John McCallum

[Provincial Choice Tax Framework Act, December 8th, 2009]

Mr. Speaker, I can be relatively brief and concise today because I think we have gone through these matters a number of times and the situation is really very simple, that is to say, it is a matter of provincial jurisdiction. I could just sit down at this point because it is that simple, but I will speak for a little bit longer.

The bill creates the framework for Ontario and B.C. to harmonize their provincial sales taxes with the GST. Beyond that it will create a framework for any other provinces that wish to harmonize their taxes to do so as well.

There is a simple principle contained in the bill, the idea that provinces have the right to choose how they tax their citizens. Specifically, the bill creates a framework for Ontario and B.C. to harmonize their provincial sales taxes with the GST, as they have chosen to do. I do not understand why this simple point is so difficult for the NDP to understand.

This is within provincial jurisdiction. It is up to the provinces to decide how they will tax. This is not about whether or not we like the tax; it is a matter of provincial jurisdictions.

It will also create a framework for any other provinces that choose to harmonize their sales tax to do so. As we know, several Canadian provinces have already harmonized their sales tax with that of the federal government, and none of these provinces that have harmonized have ever chosen to reverse their course and de-harmonize the tax.

Nova Scotia chose to harmonize its sales tax, and the federal government allowed it to do so. At the time, the provincial NDP Party vowed that if it were ever elected to government, it would scrap the HST. Believe it or not today the NDP is the governing party in Nova Scotia, and I have not heard NDP Premier Darrell Dexter indicate in any way that his government will de-harmonize its HST. In fact, the Nova Scotia NDP wants to retain Nova Scotia's harmonized sales tax. That is the choice of the Nova Scotia NDP government and we, as federal politicians, should respect the provincial NDP's choice in this area.

This year, as we know, Ontario and British Columbia have indicated their intention to harmonize their respective sales taxes, just as other provincial governments had done during the 1990s.

Today it falls to us, as federal legislators, to decide if we will allow Ontario and British Columbia to harmonize their taxes, the same way that past Parliaments have allowed other provinces to do so. I am talking about provinces like New Brunswick where a Liberal government currently maintains an HST, like Newfoundland and Labrador where a Conservative government maintains an HST, and like Nova Scotia where an NDP government maintains an HST.

The 35th Parliament allowed these provinces to harmonize when they asked to do so. Should we, today, change course and tell other provinces that might wish to follow their lead that it is too late? Should we tell them that they cannot have an HST if they want one?

I would say the obvious answer to that question is no. We must allow them to make their own decisions, and that is why I will be supporting this legislation that allows these provinces, and other provinces in the future, to make a choice regarding what is fundamentally a matter that is inside their own jurisdiction.

Let me give a very brief description of what this bill does. The bill will add B.C. and Ontario, the two provinces that are seeking to harmonize taxes, to schedule VIII of the Excise Tax Act and will set B.C.'s portion of the HST at a rate of 7% and Ontario's at 8%. It is important to note that this is a fundamental shift from the 1990s vision of a single rate across the country, which assumed that all provinces would share an identical rate.

One important shortcoming of this legislation is that first nations in Ontario will be denied the tax exemption they currently enjoy. I have written to the finance minister on this topic, and I have asked him to negotiate a fairer arrangement with the Government of Ontario on this matter.

It is also important to note that some input tax credits will initially be denied under this bill. This denial will apply to large businesses with over $100 million in sales. The input tax credit denials will be phased out over the next five years as the HST becomes a full value-added tax.

To those Canadians who are on the opposition's side of the HST, it should be abundantly obvious that the federal Conservatives have their fingerprints all over this legislation. It was the Prime Minister and his finance minister who encouraged Ontario and British Columbia to harmonize their sales tax.

It was the federal Conservatives who noticed that the two provinces were both facing deficits due to this Canada-wide Conservative recession and who offered them billions of dollars to make the tax change. If they had not done so, perhaps Ontario and B.C. would not have decided to harmonize.

