Tuesday, February 11, 1997
Bill C-70. Motion for third reading 7928
Mr. Bernier (Beauce) 7961
Mrs. Tremblay (Rimouski-Témiscouata) 7961
Mrs. Dalphond-Guiral 7963
Mr. Lavigne (Verdun-Saint-Paul) 7964
Mrs. Tremblay (Rimouski-Témiscouata) 7964
Mrs. Tremblay (Rimouski-Témiscouata) 7964
Mrs. Tremblay (Rimouski-Témiscouata) 7964
Mr. Chrétien (Saint-Maurice) 7965
Mr. Chrétien (Saint-Maurice) 7966
Mr. Chrétien (Saint-Maurice) 7966
Mr. Chrétien (Saint-Maurice) 7966
Mr. Chrétien (Saint-Maurice) 7967
Mr. Chrétien (Saint-Maurice) 7968
Mr. Mills (Red Deer) 7968
Mr. Mills (Red Deer) 7969
Mr. Chrétien (Saint-Maurice) 7970
Mr. Chrétien (Saint-Maurice) 7970
Bill C-70. Consideration resumed of third reading 7972
Mr. Hill (Prince George-Peace River) 7977
Mr. Martin (Esquimalt-Juan de Fuca) 7982
Mr. Hill (Prince George-Peace River) 7989
Motion agreed to on division: Yeas, 131; Nays, 73 7991
(Motion agreed to, bill read the third time and passed.) 7992
Consideration resumed of motion and amendment 7992
Amendment negatived on division: Yeas, 31;Nays 173 7992
Motion negatived on division: Nays, 131; Yeas, 73 7993
Mrs. Tremblay (Rimouski-Témiscouata) 7997
Mr. White (North Vancouver) 8000
HOUSE OF COMMONS
Tuesday, February 11, 1997
The House met at 10 a.m.
The Speaker: Before we get into the daily routine of business, I
will hear a point of order from the hon. member for
Mr. Hermanson: Mr. Speaker, it is not a point of order. It is a
request for an emergency debate. Is it appropriate at this time in
The Speaker: I will hear him at the end of the daily routine of
* * *
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.):
pursuant to Standing Order 36(8), I have the honour to table, in
both official languages, the government's response to 15 petitions.
* * *
Mrs. Elsie Wayne (Saint John, PC):
Mr. Speaker, I rise
pursuant to Standing Order 36 to present two petitions.
The first petition is signed by 84 people from my riding. The
petitioners call on Parliament to urge the federal government to
join with the provincial governments to make a national highway
system upgrading possible beginning in 1997.
Mrs. Elsie Wayne (Saint John, PC):
Mr. Speaker, the second
petition is signed by 332 people from the province of New
The petitioners feel that education and literacy are critical to the
development of our country and call on the House to urge all levels
of government to eliminate the sales tax, including the GST, on all
Mr. Chuck Strahl (Fraser Valley East, Ref.): Mr. Speaker, I
have a petition to present signed by 233 people from my area and
from British Columbia generally.
The petitioners are concerned about the GST, particularly on
reading materials. They ask that this regressive tax on newspapers,
reading materials and magazines be removed when any
harmonization takes place. They request that the GST be removed
from any reading material.
* * *
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.):
Mr. Speaker, I ask
that all questions be allowed to stand.
The Speaker: Is it agreed?
Some hon. members: Agreed.
* * *
Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.):
Mr. Speaker, in accordance with Standing Order 52, I wish to ask
for the adjournment of the House for the purpose of discussing a
specific and important matter requiring urgent consideration. It is
imperative that the House debate the important matter of delays in
grain shipments to Canada's west coast ports.
Current estimates are that it is costing the Canadian economy at
least $65 million. The matter requires immediate attention.
Perhaps, more important, the minister of agriculture is scheduled to
meet with the parties involved. Therefore, it is incumbent on
Parliament to meet to debate the issue before he meets with the
parties involved with regard to the delay in shipments to the west
It is on that basis and according to the standing orders that I
That this House now adjourn to give urgent consideration to the important matter of
delays in grain shipments from Canada's west coast ports.
The hon. member for Kindersley-Lloydminster
was good enough to send me notice of his application for an
emergency debate earlier today.
I have had an opportunity to look over the reasons for an
emergency debate and the adjournment of the House and, in my
view, this does not meet the exigencies of what we have set up as
criteria for an emergency debate at this time. However, I thank the
hon. member for raising the matter in the House.
Hon. Lawrence MacAulay (for the Minister of Finance, Lib.)
moved that Bill C-70, an act to amend the Excise Tax Act, the
Federal-Provincial Fiscal Arrangements Act, the Income Tax Act,
the Debt Servicing and Reduction Account Act and related acts, be
read the third time and passed.
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I am pleased to open third reading
debate on Bill C-70. This is landmark legislation. It will implement
the harmonized sales tax in the provinces of Nova Scotia, New
Brunswick and Newfoundland and Labrador.
As of April 1, 1997 the harmonized tax will replace the GST and
provincial retail sales taxes in those provinces. This legislation also
proposes over 100 technical amendments to the Excise Tax Act.
These technical improvements will serve the dual purpose of
paving the way for harmonization while making the GST run more
smoothly in those provinces that have not yet agreed to
Why do I say that Bill C-70 is landmark legislation? That is
because harmonization marks a bold and creative development in
the field of federal-provincial relations. The bill is a tangible sign
of the progress that can be made when different jurisdictions work
together and resolve to end overlap and duplication. The
significance of four governments agreeing to move forward on
harmonization of retail sales taxes cannot be overstated.
Once this bill is in place, businesses in the participating
provinces will no longer have to follow two sets of sales tax rules
and regulations. They will no longer have to deal with two different
bureaucracies nor file two sales tax returns for every appropriate
and different period under both regimes, the federal and provincial.
Under the harmonized system there will only be one set of rules
and one tax administration, and registrants will only have to file
one sales tax return.
Harmonization will make life simpler for companies of all sizes.
They will spend less time doing the books and filling out forms and
more time doing business.
As my hon. friends will recall, the structure of the harmonized
sales tax will parallel that of the goods and services tax. The tax
will apply at the harmonized rate of 15 per cent to the same goods
and services that are already taxed under the federal GST. The new
combined tax rate will be almost five percentage points less than is
currently the case of the combined rates in Newfoundland and
Labrador and 4 per cent less than it currently is in New Brunswick
and Nova Scotia. This will be a major cost saving for consumers in
The rules for registering, filing returns and claiming input tax
credits will be the same as those to which registrants across Canada
have already grown accustomed.
As we moved to this system we were very conscious of the need
not to saddle businesses with a whole new system, a whole new set
of forms, a whole new set of rules to deal with a new tax
administration, but rather, to the extent possible in moving to
harmonization, to use forms and procedures, rules and regulations
that businesses are already accustomed to and comfortable with.
One thing was clear as we travelled the country with the finance
committee. When people in the country, consumers and retailers,
said end this ridiculous anomaly of duplication, of double sales
taxes, of ten sales taxes across this country and harmonize, they
said ``please, when you do that do not saddle us with an entirely
new system. We have adjusted to the ways of dealing with the
existing GST. When you harmonize, to the extent possible, let us
use the same forms, the same rules and regulations'', and we have
In the participating provinces businesses will finally be able to
recover all sales taxes they pay on inventory and other expenses.
By contrast, in non-harmonized systems businesses have no way of
recovering provincial retail sales taxes they pay. Any of us with
experience in the complicated area of retail sales tax know that it is
indeed costly to pay tax on those inputs and it is indeed complex to
know whether or not particular inputs are subject to exemption
certificates or whether tax is payable.
In the harmonized system this added cost will not be there. In the
non-harmonized provinces, tax on those business inputs will
continue to be passed on to consumers, both domestic and foreign.
Unrecoverable provincial sales taxes are buried at all stages as
products move through the chain from manufacturer to wholesaler
to retailer. Those hidden taxes on inputs undermine the
competitive vitality of Canadian firms. Clearly this works at cross
purposes with our efforts to promote trade in this country, reduce
deficit and foster a more competitive environment.
The integration of overlapping sales taxes with a single, value
added tax structure will bring our tax system into line with other
policies that promote competitiveness.
A key element of the harmonization agreement is tax included
pricing. The pricing requirements will allow a shopper to be certain
of the full cost of what he or she is buying before the cashier rings
up the sale. To keep the tax visible to consumers, the amount or rate
of sales tax payable will be disclosed on receipts. The suggestion
that tax in pricing is just a convenient way for government to sneak
in tax increases is simply and absolutely untrue. The tax will be
clearly displayed on sales receipts and invoices for everyone to see.
Indeed, while members of the House have spoken about this
issue and their concerns about hidden taxes, not one of them has
complained about the current situation which prevails at the gas
pump, where the tax is indicated on the receipt. As I have pointed
out to the House on earlier occasions, in much of the rest of the
world we do not see legislators or individuals standing up and
railing against governments for hiding a tax which is clearly visible
on receipts. We could choose any country in Europe and we will see
taxes clearly indicated on sales receipts. Whether it is the VAT at a
certain rate or the VAT at a certain amount, it is there for the world
The fact that the taxes will be indicated on receipts in the
harmonizing provinces clearly puts the lie to the suggestion that
taxes are being buried or hidden.
Tax inclusive pricing will address a longstanding consumer
irritant. It is something which the finance committee heard a great
deal about as it travelled the country studying this matter.
Consumers are always on the hook for a sum of money that is
different from and greater than the price that is posted or marked. It
does not matter if the person is buying a restaurant meal or a
refrigerator. The point is that almost every time a cash register
rings in this country we can be sure that a consumer is caught short,
surprised, inconvenienced or embarrassed.
I stress that Canadians overwhelmingly related stories to us, as
did retailers, of awkward moments at the cash register when they
were confused as to the price of items because tax had to be added.
In testimony before the finance committee of this House, a retailer
said this to us when commenting on the prices of goods in his shop:
``I cannot sell shoes in my store for $11.49, but I can sell them for
$9.99''. But the reality is that a consumer cannot buy those shoes
for $9.99; they really cost $11.49.
While we may have some sympathy for the marketing needs of
retailers and, as I will explain later we have gone a great distance in
responding to their concerns about tax inclusive pricing with
flexible guidelines, we have had very much in mind the need for
consumers to know what things really cost, what they will really
have to pay. The marketplace place will function better because
consumers have that information.
Public opinion research has shown conclusively that tax
inclusive pricing is favoured by the overwhelming majority of
consumers. An Ekos Research Associates survey conducted this
past month found that consumers in Nova Scotia, New Brunswick,
Newfoundland and Labrador strongly support tax in pricing. When
respondents were given a choice between tax included and tax
excluded pricing, 80 per cent of consumers preferred tax included
pricing, a finding that is consistent across all three provinces.
When asked about their intensity of support or opposition to tax
in pricing, 42 per cent of consumers said they supported it and 37
per cent said they strongly supported it. Over 65 per cent of
respondents said that it is extremely important to know the full
price before reaching the cash.
The reasons stated by consumers for preferring tax inclusive
pricing are compelling. Eighty per cent agreed that taxes should be
included in the price so that the total price of a good is known
before getting to the cash. Seventy-six per cent of respondents said
that including sales taxes in the price displayed on the product is a
more honest way of showing prices to consumers. Sixty per cent of
respondents did not think that adding sales taxes to the display
price would make things more complicated for consumers, an
assertion we have heard from certain people.
While 69 per cent of respondents said that they pretty much
know the total price of an item before reaching the cash, 64 per cent
of respondents said that they are often unpleasantly surprised at
differences between sticker price and total price at the cash.
Remember my example of the $9.99 item that the retailer says he
can move at that price but also the $11.49 actual price under the
Participating governments in consultation with affected
businesses have developed guidelines for tax included pricing. We
have made and participate along with the other participating
governments a concerted effort to ensure that the pricing
requirements that accommodate the wishes and needs of consumers
do not do so in a way that imposes an undue compliance burden on
vendors. In this spirit of a fair and practical approach, the
participating governments are continuing to refine the pricing
guidelines which were released some weeks ago with a particular
emphasis on the issue of price advertising in the harmonizing
The guidelines issued a number of weeks ago go a long way
toward addressing retailer concerns about cost and inconvenience
in moving to the new tax inclusive system. I note just two options
that exist for retailers pursuant to the guidelines, namely shelf
pricing or bin pricing. There will not be a need to go through and
reticket every individual item. There are options to shelf price,
to bin price items, to dual price so that price points can be
advertised as long as the full tax inclusive pricing is also available.
So there is a great deal of flexibility in accommodating vendor
The government has listened and has responded but it has never
forsaken the desire of consumers in this country to know once and
for all the real cost of items they wish to purchase.
During the finance committee's recent study of this legislation
one of the main criticisms was that it might criminalize offences
under the pricing requirements. The participating governments are
certainly eager to encourage compliance with the new system.
Consumers would expect no less of us, but I can assure the hon.
members that failure to comply with tax inclusive pricing is not a
criminal offence but a regulatory one. In addition to clarifying this
point I would like to make the more general comment that the
government intends to take a flexible approach to monitoring
compliance with the pricing requirements.
While it is true that the new system will come into place in April
of this year, monitoring, education and assistance will be available
and compliance will only be effectively looked at six months later.
In August, as the pricing guidelines indicate, is the time by which it
is expected that vendors will have made the transition, with all the
help that the guidelines provide and other help which relevant
departments in the participating provinces will provide; a full six
months to adjust to the new scheme once it is implement. That is in
addition to the time which retailers have had and have spent
consulting with government which has resulted in the very
effective response to the pricing guidelines.
The goal is to make sure that businesses have plenty of time to
become more informed of their obligations and fully apprised to
the various options available to them in fulfilling their obligations.
Tax included pricing is not the only benefit that will accrue to
consumers under harmonization. They will pay lower prices on
many items. For the sake of argument, let us forget for a moment
about the layers of provincial retail sales taxes that are absorbed in
business costs, the tax on tax, the tax cascading that consumers pay
the price for, and consider only the nominal rate of tax that
consumers pay directly. Even with this assumption Nova Scotia
and New Brunswick consumers now pay a combined rate of 18.77
per cent on most goods that they buy. In Newfoundland and
Labrador the combined rate is almost 20 per cent.
Under the harmonized sales tax consumers will pay only 15 per
cent. This may mean a higher rate of tax on some services, as we
move to the GST base, but in the rate debate the bottom line is what
really matters. When all is said and done, I want to reiterate what
we have said in this House before, the overall tax burden on
consumers in the harmonizing provinces will decrease under the
harmonized system. How could it be otherwise as the rate moves
from 20 per cent in Newfoundland and Labrador to 15 per cent and
from almost 19 per cent in Nova Scotia and New Brunswick to 15
The bottom line is overall tax will go down and consumers will
see that as they reflect back on their overall purchases over the
course of any year in the new system. This is a benefit that will be
felt across all sectors of the economy.
I would now like to move away from the consumer related
aspects of Bill C-70 and mention that several technical motions
were adopted by the finance committee earlier. These were motions
that have addressed witnesses' specific concerns.
I want to pause for a moment on behalf of the government to
thank the finance committee for the very fine work it did in the
hearings that were held here in Ottawa where it heard from dozens
and dozens of individuals, interest groups, interested parties who
came to speak to Bill C-70. In addition to that I would like to thank
the individual members of Parliament on all sides of this House
who held consultations in their ridings, town hall meetings, and
reflected comments back to the government with respect to Bill
As the chairman of the finance committee said during the
hearings here in Ottawa, there is not one witness who came forward
to the clerk of the committee asking to be heard who was not heard,
who could not be provided for if they wished to be heard here in
Ottawa. In addition, members held individual hearings and town
hall meetings in their ridings and there was a tremendous amount
of input. In addition to the witnesses who appeared here in Ottawa,
dozens of other witnesses provided written briefs to the committee
and to individual members.
As a result of that consultation held by the committee, a number
of motions were brought forward by the government to bring
amendments to Bill C-70 at that stage which reflected concerns that
had come to the government's attention. By pausing to speak about
that process, it is to say that the system works. The committee
deliberations resulted in very specific responses to precise
problems that certain groups brought to our attention.
For instance, one group brought to our attention certain cash
flow problems that they would have as a result of the new system.
We responded to that. Individuals asked for clarification with
respect to the suggestion that failure to comply might amount to a
criminal breach. That is not the case. Clarifications came forward.
There were other examples as well.
I spoke about the cash flow issue to give an example. Under the
proposed simplification measures originally reviewed by the
committee, auctioneers would have been responsible at all times
for remitting the tax collected on auction sales to the government
rather than passing the tax back to a registered principal.
In response to concerns raised at the committee stage, these rules
are being amended further to alleviate the cash flow burden that
this measure would otherwise create for wholesalers selling large
lots of goods through auctioneers. This will be accomplished by
giving auctioneers and certain principals the option of making an
election that would allow the auctioneer to pass the tax back to the
I have been speaking about the process in responding to
witnesses to debunk those who stand in this House and say that to
propose amendments at the committee stage, or indeed at this stage
in the House, is to suggest that the government has not done its
homework or that there is something wrong with the legislation.
This is how the system works in this House and in this country. If a
government fails to listen to witnesses who come forward with
compelling reasons why legislation should be amended to respond
to particular inequities or to clear up certain anomalies or
confusions, then it is a sad day indeed.
I find it somewhat remarkable to have people stand in this House
and criticize that process when, if we presented a bill and
entertained no amendments whatsoever at committee stage or here
in the House, we would be accused of some sort of dictatorship.
The system works. It works effectively and it works well.
The arguments in favour of sales tax harmonization are too
compelling to refute. All stakeholders stand to gain from it. The
participating governments have developed a framework for
harmonization that is balanced and reasonable. Bill C-70 will
reduce the tax burden on individuals in the harmonizing provinces.
What could be wrong with that?
We have responded favourably to Canadians' desire to know the
full cost of something before paying for it at the cash register. What
could be wrong with that? We have responded to consumers who
were afraid of not being able to know the tax if they need to know
it. It will be there on the receipt for all to see. What could be wrong
Harmonization represents a fundamental restructuring of the
way in which sales taxes are levied and administered. It eliminates
overlap and duplication. It is simplified in administration, it is
simplified for retailers in compliance. What could be wrong with
There will be minimal potential for disruption and confusion
during the transition period because of the pricing guidelines and
the delays allowed to retailers to get on side. What could be wrong
The legislation shows innovation and foresight for it leaves the
door open to any province that may wish to harmonize in the
future. What could be wrong with that?
In this country we cannot wait to move forward with important
changes, for every province to sign on. Indeed it is the structure of
this federation that often opportunities are presented for provinces
to go their own way for a time. But the wisdom of this
harmonization now being embraced by three provinces will be
understood soon by other provinces because their consumers will
demand it, their retailers understand it.
