Jean-Yves Laforest

[Business of Supply, April 28th, 2009]

Mr. Speaker, the member is talking about a letter that the Quebec finance minister sent to the federal finance minister on April 1, 2009. The letter clearly states that the main difference between the QST and the GST has to do with input tax credits. The minister says very clearly in this letter that the Government of Quebec would accept to make the necessary adjustments to its QST to ensure a fuller harmonization.

From the moment the Quebec finance minister sends a letter in which she confirms what the Quebec government intends to do, the situation is very clear: the Quebec government is willing to go a long way in eliminating the few remaining differences, but—

[Business of Supply, April 28th, 2009]

Mr. Speaker, I thought I was clear on that point. What I said when I touched briefly on the historical background is important and I look forward to seeing the Liberals' position on this issue.

The Minister of Finance said he would compensate Quebec if the tax were fully harmonized. Since that time, he keeps inventing new conditions that he knows full well Quebec will never accept. Among other things, the finance minister set a requirement, and he even did it publicly. A letter published in the newspapers said that Quebec would receive compensation only if both the GST and the QST were collected by the federal government from now on. This is totally unacceptable.

There is another aspect to the commitment made by the Minister of Finance. He said that, previously, provinces were to be compensated only if they stood to lose more than 5% of their tax revenues because of harmonization. Now we know that Ontario will see its revenues increase with a harmonized tax.

[Business of Supply, April 28th, 2009]

moved:

That, in the opinion of the House, the government should negotiate in good faith with the Government of Quebec to resolve the dispute dating back over ten years regarding the harmonization of the QST with the GST in the early 1990s and agree to provide $2.6 billion in compensation to Quebec for this harmonization, and that Quebec continue to administer these harmonized taxes.

Mr. Speaker, I will be sharing my time with the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup.

The motion I am presenting today is supported by the entire Bloc Québécois. It fits within a context of tax equity and fairness. It is important to point out that there is a whole history behind this motion. I am presenting it today on behalf of the Bloc Québécois because, given the process we have witnessed by which Ontario was compensated, the Bloc considers that Quebec is losing across the board as far as harmonization of the QST with the GST is concerned.

It is important right at the start to clarify one extremely important element concerning the Quebec nation: as a nation, Quebec possesses the legitimacy required to collect and administer sales tax within its borders. The debate must be based on that principle and that statement of fact. In the course of this day it will be noted—and I will point it out as well—that the present Conservative government's arguments deny that reality.

To give a brief background, the GST was introduced in the early 1990s, and the Government of Quebec harmonized its sales tax with the GST in 1991 and 1992. It was the first in Canada to do so, and it received no compensation. Quebec felt that harmonization of taxes was important for the province's businesses. The Liberal federal government of the day called for the various provinces to follow the Quebec example and harmonize their sales tax.

After several interventions, the Maritimes harmonized their sales taxes in 1997. The Liberal federal government then compensated the maritime provinces which had done so with close to $1 billion, given that there were costs connected to harmonization. Then the province of Quebec asked that Liberal government why it was not offering Quebec the same thing. Since Quebec had already harmonized its sales tax with the GST, why should it not be compensated?

The Liberal government refused to consider the Quebec government's request for financial compensation. It said that it would provide compensation for the transition to a harmonized tax if the province's revenues declined by more than 5%. In Quebec, revenue losses were less than 5%. Quebec agreed to that because that was the rule, and the province went along with that way of doing things. Quebec always tries to cooperate, so it accepted the situation because it had not lost more than 5% of its sales tax revenue.

However, the Conservative government has changed the rules dramatically. This spring, when the Government of Ontario introduced its budget, it announced plans to harmonize its provincial sales tax with the GST and stated that it would receive $4.3 billion in compensation from the Conservative government. Interestingly, Ontario, like Quebec, will not be losing more than 5% of its sales tax revenue.

On the contrary, by harmonizing its sales tax, the province will collect more revenue. As I said earlier, this is about tax fairness, and that is the point. It is perfectly clear that the federal government is compensating Ontario, and that smacks of favouritism.

In response, the Government of Quebec passed a unanimous resolution calling on the federal government to pay $2.6 billion in compensation, a pro-rated amount based on Ontario's compensation.

Since then, the Minister of Finance has been scrambling to come up with excuses that have absolutely no relation to the logic underlying the Government of Quebec's request. He has been stonewalling by coming up with new reasons for his refusal almost every day.