That possibility is of course strictly hypothetical, because the hard reality is that both Ontario and B.C. have in fact decided to harmonize their sales taxes and regardless of their reasons have struck and signed deals with the federal government. That is why, as I said earlier, this legislation is about whether Ottawa feels that provinces have the right to determine how they tax within their own areas of jurisdiction.

I appreciate that some in this House may not like the HST, but I would suggest that if they want to begin prohibiting provinces from working in areas of their own jurisdiction, they should resign from this House and they should run for their provincial legislatures. Otherwise, they should support this bill and its very simple principle that should not be beyond the NDP's capacity to understand, that principle being that provinces have a right to decide whether or not to have a harmonized sales tax.

[Questions Passed as Orders for Returns, December 7th, 2009]

With respect to the Department of Finance, for all contracts under $10,000 signed between December 1, 2008 and October 19, 2009, what is the: (a) vendor name; (b) contract reference number; (c) contract date; (d) description of work; (e) delivery date; (f) original contract value; and (g) final contract value if different from the original?

[Questions on the Order Paper, December 7th, 2009]

With regard to government advertising, how much money did the government spend on television and radio advertising between October 1 and 26, 2009 inclusive, giving particulars of (i) how much each department or agency of government spent on such advertising, (ii) the subject and nature of each advertisement, (iii) the broadcast outlet on which each ad was broadcast, giving the name and location of the station, (iv) the dates on which the advertisements aired?

[Questions on the Order Paper, December 7th, 2009]

With respect to section 3.7 of the Treasury Board’s Policies and Guidelines for Ministers’ Offices, between October 19, 2007 and October 19, 2009 what is the total amount of funds dispersed from the Consolidated Revenue Fund to pay for: (a) severance pay for departing exempt staff of the combined Cabinet including the Prime Minister’s Office, all Ministers’ offices and all Ministers of States’ offices; and (b) separation pay for departing exempt staff of the combined Cabinet including the Prime Minister’s Office, all Ministers’ offices and all Ministers of States’ offices?

[Disposition of an Act to amend the Excise Tax Act, December 3rd, 2009]

Mr. Speaker, I thank my colleague from Charlottetown very much for that insightful question. It happens the two of us were both elected in the year 2000 and have been good colleagues and friends since then, but it does seem to be the fate of the Liberals that every once in a while we are called upon to inherit a big, fat, juicy, ugly Conservative deficit, and Canadians ask us to clean up the mess.

I would agree with my colleague that that is indeed what happened in 1993. There was a record $42 billion fat Conservative deficit which we inherited. At that time we were the laughing stock of the G7. We were the worst. We were about to become a third world country and have the IMF come in.

However, what did we do? We cleaned it up and we brought that debt down from the worst to the best. Then these Conservatives came in and they inherited the best debt situation in the whole of the G7 by a country mile. They squandered that surplus before the recession hit. They turned it into a deficit. Now once again, we have a record Canadian, ugly, Conservative deficit, this time of $56 billion. I suspect we, at some point, will be called in to clean up this second Conservative mess.

[Disposition of an Act to amend the Excise Tax Act, December 3rd, 2009]

Mr. Speaker, I did not think I criticized the Conservatives about the recession, had I? Therefore, I do not know quite what the member is talking about.

However, I would point out that while I appreciate the compliment of leading the nation's finances 13 years ago, I was not even elected to this Parliament 13 years ago, but I thank the member anyway.

I will take this opportunity very briefly to correct the typical propaganda and weasel words coming from the government. Every economist on the planet measures a country's growth by gross domestic product, GDP. It is a fact that in the last six months Canada's growth measured by GDP did worse than every other country in the G7 except one, the UK, the second worst.

The government did not like to sell that picture to Canadians so it invented some other measure called domestic demand, some arcane thing that no one else uses. Lo and behold, Canada looked better when measured by domestic demand, whatever that is, over the past six months. The government is trying to fool Canadians because the only measure is GDP on which we are second to last. Therefore, it picked some garbage arcane measure instead on which we do better, but nobody will believe this nonsense.