With the exception of one witness, every witness who appeared
before the finance committee supported harmonization across this
country and urged the government not to give up on trying to effect
harmonization with the rest of the provinces. I might point out at
this time that the province of Quebec is currently harmonized with
the federal GST. The province of Quebec understands the benefits
of harmonization. What could be wrong with harmonization? If it
is good enough for Quebec, why is it not good enough for the
Before closing, I would like to focus on an aspect of
harmonization which has been much discussed and some might say
yelled about in this House as it was a moment ago. It is the decision
by the government to provide a formula for short term adjustment
assistance to qualifying participating provinces when they face
significant structural costs to enter the new integrated sales tax
Under this legislation, this move to a harmonized sales tax,
adjustment assistance becomes available to provinces that
experience a revenue shortfall in excess of 5 per cent of their
current retail sales tax because of moving to the single harmonized
sales tax system. I repeat the formula is that adjustment assistance
becomes available to provinces that experience a revenue shortfall
in excess of 5 per cent of their current retail sales tax revenue
because of moving to a single harmonized system.
This is the case for Newfoundland and Labrador. This is the case
for Nova Scotia. This is the case for New Brunswick. Under this
formula, Quebec would not have qualified for adjustment
assistance when it harmonized, nor would British Columbia or
Ontario if they harmonized right now.
In fact, while my friends opposite rail against this adjustment
assistance, Quebec did not experience a loss of revenue when it
harmonized because of the way in which it harmonized over a
period of time, not all at once as the participating provinces are.
Quebec ran two parallel systems and experienced an increase in
revenue, not a decrease.
There is another aspect of this adjustment assistance debate
which needs to be repeated in this House. Our history is rife with
examples where such assistance has been offered to provinces or
regions. I hear little from members opposite about those other
examples when they benefited their provinces. However they rail
against this adjustment assistance to Atlantic Canada which some
of them would not qualify for.
When the Crow rate which helped the farmers of the west
respond to the challenge of distant markets was abolished, over $1
billion in adjustment assistance was provided to grain farmers. I
did not hear any complaints from the members of the third party
such as we are hearing with respect to adjustment assistance for
Atlantic Canada in moving to the harmonized system.
In 1972 when the federal government instituted income tax
reform, every single province received adjustment assistance, a
total of $2.7 billion over a seven-year period. I did not hear anyone
say: ``No, do not give our province any of that''.
When subsidies were scaled back for the agricultural sector,
compensation was also provided. I did not hear members of the
official opposition or the third party stand up and say: ``No, we are
not entitled to that. Do not do that''.
It is curious. Those examples, the Crow rate and agricultural
subsidies benefited particular regions and provinces and not
Atlantic Canada. This adjustment assistance which is justifiable,
which is justified, which is appropriate because of revenue losses
in those provinces, is being criticized by people who stood silent in
this House when adjustment assistance went their way. I think that
says it all.
What I find disappointing is that there are Canadians who have
attacked the entire concept of this adjustment assistance, but that is
a mindset which ignores history, misreads the present,
misunderstands the past and lacks vision for the future.
The assistance we have developed applies equally to all. There is
no discrimination, no favouritism and no bribery. The participating
provinces are joining in the harmonized system because it will
make their economies more efficient, more effective, more
competitive and consumers will benefit.
Some critics may view this bill as an easy target if their ambition
in life is to grab headlines and score cheap political points in the
short term. However, the legacy of this government is sound
management, not sound bites.
As I just said in English, Bloc members are against
harmonization, which is very surprising, because Quebec already
has harmonization. Is it because they want to keep the benefits of
harmonization for themselves, their companies and their
Could that be the reason? Do they want to keep a comparative
advantage for themselves? Atlantic Canada wants that same
comparative advantage. Its governments have decided that they
shall have it and indeed they will.
As an economic policy and as a model of federal-provincial
co-operation, the merit of this legislation is unassailable. Therefore
in closing, I urge hon. members of the House to support Bill C-70.
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr.
Speaker, it is a pleasure to speak on third reading of Bill C-70. This
is a very important bill. It is certainly not routine. This bill will
have crucial consequences for the maritimes but also for all
citizens in Quebec and Canada. In my view, this bill is highly
controversial, concerning as it does a measure that the members of
this government fiercely opposed when they were in opposition.
Hon. members will recall, and especially my colleague from
Sorel, the battle of epic proportions which the Liberal Party of
Canada waged against the GST. Later on I will share with you some
quotes from the Liberal opposition's report when the GST was
introduced and from the debates that preceded its introduction. The
position taken in this report was the exact opposite of the position
taken today by the Liberal government, the opposition at the time.
Bill C-70 provides that in three Atlantic provinces, provincial
sales tax will be merged with the GST, so there will be only one tax,
referred to as it the ``HST'', the harmonized sales tax, which will be
15 per cent. Basically, this agreement compensates three maritime
provinces for harmonizing their sales tax with the GST. In fact, this
compensation will be paid for by the people of Quebec and other
Canadian provinces outside the maritimes and is expected to
amount to nearly one billion dollars.
The government has not provided any solutions. If the
government wanted to achieve anything at all with respect to the
GST, it certainly did not do so with this bill. We will comment on
the government's commitments later on. The harmonization that
was much vaunted by the other side for many months has not come
through. It is only being done in a specific geographic area, in three
maritime provinces. Harmonization should mean harmony, but that
is certainly not the case.
During the three days of public hearings held by the Standing
Committee on Finance, even representatives from the maritimes
disagreed with the government's proposal and, meanwhile, the
government did not have a clue how to get out of this mess.
Before getting to the crux of the matter, I would like to make two
comments regarding the procedures followed for this bill and the
conduct of the government's representatives. First of all, the
government's representatives behaved in a manner I would call
undemocratic, ever since we started examining this bill.
At the second reading stage, we received the bill 24 hours before
hand. Twenty-four hours to examine a bill that is more than 300
pages long, plus explanatory notes. We were told to do our job. We
must explain to the public that certain parts of the bill could cause
problems and should be debated in the House.
It is unheard of to receive a bill as important as this one, with so
many clauses and having so many potential consequences, only 24
hours ahead of time. It is hard to explain why, unless we realize that
the Liberals want to talk about GST as little as possible. They want
to give us as little ammunition as possible with which to attack the
GST because their own arguments are so weak. From the very
beginning, their approach has been very much ad hoc.
Quite simply, I wish to point out two things in connection with
the attendance of the witnesses over three days in early January and
the way the Liberals presented things.
First of all, right from the word go, right from the start of these
hearings, the Liberals arrived at the finance committee with 16
amendments to their own bill. Imagine how unsure of themselves
they must have been to have seen problems in the bill they had
tabled themselves, to start off by giving the committee 16
We saw those amendments at the same time everyone else did,
even though our role as official opposition would require us to have
access to them in advance so we could assess their scope. And that
is not all.
On the third day of the hearings, because hearings on such an
important matter were restricted to three days, the Liberals tabled
113 amendments on the very evening that the bill was being
analyzed clause by clause. Yes, 113 amendments to a government
bill introduced by representatives of the government-there is
some incongruity to that.
Mr. Lebel: They were bewitched by a magic potion.
Mr. Loubier: Exactly. So, for a bill of approximately 272 pages,
there were 113 amendments. You can see that both the process and
the bill itself can be described as an improvisation right from the
start. Proposing 113 amendments to 272 clauses is a neat trick.
Not only did they table these amendments, which is ridiculous
enough in itself coming from a government that claims to be
serious, but at the same time, those amendments to the bill were
provided to us two hours in advance, and involved modifications
and outright deletions.
I get the feeling the government is so anxious to conceal things
about the GST that it wants to prevent us from doing our job as the
official opposition. And despite our asking continually during the
three days of hearings in January that they be extended, because
people from the maritimes wanted to take part in the finance
committee hearings in order to explain that the government was
making a mistake, with its perpetual improvisation, with its game
of pretending to do something about the GST, whereas it had
promised to scrap the GST, to abolish the GST, our request was
refused. As a result, the bill is riddled with inconsistencies, even
practical barriers for businesses. We shall return to that point later.
As for the improvisation I referred to, even this week when we
undertook examination of Bill C-70 at the report stage, we did not
even have the bill as amended by the committee available to us
when we started our examination. That takes the cake. This is a
solemn institution, with a government that claims to be
responsible, and, when Bill C-70 is studied at report stage, we do
not even get the latest amended version of it. I think Liberal
members are so stricken by pre-election fever that they forget to do
their work properly. Lucky for them they have an official
opposition that looks after the interests of Quebecers and
Canadians while this fever rages.
Not only is the government continually improvising, it is
diverting taxpayers' attention in this bill. Why? Because the bill
talks about harmonizing in a small part of the country: three
maritime provinces at a cost of $1 billion, we must not forget. It is
too awful for us to keep silent on this political compensation.
They are hiding the truth. It is not the truth to say that
harmonizing is necessary in the maritimes, and this will provide an
example for the future. The truth is that the government made a
commitment to abolish the GST. The commitment was not made by
the rank and file of the Liberal Party. The Deputy Prime Minister,
who made a big production of her resignation and re-election at the
cost of half a million dollars, had promised her government would
abolish the GST. So did the Prime Minister. We must not let this be
forgotten, because we will soon be going to the polls, and the
people will remember that, when the Prime Minister makes a
promise, he will not necessarily keep it, because he can say
whatever he likes and do the complete opposite once he is in power.
The people will remember. They will remember that, during the
election campaign, the current Prime Minister said, and I quote:
``We will scrap the GST''. Scrapping does not mean harmonizing
and it certainly does not mean paying $1 billion in payoff to the
maritime provinces in order to come out smelling like a rose in the
matter of the GST.
The people of Canada and Quebec will remember as well that the
Prime Minister said on May 2, 1994: ``We hate this tax and we are
going to eliminate it''. They will remember each time the Prime
Minister opens his mouth to make a solemn commitment, as we
have seen regularly since that famous evening in Verdun, the first
referendum evening when he made a slew of commitments he did
not keep either. People will know that the Prime Minister's
commitments are not worth the microphones he utters them into.
The Liberals, the government, the Liberal Party of Canada have
a very selective memory on the subject of Bill C-70, and the
comments I heard earlier from my colleagues prove it. First, when
they were in opposition, the Liberals got themselves in a great
state. My colleague from Sorel remembers that, because he was a
member of the Conservative Party, which was in government and
which set up the GST.
In their minority report, a report dated November 1989, when
they were in opposition, the Liberal members of the Standing
Committee on Finance stated, and I quote: ``It is the position of the
Liberal members of the finance committee that the Conservative
goods and services tax proposal is flawed and cannot be ``patched
up'' in a way that would it fair for Canadian taxpayers''. This is a
quote from page 262.
What have the Liberals done with Bill C-70? A patch-up job. In
the three Atlantic provinces, the existing GST and provincial sales
taxes are being replaced with a single tax called HST, or
harmonized sales tax. But the fact of the matter is that it is the same
tax. It is the GST with a different name, with approximately $1
billion in bonus for the maritimes. They have done a patch-up job
to meet their election objectives. They have made a partisan
patch-up job at public expense, at the taxpayers' expense, with the
taxes paid to the federal government every year.
Here is another quote from the Liberal minority report, at page
277, regarding the fact that the new harmonized sales tax would be
included in the sales price. I may have failed to mention this detail.
The maritimes tax harmonization scheme provides for the new 15
per cent tax to be included in sales prices.
Coming back to the minority report tabled by the Liberals in
1989, at the time when the goods and services tax was established
and the Liberals were in opposition, let me quote from page 277 of
the minority report, which stated: ``The great danger of making the
GST a hidden tax is that it would be much easier for the
government to raise the rate in the future''. In those days, the
Liberals opposed tax inclusive pricing, arguing that the
Conservatives would do everything they could to raise the tax
without anyone noticing. The Liberals are doing that very thing.
That is incredible.
I would like to bring to the attention of the public another quote
from the report of the Liberal minority, which was in opposition at
the time. They were sitting then exactly where we are sitting today.
Regarding tax reform, the Liberals said, and I quote from page 300
of their report to the finance committee: ``Sales tax reform cannot
be undertaken independent from income tax reform, corporate tax
reform, social welfare reform or independently of the other levels
of government. Canada is in need of an overall tax reform that
encompasses all forms of taxation and all levels of government''.
Not only did the Liberals not abolish the GST, but they have not
undertaken any overall income and corporate tax review.
We had to nip at the heels of this government for three and years,
and we had to submit ideas and analyses ourselves to reform
individual and corporate taxation, as was done in November for
businesses and just recently for individuals. The official opposition
had to do the government's job as regards tax reform, because the
government is not doing its job. It even goes against its own vision,
doing exactly the opposite of what it claimed it would do when it
sat in opposition. As for the participation of other levels of
government, we know what to make of it.
Officials representing the governments of Quebec, Ontario,
Manitoba, Saskatchewan, Alberta and British Columbia were
literally pushed aside. Why? Because this is a bill providing $1
billion in compensation, something which is unacceptable to
officials representing Canadian provinces other than the maritimes,
including those from Quebec. It is unacceptable because the
government takes money paid by the taxpayers from all these
provinces to compensate the maritimes through a local
harmonization process. This is unprecedented. It is obviously a
political and partisan measure that makes no sense at all. We have
now reached the point where, in order to make local tax changes in
the maritimes, the federal government takes the taxpayers' money
to compensate the provinces concerned. It makes no sense.
The result is a bill that is in total contradiction with what the
Liberals claimed to defend before they took office. It has nothing to
do with the tax reform they claimed to support at the time,
particularly as regards the GST, a tax which they then claimed to
hate. The Liberals said they hated the GST. At the time, they
pointed their fingers at the Conservative government and
relentlessly attacked its members on the GST issue. All the Liberal
members who were there at the time said the GST had to be
abolished, that it had to be scrapped, because nobody wanted that
tax in Canada. Once they took office, there was no problem any
more. Not only did they keep the GST, but they are also tinkering
with it, something to which they had been opposed at the time.
In addition, with respect to the process surrounding the debate on
Bill C-70, we added our voice to that of the Government of Quebec
and the governments of certain Canadian provinces and urged the
federal government to make public the details of the calculations
that prompted it to hand over $1 billion, or close to $1 billion, in
compensation to the maritime provinces.
Each time, we came up against a blank wall. The government is
refusing to make public the criteria behind this compensation, how
it was calculated and the figures available for the three maritime
provinces. Their refusal to release this information means that
there is something to hide. Could it be that the $1 billion in
compensation is not justified? Could it be that a request from the
governments of these three Atlantic provinces was thrown on the
table and the Minister of Finance responded with this $960 million
subsidy? Could it be that this is nothing more than a partisan
agreement, something to show Quebecers and Canadians that the
government is working to reform the GST, that it is doing
something? Because, by doing something, they are giving the
impression that the Liberals are gradually starting to deliver on
It is not right that $1 billion of our money has been spent and no
details are available about how this amount was arrived at.
I again ask the Minister of Finance, on behalf of the Government
of Quebec and the provincial governments who have been asking
for this information since the early summer, to make it public. I
remind him of this request that he make public the criteria and the
method used to calculate this $1 billion in compensation to the
This is not the only bill Quebecers and Canadians will be stuck
with as a result of this agreement between the federal government
and three maritime governments. Three, five, ten, fifteen, twenty or
one hundred years down the road, taxpayers outside the maritimes
will also be hit with the ongoing costs of equalization payments.
With your permission, I am going to give a little explanation of
the equalization process for the benefit of the public. A province
gets an equalization payment if it is determined that its tax base, in
other words its ability to collect taxes from taxpayers, is not
sufficient to enable it to provide public services equivalent to those
available elsewhere in Canada. There is a very complex formula. I
would urge you, Mr. Speaker, since you sometimes seem to enjoy
the complexity of things, to read a lengthy but very interesting
document put out by the Minister of Finance explaining all the
calculations in detail; the technical wizardry is something else.
So when we analyse the tax base and are faced with the fact that
in the maritimes the Liberal government purposely made the
suggestion, which was accepted, to reduce the sales tax base, we
see that equalization will play a greater role in the future than it
already does in the three maritime provinces. Let me explain.
In the three maritime provinces, sales tax plus the federal tax on
goods and services, the GST, added up to around 19 per cent:
provincial sales tax plus GST equalled a tax of 19 per cent on goods
purchased in those provinces. In the agreement with the maritimes,
this tax is reduced from 19 per cent to 15 per cent. In other words, 4
per cent of potential tax revenue was eliminated.
Eliminating this 4 per cent of potential sales tax revenue of the
three maritime provinces will necessarily mean that equalization
will play a more important role.
To finish my exposé, in the future, after paying one billion
dollars in compensation to the government's three maritime
provinces, Quebecers and Canadians will continue to pay through
equalization, Quebecers perhaps to a lesser extent because they
will be asked to vote in a future referendum on the sovereignty of
Quebec, but other Canadians will have to pay in perpetuity for the
sales tax forgone by the maritime provinces as a result of reducing
total consumer taxes from 19 per cent to 15 per cent.
The Minister of Finance is not advertising the fact. When we
asked him about this in the House, he was vague to say the least. He
was confident about the positive impact on economic growth and
said that the tax revenues connected with his fantastic
harmonization agreement with the maritimes would ensure that
equalization would not be a major problem.
It is totally unrealistic to say that equalization would not be a
major problem and that taxpayers will not pay in perpetuity for this
very costly agreement with the maritimes.
According to Bill C-70, the agreement with the three Atlantic
provinces could be used as a model for implementing the new
harmonized sales tax system, which is nothing more than the GST
in disguise. It is just as heinous as the previous tax. They say this
could serve as a model for a new consumption tax system in other
provinces in Canada. If this is the model, then, as we say, things
must be pretty rough.
Even in the maritimes, they are rejecting this new system. This
new tax system is going to be a fiasco. In the maritimes, they fear it
will bring total chaos. If this is the model they want to implement
elsewhere, it is not worth much, and the government has problems.
Since the Liberals set aside only three days for finance
committee hearings, witnesses from the maritimes willing to come
to Ottawa to testify on this bad piece of legislation had to be turned
away. As some of them told me, the Liberals thought that, during
those three days, the representatives of the three maritime
provinces would praise the government, tell them what a good job
they had done, and say that they were happy to have the $1 billion
in compensation paid by the people of the other provinces and
proud of the agreement and of being used as a model for the
implementation of a new tax system elsewhere in Canada.
The Liberals, however, got a great surprise-so did we for that
matter. According to the Minister of Finance, this agreement
appeared to be well received in the maritimes, and we believed
him. We did not take his word, as usual, but we did think there was
an element of truth. He believed what he said. He had met
representatives of the maritimes, and everything was fine. Even the
members from the maritimes said the agreement was a wonderful
During the three days of finance committee hearings, the
representatives of the maritimes told us that the bill had to be done
over from scratch. The bill could not be used in the maritimes,
because of the minister's endless changes. I myself would not do
this bill over from scratch. I would pitch it in the garbage.
Why. The answer is simple. The aim of the bill was to improve
opportunities for economic growth by promoting consumer
spending, which would create thousands of jobs in the maritimes.
