the flip of the assets there are tax implications. These tax implications are actually obstacles to the Canadianization of the banking operation. This amendment would remove at least a part, if not all, of that taxation obstacle when the banking changes are made. Those would be GST-HST taxation implications.
Another one is really a fairness provision. We are all familiar with taxation deadlines, applications for rebates, filing for taxes and really filing for anything where there is a deadline. The government believes, and quite properly, that there is an argument to be made that some discretion should be left with the minister to allow for late filings in exceptional circumstances.
Some particular incidents came to light recently involving GST-HST applications in the province of Nova Scotia. I think that a discretionary late filing exemption under exceptional circumstances is a good idea. I know that over time these exemptions can be taken for granted sometimes. We will have to keep an eye on that.
Another area that I noted, and I would commend the change, has to do with a taxation problem that hearkens back to the days of prohibition, when there was absolute prohibition on anything that produced alcohol. That includes a still or any of the equipment that would be used to make illegal alcohol in a business, a home, a basement or a shed anywhere across the country.
As a result of that structure, modern businesses in winemaking and provincial health laboratories that test and need some kind of a distilling operation to do their health care testing find that they have to pay taxes, GST and excise tax, when they purchase or maintain the equivalent of stills for making alcohol, and of course that is totally inappropriate. In the modern world, a provincial laboratory, a winemaking operation or a private laboratory doing health care testing, all of which are licensed, of course should not have to pay excise tax in addition to what they have to pay to set up these facilities. This exemption is quite appropriate.
Those are three things that the bill does. They may seem small to the parties affected and they may loom large, but it is an adaptation of our taxation regime intended to reduce the negative impact on these commercial and government operations.
All in all, the changes contained in the bill are not what one would call strategic. They are not large in tax implication. They mostly have to do with fairness and removing clogs or obstacles in the taxation system that the common sense of a Canadian would say should not be there.
On that basis, although the bill covers a number of different taxes, including the excise tax, the GST and the air travellers safety tax, the Liberal opposition is on balance quite prepared to support the bill. We hope the bill can move through the House and the other place quickly so that we do not have to waste too much time.