First, he said that the tax was not really harmonized. In a letter to the Minister of Finance, Quebec's former finance minister, Ms. Jérôme-Forget, said that her government would address the few remaining differences between Ontario's and Quebec's harmonized taxes. It is clear that the Conservative government must compensate Quebec if the two taxes are harmonized and on a level playing field.

Then the government came up with another excuse, and now it is forcing a completely unacceptable situation on Quebeckers.

In 2006, Quebec was said to be a nation, yet it is not recognized as such. In addition, it is being asked to give up the power to collect taxes from its citizens and raise tax revenue from the QST and the GST, something it has been doing since the beginning of this harmonization process. That is totally unacceptable on the part of the Conservative government.

During the 2006 election campaign and the years that followed, we heard the government boast about its open federalism approach. Talk is fine, but we have seen no action since. Unfortunately, what we have here is another example of adding to the pile. Disputes are piling up and, once again, Quebec is the one being denied $2.6 billion.

Great efforts were made during the 2006 election campaign to seduce the electorate. The current Prime Minister went as far as to promise that the provinces' jurisdictions would be respected, that the fiscal imbalance would be dealt with, that the international extension of Quebec's internal jurisdictions would be recognized, that Quebec would have special autonomous status through the recognition of its institutional responsibilities, and that open federalism would put an end to the constant confrontation between Quebec City and Ottawa. That is what the current Prime Minister promised, but clearly these were only words.

Now, two elections later, the great seduction has been replaced with the great disappointment, of which there are many examples. The case at hand today is unfortunately one more example showing that, regardless of the government in office at the federal level, be it Liberal or Conservative, hardly anything has changed in how Canada operates.

There has been a short honeymoon between Quebec and the Conservatives, but I can assure this House that the honeymoon is over and that the confrontation between Quebec City and Ottawa is back on with a vengeance. Moreover, this whole situation is unacceptable to all Quebeckers. We have introduced this motion because we think and we are convinced that Quebec ought to get its fair share and that this is ultimately a matter of fairness and social justice.

[Martin Gray, April 27th, 2009]

Mr. Speaker, I would like to congratulate Ms. Isabelle Saint-Hilaire, guidance counsellor at Val-Mauricie secondary school, who has invited the famous Franco-American Jewish writer, Martin Gray, to speak to the students of her school today.

As an adolescent, Martin Gray experienced the horrors inflicted by the Nazi regime. Later, his wife and four children perished in a forest fire. He became a writer to give his life purpose. Mr. Gray has received more than 800,000 letters from people who told him that his story has renewed their sense of purpose.

Prior to the arrival of Mr. Gray, all students were required to read For Those I Loved, discuss it in class and prepare questions for the speaker, who said that he is delighted to visit Shawinigan.

Congratulations to Martin Gray for his message of courage and hope and kudos to Isabelle Saint-Hilaire for this remarkable initiative.

[Goods and Services Tax, April 23rd, 2009]

Mr. Speaker, that is clearly unfair.

The federal government gave the Atlantic provinces $1 billion and Ontario $4.3 billion for harmonizing their sales taxes. The Minister of Finance said he was prepared to compensate the other four provinces, but he has not offered Quebec anything.

Does the minister realize that it is unfair to penalize Quebec for being the first to harmonize its tax and that he should, in all fairness, give the Government of Quebec the $2.6 billion it is asking for?

[Goods and Services Tax, April 23rd, 2009]

Mr. Speaker, in 2005, the Prime Minister boasted that his brand of open federalism would respect Quebec's areas of jurisdiction. Now his Minister of Finance is saying that he will not compensate Quebec for harmonizing its tax with the GST unless the province agrees to allow the federal government to collect the tax. Quebec has made its position very clear. Minister Jacques Dupuis said, “We will most certainly not agree to allow the federal government to collect tax in Quebec”.

Is the Prime Minister's position negotiable, or does the same condition apply?

[Business of Supply, April 23rd, 2009]

Mr. Speaker, I will be splitting my time with the member for Saint-Bruno—Saint-Hubert.

Obviously, a lot of people are worried about credit card usage fees imposed on consumers. I said “obviously” because right now, two committees, the Standing Committee on Finance and the Standing Committee on Industry, Science and Technology, are considering the matter and will be reviewing these issues very soon.

Also, witnesses are appearing before the Senate to air various points of view on a problem that consumers and merchants have known about for a long time, a problem that has gotten worse lately.

The New Democratic Party's motion talks about consumer protection, but the motion moved in the Standing Committee on Finance also mentions merchants, who are also important players, subject to a rather complex process for credit card usage. In a way, sudden fee increases hurt them too.