According to some representatives from the maritimes, the new
harmonized sales tax would create so many jobs the affected
provinces would not have enough room for them all.
In fact, this tax may threaten rather than create jobs. There are
very high costs associated with setting up and managing a new
sales tax system. Representatives of large businesses operating in
the three Atlantic provinces as well as in other Canadian provinces
cautioned us not to proceed. Not only will setting up this new
system cost approximately $100 million, but businesses operating
in the maritimes will have to pay between $90 and $100 million per
year in recurring management costs.
There are no savings. Harmonization may well prove to be a
monumental fiasco. Representatives of major organizations like
the Retail Council of Canada, whose members are responsible for
65 per cent of the retail trade, told us tax inclusive pricing was a
bad idea. According to them, it will confuse consumers and result
in additional management costs for retail operations, regardless of
Sears Canada, Woolworth Canada and Canadian Tire-not
exactly small businesses-also told us not to implement this
system. They asked that the implementation of the system be
deferred because of the incredible difficulties inherent to its setting
up and management.
Businesses like Canadian Tire, Woolworth and so on are in the
habit-and I think this is normal-of seeking the highest possible
rate of return, so they centralize in huge warehouses the goods that
will be sold through their many stores across Canada.
Goods are shipped from these large warehouses to the retail
stores operated by Canadian Tire, Woolworth and other companies.
But before they are shipped, the goods are tagged or labelled. At
present, there is centralized tagging for all of Canada, which means
that the procedure is the same throughout the country. The tags
indicating the retail price are the same in Ontario, Quebec and the
But the new system and the inclusion of the new harmonized
sales tax in the sales price for the three maritime provinces will
change all that. Large chains that warehouse and tag their goods
themselves will be forced to put, on one side, goods for sale in the
three maritime provinces and, on the other, the goods for sale in the
other Canadian provinces and Quebec.
Why? Because the price will not be the same. The retail price of
goods sold in these chain stores in Quebec, Ontario, Manitoba and
so on, will not include the sales tax, while the price of goods sold in
the maritimes will. So, these are two different systems.
They require different accounting processes and different
inventory management systems. This means not only a different
inventory management system, but also a different management
system for the taxes to be paid by these businesses. The stock value
is based on the costs of buying goods and on resale costs. Imagine
the mess. All this to help but a fraction of the Canadian population.
This will result in an increase in overall costs and in a terrible mess.
And the Minister boasts about having set up an extraordinary
model. Extraordinary indeed. It is a model that is costing us $1
billion, that will cost us even more in equalization payments, that
will trigger implementation costs of $100 million for businesses in
the maritimes, that will result in yearly recurrent expenses of 90 to
100 million dollars in additional management costs, because
managing stocks, prices and the movement of goods in the
Canadian provinces will be a terrible nightmare for these
This is serious. It is no wonder that, on the third evening of
January, when the snow was falling and it was really nice outside,
the Liberals tabled 113 amendments to their own bill. They do not
know what to do. They do not want the charming Minister of
Finance, who is a very credible person, to lose face. He could
indeed lose face with a bill such as this one. It makes no sense. If,
even with a $1 billion gift to the maritime provinces, the federal
government is still not able to sell this unenforceable bill, then
there is a problem.
I personally told the chairman of the Standing Committee on
Finance that it made no sense to table such a bill. I did not get a
clear answer from him. I have the feeling that he too is beginning to
think the days are long when dealing with Bill C-70.
It came as no surprise when, yesterday, the government
displayed an undemocratic attitude that has become something of a
tradition in the past three and a half years by imposing closure on
this bill. The more we talk about the GST, the more it hurts the
government. There is a difference between harmonizing,
particularly if it is done improperly as in the maritimes, and
abolishing the GST, which is what the government pledged to do.
The more we talk about this bill, the more we analyze it. After
all, the government only gave us 24 hours to review this legislation,
including its explanatory notes, to make sure the interests of
taxpayers are protected.
The closer we look at this bill and the more people we consult,
even in the maritimes, the more we are left with the conclusion that
you have to be a little strange, to have a brand of logic that perhaps
only they understand, to bring in a system of taxation like this one.
It makes no sense.
I ask the Minister of Finance, who is listening attentively, to
delay implementation of this bill, to listen to the arguments put
forward by the maritimes and by the official opposition and the
other opposition. It makes no sense to implement a bill like this,
that is costly for everyone, just so that he will look like he is doing
something about the GST. It is unbelievable, but this is what often
happens, more often than not. We therefore formally ask him to
postpone this bill.
We agree that politics have changed. A politician can make
mistakes. And a politician who makes a mistake and admits it can
be forgiven. The Minister of Finance made a mistake; the Prime
Minister also made a mistake. He made a mistake with this bill. He
has made many since we have known him, but this bill takes the
If the Minister of Finance admits that he made a mistake with
this bill, that it is costly, that it is a fiasco, we will probably forgive
him, because to err is human, but he must stop feeding us this
nonsense. He must stop telling us how wonderful this bill is, when
he cannot even convince the people in the maritimes that he is
Having given my views on Bill C-70, I would like to take a
moment to look at taxes on books.
The government is proudly telling anyone who will listen, and I
heard a Liberal colleague crowing about it just recently, that it has
lifted the tax on books. It is true that it has lifted the tax on certain
books, but not all. Furthermore, when the Finance Minister tabled
his bill, I congratulated him on this aspect of it, but asked him to
chuck the rest. I congratulated the Finance Minister on taking a
first step by removing the GST on books. But he did not go far
enough. He is exempting books bought by institutions of learning.
This represents only a small percentage of the books bought in
Quebec and in Canada.
We are asking, as we have for years, that the GST on books be
eliminated. Even before the last election, my seven colleagues who
founded the Bloc Quebecois-and I acknowledge the presence of
the hon. member for Sorel-battled to get the GST taken off books.
They joined forces with the entire literary community of Quebec
and Canada to demand that culture not be taxed, that books not be
taxed, and that steps be taken to make culture more accessible.
The first seven representatives of the Bloc Quebecois-Bloc
Quebecois: the first generation, they might be called-were the
first to rise up in defence of Quebec literary culture, and Canadian
literary culture as well. This is somewhat incongruous, but there is
something rather incongruous about the Bloc Quebecois too. It
does, however, fit in well with history until Quebec decides to take
charge of itself and declare its sovereignty.
Yet it is somewhat peculiar for sovereignists to be defending
Canadian culture, by demanding that the GST be removed from all
books and fighting a minister for international trade who is
prepared to put it up for grabs by the Americans or anyone else in
the world. And it is somewhat peculiar for sovereignists like my
colleague for Richmond-Wolfe, the culture critic, to rise in the
House and demand that the CBC and the major cultural institutions
be given back all the money they have been robbed of in the past
three years. All this devastation is caused by the same person: the
finance minister, who looks good, winks nicely and just oozes
charm, but he can sure wreak havoc.
What we are doing may be peculiar, but we are doing it
nonetheless. We are standing up proudly in defence of culture, and
we are asking the Minister of Finance-and this is the second time
the official opposition is asking him this-to abolish the GST on
books, thus giving a boost to the culture he claims to be defending.
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker, I rise to
speak to Bill C-70. The first thing we need to do when speaking to
this legislation is to talk about it in context. To do that, we need to
go back, believe it or not, about eight years to the time when the
current finance minister was seeking the leadership of the Liberal
At that time if I remember right-I have a newspaper clipping
somewhere from the Calgary Herald-the finance minister came
out four square against harmonization. The reason he was so
opposed to harmonization at that point was that he foresaw, quite
correctly, that harmonization would make it extremely difficult to
ever lower taxes once it was in place.
That is what he said in 1989. I truly believe that what he said is
true. What has happened since then demonstrates in a way that I
cannot say with words, that the government cannot be trusted on
these issues, that it will say one thing and do quite another. The
Liberals are more interested in staying in power than in serving the
Between 1989 and the election of 1993, we heard over and over
members of the opposition, people who currently hold positions of
responsibility in the government, people like the defence minister,
the Prime Minister, the finance minister and the Deputy Prime
Minister, say in one form or another that they were going to axe the
GST, they were going to scrap the GST, they were going to abolish
People who are currently prominent Liberal backbenchers-if
that is not an oxymoron-said over and over again that they would
get rid of the GST. Many of them had it in their campaign
literature. We pointed out in the House who those people are. The
member for Niagara had it in his campaign literature. The member
for Vancouver South had it in his campaign literature. The hon.
member across the way is challenging me on this. I have given him
some names and I trust that he will check this out so that he knows
how he is being duped by his own party.
We all recall a few days before the last election campaign-I do
not think the member across the way will deny this-that the
Deputy Prime Minister appeared on national television and said
that if the GST was not scrapped, axed and abolished, she would
resign. She said it on national television.
In the days following the election campaign, all of a sudden the
government did a complete 180 degree turn on those types of
promises. Members across the way will say that on page 22 of the
red book it states that the Liberals were only going to replace the
The Liberals said one thing in the red book, of which
approximately 70,000 copies were distributed. They were saying
something completely different when they got on national
television where millions of people were watching. It was probably
the only information most people got on the Liberal platform
because that document had so little circulation for very good
reasons. On the one hand the current government was saying one
thing and on the other hand it was doing another thing.
Let us fast forward a little. It was well into the government's
mandate when it started to finally feel the pressure of all the
promises Liberals had made and had used to lever themselves into
power. They had made a ton of promises about these things. I see
my friend from Broadview-Greenwood is here. He remembers
this very well. Those promises were catching up to them.
Finally, after an embarrassing situation here in the House where
government members had to vote against scrapping the GST, even
though that was the promise many of them had made on doorsteps
across the country during the election campaign, the Deputy Prime
Minister, after polling her riding, saw that it was safe for her to
resign because she knew she could be re-elected again, and
resigned. It cost the country half a million dollars or something like
that, but finally she did resign. She was subsequently re-elected.
We all know that. I think that was a disappointment to Canadians
who felt that if she resigned she should not run again.
While all that was happening, the government was going through
all kinds of machinations to make a deal with Atlantic Canadian
premiers. It offered them a backroom deal of $1 billion if they
would come on board to be part of a harmonization deal.
People will remember that the provinces were not exactly lining
up to come on board and sign a harmonization deal. The
government did talk about a harmonization deal but all of the
provinces said that there was no way they wanted to be part of it.
That was until the government put $1 billion on the table. Is it not
funny how $1 billion will change attitudes, especially when that $1
billion is designed for Liberal premiers in Atlantic Canada?
That was the second time in this sorry saga that the people of
Canada had been let down. They had been let down initially when
they were told that the GST would be scrapped and it was not. The
second time was when a backroom deal was cut with Atlantic
Canada premiers and people were left out in the cold. Despite the
fact that in Atlantic Canada this deal was going to fundamentally
affect their lives they had no say. It was $1 billion, and the people
of Atlantic Canada were left out.
That is not where this tale ends. We wish it did but it goes on.
The government said it was going to introduce HST legislation or
as it is euphemistically called in Atlantic Canada BS tax
legislation. That was done on December 2, 1996. It was only days
after that when the Prime Minister appeared at a town hall meeting
and he was still in denial. I guess the Prime Minister is so
cocooned, so distant, so disconnected from reality he still cannot
get it through his head that what he said in the days leading up to
the election campaign were words that people had actually counted
on him fulfilling.
He appeared at the town hall meeting. He actually chided a
young woman from Montreal, Johanne Savoie, for having the nerve
to try to hold him accountable for his promise. He said to her:
``Tell me when you heard me say that I would scrap the GST''.
Much to his chagrin she did exactly that. She told him that she had
seen him on television. She told him that she had heard him on the
radio. He denied it but the CBC reported seconds later on a
newscast that indeed he had said those things.
The Prime Minister was caught. He was hung on his own words.
Again the Prime Minister was in denial. He was trying to tell
people that he had not said those things when in fact he had. I wish
I could say that the Prime Minister saw the error of his ways,
apologized and said that he would not do that again and it was
wrong for him to do that, but he did not. The whole thing continues
on. The sorry mess continues.
After that the government in its wisdom decided that not only
was it not going to allow people the chance to be involved in having
a discussion about the $1 billion that went to Atlantic Canadian
premiers, and people were not going to be allowed to hold the
government accountable on breaking a promise to get rid of the
GST, the government was not going to even allow people from
Atlantic Canada to come to hearings on the GST.
During hearings in January, I moved a motion that hearings be
extended and moved to Atlantic Canada so that the people there
could have a say on this issue. I would say that unless people have
that opportunity, we have at least taxation without consultation if
not taxation without representation.
I know there were some hon. members opposite, and at least one
from Atlantic Canada, who said ``I am sensitive to the fact that
people in my region should have a say in this. I am going to
advertise and we will fly them from Atlantic Canada to Ottawa''. In
other words, in her situation, because I guess she felt that she could
only push her luck so far with her colleagues, she was trying to do
what she could.
Certainly that flies in the face of all logic. The finance
committee should go to Atlantic Canada to talk to people about a
taxation system which will affect their lives in a fundamental way.
We had all kinds of people come forward from business.
Provincial politicians came forward. We had people come forward
representing groups such as chambers of commerce who said that
there were flaws in the legislation. There were things that were
wrong with it. They had to come to Ottawa because Ottawa was
simply too arrogant to go to them.
Ottawa could not be bothered to go to Atlantic Canada, despite
the fact that this legislation is going to have a profound impact on
the economic future of Atlantic Canada. That is wrong. It is
fundamentally against everything which every member in the
House believes in, even if some cannot bring themselves to say it.
Just about every member of the House knows that if we are going
into a region to say ``we are going to change your tax system
completely'', then those people should have the right to have their
say before a committee which has some influence on how the
legislation will be implemented. It is common courtesy. It is
common sense. It is something that should happen as a matter of
course in a democracy.
Unfortunately Liberal members voted it down. It is shameful. It
is ridiculous. I hope that when those members return to their
ridings in Atlantic Canada they will come up with an explanation to
justify how they could deny their constituents what should be a
I have talked about the lack of process in inviting input, but that
does not mean there were not people who were raising their voices,
speaking out against many aspects of the harmonization
One of the biggest problems people have with the HST
legislation is the tax in pricing component. I talked to dozens and
dozens of business organizations and people who had grave
concerns about the impact it would have on their businesses in
Atlantic Canada and, as a consequence of the impact on those
businesses, on the people of Atlantic Canada.
People came forward from Carleton Cards who said they will
close 19 stores in Atlantic Canada if this legislation goes through.
There was no caveat on the comment. They said they will do this.
Woolworth's has 125 stores in Atlantic Canada. Those stores fall
under a number of different names. It might close as many as 25
per cent of them. Over 30 stores in Atlantic Canada will be closed
because of this legislation. It said that some of the things in the
legislation and the tax in pricing component will mean extra costs
to business. That will mean that all the stores which are marginal,
which are barely making a profit, will all of a sudden become
unprofitable. Many stores will be facing new leases in the near
future and given the choice between signing a new lease or closing
the store, knowing that the legislation will mean they are destined
to be unprofitable, those businesses will be closed. Obviously the
people working in those stores will lose their jobs.
In Atlantic Canada those jobs are precious. People need those
jobs in Atlantic Canada. For crying out loud, the unemployment
statistics which came out on Friday told us that unemployment in
Newfoundland is at 20 per cent. That is a human tragedy of
unbelievable scope. However, the government entertains to let
businesses close because of its legislation and a part of it is not
even necessary to carry forward the great bulk of the legislation to
achieve any good that could come from the legislation, according
to these businesses.
I have not even mentioned the other businesses that closed down.
MMG Management closed a number of stores in New Brunswick,
and I believe 72 or 75 jobs were lost as a result. This is not an
abstract piece of legislation that has no effect in the real world. I
can guarantee that the effect is quite profound and I would say for
those people who have lost their jobs it is a great tragedy.
That is one aspect of the legislation that people were speaking
out against, but again they had no voice in Atlantic Canada, first
because there were no hearings in Atlantic Canada and second, I
would argue, because a bare few MPs from Atlantic Canada have
even bothered to speak to the legislation. I have yet to see one of
them stand in question period and go after their own minister,
asking why they are not listening to the people of Atlantic Canada
on concerns they have with this legislation.
However, it does not end there. There are other concerns that
people have. One is that the legislation will mean that a
disproportionate impact of the tax changes will fall on the poor in
Atlantic Canada. For years the government and Liberals have
talked about how they care more. They have tried to assume the
superior air. They have tried to take the moral high ground on the
issue of compassion and they have tried to tell Canadians they care
more. But it is indisputable that this legislation will mean that the
people of Atlantic Canada who can least afford it will bear the
brunt of the cost of this legislation.
Let me give an example. Children's clothing will go up in cost in
Nova Scotia, heating fuel for homes will go up in cost, utilities of
various kinds will go up in price, gasoline for cars will go up in
price. People who can least afford it will be trapped by this new
legislation because they are on a fixed income and do not have the
means to make it up.
Contrarily, ironically, a fur coat will cost less; a yacht will cost
less. But did we hear members from Atlantic Canada raising this in
question period? No. They are absolutely mute on this point. Did
the people of Atlantic Canada have a chance to raise this before the
finance committee in their home towns in Atlantic Canada?
Absolutely not. Again I think the government has let the poorest of
the poor in Atlantic Canada down.
There are other problems with this legislation, not what is in the
legislation but what is not in the legislation, which is the fulfilment
of the promise the government made to end the GST on reading
materials. It would be bad enough if it simply did not fulfil the
promise, but when it ends up doubling the GST on reading
materials, I think that simply mocks the people to whom the
promise was originally made.
The don't tax reading coalition wrote to the Prime Minister in
the lead-up to the 1993 election and asked him if he would remove
the GST on reading materials. ``Oh, my, yes'', the Prime Minister
said. ``Yes, we will get rid of the GST on reading materials. After
all, we passed that sort of policy at our policy convention''.
Subsequent to the Liberals' policy convention in 1993 they also
passed another policy in 1995 to get rid of the GST on reading
materials. But the GST remains on reading materials.
I know some will argue that they have removed it in some ways
for university and libraries. I want to be fair. They have done that,
but they have come nowhere near fulfilling their promise. In fact,
by introducing the harmonized sales tax in Atlantic Canada they
have doubled the GST on books.
Once again we have the Liberal myth versus the reality. The
myth being ``we are going to get rid of the GST''. The myth being
``we care about the poor''. The myth being ``we are going to listen
to people''. The reality was they did not get rid of the GST, they did
not remove it from reading materials. The reality is they raised
prices for the poorest of the poor in Atlantic Canada. The reality is
people did not have a voice because there were no hearings in
There is even more, and I must comment on these things. One of
the things we have heard from the government over and over again
is what the finance minister spoke to the other day. He said ``we
believe in tax fairness''. He talked about the tax fairness measures
he and his government have introduced since they have been in
If you are a taxpayer, when you look at these so-called tax
fairness measures, you will be bound to say that this is not tax
fairness but a tax grab. In so many cases the finance minister
removed legitimate deductions simply so more revenue could be
raised. If it were tax fairness the Liberals would have given the
money back to Canadians in the form of a lower rate. That would
have been fair. But they kept the revenue.