[Disposition of an Act to amend the Excise Tax Act, December 3rd, 2009]

Mr. Speaker, I thank my colleague for a speech rivalling that of the parliamentary secretary in both length and relevance.

He basically misses the point when he talks about what a Liberal member would do. It is not what a Liberal member would do. It is what a federal member should do, a member of the federal Parliament.

He has not addressed the core issue, and I repeated it at least six times in the hope that NDP members might understand the point. The point is not so much whether or not one likes this tax. The point is whether we think that we as federal parliamentarians have the right to ride roughshod over the desires of duly elected governments in the provinces.

If a province decides to enact a tax that is in its own jurisdiction, the province has the right to enact that tax. I would hope that one of the NDP members, when one of them no doubt stands up again with questions, will address that central issue.

[Disposition of an Act to amend the Excise Tax Act, December 3rd, 2009]

Mr. Speaker, there are really two sides to this debate. On the one hand, there is the medium-term point of view that harmonization will make provinces more competitive and lead to the creation of many jobs. On the other hand, there is the negative point of view that some taxes will cause some goods and services to cost more.

My major point is that the federal Parliament ought not to be the primary place for such a debate. The primary place for such a debate should be in the Ontario legislature and the British Columbia legislature, because it is a provincial matter what kind of tax provincial governments choose to impose. It is our job here in Ottawa to listen to what the two provinces decide and to pass legislation that allows them to act on that decision.

To those Canadians who are on the opposite side of the HST debate, it should be remembered that the federal Conservatives do in fact have their fingerprints all over the bill. It is the Prime Minister and his finance minister who encouraged Ontario and British Columbia to harmonize their sales taxes. It was the federal Conservatives who noticed that the two provinces were both facing deficits due to the Canada-wide Conservative recession and offered them billions of dollars to make the sales tax change. If they had not done so, maybe Ontario and B.C. would not have decided to harmonize.

Of course, that is strictly hypothetical. The hard reality is that, for whatever reason, both Ontario and B.C. have decided to harmonize. They have struck legitimate signed deals with the federal government. As I said earlier, that is why the legislation will be about whether Ottawa thinks that provinces have the right to determine how they tax within their own areas of jurisdiction.

There is also a question related to this motion. Although no province has ever decided to de-harmonize, should one decide that that is the path the province would want to take, should Ottawa allow them to do so? I believe the obvious answer is yes. A province should be free to decide how it wants to tax its citizens within the parameters of the Constitution.

Our position is clear. Whether we in the House like the harmonized tax or not is largely irrelevant because it is a matter for provincial duly elected governments to decide. Once a legitimate legal decision has been made and an agreement is signed with the federal government, the role of the federal Parliament is to allow those provinces to tax as they see fit to tax within their own field of jurisdiction.

I will be interested to see if my colleague on the finance committee, the member for Outremont, will be voting against this legislation. Will he be voting no? Will my friend from Outremont be telling the people of Outremont that he believes it is in Ottawa that the decision should be taken on how provincial legislatures must tax their citizens? Is it the view of the member for Outremont that we have un fédéralisme dominateur and that all decisions on provincial constitutional taxation are to be made in Ottawa? Although my friend from Outremont will vote against this legislation, I would be most surprised if he ever commented on the matter when he returns home to his riding.

What we can do here today is give a clear signal to the two provinces that have asked to harmonize and join with the provinces that have already harmonized that they are free to do so. To tell them that the door has not been closed on sales tax harmonization, leaving some provinces with an HST and other provinces unable to have one, is not a legitimate decision.

That clear signal is what this motion is about. It lays out how the bill will proceed through the House, including committee stage beginning tomorrow. The motion also contains a commitment that if the bill is not passed by the Friday on which the House is set to rise for the holiday break, we will continue to sit in this place on Saturday to further discuss the bill.

As I stated earlier, there is a clear question here. Perhaps I have been a bit repetitive but it seems to take repetition for it to sink into the minds of the NDP members. Basically it is a very simple question and I have repeated it perhaps three or four times, but they still do not seem to get it.