If this hurts merchants, in the end, consumers will wind up paying for it. That is why we agree that this motion should call on the federal government to adopt measures to better protect consumers, but we must not forget that merchants are part of the process too.

There is a lot we do not know. People do not know everything, and banks do not tell us everything about the credit card acquisition process and related regulations. It is complicated, and that is why people tend not to read all of the fine print in the contracts they sign.

Under the current system, an individual can acquire a credit card and use it to pay a merchant. The merchant then has to deal with a credit card company, such as VISA, as well as with what is known as an acquirer, which provides a data transaction system. Credit card issuers, often banks, are also involved.

Popular imagery always focuses on the huge profits that the banks have been making for years, but I think it is important to again point out the full context and consider the fact that a great deal of information and education must be provided about the credit card system, in order to fully understand who is making profits, how companies are able to increase them and why they do so.

We in the Bloc Québécois believe that the federal government must act. We therefore support the principle of this motion, so that in committee we may examine more closely the various issues we are dealing with today. However, although we support the principle, the federal government must definitely be extremely careful about respecting provincial jurisdictions and Quebec's jurisdictions if it takes any legislative action.

For example, since 1971, Quebec has had the Consumer Protection Act, which already provides a framework for the contractual agreements between credit card companies and consumers. If this motion passes and the federal government decides to go ahead with legislation, it will be important to respect Quebec's expertise and competence in this area. Furthermore, several incidents since 1971 have helped the Quebec government develop its competence in this area, which has even been recognized in a Supreme Court of Canada decision.

To analyze the overall situation, it must be seen in a very broad context. The current economic and financial crisis clearly shows that debt is a major problem in Quebec and in Canada. This situation is even worse for our neighbours to the south. Credit that was granted with very little background checking is what caused such massive debt and the current global crisis. This is prompting parliamentarians to have a look at the situation and think about what we can do to protect consumers and merchants.

We had some proof of that yesterday when the Bank of Canada once again reduced its key interest rate to 0.25%, which is an unprecedented low. For a long time, the spread between the Bank of Canada's prime rate and the rate financial institutions charge their clients who use credit cards has been far too great. Bank rates hover around 18% or 19%, or even 20%, when we now have a key interest rate of 0.25%. This is a disturbing problem that we must examine carefully.

Why are we allowing banks to continue to rake in such huge profits at a time when consumers are increasingly vulnerable? The marketing techniques used by banks—a Liberal member was just talking about premium credit cards—have once again compounded the problem of the appeal for certain consumers. In fact, many consumers consider the use of a credit card issued by a bank and associated with a given product a way of profiting from their purchases.

However, we know very well, with regard to the matter of credit cards, that banks issue them in the hope that the holders will not pay the full balance of their purchases within one month. That is where the banks make their huge profits. Consumers are not very well educated about that. There is also a lack of knowledge about the fees charged to merchants who, quite often, do not understand what they are being charged and why their fees increase.

Therefore, the Bloc Québécois supports this motion in principle but the government will have to exercise caution before going any further and be truly cognizant of the fact that there are other competent authorities in this matter, such as the provinces.

[Goods and Services Tax, April 21st, 2009]

Mr. Speaker, my question now is for the Quebec lieutenant who has quietly given up defending the interests of Quebec, and is accepting his government’s use of the fiscal weapon to deprive Quebec of $2.6 billion and trying once again to strip Quebec of its prerogatives.

Will the minister stand up and denounce this absurd situation whereby Quebec's income taxes are used to pay the compensation that the federal government is granting to others?

[Goods and Services Tax, April 21st, 2009]

Mr. Speaker, Quebec and Ottawa are in a dispute over the harmonization of the GST and the Minister of Finance has made his conditions for compensating Quebec known. He position is that Quebec should stop collecting the GST and QST, and that these taxes be collected by the federal government in future.

Can the Minister of Finance tell us whether this condition is non-negotiable for compensating Quebec? Is he telling Quebeckers that it is this or nothing?

[Goods and Services Tax, April 20th, 2009]

Mr. Speaker, we just said that it was already harmonized.

The federal government gave the Maritimes $1 billion and Ontario $4.3 billion for harmonization, but it is making excuses to deprive Quebec of its $2.6 billion.

Does the minister realize that, by refusing to offer compensation, he is not only depriving Quebec of money to which it is entitled, but forcing Quebeckers to pay for compensation given to other provinces?