They had a chance to demonstrate that they really believed in tax
fairness when members of the medical community, private
ambulance services and physicians, said to the government that
when the legislation came into place, many people like farmers and
pharmacists were able to zero rate GST because they could not pass
it on to the people who ultimately consumed the services which in
their case would be the provincial governments. They asked to be
treated in the same way as others who were zero rated.
There were some wonderfully warm words from the other side
that this is important, we need to be fair to everyone, the tax system
should treat everyone fairly. But what did the Liberals do? They
said no. They said ``tax fairness only means that we get more
money. We close loopholes'', as they call them, ``so we can get
more money. It does not mean that we would ever give money back
to anybody. That would not be fair. We would not want to treat
everybody the same, especially if it meant giving taxpayers a
Again the government let people down. It says on the one hand
that it believes in tax fairness but on the other hand it does
something quite different.
People raised some other concerns with respect to tax in pricing.
One of the first people we had before us in our Ottawa hearings
three weeks ago was a gentleman who raised a concern about a
provision in the legislation that would allow the government to
send someone to jail if they inadvertently did not put a tax inclusive
price on a chocolate bar or whatever. When he raised this issue the
finance committee was in an uproar and everyone said ``we will fix
this. We will not allow that to happen. That is ridiculous. What
happened here? How did this happen? We are going to fix this''.
To its credit, the government will no longer send anybody to jail
if they inadvertently do not put the proper price on a chocolate bar.
What bothers me is the fact that this provision was in a press
release that came from the finance department betrays an attitude.
It tells us that the finance department and by extension the finance
minister are so disdainful of the public on these sorts of issues that
they will put things in a press release that they want to be widely
disseminated by the media to the public. It speaks of an arrogance
in the government that in the past has been the downfall of other
When people raised this, politicians on the finance committee
immediately saw this was wrong. They protested against it and it
was changed. But my question is how did this get in there in the
first place. Why did they have that type of language in the
At every stage over the last three years we have seen the finance
department become more and more aggressive with respect to
people who are trying to do their own books. All of a sudden an
official from finance or revenue shows up says: ``We are going to
squeeze every nickel out of you and if you do not give us every
nickel, we are going to camp on your doorstep and make life
miserable for you''. Everybody knows. The government has hired
more auditors and tax collectors. It has made life generally more
miserable for people who are simply trying to get by and run a
business out there, the people who create real jobs.
I think the government went over the line in the harmonized
sales tax legislation when it publicized in a press release that a
person will go to jail for 30 days if he does not put the proper price
on a chocolate bar. It bespeaks an attitude, one I do not think
Canadians like. It is an attitude we saw coming from the Prime
Minister in the town hall meeting. It is an attitude we saw coming
from the Prime Minister in an interview in the Toronto Star on the
weekend. Frankly, I think Canadians are a little sick and tired of
that type of arrogance and that kind of disdain for regular rank and
file Canadians who are simply trying to get by.
I want to say a word about the tremendous bureaucracy the
government is putting in place in introducing harmonized sales tax
legislation. Tax in pricing is something that simply does not have to
be in the legislation in order for the government to carry forward
with the bulk of its changes but it has insisted on it being in there.
The government has said it has to have it despite the protest from
businesses which said it is going to cost jobs in Atlantic Canada.
Businesses said they are going to end up passing on costs of $100
million a year to Atlantic Canadian consumers and the government
does not care. The government said not to worry about it, that it
will set up a regulatory regime to make it a little easier for them
and it will not be such a big deal.
The government has even come down with guidelines saying to
those who want to have catalogues in Atlantic Canada that in their
catalogues they must say in type which is one thirty-second of the
page in size that the prices do not include provincial sales taxes.
Are we now going to see an army of bureaucrats come out with
pocket protectors, rulers and magnifying glasses? Are they going to
come into Atlantic Canada and sit down and measure the type in
catalogues? Are they going to be measuring signs in stores?
The government came up with 20 or 25 different ways of
allowing people in Atlantic Canada to comply with the legislation
before the government would come down on them for not being in
compliance. The end result is we are going to have 20 or 25
Consumers are going to be hopelessly confused. What started
out as tax simplification is now going to be tax complication. It
completely defeats the whole purpose of the legislation. It is
ridiculous to be doing it this way but the government, never to be
swayed by common sense or logic, decides to boldly go ahead and
damn the torpedoes.
I have talked about the process and I have pointed out that
initially the government said it was going to scrap the GST and it
did not. Then it went ahead with the backroom deal and left the
Canadian people out. It gave Atlantic premiers $1 billion to go
ahead with the legislation. Then it refused to have hearings in
I think it is appropriate that this has been topped off with the
government now invoking closure on this legislation. Once again it
is shutting the Canadian people out of the process. It is saying to
the people that elected representatives cannot stand up for the
people of Atlantic Canada to point out the flaws in this legislation,
to try to get the government to change its mind when so many
people have indicated they have grave concerns with the
legislation. And here we are debating this legislation for the last
This government has used closure more often than any other
previous government. Twenty per cent of the legislation that
passes through this House is subject to closure. In other words the
government says it is going to shut down debate here in the
Parliament of Canada. This is the place where democracy should
reign supreme, and the government routinely denies members of
Parliament the right to freely express themselves. I think that is
It was wrong when hearings were not held in Atlantic Canada. It
was wrong when the premiers of Atlantic Canada cut a deal with
the Prime Minister for a billion dollars and left Canadians out of
the process. It was also wrong when the government deceived
Canadians about its intentions with respect to the GST.
This movement to introduce closure simply punctuates the
sentence. It puts a period on a sentence of anti-democratic
behaviour and behaviour that simply does not become mature men
We have arrived back at where we began. I want to make the
argument for why this whole idea of harmonization is a bad idea.
At the beginning of my speech I pointed out that the current finance
minister, the member for LaSalle-Émard, when he was in
opposition in 1989 and running for the leadership of the Liberal
Party, pointed out that harmonization would make it very hard to
lower taxes in Canada. He was prescient. He was dead on. He knew
exactly of what he spoke. Political convenience made him change
his mind over the years.
There is no denying that harmonization will make it virtually
impossible to lower taxes in this country. Let me explain why.
There are two major reasons.
The first reason exists in the agreement itself. The agreement
states that in order to raise the rate of the harmonized sales tax, it
requires only a simple majority of provinces and the federal
government to agree and then they can go ahead and raise the rate.
However to lower the rate requires absolute unanimity. It requires
everybody to get on board and say that they agree to lower the GST,
or the harmonized sales tax, or the BST, or whatever you want to
When was the last time we had complete agreement on anything
in this country? For crying out loud, we have had the Charlottetown
and Meech Lake accords. It is fairly obvious that in a country this
big and this diverse it is going to be virtually impossible to get 10
provinces, two territories and the federal government to ever agree
on anything let alone lowering taxes which almost never happens in
The finance minister was right in 1989. He was right when he
said that harmonization would make it impossible to lower taxes.
I want to make another point with respect to the difficulty this
poses in coming up with ways to lower taxes. One of the arguments
I would make for not introducing harmonization is that when we
have a single rate of tax across the country we eliminate
competition between jurisdictions.
One of the great advantages of my province of Alberta is that we
do not have a sales tax. Frankly, I think it is because Alberta does
not have a sales tax that Saskatchewan's sales tax is not higher than
it already is. The same would apply to B.C. People already come
across the border to shop in Alberta because we do not have a sales
tax. If we go to a single rate across the country, we will not have the
type of competition that puts downward pressure on taxes. We need
that in this country of all countries. In the G-7 we need it.
I looked at a graph the other day and granted, it was of income
taxes. In this particular case it showed the increase in income taxes
in Canada compared to the G-7 average. Without a word of a lie,
our income taxes between 1965 and 1994 have gone up 1,000 per
cent higher than the G-7 average.
No one can tell me that we do not need every mechanism
possible to keep downward pressure on taxes in this country. We
have had 35 surreptitious, sneaky tax increases by this government
alone. We had 71 by the Tories before it. Every year because of
what is called bracket creep, the government raises taxes in effect.
Any time inflation is below 3 per cent, none of that is indexed. We
end up paying probably close to $2 billion more in new taxes every
We have some of the highest taxes in the industrialized world
and we need every mechanism, every tool we can find to push taxes
down. That is why our party has argued that it is time to have a
debate about taxes in this country.
Some people have said: ``Let us look at the deficit problem and
the debt problem''. We agree with that. That has been the Reform
Party mantra for 10 years. We have been saying let's balance the
budget. But balancing the budget is not the end. It is the means. We
have to shrink government and balance budgets so we can have
lower taxes which creates all kinds of wealth in this country. That
creates jobs, permanent jobs, well paying jobs. That is what it is all
We need to have the tools in this country to lower taxes. We do
not want to give any government some kind of veto power to keep
taxes high. That is what the government is proposing to do not only
with this legislation but with future legislation that would have to
deal with the harmonized sales tax.
That is wrong. We cannot afford to have higher taxes. Do people
in this Chamber realize that in 1996 we had record high taxation
which led to record high personal indebtedness, which led to
record bankruptcies? There were more bankruptcies in 1996 than in
any previous year. For 76 months in a row, as a result of all that
taxation, we have had unemployment over 9 per cent in this
Can there be any question that taxes kill jobs. By now we must
have learned that message. If people doubt it, I invite members to
look just south of the border to the state of Michigan. Look to
Michigan, a state that was part of the rust belt only a few years ago.
It elected a new governor in 1990. He introduced 15 tax cuts.
Michigan produced 450,000 new jobs between 1990 and 1995.
That is more jobs in one state than the entire country of Canada
produced in that five-year period. That is 450,000 in a state of
what, six or eight million? In a country of 30 million, we could not
produce that same amount of jobs.
That is unbelievable to me. It is unbelievable that we have not
learned that lesson. The lesson is that taxes kill jobs. If we ever are
going to deal with the problem of unemployment, we must learn
this lesson. We must get our tax rates down. It is time that members
in this place learned that lesson.
I must point out for a moment that our party has introduced a
plan that will offer Canadians a way to get to the point where we
have lower taxes. We will give people the tool that the government
is denying with this GST legislation.
We have said that we will shrink the government. We will get rid
of some of the wonky subsidies. We will not hand out money to
Bombardier any more. That would not be done under a Reform
government. We will not give money to some of the weird and
wacky special interest groups who love to grace the halls of
Parliament at budget time to cry for more money. They will not get
money from the Reform Party. People are just a little sick and tired
of giving money to those sorts of people.
We will cut spending for all those departments that more
properly belong at the provincial level. We will not have those any
more. We will provide Canadians with a government that does
about 10 things and does them well. We want a government that
focuses on getting the justice system right. Instead of doing 20 or
25 things and doing them all poorly, let us do 10 and do them right.
Let us fix the justice system.
Let us fix national defence. It has become a national
embarrassment the way the government cannot get a handle on
fixing national defence. There is a rot at the top of national defence
and we cannot fix it. If we would focus on fixing it instead of
spending money on flags or whatever it is we are doing, we could
actually do these things. We would be doing the country a great
Let us do those 10 things well. Let us get out of certain areas that
we are in right now which more properly belong to the provinces.
Like welfare. The provinces and lower levels of government have
the solutions to things like the welfare problem. They are much
more capable of dealing with it than bureaucrats 2,000 miles away.
Let us let the provinces deal with those things.
If we shrink government we can balance the budget and give a
dividend back to Canadians in the form of lower taxes, $2,000 by
the year 2000. That is what Reformers propose to do. That is the
way to help people in Atlantic Canada, in central Canada and in the
western part of the country. That is how Reform is going to help
people. We will not go around raising taxes or removing the
mechanisms to lower taxes. That is what the government has done.
That is not our plan at all.
I will summarize by saying that the finance minister was right in
1989. He foresaw that harmonization meant higher taxes. He
foresaw that this legislation would simply mean that at some point
in the future, when the deficit had been dealt with, it would be
impossible to lower the GST to give Canadians the benefit of their
I conclude by saying that we are opposed to this legislation. I
hope that hon. members, in particular those from Atlantic Canada,
will see the folly of this legislation and will vote against it.
Mr. Ronald J. Duhamel (St. Boniface, Lib.): Mr. Speaker,
initially there had been an accord that I would be sharing my time,
but that has now been changed and I will not be doing so.
I am pleased to have the opportunity to address the House today
in support of this bill, which makes amendments to the GST and
harmonizes the HST in the Atlantic provinces. I am pleased to do
so because I want to try to bring forward some of the more positive
features while recognizing that there are difficulties. A model has
been put forward that is applicable to other provinces, with the
same advantages to other provinces.
No special deal has been set up, as some colleagues would
pretend, in order to try to make politics. It is rather interesting
when one talks about the Reform Party these days. There are a lot
of articles about how much difficulty it is having. It is not unusual
to notice why. We have just heard from one of their more moderate
members who spent much of his time talking about going to jail for
putting a sticker at the wrong place on a chocolate bar. Let us get
serious. Would that really happen?
He talked about the arrogance of the Prime Minister. What
nonsense. We have one of the most gentle, kind, down to earth
prime ministers we have ever had. There is no arrogance. That is
the kind of sentiment that Reform wants to put out in order to gain
He talked about Bombardier, which is one of the large,
prosperous and significant companies in Canada, and within a few
seconds was talking about weird, wacky interest groups and
somehow put them together. If you are an interest group, does that
make you weird and wacky? No, I think not. I know of a lot of
interest groups whose members are extremely well educated and
knowledgeable who have specific and important objectives. Just
come to Parliament and to governments to share information and
seek assistance does not mean that it is inappropriate, but there
goes the Reform philosophy. It puts Bombardier and weird and
wacky interest groups all together. That comes from one of their
more moderate members.
Is anybody surprised that Reform is having difficulty trying to
convince Canadians that it is a serious political party? It does not
I recognize that the scrap versus replace debate is ongoing. I
understand the position of both groups. I made it my job to do so.
However, I think any fair-minded person would recognize, if they
took the time to look at it, that this legislation is a big step toward
the accomplishment of another of the government's red book
promises, as imperfect as it may be.
I want to quote what was in the red book as opposed to what the
opposition parties that are trying to make political hay are saying.
They recognize that taxes are not popular. They recognize that
when a tax is changed, that is the time to try to embarrass the
government. There is no serious criticism in trying to make what is
happening better, simpler, easier, more acceptable to businesses
and consumers. There is none of that. There is simply an attempt to
exaggerate items, but they exaggerate to the point where no one
really believes them.
I will return to the quote.
A Liberal government will replace the GST with a system that generates
equivalent revenues, is fair to consumers and to small business, minimizes disruption
to small business, and promotes federal-provincial fiscal co-operation and
That is what we said. I realize that in the course of the debate,
there are a number of things people may have said. And
unfortunately, they may have caused some people to jump to
conclusions. That is really too bad.
Suppose we look at what we said officially.
The broad elements of the final agreement with the Atlantic
provinces included-it is important to understand that because
therein lies a model which could be applicable to other
provinces-a substantial reduction from current combined rates
down to 15 per cent in the three participating provinces; a single
administration for both federal and provincial sales taxes; tax
inclusive pricing so consumers will know in advance of their
purchase the exact price they will pay. For transparency purposes,
the tax or rate of tax will be shown separately on the sales slip.
A national approach to interprovincial sales will ensure a level
playing field for businesses in the participating provinces. Federal
rebates and the GST low income tax receipt will continue to apply
under the harmonization agreement.
A key element of the new system is a single set of rules and
forms, as well as a single administration. Tax relief for charities
and public sector bodies will continue. Participating provinces will
provide rebates for the provincial component of the HST to
charities and qualifying non-profit organizations.
In each province, municipalities, hospitals, schools, public
colleges and universities will receive a partial rebate of their tax.
I believe that businesses in participating provinces will become
more competitive at home and abroad. Some have indicated
exactly that, recognizing that some people have disagreed with
Furthermore, businesses will collect and remit the HST on sales
in the participating provinces. This approach ensures that sales tax
is collected and remitted in a more effective and efficient manner.
Surely we have a commitment to be more effective and efficient.
Perhaps the Reform Party does not want that.
Simply put, the harmonized sales tax means a simpler tax system
for both consumers and businesses which is more efficient to
I would like to address an issue about which I am pleased with
the direction taken. I have always supported and continue to
support the removal of the GST from all reading materials. It is a
position which I took a long time ago and I have not wavered from
I was extremely pleased with the announcement made by the
Minister of Finance on October 23, 1996. At that time the minister
announced the government's intention to implement a 100 per cent
GST rebate on all books purchased by public libraries, schools,
universities, public colleges, municipalities, qualifying charities
and non-profit organizations across Canada, effective immediately.
I have not heard the opposition talk a lot about that.
This change includes all classroom books distributed freely to
students by educational authorities. As a result, all books
purchased by these bodies will not be subject to the federal sales
tax anywhere in Canada.
This rebate affirms the federal government's commitment to
support literacy. However, I must confess that I consider the
measure to be a partial sucess as opposed to a total success. This
special rebate recognizes the important role played by public
libraries, educational institutions and other community
organizations in helping people learn how to read and improve their
reading skills, something which has become increasingly critically
important in today's society.
Finally, I have received numerous representations from
physicians in my riding and from across Canada. The physicians
have made what I consider to be an effective case concerning the
application of the GST to their practices. Although physicians are
treated for income tax purposes as small businesses, they are
unable to claim a GST refund on the medical supplies used in the
delivery of health care.
I am told that the recent agreement between the federal
government and the Atlantic provinces will make matters even
worse than they were. I believe that doctors deserve to be treated
the same way as any other self-employed Canadian or small
As I said at the finance committee meetings which reviewed Bill
C-70, I have concerns with respect to the GST and physicians.
Officials acknowledged that such difficulties need to be addressed.
It continues to be my hope that an equitable solution can be found.
Surely there is a solution that is acceptable to both physicians and
government. I am seeking a solution that is acceptable to the
government and to the doctors. I will continue to play a role to that
end if I am requested to do so.
Finally, I would like to sum up the benefits of harmonizing the
GST. This is not to say there are no obstacles to overcome, no
problems. Obviously, the system is changing, and when we change
something, we know there will be problems. We cannot anticipate
everything, but the benefits are there, and I will mention a few. It is
one of the most effective measures for supporting job creation and
economic growth in that region.
Some people say we should remove the GST altogether. We
would love to be able to do that, and if it were at all possible, that is
what we would do. However, we cannot forego the revenue. The
Prime Minister and the Minister of Finance have said many times it
would be impossible to abolish, to shelve this tax, without
replacing it with a tax increase to keep revenues at the same level.