I am only going to speak for about one more minute, but I will repeat one last time the simple question that I am asking the NDP to absorb. The question is: Do provinces have the right to choose how they tax their own citizens? I would ask the members of the NDP to please consider this. Do provinces have the right to choose how they tax their own citizens?

It seems that the NDP is saying that the provinces do not have that right. We on this side of the House are saying that the provinces do have that right, whether or not we happen to be fans of the precise tax which those provinces choose to impose. The Liberal Party believes that provinces should have that ability. We will be supporting this motion to give those provinces the legal certainty that they need.

[Disposition of an Act to amend the Excise Tax Act, December 3rd, 2009]

Mr. Speaker, I am pleased to rise to speak on this issue. I will be relatively brief and concise, at least by the standards of the parliamentary secretary. I do agree with him that this is a matter that we do not want to dilly-dally on for too long. It is a relatively simple argument that I am about to make.

I am pleased to speak to this procedural motion, which outlines how the House of Commons will go about examining the tax framework that would allow provinces whose sales taxes are not harmonized to pursue harmonization if that is their wish.

The bill asks a very simple question of us all. I just said it is a very simple question so maybe the hon. member will get it the second time around. The question is: Do the provinces have the right to choose how they tax their citizens? That is a very simple question. Specifically, this motion asks if provinces have a right to harmonize their sales taxes with the federal goods and services tax.

It is important to note that seven provinces have already harmonized their sales taxes with the federal government, and none of the provinces that have harmonized have ever chosen to reverse their course and de-harmonize that tax.

In 1997 at the time of sales tax harmonization in Nova Scotia, the provincial NDP, led by Robert Chisholm, vowed that if the NDP were elected to govern, it would scrap the HST. Today it happens the NDP is the governing party in Nova Scotia, but interestingly, I have not heard NDP Premier Darrell Dexter indicate in any way that his government will de-harmonize the sales tax. In fact, the Nova Scotia NDP wants to retain Nova Scotia's harmonized sales tax. That is the choice of the Nova Scotia NDP government. We as federal politicians should respect the provincial NDP's choice to retain Nova Scotia's HST.

This year two other provinces have indicated that they would like to harmonize their sales taxes with the federal government just as other provincial governments had done during the 1990s. Now it will be up to us as the federal legislators of the 40th Parliament to decide if we will allow Ontario and British Columbia to harmonize their taxes in the same way that the 35th Canadian Parliament allowed the other provinces to do.

Should we allow provinces such as these to have a harmonized sales tax and not others? My answer to that would be clearly no. It is not the job of the federal government to give certain taxing powers to one province and to deny those same powers of taxation to other provinces. That is not how I believe our founders imagined Confederation would unfold and it is certainly not how I believe it should unfold.

It is a very simple principle and it is one that we must decide is either right or wrong. While the NDP will try to paint the bill as thousands of things that it is not for political gain, this is the essential principle that at the end of the day we will all have to decide if we support or reject.

There are certainly arguments to be made on both sides on the merits of the harmonized sales tax, and generally speaking those arguments should rightly be made in the provincial legislatures. What we in Ottawa must not do is to deny those legislatures the ability to have that discussion or make those decisions.

In terms of the benefits of harmonization, there are reports from Jack Mintz and others that have indicated harmonization will lead to gains in investment, productivity, wages and jobs. Mintz, for example, suggested harmonization in Ontario could over five years create some 500,000 jobs. In a province that has seen manufacturing jobs hammered by the Canada-wide Conservative recession, this is certainly good news.

There is, of course, also concern about increased costs on certain items, and people with those concerns have certainly made them--

[Disposition of an Act to amend the Excise Tax Act, December 3rd, 2009]

Mr. Speaker, I have a question for the parliamentary secretary. As occurs from time to time, we happen to be voting the same way on the motion, but I do not understand one thing. He repeatedly said how important it was to move this through quickly. Yet it was my perception that he talked at great length, almost, one could say, ad nauseam, and also provoked many interventions.

If it is so important to proceed expeditiously, why did the parliamentary secretary elect to speak at such great length, thereby prolonging this agony?