I also wanted to talk about tax cuts, something not often
mentioned by my opposition colleagues. For consumers in the
three provinces where the tax is being harmonized, this new system
will mean a tax cut and eliminating the tax on the tax. That was not
The new tax will be better for consumers, business and
governments-that is what harmonization is all about-and it will
be easier for the consumer, because tax will be included in the sales
price. What consumers see on the price tag is what they will pay at
the cash, but retailers will indicate the tax clearly on the sales slip.
Those are the advantages.
Businesses in harmonizing provinces will have only one sales
tax administration to deal with and not two; a single group of
auditors and not two.
It is a better system for the economy, because the harmonized tax
will be more effective from an economic standpoint. It is a national
strategy for interprovincial sales to ensure the rules of the game are
fair for businesses in participating provinces. Furthermore, federal
refunds and the GST credit for low income earners will continue to
apply under the harmonization agreement.
I believe that the government is taking a big step forward with
this bill, as imperfect as it is. It is a complex bill. It was complex
before, it is complex still today and it will continue to be. Clearly
there will continue to be challenges and difficulties to surmount.
Surely if we are what we pretend to be in this House, we ought to be
identifying not only the problems, not only the hurdles, not only the
challenges, not only the insensitivities if they exist, but also the
solutions to correct it. I have not heard that.
I have heard gross exaggerations that they will remove the tax
and they will do this and they will do that and then they will do this
and that and this and that, knowing full well there will never be an
opportunity for them to do it. It is very easy to promise everything
when you know you are not going to have to do it. But where is
your responsible behaviour when you look at a piece of legislation
and you are unable to look at not only the difficulties but the
merits; when you are able to identify not only the problems but to
suggest corrective measures as opposed to empty exaggerated
rhetoric that attempts to aid a drowning party and somehow lift it
up? That is what is happening here.
I personally look forward to the signing of agreements of this
nature across the provinces. I am hopeful my colleagues will use
their resources, their knowledge, their insights in order to make this
legislation even better than it is. If they were to do that, they would
be helping consumers across Canada. If they were to do that, they
would be helping business men and women across Canada. If they
were to do that, they would be helping our country, which is
already number one on a number of measures, become even better,
stronger, more united, more oriented toward helping each other as
opposed to being pecky and picky and attempting to destroy the
very fabric that holds us together.
Mr. Nunez: Mr. Speaker, I rise today to speak at third reading of
Bill C-70 concerning the so-called replacement of the GST, the
goods and services tax.
Mr. Silye: Point of order, Mr. Speaker.
The Deputy Speaker: The hon. member for Calgary Centre is
going to say that the Bloc just spoke and therefore it should be him.
Mr. Silye: No, Mr. Speaker, I just wanted to ask a question. Are
we not under questions and comments? When does that kick in?
The Deputy Speaker: It does not. At this stage of the debate
there is not 10 minutes for questions or comments.
Mr. Silye: Mr. Speaker, under orders of the day it says that after
three speakers, one from each party, we go to questions and
comments after 20 minute interventions.
The Deputy Speaker: Thank you very much my hon. colleague.
Just give me a moment and I will check that.
I am most grateful to my hon. colleague for Calgary Centre.
There was an error by the Chair and in fact the hon. member for
Calgary Centre is quite correct. There is a 10 minute questions and
comments period. I call on the hon. member for Calgary Centre.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I do not
mean to interfere in the debate but the member will get his chance
and so will we.
I would like to ask the hon. member from the Liberal Party who
just gave his speech to comment on a couple of things within his
First, I would like to comment that members of the Liberal
government, including the Prime Minister, always say that they are
number one and that by a number of different lists they are number
one. Do you not think, Mr. Speaker, that anybody could be number
one in any profession, in any business, if they could borrow for 30
years and just let that debt continue to grow and invest anywhere in
the world and let that debt continue to grow and be number one in
The government fails to recognize that the real problem is the
debt which we are not making any payments toward. This
government is adding to the problem a little more slowly than the
previous government, but it is still adding to the problem. That is
what I have to say about this number one issue.
Back to the debate on Bill C-70. The member referred to two
things, one was that this bill is imperfect. I would like him to
outline where he feels this bill is imperfect. It is his responsibility
to tell the people of Canada where he as a member of the
government side thinks this bill is imperfect.
I would also like him to comment on the justification for already
spending a billion dollars on this movement. The bill does not even
come into effect until April 1, 1997, yet this government with last
year's revenues has already dished out, paid under the guise of
transitional costs although it has not even transitionalized-if that
is a word-close to a billion dollars.
I would like the member to comment on where this bill is
imperfect and the transitional cost of a billion dollars.
Mr. Duhamel: Mr. Speaker, I welcome the question. I thank my
colleague for making the intervention to the Chair and
subsequently to me because it gives me an opportunity to respond
to the questions that were raised.
For that member or any member, particularly a member of the
Reform Party to suggest that we are number one on any number of
measures because we have borrowed is virtually scandalous. We
are number one because we are Canada. We are number one
because we are Canadians. We are number one because our
aboriginal peoples from the beginning of this country have
contributed to its greatness, because the English and the French and
Canadians from virtually every single country in the world have
come to contribute their talents, their energy and their efforts to
make this country the country that it is.
He suggested that we have become number one because of
previous governments with which he is very sympathetic and if my
memory serves me correctly, he wanted to run for a particular
government that had the same label as the one that preceded this
one which doubled the debt. To suggest for one moment that we are
number one because we borrowed is scandalous. I am surprised and
disappointed because I have a lot of respect for that member.
Frankly as I see some of the more moderate members making some
of those grossly exaggerated, insensitive inaccurate comments, I
know where they are going: down, down, down.
With respect to the imperfect bill, there are a number of
imperfections. There are difficulties with respect to advertising.
There are difficulties. For example, a particular item might cost
$9.99 and with the tax it would be beyond that. People have in their
minds that they are buying a $9.99 item. There are many others.
My colleague probably read-I hope he did-the various
testimonies from the literally hundreds of groups that drew various
points to our attention and that wanted them corrected. These are in
the process of being corrected.
There is virtually no piece of legislation that does not improve
after men and women of sound mind and good intentions have
looked at it in a co-operative way in order to make it better for the
people they represent and serve. Is that astonishing? It would be
extremely astonishing if legislation of that magnitude and impact
did not undergo refinement. In fact it would never happen. My
colleague knows that and he knows it full well. It is an attempt to
try to embarrass the government, but it is not going to work.
We are talking about all of these dollars that have supposedly
been spent. Does my colleague suggest they have been spent for
naught? Does my colleague suggest that we spent that to have fun?
Does my colleague suggest that we spent that irresponsibly? Where
is the proof? Of course not. Changing any system is expensive and
he knows that. He knows that changing any system is expensive but
he will not acknowledge it. I find that most unfortunate, most most
unfortunate. It is to help with the transition and he knows it.
Mr. Silye: Mr. Speaker, the hon. member refers to this billion
dollar payment, or $961 million, as supposedly spent. The proof is
that it is in the public accounts for last year. The money has been
spent. The finance minister included it, against generally accepted
accounting principles I might add, in last year's expenditures. It is
there. The money has been given to those three provinces. For
what? Why? The bill does not even come into effect until April 1.
The finance minister is borderline on breaking conventional
accounting practices and that is my proof.
Mr. Duhamel: Mr. Speaker, I find it shocking that my colleague
would suggest the Minister of Finance is breaking rules and
regulations that have been established. I do not believe that.
Canadians do not believe that. The Minister of Finance is one of the
finest Ministers of Finance we have ever had. He is one of the
people whom I admire the most because he does toe the line. He is
aware of the rules and regulations. He follows them.
For my colleague to suggest that because a bill comes into effect
on a certain day and there are no expenditures before shows a lack
of understanding of the political process, of the implementation
process. I thought he was a business person, I would even add of
business principles. That is shocking, absolutely, totally,
Mr. Silye: Mr. Speaker, as a business man it would be improper
for anybody to load up front a billion dollars in any business
venture before the whole deal takes place.
This has cost the Canadian taxpayers one billion dollars already.
Now it is going to cost corporations the transitional cost for their
computers, their point of sale equipment. I am glad he is getting
coached by the member from the finance committee because he is
going to need it.
The business aspect of this deal is that now that the taxpayers
have paid up front, front end loaded a billion dollars, the retailers
and the businesses will have to pay to change their computers and
to change all this mixed up tax included pricing. After that is all in
place, then guess who will have to pay some more after that in a
year or two, starting in April. The consumers will have to pay more
on goods and services that the GST never applied to. There will be
three people paying a lot.
As a business person I would never have entered into this kind of
arrangement. It is piecemeal, ad hoc and irresponsible.
Mr. Duhamel: Mr. Speaker, I wish we could continue this
exchange because the more questions my colleague asks, the more
he and his party are falling at this point in time.
I cannot believe my colleague would not recognize that we had
an agreement signed much before April 1. He forgets that. He
conveniently forgets it I suspect, because he is quite a bright fellow
With respect to the way he suggests we have spent the money,
front end loaded, he uses expressions. I wonder if he could define
them for us. It would be very helpful to Canadians because most of
them do not know what he is talking about.
He knows that that money was needed. He knows that that
money was spent responsibly. He knows that we had an agreement
well before April 1. He knows that the Minister of Finance and his
colleagues have done a tremendous job on an extremely complex
If he will recant, I hope he will give an address and do nothing
but point out some of the positives of this piece of legislation. At
the same time he should indicate what he might do in order to prove
it as opposed to making grossly exaggerated, insensitive and wildly
Mr. Osvaldo Nunez (Bourassa, BQ): Mr. Speaker, I hope I will
not lose my temper like the previous speaker. I am pleased to speak
to Bill C-70 concerning the GST. This bill proposes a so-called
replacement of the GST by the HST, or harmonized sales tax.
This is basically the same tax, in the same amount. Nothing is
changed, really. I would like to draw your attention, however, to the
attitude of this government that does not fulfil its promises.
We have here a glaring example of a promise unfulfilled by this
government. They had made an election commitment to eliminate,
kill, abolish the GST. ``We will scrap the GST'', said the current
Prime Minister on television when he was running in the election.
``We hate this tax and we will kill it''.
In a minority report dated November 1989, the Liberals, then in
opposition, stated: ``It is the position of the Liberal members of the
finance committee that the Conservative goods and services tax
proposal is flawed and cannot be `patched up' in a way that would
it fair for Canadian taxpayers''.
The Prime Minister has tried to make the public believe that he
had never made any promise of the sort. But the evidence is there,
television was there. He was forced to recognize it, after a waitress
questioned him about this toward the end of last year and after
being taken to task in an editorial published in the Globe and Mail.
The Minister of Canadian Heritage was forced to resign her
position as a member of Parliament over this, and this has cost the
taxpayers $500,000. The hon. member for York South-Weston,
who is an honest man, left the Liberal Party of Canada, accusing it,
that is the government, of not having fulfilled its commitments.
Indeed, it is the members opposite, government members,
particularly those who hold ministerial responsibilities, including
the Solicitor General, the Minister of Health and the Minister of
Public Works, who fought this tax when it was introduced in
Parliament by the Mulroney government.
Voters will not forget what this government did. They will not
forget that it has not kept its word in this case, but also regarding
other issues, including job creation. This is one of the most
negative things about this government, which was elected under the
slogan ``jobs, jobs, jobs''. There is also another issue concerning
which the government did not keep its word: the funding of the
Today, with Bill C-70, the government is seeking to harmonize
the GST with provincial taxes. However, it is already costing the
federal government $1 billion to harmonize the GST in the Atlantic
provinces. The government refuses to provide the same financial
assistance to the Government of Quebec, which is in the process of
spending $1.9 billion to harmonize its tax with the federal one.
Like others in the Bloc Quebecois, I would like to say and to
repeat this: there can be no sales tax reform without an in depth
review of personal and corporate income tax, and without the
participation of the other levels of government.
It is imperative that Canada undertake a tax reform that will
include all forms of taxation, at all levels of government. For three
years now, the Bloc Quebecois has constantly been raising the issue
of taxation. Two reports proposing excellent recommendations
The first, which was tabled last November, examines corporate
taxes. The second looks at individual taxes and was tabled in this
House a few days ago.
The Bloc Quebecois firmly opposes family trusts and tax havens.
We also defend the interests of Canadian and Quebec taxpayers.
We proposed an overhaul of the corporate tax system. The federal
government could recover up to $3 billion annually by eliminating
certain outmoded, ineffective and unfair tax expenditures. This
money could then be used to help businesses create jobs.
Tax expenditures allow businesses, particularly large ones, to
reduce the taxes they pay to Revenue Canada by quite a bit,
sometimes to eliminate them entirely. The cost of these tax
expenditures is estimated at over $9 billion annually, according to
the latest figures from the finance department.
These billions of dollars in uncollected taxes represent an
additional tax burden for taxpayers and other businesses that do not
benefit from these tax deductions.
It is useful to point out that the percentage of federal tax revenue
from corporate income tax has fallen considerably over the last 30
years. It dropped from 23 per cent in 1961 to 9 per cent in 1995.
Canada is one of the G-7 countries with the lowest corporate taxes.
It has also ranked well below the average for OECD countries
consistently since 1965.
Given the current job market difficulties, the goal of corporate
taxation should be to maximize the creation of sustainable and
meaningful employment, while ensuring that financing of public
services is shared equitably by corporations and individuals.
The tax system must encourage businesses, particularly SMBs,
to create jobs. It is important to emphasize at this point that it
would still take over 800,000 more jobs in Canada to match the
situation in 1989, before the recession.
Official unemployment rates are still scandalously high, 9.7 per
cent in Canada and 12.2 per cent in Quebec, according to Statistics
Canada figures released a few days ago. Why is Canada unable to
lower its unemployment to 5.4 per cent, as the U.S. has done? It
must be pointed out that, in the public sector alone, 200,000 federal
and provincial public servants have lost their jobs in the past two
years. This is unbelievable.
The government lacks control over intercorporate dividends,
which means that some companies with branches in tax havens
such as Barbados are able to minimize the tax they have to pay by
doing some tax planning. They maximize their profits via means
that are unproductive to both the government and society.
According to the auditor general, this tax loophole appears to
have cost the taxpayers the modest sum of $240 million in 1992
alone. The Bloc Quebecois recently tabled its second report on
personal income tax, a system which currently favours the most
advantaged people in the country.
The federal government currently pays out $77 billion in tax
expenditures to individuals annually. By introducing greater
progressivity, the Bloc Quebecois has identified $2.5 billion that
could be recovered by doing away with, or tightening up, tax
expenditures that are deemed unfair. Obviously, it would be the
low and middle income taxpayers who would benefit from this
The federal government has been in power for over three years.
The actions it has taken to make the taxation system fairer and
more progressive are lamentable. The Minister of Finance is
holding up corporate tax reform unduly. What is more, he is
refusing to undertake any serious study of the personal income tax
system. He does not dare attack tax advantages which run the risk
of upsetting the friends of the Liberal Party.
The Bloc Quebecois is addressing the federal tax system in a
concrete manner in order to make it more equitable, more
progressive and more focussed on job creation.
For instance, one concrete measure would be to abolish outright
a privilege that is now obsolete: the tax free salary and other
remuneration paid to the Governor General by the federal
government. This is an anachronism, because today, even the
Queen of England has to pay income tax.
The Bloc Quebecois suggested that part of the resources in
RRSPs be spent on fighting unemployment. An RRSP-employment
program would allow a person who is unemployed to withdraw part
of his RRSP without penalty for the purpose of starting up a
business. Now that is a great suggestion by the official opposition,
the Bloc Quebecois, that would create jobs. The Minister of
Finance should include it in the budget he will bring down in this
House on February 18.
We also suggest raising the maximum for investments in a
labour sponsored fund. The Liberals reduced this maximum from
$5,000 to $3,500 in the 1996 budget. However, these funds have
had a positive impact on economic development and job creation.
The maximum should therefore be raised to $5,000.
Last October, I attended a meeting of the finance committee
which heard submissions from representatives of venture capital
corporations. These included Fernand Daoust and Pierre
Laflamme, for the Fonds de solidarité de la FTQ; Jim Cambly for
Working Ventures Canadian Fund; Earl Storie, for Vengrowth
Investment Fund; David Levi, for Working Opportunity Fund of
British Columbia, and Jim Delaney for First Ontario Labour
Sponsored Investment Fund.
Labour sponsored venture capital corporations administer a total
of $3 billion. They exist in practically every region in Canada.
These investment funds are sponsored by the labour movement.
Capitalization is provided by a vast number of shareholders, mostly
workers. The federal and provincial governments give tax credits.
The purpose is to protect and create jobs, stimulate regional
economic development, and provide training for workers and
shares in the company supported by their money. We all know that
unemployment and job insecurity have become a fact of life in our
The Fonds de solidarité of the FTQ is the oldest labour
sponsored investment fund in Canada. It was set up in 1983 and for
14 years injected one billion dollars into small businesses in
Quebec, thus helping to save or create about 45,000 jobs. These
funds warded off a final shutdown at the Kenworth company in Ste.
Thérèse, Quebec, and protected hundreds of jobs held by members
of the CAW.
I want to take this opportunity to pay tribute to the FTQ, the
labour organization where I worked for 19 years, on this its 40th
anniversary. In fact, it was on February 16, 1957, in Quebec City,
that delegates of the Fédération provinciale du travail du Québec
and the Fédération des unions industrielles du Québec founded the
FTQ. This merger brought together trade unions and industrial
At the time, the labour movement was very active and fought the
Duplessis government which since 1944 had been actively
It must be pointed out that, in actual fact, the FTQ is far more
than 40 years old. Its origins go back to the end of the nineteenth
century. It builds on the old traditions of a combination of
European and North American trade unionism, and is the heir of
the rich history of the international labour movement.
Today, the FTQ represents 480,000 people working in all sectors
and all regions of Quebec. In addition to doggedly defending the
interests of wage-earners of all backgrounds, the FTQ also battles
for the sovereignty of Quebec and for its membership's right to
work and to live in French. On behalf of the House of Commons, I
wish the FTQ, my labour congress, all the best on its 40th
My colleague from Saint-Hyacinthe-Bagot was saying just
now that the government is ramming this bill through and taking an
undemocratic attitude by preventing discussion on this highly
complex bill. It is close to 300 pages in length, and thrown together
any old way.
He also referred to the pre-election fever the government is
trying to turn to its advantage, particularly in Quebec. According to
the latest surveys, the Bloc Quebecois has 49 per cent of public
support, and the Liberal Party of Canada only 39 per cent.
I would like to touch on the meeting held in my riding of
Bourassa this past Sunday. It confirmed the nomination of my long
time opponent Denis Coderre as the next candidate for the Liberal
Party of Canada in my riding. I defeated him in 1993, and will
have no trouble doing so again in the next federal election.
The riding's provincial representative, Yvon Charbonneau, was
present at this meeting. I would remind you that he used to be a
trade unionist like myself, but he renounced those convictions
somewhat by joining the Quebec Liberal Party, which had
imprisoned him and other union leaders in 1972. Mr. Charbonneau
was quoted as saying: ``In this riding, we have a Bloc Quebecois
member, Osvaldo Nunez, and we want to get him out of here''.
With all due respect to my provincial counterpart, I wish to tell
him that it is neither he nor his party who will push me out of my
riding. These words do not scare me, nor do the racist attacks
against me by my former and current Liberal opponent in Bourassa,
Mr. Coderre, and by the former federal Minister of Human
Resources Development, now the Minister of National Defence.
The three provincial Liberals supporting the Liberal candidate
on Sunday were called to order by Jonathan Sauvé, president of the
Quebec young Liberals. He wanted to remind them that the Liberal
Party of Quebec had to remain neutral in the next federal election
campaign. Mr. Sauvé also said that the provincial Liberals must not
team up with any federal political party.
The Quebec Liberal Party youth commission revealed its
intention not to campaign for the Liberal Party of Canada. Mr.
Charbonneau thus appears at odds with the calls for neutrality
issued by his leader, Daniel Johnson.
Jonathan Sauvé added yesterday that they had spent much of the
past year explaining to Quebecers that the QLP was not a branch
office of any other political party.
Bill C-70 is not acceptable to the people of Canada, to the people
of Quebec and, especially, to the people of Bourassa. It is unfair. It
is a bad bill. It is a half baked bill, and I will vote against it.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I would
like to ask the hon. member from the Bloc to tell the House what he
thinks about the comment of the member for St. Paul's who also
wants to ask a question. Earlier today and also yesterday, in
defence of the harmonization or blended sales tax, BST, the
member for St. Paul's used Quebec as an example and said that if it
is good enough for Quebec it should be good enough for the rest of
I would like to know what is the Bloc's response to that kind of
justification for the rest of Canada and all taxpayers to spend a
billion dollars just in three provinces. How and in what way would
Mr. Nunez: Mr. Speaker, as the hon. member has just said,
Quebec harmonized its tax in 1991 and asked nothing of the federal
Today, we realize that harmonization cost nearly $2 billion. We
say that, if the federal government is prepared to pay $1 billion to
the Atlantic provinces to harmonize the federal tax with the sales
tax of these three provinces, why would it not pay Quebec the
amount it is asking for?
This takes nothing away from our statement as representatives of
the Bloc Quebecois or the speech I made to the effect that this bill
was hastily thrown together, is bad and unfair, and is one we will
Mr. Silye: Mr. Speaker, I have a brief question for the hon.
member of the Bloc. If the Government of Canada were to offer
Quebec a billion dollars would it then agree to drop its plans to
secede from the union and stay in Confederation?
Mr. Nunez: Mr. Speaker, the question is totally irrelevant. In
any case, I can tell you that the sovereignty project in Quebec
cannot be bought. We would not drop it, even if the government
gave us $2 billion. I must add that we send $30 billion every year to
The sovereignist project is a political project, a social project
that arises from the hearts of Quebecers in response to the deep
aspirations of the people of Quebec. It will go on until Quebec
becomes a sovereign country.
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I am very pleased that the hon.
member for Calgary Centre actually asked a question about this bill
because prior to that it was very confusing. The member for the
Block appeared to be talking about the Quebec provincial election.
I have to remind him that this is the Parliament of Canada and we
are debating federal legislation here not the situation in his riding
for the provincial election.
The hon. member talks a lot about tax rates. Does he think it is at
all important to have in mind how personal and corporate tax rates
in this country compare to other jurisdictions? Does that have any
impact on the prosperity of this country and is that a legitimate
thing? Does he know what our position is and our tax rate is versus
our major trading partner or anyone else for that matter? I would
like to hear a comment from him about comparative tax rates and
the importance of that.
I also wonder whether he might comment on some of his
colleagues in Quebec City who said, during the last referendum,
that if Quebec were to separate it would become a tax haven with
extremely low tax rates to attract investment, both corporate and
While the member rails against the government, I suspect he
may not know much about comparative tax rates and certainly not
much about what is in store from some of his colleagues in his own
home province of Quebec City who talk about Quebec becoming a
Mr. Nunez: Mr. Speaker, everyone knows that it is very difficult
to compare tax systems internationally. On the whole in Canada
and Quebec, the tax system favours business. Corporate taxes are
much higher in some countries than they are in Canada, and in
In a sovereign Quebec, I think it will be much easier to set up a
much fairer tax system, one that is much fairer for individuals and
corporations, one that stimulates job creation.
For example, as I mentioned earlier, the labour sponsored
investment fund has contributed hugely to job creation in Canada
and, particularly, in Quebec, and we will promote this fund in a
sovereign Quebec. Right now, all the federal government is doing
is cutting some of the credits to these funds, which runs counter to
its job creation policy.
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): I
congratulate the hon. member for doing such a good job of
explaining the Bloc's analysis of Bill C-70 and answering our
colleague's question on taxation in a sovereign Quebec.
Perhaps he should have added-it was an omission on his part, I
am sure-that the federal government started by offering its own
vision of taxation, of how to make it fairer and more equitable. I
think the Liberal Party should take a good look at itself before
talking about what the tax system should be like in a sovereign
I have a question for the hon. member for Bourassa. How does he
explain that, when Quebec harmonized its sales tax with the federal
sales tax in 1991, no compensation was paid to Quebec, while it
should have been entitled to $2 billion? In his opinion, what was
the finance minister's motivation for giving the maritimes $1
billion just like that?
Mr. Nunez: Mr. Speaker, in a nutshell, there is no justification
for paying huge amounts to three Atlantic provinces to harmonize
their taxes. All taxpayers in Canada and Quebec will have to foot
the bill, at a time when this government is telling us that the deficit
must be tackled. It seems unreasonable to me to grant this $1
billion subsidy to the three Atlantic provinces.
Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I am
surprised that the Liberal member for St. Boniface, who has proven
to be very aware, intelligent and with it, was not on the issue that
the government has already given $1 billion to three of the Atlantic
provinces for harmonization. In fact, the payment was made out of
last year's funds. The payment was criticized by no less than the
auditor general because a final agreement had not been signed. It
was only a letter of intent. The auditor general said it was a very
dangerous precedent to be set by a finance minister for future
years. It is on the borderline and is construed and believed by a lot
of people to be against generally accepted accounting principles.
The member for St. Boniface just proved by his speech and lack
of knowledge what the first speaker from our party, the member for
Medicine Hat, pointed out earlier, that the Liberal members of
Parliament are being duped by the government and by the finance
minister on this issue.
Here we have the situation in Atlantic Canada. Canadian
taxpayers have already spent $1 billion to get rid of this GST. To
help the Liberals keep their promise we have now paid $1 billion to
three Atlantic provinces. Retailers and businesses estimate they are
going to spend upwards of $100 million. They presented these
numbers to the Standing Committee on Finance. This is not a
number I am making up, nor am I exaggerating, it is their number.
Third, starting April 1, 1997 the consumers of Atlantic Canada
are going to see how this affects their pocketbook. I do hope the
Prime Minister does call an election for June because after three
months of paying at the tills and seeing how this whole fiasco
affects them, there will be a groundswell against the Liberal Party.
It will have overestimated its popularity in the polls. There will be
a new groundswell for a party that does offer a true alternative, a
true choice and a fresh start for Canadians.
With that introduction let me get into some of the main elements
of Bill C-70 at third reading. In direct contradiction of Liberal
Party members who have their speeches written by spin doctors
that we support this harmonized sales tax, let me point out that the
minority report of the Reform Party on replacing the GST clearly
stated otherwise in its executive summary.
On page 113, for the record, accurately, in context it states:
The majority finance committee report on the replacement of the GST cannot be
fully endorsed by the Reform Party. While the replacement goes part of the way in
responding to concerns presented to the committee, many of the concerns will only
be addressed by future negotiations with the provinces.
I did not realize at the time that meant bribing them.
The majority report recommendation merely tinkers with the current GST and
does not live up to the Liberal promise to ``Scrap the GST''.
After all, this is what it is all about.
We are of the view that value added taxes are incapable of responding to a
significant portion of the concerns raised during our hearings.
The Reform Party recommends that spending cuts be the government's first
priority. As well the entire current system personal, corporate and value added taxes
should be replaced by a simple, visible and proportional system of taxation that
incorporates the principles of fairness and the lowest rate possible. In the interim, the
party will support reforms to the current regime that move in this direction.
After all, we do want what is in the best interests of all
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
Liberal members yesterday and today said they do not
understand why the costs are going to go up. The costs are going to
go down because the provincial sales tax will be treated like the
GST. There will be input cost recoveries by the businesses lowering
the costs. Let me tell these members why the cost goes up.
It goes up because the base on which this new combined tax will
be applied has become broader. It will be applied to more goods
and services. Previous speakers have pointed out, from clothes to
housing, where this tax will apply. Because of that broader base the
new harmonized sales tax or blended sales tax, HST or BST, will
cost consumers more money.
In the ninth report of the Standing Committee on Finance the
The GST is collected at each stage of the production and distribution process.
However, since each business collecting the tax also receives input tax credits for the
GST it has paid out, it is the final consumer who ultimately pays the tax.
It is the final consumer who ultimately pays the tax. As Liberal
members try to defend this HST in terms of cost savings, they must
not forget that yes, it is a savings for businesses after they pay the
initial outlay of $100 million to conform their point of sale
material, but it is the consumer who will ultimately pay a higher
This is why other provinces like Ontario, Saskatchewan and
British Columbia which have provincial sales tax are against it. It
will shift the tax burden from businesses to consumers and that is
what is bad about this particular bill. In effect it is an 8 per cent
increase on those particular goods and services that were strictly
on the PST and not on the GST. The GST has a broader base than
the PST. That is a simple fact and simple arithmetic and should be
enough proof for the Liberal members as to why this will be an
increase in costs to consumers.
The purpose should be to eliminate dual tax regimes, but this
version retains it for national firms. Somebody operating outside
those three Atlantic provinces will have to have tax included
pricing there, not tax included pricing elsewhere.
Therefore when they report their taxable income, they will need
two different forms. This is an increased cost for businesses which
then, in turn, looking at the bottom line, eventually will pass along
this cost to the consumer. Once again it hits the consumer where it
hurts the most, right in the pocketbook.
This billion dollar bribe or transitional payment to the three
provinces, the cost of reducing the sales taxes in the harmonized
provinces, is being paid for by all the taxpayers.
The deal will increase the complexity of the tax system for all
businesses in Canada with operations in the Atlantic provinces. It
does not just affect those three provinces. It is not just a deal for
those three provinces.
National retailers have said that tax inclusive pricing in a
partially harmonized system will lead to increased cost. If done
nationally it would be a much simpler solution due to separate
packaging requirements for harmonized provinces.
In response to these concerns, the federal government and the
participating governments announced changes on January 17,
Mr. Campbell: Mr. Speaker, I rise on a point of order. I am sorry
to interrupt my friend, the hon. member for Calgary Centre, but I
am sure he would want me to point out that he used a word in his
speech that you have asked in this House just yesterday not be used
in this debate, the word bribe. I would ask that he withdraw that
The Deputy Speaker: I do not know that the hon. member for
Calgary Centre was here yesterday when that word came up. There
was some discussion about it. The hon. member's colleague did
agree to replace that word with a more palatable word in the House.
The Chair suggested that the word bribe in the dictionary
probably has something about a payment or an inducement for an
illegal purpose. If the hon. member has a dictionary that suggests
otherwise or if he wishes to look at a dictionary and finds that the
Chair is mistaken on that, fine. Otherwise I wonder if he would be
kind enough to rephrase that term.
Mr. Silye: Mr. Speaker, in the rest of my speech there is no
reference to any form of inducement. I will not be using that word
An hon. member: No withdrawal?
Mr. Silye: People can ask for what they want. The Canadian
taxpayer knows what is going on here. We know what is happening.
Everybody knows what is happening. Whether or not we withdraw
a word is not the issue.
The issue is we have now made a large payment prior to the
enactment of the bill itself to three provinces. The government
calls it a transition cost. There has been nothing in transition yet,
but that money has been paid. I call that an inducement. I call that
an encouragement. I call that a lot of things. It may come close to
the word that I am not supposed to use, and so I will not use that
word if they find it offensive. But the Canadian public knows if it
smells like a-, it is a-.
Mr. Campbell: Mr. Speaker, on a point of order, the hon.
member for Calgary Centre, whom I have great respect for, would
notice that when he stood up and said initially that he did not intend
to use that word any more, I sat down and did not rise to my feet.
He has now gone on for another two minutes suggesting that is
precisely what he intended to say, ending in his last comments a
moment ago. I would renew, through you Mr. Speaker, my request
that he withdraw the initial use of that word. I was prepared to
leave it be, but not in light of his later comments. I renew that
request through you, Mr. Speaker.
The Deputy Speaker: The hon. member, to the Chair, did not
use the word in the last two minutes, but I would ask the hon.
member if he would be kind enough to withdraw the word of two
minutes ago and to please avoid using that word again.
Mr. Silye: Mr. Speaker, I will not withdraw that word and I will
tell you why. You gave me an opening and said if I find a dictionary
where the definition of my use of the word bribe is acceptable then
I can use it.
I will give a definition of the word bribe: ``Money offered to
procure action in favour of the giver''. This is money given to three
provinces, that favours the federal government, for them to comply
with the harmonized sales tax.
I would like to proceed. There have been already three or four
minutes taken out of my speech. May I continue?
The Deputy Speaker: The hon. member's colleague yesterday
did withdraw the word. The Chair did not rule that the word bribe
was an unparliamentary word. It leaves the Speaker in an awkward
position if the member is going to take the view that it is a
The Oxford Concise Dictionary, page 161, defines ``bribe'' as a
verb: ``to act especially illegally or dishonestly in one's favour by
gift of money, services, et cetera''. Bribed the guard to release the
suspect is given as an example. Second, a noun: ``money or
services offered in the process of bribing''.
It seems to me that, as was suggested earlier, this dictionary at
least suggests there is an illegal purpose involved. It is correct that
Beauchesne's does not appear to put ``bribe'' on its list of
unparliamentary words, at least what I can see quickly.
I would invite my colleague, in view of what has been stated in
the dictionary, to agree to withdraw the word in the interests of
amicable, open debate.
Mr. Silye: Mr. Speaker, I do like to be amicable and I like open
debate. In no way when I used the word bribe did I mean that it was
illegal. Nor do I mean that the government is being dishonest, even
though that definition is hinted at in your definition .
My definition basically says ``money offered to procure action in
favour of the giver''. A further definition below that is ``pervert by
gifts or other inducements the action or judgment of'' whomever. It
is a matter of interpretation. I do not mean that what is being done
here is illegal, but it is something being done that the Canadian
taxpayer should be aware of. Three provinces will have their costs
lowered because of this particular payment than the other provinces
at the cost of all taxpayers. I would just like to proceed with the
The Deputy Speaker: The hon. member did not give a source
for his definition. I hope it was not ``Levinson's Unafraid
Dictionary'' or something like that. I wonder if he would be kind
enough to give us the precise and complete definition he has and
from what dictionary.
Mr. Silye: Mr. Speaker, the definition I have is a xerox copy of
page 147 from the Concise Oxford Dictionary 1973. Is that the
same one you have?
The Deputy Speaker: Actually this one is from 1995 and I think
I gave the entirety of the definition. I think somebody was looking
at earlier editions and we are now living in 1997.
I appreciate exactly what the member is saying and I would
again invite him to withdraw that word so that we can get on with
other issues other than spending all morning on this issue.
Mr. Silye: Out of respect to you and the Chair, Mr. Speaker, I
will withdraw the word bribe.
With respect to harmonization, businesses located outside the
harmonized provinces will also be required to collect both the
federal and provincial portions of the blended sales tax on
purchases made by residents of the harmonized provinces. That
means businesses in seven other provinces will have to act as tax
collection agents for the provinces of New Brunswick, Nova Scotia
and Newfoundland and they will have to carry the associated costs.
That is another reason the bill is not well thought out and should
not be proceeded with.
The Reform Party opposes tax inclusive pricing. This practice
violates the principle of open taxation which is essential to the
efficient functioning of open democracies. Disclosures 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.
Eventually governments simply increase the rate when they need
We are heading toward a $700 billion debt. We are going to crack
$600 billion sometime this year. Our interest costs are rising
notwithstanding the lower interest rate. The economy always goes
in cycles. Economists tell us that. The government continues to add
to the debt. It is doing so less than the previous government, but it
is still adding to it. It added $17 billion or $18 billion last year. That
is a lot of money. It is a deficit. It is adding to the problem. As those
interest costs go up, the government will have no other choice but
to raise taxes. It will raise the HST/BST from 15 per cent to 20 per
cent to 25 per cent. It will raise personal taxes and corporate taxes.
It will be forced to raise taxes in order to make the payments on the
The standing committee listened to a lot of complaints from a lot
of people who came to the hearings and it claims to have solved
them. I am not sure that it has. Some of the issues were highlighted
in a story by John Geddes of the Financial Post. He used Carlton
Card's representation which was made by Shannon Hallett, who
expressed her firm's frustration with the Liberal members of the
Commons finance committee. She warned that a policy the
government plans to impose will force Carlton to close 19 of its 37
shops in the economically fragile Atlantic provinces. Is that not of
concern to a party which ran on jobs, jobs, jobs?
At issue is the proposal to force retailers to bury the new 15 per
cent harmonized sales tax in prices rather than adding on the HST
at the cash register. To retain that support, why not just drop the tax
Tax in pricing would cost Carlton $84,000 in one-time expenses
such as programming computer inventory systems. It would add
$63,000 a year in continuing costs such as putting new prices on
cars bound for the east coast. Furthermore, tax in pricing would
cost stores in the three provinces about $90 million. Winsbys Shoes
told the committee how hard it would be to sell a $99 pair of pumps
if it had to put a $115 tax in price tag on them.
Shoppers Drug Mart vented annoyance at the prospect of having
to comply by putting up tax in price conversion charts beside racks
of magazines which come printed with the tax out price.
Re-ticketing thousands of items in a store and trying to cram the tax
and tax out price along with the bar code on small labels will be a
These are all problems that the bill has not solved, even though
the Standing Committee on Finance said it would look after all of
Why is Ottawa so determined to keep this contentious tax
included pricing rule when the rest of the harmonization of two
taxes into one could be sold much better and could be accepted by
Canadians all across Canada?
Mr. Kirkby: Because you told us to.
Mr. Silye: I already covered the topic of what the Reform Party
said and what it did in its minority report in context, not out of
context as the Liberals are trying to do again.
Ottawa is proceeding with this because this is its idea of keeping
its election promise. This is it folks, Canadian taxpayers. This is
how the Liberal Party has kept its promise. Liberal members went
door to door and said that they would get rid of, abolish and kill this
tax. They said that they hated it. This is what they did. They got rid
of it by blending it with the provincial sales taxes in three
provinces. They feel they have now kept their promise. What they
have really done is they have entrenched the GST forever.
When the Minister of Finance was on this side of the House he
said that if you ever harmonize a GST with a PST, you entrench the
GST forever, and he has done it. The member from Toronto also
stated that the committee looked at a lot of options for the GST and
the final solution was that there was no better tax than the GST. The
Liberals have entrenched it. This is their way of keeping their
promise of getting rid of the GST.
Look at their promise in the red book that they would replace the
GST with a system of taxation that was simple and more fair. All
the evidence I have given today is to the contrary. It is unfair. It
favours one region over another. It subsidizes one over another at
the expense of the other. Businesses are yelling out saying that they
could go broke. Is that fair?
It is so complicated that there are definitions for tax in and tax
out pricing. There will be four items on the shelves in the stores
which people are pointing out. Is that simpler or is that more
confusing? The definitions of all these rules and the white book
required to implement all these rules will add about another 300
pages to the Income Tax Act. That is not simplifying it. A
harmonized tax can make sense, and I will get to that soon.
The Reform Party sees the GST as an unnecessary and temporary
tax that does not belong in the federal domain. Inasmuch as the tax
will exist temporarily, the Reform Party encourages the
government to streamline taxation, remove as many of the
significant problems that exist until such time as we can implement
much wider tax reforms that provide both tax relief and tax
If the government presented a national solution to this problem,
a national solution to fulfil its promise to get rid of the GST or to
replace the GST with something that was revenue neutral, then we
could support it. We have given the government some suggestions
but it has chosen not to listen. The government said that it listened
to over 20 proposals but the one proposal the government did not
listen to is the proposal in our fresh start.
It is a proposal to simplify the tax system and generate the
replacement revenues required so we can eliminate the GST. It
would operate on the basis of a simplified tax system. We could get
rid of this convoluted, complex, confusing income tax system we
have now and replace it with a more effective, fair, simplified,
harmonized system, harmonized with the Canadian taxpayers. Get
in tune with the people who pay the final price. It is the person at
the cash register, not the person who produces the goods, not the
person who sells them. It is the person who buys them.
Why not have a system where we increase our personal
exemptions, as we say in our fresh start? We could increase spousal
exemptions, remove the federal and provincial surtaxes, reduce the
UI premiums not by five cents per hundred as this finance minister
would do, but reduce them every year by 10 cents until we get to 28
cents or 30 cents, or 60 per cent as some people are asking for.
We need to do something for the Canadian taxpayers, for the
people who have to foot the bill to run government. Why do we
have to spend $108 billion? Why not just spend $90 billion to run a
government as we suggest in our fresh start platform? We could
pass along those spending savings to the taxpayer in terms of tax
breaks and tax cuts.
The difference between the Reform Party that would only spend
$90 billion and the Liberal Party that spends $108 billion is that we
would give the people the money to look after themselves right at
the source before they send it here to Ottawa where Ottawa takes 30
per cent to 40 per cent off and sends it back to them in terms of
child care and child tax credits et cetera. Why not leave the money
in parents' hands in the first place to take care of their children?
They will have more money for clothes and food right when they
earn their money. Create the incentive for people to work and earn
more so they pay less in taxes, not more in taxes. Why punish
incentive? Why not create incentive and help these people look
after their families?
It is ridiculous that we tax people who make $12,000. It is
absolutely shameful. Yet this government is planning to reduce
child poverty by increasing payments. This is admirable and it is
one way of doing it, but a better way of doing it, a less expensive
way of doing it is to leave the money in their hands in the first
In conclusion, the Liberals' are attempting to keep their promise
to replace, to harmonize, and it is not even harmonized. It is not
even harmonized in the Atlantic provinces. They could not
convince Prince Edward Island to come on board. There is no
unification there. It has not worked. It is not going to work. It is
going to be a big embarrassment to this government.
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, I much prefer the discourse of the
hon. member for Calgary Centre when he leaves the explosive
words behind and gets back to the substance which he does very
I want to ask him one question on the substance of what is being
done and the change that is taking place in Atlantic Canada. I
wonder if he had any idea and would share with this House the
amount of tax that is currently on business inputs in the Atlantic
Because I may run out of time and not have a chance to find out
if he knows, I would like to share with the House the fact that
businesses in Atlantic Canada spend $700 million paying retail
sales tax on their business inputs. Interestingly enough, that will be
returned to business, and will be available to business to pass on to
consumers in lower prices and to offset any of the costs that some
businesses may incur in moving to the new tax inclusive pricing
system. Out of that, approximately 20 per cent or $140 million is
tax on business inputs that is paid by retailers in Atlantic Canada.
I did hear the member opposite speak earlier about the cost to
retailers in Atlantic Canada but I wonder if he knew about the $140
million in inputs that they are not going to have to pay and the $700
million the business sector in Atlantic Canada will be saving and
passing on to consumers.
Mr. Silye: Mr. Speaker, I appreciate the question. I will try to
answer it in the following way.
There is no question that if businesses are allowed to get credit
for their input costs amounting to $700 million, as the hon. member
put it himself, this savings is available for businesses to pass along
to consumers. It is available but that does not mean they will pass it
along. Let us assume that they do. There is $700 million that will
then be passed along to the consumers. That is revenue neutral.
There is no increase in costs, there is no decrease and everybody is
What about this close to $1 billion payment to the three Atlantic
provinces? Why was it made? It was made because
theoretically-and this is all theoretical; we are in the realm of
theory here-these three provinces would receive that much less in
revenue by moving
over to a lower combined rate from their 18 to 20 per cent down to
15 per cent to make up for that loss in revenue which they would
have received from their provincial sales tax. Because of this input
system through the GST, because it is a different form of a tax, they
have to be compensated.
To compensate three provinces at the expense of all Canadian
taxpayers is something I certainly object to when it is not necessary
to do so. Then there is the fact that it is a 15 per cent combined rate.
This tax goes on goods and services that the GST did not go on
before. This will have a dramatic effect and impact on the
consumers of Atlantic Canada. It has an impact on those businesses
which deal with Atlantic Canada that are located outside of
Atlantic Canada because they have to sustain dual packaging, dual
pricing. It adds a lot of complications and a lot of cost.
There is this argument that this is just like a GST. Instead of
getting rid of or replacing the GST, I still argue and maintain that
the government has entrenched the GST and has, in effect,
introduced in those three provinces a 15 per cent GST. Remember
when the Conservatives first introduced this tax and the Liberals on
this side said they would have to get this rate and that rate down
and make all these exemptions, which they did? However, the
biggest argument against this was that once the bill was passed the
government would be able to raise it and raise it.
I humbly submit that this could very well be the first step by a
government, maybe inadvertently, actually increasing the GST
from 7 per cent, which was originally supposed to be 9 per cent, to
15 per cent.
I understand and agree with the merits of the GST system and its
advantages to business and how the tax does not cascade. It does
make sense. However, when we look at the impact on the range of
goods and services that Atlantic Canadians will now have to pay 15
per cent on rather than the previous 9 per cent, their costs will go
up. Their out of pocket, disposable income will go down. They will
find that they have less money for goods and services.
That is my argument in terms of the counter balance and the
higher cost to consumers which offsets this $700 million in input
costs, which does makes sense, which should help businesses and it
should be passed along. There is also the fact that the provincial
governments make less revenue and need to be compensated.
What happens at the end of four years? This billion dollar
payment to the three provinces is supposed to be just for the three
or four years. What if those three provincial governments still have
not balanced their books and are still running deficits? What if they
need more money for whatever they want to provide their citizens?
What are they going to do? They are going to have to raise the tax.
Now they have a convenient one tax they can raise, which is our
other argument against this tax.
I am only trying to be fair in pointing out the criticisms of this
tax. I think our party has been very good, even in the standing
committee, of offering solutions. The members of the standing
committee know that we tried very hard to work with the
government to come up with a system to replace the GST. We
looked at a lot of things but this piecemeal, partial harmonization
will do more harm and create more confusion at a higher cost than
if the government would have taken its time and done it right with
all the provinces complying and co-operating rather than just trying
to save the Deputy Prime Minister's political career.
Mr. Alex Shepherd (Durham, Lib.): Mr. Speaker, I listened
with interest to the member for Calgary Centre. There is just one
aspect of the harmonized GST that the hon. member possibly did
not touch on and that is the whole concept of the ability to remove
provincial sales tax from export sales.
Members will know that Canada is a major exporting country.
Indeed, a big section of our job growth has been related to the
export sector. Much of the financial recovery that we are going
through right now is related to exports. The maritime provinces, in
particular, need to rebuild their economy so that they move into the
21st century. Exporting will be a big feature of that.
For example, in my riding General Motors manufactures cars
and sells them on the U.S. market. Every car that is shipped into the
United States from plants in Oshawa will have a certain degree of
provincial sales tax embedded in the selling price. That makes our
exports less competitive with some of the other competitors that
are involved, such as OECD countries and southeast Asia. One of
the main aspects of the GST was its ability to remove taxes from
We have provided these three provinces in particular-and the
province of Quebec already has a harmonized GST-with a tool to
rebuild their economy and a tool to enter into the 21st century with
a more dynamic economy zeroed in on export sales.
Why would the member and his party try to frustrate the whole
concept of building a new and better economy for the people of the
maritimes to create jobs in the future?
Mr. Silye: Mr. Speaker, I welcome the question from the hon.
member. I agree that a goods and services tax, that a consumption
tax along the lines of the GST does eliminate tax cascading and
does allow us to produce and manufacture products, and export
goods at a lower cost.
That still does not justify what the government is doing with
this partial harmonization in three provinces. That is a tax theory,
a tax question, and I agree with the member's point of view on
How long will it take the savings from this Oshawa plant to
recover a billion dollars of taxpayers' money to help three
provinces to recover the $100 million minimum that some of these
businesses have said it will cost them to conform to this new bill?
Yes, it is good for business. Yes, products can be sold cheaper.
However, in the end the very philosophy of a GST is that the
consumer pays the tax. The hon. member knows that.
What we have done here is make it more fair for business. There
is no question about that. However, we have now increased taxes.
Harmonization helps. Instead of having two taxes, federal and
provincial we have one. All those arguments make sense.
When the consumers find out how much more it will cost them, I
predict there will be a lot more complaints and a lot more people
crying about it than there is now. Everybody will be affected. At
first they support the theory and the concept. Then, as they find out
more about it, it becomes like the tax inclusive pricing which is
causing a nightmare. That is what is really creating a cost for
The government would have them on side if it just dumped it. I
do not know why the geniuses in cabinet do not go for it. They are
stubborn. They will force it. The MPs will have to explain it. That
is fine. Handle it. That is their job. They brought this in.
In the end, wait until the consumers get a hold of it. Wait until
they see how it affects them. That is when it will be really of
concern to members of Parliament, especially the Atlantic
provinces. They will hear about it in their constituency offices. I
Mr. John Maloney (Erie, Lib.): Mr. Speaker, it is a privilege
for me to rise today to speak on Bill C-70, the harmonized sales tax
A great deal has been said in this debate about harmonization,
what it will mean for Nova Scotia, New Brunswick, Newfoundland
and Labrador. For the benefit of this House I want to take a moment
to review some of these benefits. I would remind hon. members
that the HST and its ensuing benefits will impact positively on the
three participating provinces.
Clearly there could be additional benefits for the other provinces
as well. I hope people are listening carefully to this debate today,
especially in my home province of Ontario. It has been repeated
several times in this debate that Bill C-70 represents a significant
step toward a fully harmonized sales tax system, one of the
The end result for the three participating provinces will be a
system that is fair to consumers and small businesses residing and
operating there. The new system will also promote fiscal
co-operation and harmonization among the federal government and
those three provinces. Hon. members know why harmonization
will result in a simpler, fairer and more economically efficient sales
First, consumers in those three provinces will benefit. Removing
the provincial retail sales tax from the business inputs, together
with a lower 15 per cent rate and reduced compliance costs for
businesses will mean lower consumer prices on many goods.
Consumers will also know the full price of what they are buying
before they get to the cash register because of tax inclusive pricing.
At the same time, the rate of sales tax payable will be visible on
Second, under the HST, businesses will be dealing with only one
set of sales tax forms and operating rules. There will be one tax
administration instead of the two sets of everything they do now.
Not only will they have reduced compliance costs, but the
competitiveness of businesses will be promoted. That is because
the HST payable on business inputs will be recoverable, especially
for businesses located in the participating provinces.
There will also be lower administrative costs under the HST
because overlap and duplication will be eliminated. Of course, the
single lower rate of 15 per cent is significantly lower than the rates
currently in place in the three participating provinces.
It is important to note that the harmonization in the participating
Atlantic provinces will mean a drop in their combined sales tax
rates from just under 20 per cent to 15 per cent in Newfoundland
and Labrador and from just under 19 per cent to 15 per cent in both
Nova Scotia and New Brunswick.
To ensure a smooth transition, the HST base will be the same as
the GST base. The rules governing the new system will generally
be the same as those for the GST.
Economic benefits will also flow from the removal of tax on
business inputs. In addition to eliminating the tax cascading that is
inherent in existing provincial retail sales tax systems, the
harmonization of sales taxes will minimize distortions in
I refer to businesses being able to recover the tax on business
inputs in the new system. Keep in mind that the current provincial
retail sales taxes are applied on the price of purchase, including the
GST. Since the existing provincial retail sales taxes do not have a
mechanism for removing taxes paid on purchases by businesses in
the course of producing the goods and services that they sell, these
taxes become embedded in the prices that businesses charge for the
goods and services they produce.
A key advantage of the HST will be removal of the embedded
taxes. This will make the tax payable on goods and services more
transparent to consumers. In addition, companies and the
participating provinces will be able to price their goods more
competitively. This will be particularly advantageous for exported
goods which will be completely relieved of tax. Along with
promoting the international competitiveness of businesses in the
participating provinces by removing tax from exports, steps will
be taken to ensure that they and their competitors and
non-participating provinces are treated equitably.
The design of the tax will ensure that goods and services sold
into a harmonized province from outside the province for
consumption or use in the participating province are subject to the
same level of tax as goods or services sold within the province.
Registrants across Canada will be required to collect HST on
goods or services sold in a participating province or shipped to that
province. At the same time they will be eligible for input tax credits
for HST paid on inputs into their commercial activities. Under
current provincial sales tax rules in both participating and
non-participating provinces, consumers are required to pay tax on
any taxable purchase consumed in their home province.
If a purchase is made from a business in another province,
consumers are required to self-assess the applicable provincial
sales tax. The requirement to collect tax on interprovincial sales
will ensure the application of a provincial tax is continued under
harmonization in an administratively efficient manner.
In order to ensure a consistent and simple approach for
businesses required to collect HST on interprovincial sales, a single
set of rules will be provided in the Excise Tax Act. The federal
government will apply this approach on behalf of any province that
adopts a similar system.
As hon. members know, the registrants will be able to recover
tax payable at the HST rate of 15 per cent on goods and services to
the extent that they are acquired for consumption use or supply in a
commercial activity. This will eliminate the tax cascading inherent
in existing retail sales taxes in participating provinces.
We know too that the removal of tax on business inputs will
enhance the competitive position of businesses operating in those
provinces. Similarly, special rebate mechanisms will apply where
property or services are acquired in participating provinces and the
property is removed, or the services are for use outside these
provinces by people who are unable to claim input tax credits.
Let me emphasize that registrants regardless of where they are
located will be able to claim input tax credits in respect of tax paid
or payable either at the 7 per cent GST rate or 15 per cent HST rate
on property and services they acquire or import into Canada as
inputs into their commercial activities.
By allowing registrants located in participating or
non-participating provinces to claim input tax credits for tax paid
or payable regardless of whether it was charged at the 7 per cent
GST rate or at the 15 per cent HST rate, the dual objectives of
eliminating tax cascading and maintaining competitive equity can
be achieved in a way that is both simple and effective.
Businesses engaged in commercial activities anywhere in
Canada that purchase goods and services in participating provinces
that are taxed at the harmonized rate will be entitled to recover tax
payable at the HST rate. Another result is that when reporting tax
collected or claiming input tax credits, registrants will not have to
separately identify the federal and provincial components of the
HST at the 15 per cent rate or tax collected or payable at the 7 per
cent GST rate.
Furthermore, most registrants will continue to use the current
GST return to calculate net tax remittances. This aspect of
harmonization will make a difference between the participating
provinces and the remaining non-harmonized provinces.
Let me reiterate that at present in all provinces except Alberta,
consumers pay provincial sales tax on all taxable purchases
consumed in their home province. If they buy something outside
the province they are required to self-assess the provincial tax
applicable. Businesses generally apply only the GST on sales to
other provinces but they are still required to indicate where PST
does not apply, for example by destination. The PST does not apply
out side the province.
Under the HST there will be no hidden taxes because of the input
tax credits that businesses can claim to recover the tax on goods
bought to run their operation and make products. Equity and
competitiveness for Atlantic businesses dictate that all goods and
services consumed in participating provinces should be subject to
the same level of sales tax. This includes goods supplied by
businesses in non-participating provinces for final consumption in
Introducing a national measure for collecting tax on
interprovincial sales will establish a stable, fair and predictable set
of rules for businesses selling into the harmonized provinces. As
we know, businesses in the non-participating provinces will have to
apply the 15 per cent HST on all sales into a harmonized province.
I should point out here that frequent changes will not be required
as other provinces harmonize. This is not a new sales tax on goods
and services sold in the participating provinces. Sales tax on
interprovincial sales has always been applicable. Many national
businesses involved in interprovincial transactions already collect
and remit provincial taxes on a province of destination basis. This
new approach merely ensures that sales tax is collected and
remitted more efficiently and effectively.
As long as collection of tax on interprovincial sales is based on a
single set of rules, collecting the 15 per cent HST will not involve a
significant change for these businesses.
Some consumers shop to purchase items free of provincial sales
tax in other provinces. While consumers are required to self-assess
the applicable provincial sales tax on these purchases, as I
mentioned before, this is not the most effective way to ensure that
the tax is paid.
With businesses now having to collect and remit the HST when
they sell into a participating province, consumers will no longer be
able to purchase these goods free of provincial sales tax.
Consequently, the same tax savings incentive to buy out of
province will no longer exist. This approach is more equitable for
businesses and consumers alike. Retailers in participating
provinces will no longer be at a disadvantage compared out of
province vendors. Both will be required to charge the full rate of
tax on their sales.
Collection of tax on interprovincial sales requires two basic
elements, a common base and referencing of federal legislation.
The national approach to interprovincial sales establishes an
efficient and effective system for collection of tax on
interprovincial sales which can benefit all provinces by facilitating
the collection of the provincial sales tax on all sales into the
We already know the HST treatment of interprovincial sales
benefiting participating provinces. For example, through additional
sales tax revenues and by providing a level playing field for all
businesses selling in or into participating provinces.
We know too that there will be no incentive for businesses in any
province to avoid paying tax on their inputs as they can claim input
tax credits for the full amount of tax paid.
As I said at the beginning, this bill puts into law the first step
toward replacing the GST with a truly national sales tax system.
Perhaps, when the non-participating provinces see the benefits of
harmonization, they too will join in and reap the benefits. After all,
the consumers and businesses in those provinces deserve the same
breaks as residents in Nova Scotia, New Brunswick and
Newfoundland and Labrador.
No doubt the HST will be a better sales tax system when it is a
national system. But this is a start, an important, valuable start that
will truly benefit the economies of the Atlantic provinces. That is
why I urge all hon. members to support this bill.
Mr. Jean-Marc Jacob (Charlesbourg, BQ): Mr. Speaker, I am
pleased to participate in this debate on Bill C-70 for various
reasons. Several of my colleagues and members of the Reform
Party have pointed out that, through this bill, the Liberal Party has
completely reneged on an election promise.
I was listening to the hon. member for St. Boniface, who
mentioned the added bonuses of the so-called harmonization of the
GST. All the hon. members will remember the statements made by
the Prime Minister, the Deputy Prime Minister and even the
Minister of Finance to the effect that the GST was an unfair,
regressive tax which hurt the economy and, in some respects,
encouraged work for cash when the tax is applied to services.
We have realized that, after undertaking to abolish this unfair
and intolerable tax, the government is now diverting attention by
saying that it has been successfully harmonized and that the Prime
Minister's promise to eliminate the tax had been misunderstood.
It will be remembered that, in the late 1970s, the Liberal Party
guru, former Prime Minister Trudeau, had taken very similar action
regarding the gasoline tax. At the time, when former Prime
Minister Joe Clark was briefly in office, Mr. Trudeau described the
gasoline tax introduced by the Conservatives as an unacceptable,
intolerable and unfair tax that would be abolished as soon as the
Liberals were in office.
And we all know that Mr. Trudeau became Prime Minister of
Canada and that the gas tax was not abolished. Quite the contrary, it
was increased. This bears a strange resemblance to the promises
made by Mr. Trudeau's disciple, the current Prime Minister, who
said he would abolish the GST because it was unfair, regressive and
bad for the economy. Again, the promises made were not fulfilled
and the government has now found a roundabout means, the
so-called harmonization, which it touts as an outstanding solution.
We will never stress often enough what I would call the
inconsistent, farfetched promises made over a period of decades by
the Liberal Party, a party that makes all kinds of promises but never
fulfils them. Such was the case with the gas tax and such is now the
case with the GST.
The government talks about harmonizing the GST but, to my
knowledge, the GST is still at 7 per cent, under the agreement
reached with the maritime provinces. What was harmonized is the
provincial tax, which was lowered in Newfoundland, New
Brunswick and Nova Scotia. In other words, the provincial tax was
harmonized, thus reducing the total tax, a loss the federal
government will quickly compensate through equalization
But the government also gave these three provinces $961 million
in compensation, to help them integrate the GST and implement
the so-called harmonization. Strangely enough, Quebec was a
harmonization pioneer, as mentioned earlier by a Liberal member,
who said that having an harmonized tax was good for trade and
exports. Again, one wonders what principles of justice and fairness
are used by a government that subsidizes and compensates the
three maritime provinces that agreed to ``harmonize'' their taxes,
while Quebec did the same at its own expense.
I was in the private sector when that process took place and I
remember that all the costs, such as the acquisition of software to
integrate the GST with the provincial sales tax, were supported by
small and medium size businesses in Quebec. As for the provincial
government, it trained some of its employees and integrated its
computer system so as to achieve harmonization with the GST.
Did Quebec get any compensation? Let me use the words of the
Minister of Human Resources Development in reference to culture:
``Not a bloody cent''. We did not get any compensation from the
federal government. Now Quebec is asking to be compensated for
having harmonized its tax with the federal GST, but this
government is turning a deaf ear so that the province might not get
Meanwhile, the maritimes, where, as the government says, the
tax has been harmonized, are being subsidized or compensated to
the tune of $961 million.
With such compensation, New Brunswick can now be
competitive and attract some Quebec and Ontario businesses, by
stressing the fact that taxes will be lower in that province, given the
kind of subsidy granted by the federal government, through the
compensation paid to maritime provinces.
This is a rather curious system when you look at it: the federal
government provides a kind of competitive tool to three provinces
by harmonizing its tax, to the point that it becomes unfair, since
these provinces will benefit from such a substantial subsidy or
compensation. How then can we believe that the Canadian
federation, with bills such as this one-
The Speaker: I am sorry to interrupt the hon. member. I know
you are in the middle of your speech, but you will have 14 minutes
left. You will have the floor again after question period.
It being almost 2 p. m., we now move to members' statements.
STATEMENTS BY MEMBERS
Mrs. Anna Terrana (Vancouver East, Lib.):
Mr. Speaker, last
week the Chinese community celebrated Chinese New Year. In
fact, the celebration was enjoyed by all communities under the
leadership of those Canadians who emigrated from the countries
where Chinese New Year is observed.
In my riding of Vancouver East the Chinese Cultural Centre, the
Chinatown Merchants' Association, the Chinese Benevolent
Association and S.U.C.C.E.S.S. organized several events in which
a large number of people participated. It was a real celebration with
a very successful parade with lions and dragons, drums and
fireworks in a glory of colours and folklore. All devils were scared
One of the groups in my community we are very proud of is the
Strathcona Chinese Dance Company. It was invited to Ottawa by
the National Capital Commission to inaugurate Winterlude.
Thirteen young people came under the leadership of Annabel Ho,
while in Vancouver the remaining 70 young dancers performed
under the leadership of Mimie Ho.
I would like to congratulate the whole Chinese Canadian
community for its contribution to Canada and for sharing its
traditions with all other Canadians.
Kung hei fat choy. Happy New Year of the Ox.
* * *
Mr. Bill Gilmour (Comox-Alberni, Ref.):
Canadians expect a fair and responsive justice system. Yet for the
past three years the apparent lack of justice in the Patrick Kelly
case brings to light serious problems within our justice system.
Kelly, a former RCMP officer, was convicted of murder when
his wife fell to her death from their 17th floor balcony. The police
investigation into the Patrick Kelly case is being conducted by the
same police force and the same homicide squad that has been
accused of wrongdoing in the original investigation.
How can Mr. Kelly have an independent review when Ed
Stewart, the primary officer in the original investigation, is staff
officer with the police department reinvestigating the case? Ed
Stewart apparently lost the tape recording that would verify or
refute many of the allegations made by the key witness who later
recanted her statements. This brings into question any impartiality
in the investigation.
In the name of justice, the Minister of Justice must arrange for an
independent body to conduct the Kelly investigation.
Mr. Gilles Bernier (Beauce, Ind.):
Mr. Speaker, SMBs are the
biggest employers in almost all communities in Canada,
accounting for over half of all this country's jobs in the private
When it comes to job creation, SMBs are responsible for 80 per
cent of all net new employment. In addition, SMBs generate over
one quarter of all sales, one third of all profits, one fifth of all
goods, and approximately 40 per cent of the GDP.
Unfortunately, SMBs are spending too much time, money and
energy complying with government requirements. The smaller a
business, the higher its basic costs.
With the largest concentration of SMBs in Canada, the Beauce
region is in a position to comment. I urge the government to do
something to reduce the paper burden so that our SMBs can spend
more time doing what they were intended to do, which is to
produce goods and service effectively and not to waste time on
often pointless paperwork.
* * *
Mrs. Suzanne Tremblay (Rimouski-Témiscouata, BQ):
Speaker, today the Communauté des filles de Jésus in Rimouski is
celebrating the 100th birthday of Sister Marie-Anne Chenel, also
known to many as Sister Sainte-Hermine. I would like to add my
congratulations to those of her religious family and her relatives.
Over the years, Sister Chenel has followed her chosen path with
conviction. She lovingly took up duties as the teacher of young
children and, through her presence and involvement, built up
lasting ties within her community.
I wish Sister Sainte-Hermine serenity on her journey. May she
continue to be, for a good many of us, an example of perseverance
* * *
Mr. Stan Dromisky (Thunder Bay-Atikokan, Lib.):
Speaker, I rise today to inform the House of the fantastic work
being conducted at the Thunder Bay Regional Hospital's McKellar
A Thunder Bay medical specialist, Dr. William McCready,
indicated that McKellar is the top hospital in Canada for organ
donation. In 1996 nine multi-organ donors were brought to
McKellar. Transplant teams have retrieved healthy hearts, kidneys,
livers and lungs for use in patients throughout Canada whose
diseased organs put them in a life or death situation.
The transplant process is facilitated when Canadians sign a
donor card and when their relatives or next of kin have given
permission for organs to be removed for transplanting. I urge all
Canadians to complete donor cards. This humanitarian act has the
potential to give the precious gift of life to someone in need.
* * *
Mr. Ted McWhinney (Vancouver Quadra, Lib.):
the domestic law and administration of Great Britain have created a
serious disadvantage for 130,000 Canadian citizens of British
origin now living in Canada who are entitled to vested pensions
from the British government. These British-Canadians do not enjoy
the same benefits as British immigrants to the United States and
other countries whose British pensions are indexed against
We ask the Canadian government to continue its diplomatic
efforts to persuade the Government of Great Britain to bring its
treatment of British-Canadian pensioners in line with similar
pensioners in the United States and other countries.
* * *
Ms. Jean Augustine (Etobicoke-Lakeshore, Lib.):
Speaker, I am encouraged as I speak to constituents in my riding
that crime prevention and our commitment to a partnership with
law enforcement, community groups and citizens for safe homes
and safe streets is working.
In 1994 our government established the National Crime
Prevention Council. Active community involvement is growing.
Last month Mr. Fred Roberts, one of my constituents, witnessed
a robbery and assault of a senior by a group of teenagers. Mr.
Roberts did not think twice about rushing to aid his neighbour.
Later he apprehended a perpetrator and persuaded him to turn
himself in to the police.
The Etobicoke Crime Prevention Association is also central in
working with Youth Service Canada and the Department of Justice
to create prevention programs.
All this proves that citizens, communities and governments can
work together to prevent crimes and to produce safer streets.
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies, BQ):
Mr. Speaker, last Saturday in Nagano, Japan, Jean-Luc Brassard
took the world moguls title in freestyle skiing. The silver medal
went to Stéphane Rochon. A few hours later, Nicolas Fontaine won
the gold in aerials.
The names of Jean-Luc Brassard, Stéphane Rochon and Nicolas
Fontaine will now stand alongside those of Gaétan Boucher, Josée
Chouinard, Isabelle Brasseur, Sylvie Bernier, Myriam Bédard,
Sylvie Fréchette, Annie Pelletier, Gilles and Jacques Villeneuve,
Bruni Surin and many others, who are eloquent testimony to the
fact that Quebecers can compete with anyone in the world and win.
Bravo Jean-Luc. Bravo Stéphane. Bravo Nicolas.
* * *
Mr. Lee Morrison (Swift Current-Maple
Mr. Speaker, prairie elevators are
bulging with grain. Meanwhile dozens of ships are waiting to load
in Vancouver and massive demurrage charges to western farmers
The two major railways have chosen this inopportune time to
suspend service for at least three weeks on hundreds of kilometres
of lines in western Canada. Outstanding car allocations have been
cancelled and producers have been hung out to dry.
As usual, the interests of western grain farmers are being
ignored. However with a transport minister from Victoria and a
minister of agriculture apparently from some other planet, this is
* * *
Mr. Svend J. Robinson (Burnaby-Kingsway, NDP):
Speaker, the Liberal government is under tremendous pressure
from tobacco manufacturers to weaken and delay Bill C-71, the
tobacco legislation. New Democrats urge the government to move
ahead with the bill, which already represents a compromise, with
no more concessions and no more delays.
It is ironic that the tobacco industry is seeking to make deals
around sponsorship such as allowing international events. At the
same time other governments, including the U.S., Belgium and
France, are moving to a total ban on all tobacco sponsorship of arts
The government should ensure that the funds lost to cultural and
sports groups are restored and strengthened from other government
revenues. The government must not be bullied by the high pressure
propaganda from the tobacco companies, companies that have
already a very cosy relationship with the Liberal Party.
Canadians can have both a rich and varied cultural and sporting
life and protect the health of our children and our own health from
the destructive impact of tobacco.
No more concessions and no more delays. Move ahead with Bill
* * *
Mr. Gary Pillitteri (Niagara Falls, Lib.):
Mr. Speaker, we have
witnessed the Liberal government's ongoing commitment to
Canadian youth by several initiatives geared to provide our young
people with a better and brighter future. To achieve this important
goal, the government needs the full co-operation of the whole
The recently introduced tobacco legislation is focused mainly on
deterring our young from ever starting to smoke. Therefore, the
report showing that the community of retailers in Niagara Falls has
the highest percentage of refusals to sell tobacco to minors, 90 per
cent against 50 per cent which is the national average, is indeed
Niagara Falls retailers have demonstrated their commitment in
helping to prevent youth from experimenting with and becoming
addicted to tobacco, thereby contributing to a healthier society.
* * *
Mr. Harold Culbert (Carleton-Charlotte, Lib.):
Speaker, last week the Minister of Finance announced the tabling
of the 1997 budget on February 18. I suspect this budget will be
delivered in the same balanced fashion as the first three budgets of
this government: balanced in order to protect the social programs
respected by all Canadians yet building economic growth and jobs
for Canadians while meeting the financial goals and obligations
that will allow Canada to continue as a leader among the G-7
Today, Canadians are proud of bringing our financial house to
order and no longer being referred to as a financial third world
country, but instead being known as a world leader for building
economic growth and creating over 700,000 new jobs for
I am certain that once again the 1997 budget will focus on
economic growth and jobs, the protection of our social programs
and keeping our financial house in order.
Mr. Denis Paradis (Brome-Missisquoi, Lib.):
two years ago this week, on February 13, voters in
Brome-Missisquoi elected me to represent them in this House. To
all my constituents, I would like to say again how proud I am to be
their member, their communications highway to Ottawa, their
voice in this Parliament.
In the by-election held two years ago, federal and provincial
Liberals working together and a strong federalist force helped to
take Brome-Missisquoi away from the Bloc Quebecois. This
solidarity has been beneficial to all our constituents.
Now that a federal election is imminent, let us all join in a
common effort to ensure that all of Quebec's regions, especially the
Eastern Townships, elect those who are truly prepared to defend the
interests of Quebec within our country, Canada.
My nomination meeting will be on Thursday, February 13, 1997,
and I will say again how proud I am to be a member of Team
* * *
Mrs. Madeleine Dalphond-Guiral (Laval-Centre, BQ):
Speaker, on the weekend in Drummondville, the Minister of
Human Resources Development said quite bluntly that the French
language and culture survived in Quebec thanks to the federal
government, because Quebec, according to the minister, never
invested a red cent in culture.
Apparently, these words were a clear indication of the minister's
attitude. He lost his cool before the young Liberals.
If that is indeed the case, we have reason to be concerned about
the minister's ability to keep his cool during the next election
The official opposition believes that the minister's remarks
reflect this government's contempt for Quebec. The federal
government feels superior to Quebec and sees Quebec culture as
merely a regional phenomenon in Canada.
The Quebec Department of Culture was established on March
24, 1961, and it was a federalist, Liza Frulla, who reminded him of
this. He is young yet, so there is still hope for improvement.
Mr. John Duncan (North Island-Powell River, Ref.):
Speaker, today a group of North Bay residents is on Parliament Hill
with a petition. It brings attention to the possible move to Winnipeg
of the North Bay military base's main function, monitoring and
maintaining air surveillance over North America. Political
influence is expected to play a major role in the decision.
We are asking Mr. Chrétien to ensure the survival-
The Speaker: You cannot use the name of a member of
Parliament. Use his title, please.
Mr. Duncan: We are asking the Prime Minister.
I am quoting Monika McGrath, a resident of North Bay and
organizer of the bus trek: ``The politicians always make decisions
that affect everyone but tend to forget this country's most valuable
resources, our children. Therefore, we will be here to present their
petition to the Prime Minister under the heading: Don't Kill My
Since 1993 the DND workforce at North Bay has been reduced
by two-thirds. The people of North Bay deserve a response from
The Speaker: The hon. member for Hillsborough.
* * *
Mr. George Proud (Hillsborough, Lib.):
Mr. Speaker, I rise to
pay tribute to the second oldest legislative building in Canada.
Province House in Charlottetown, the home of the P.E.I.
legislature, turned 150 years old in January of this year.
Over that 150 years it has been the location of gala receptions for
numerous visiting dignitaries and the site of countless heated
debates. More important, it was the site of the Charlottetown
conference of 1864 where the Fathers of Confederation first
discussed the formation of our great country.
In recognition of its historical significance, Province House was
declared a national historic site.
Province House stands as a symbol of Canadian and Prince
Edward Island strength and unity. Tonight the Charlottetown
Historical Society and Parks Canada will officially celebrate its
birthday, with more festivities planned throughout the year.
On behalf of all my hon. colleagues, I would like to wish
Province House of Prince Edward Island a happy 150th birthday.
Mr. Raymond Lavigne (Verdun-Saint-Paul, BQ):
Speaker, yesterday the Government of Canada announced it was
granting $1.3 million to the Société nationale des communications
du Québec. This amount will come out of the transitional fund for
job creation, which includes $90 million for Quebec.
Thanks to this financial assistance, the Société nationale des
communications du Québec will be able to establish a call centre
that will offer business and residential customers a wide range of
This is another way for the government to make a tangible
contribution towards job creation and economic recovery in
* * *
Mr. John O'Reilly (Victoria-Haliburton, Lib.):
I rise today to inform the House of one example of turning disaster
into success. In Kirkfield, Ontario the Sir William Mackenzie Inn
is doing just that.
A tornado in 1995 wiped out many mature trees across the 13
acres of land. Instead of this devastating the land of the inn, it gave
the owners an idea. On June 22, 1996 the inn decided to have a
wood carving contest using chainsaws. The inn awarded free
accommodation, great prizes and lots of media coverage.
Once destroyed trees turned into works of art. One carving
resembled a moose in the forest, while another resembled mother
nature. The winner, ``Cougar on the Rocks'', by Peter Turrell was
In conclusion, I would like to congratulate Joan and Paul Scott
for turning a near business closing incident into a huge success.
Mr. Speaker, when you visit Kirkfield this summer, drop in to
view these masterpieces.
ORAL QUESTION PERIOD
Mrs. Suzanne Tremblay (Rimouski-Témiscouata, BQ):
Speaker, enough is enough. There are limits to rewriting the red
book to reflect the devastation wrought by this government.
Before the 1993 election, we read on page 88 of the English
version of the red book, and I quote: ``Funding cuts to the
Canadian Broadcasting Corporation, the Canada, Council, the
National Film Board, Telefilm Canada, and other institutions
illustrate the Tories' failure to appreciate the importance of cultural
and industrial development''.
My question is for the Deputy Prime Minister and Minister of
Canadian Heritage. How can she say this morning, following a
cabinet meeting, that, by promising stable funding to the CBC as of
1998, she is fulfilling the commitments of the red book, when for
the past three years the Minister of Finance has relentlessly cut
more than $500 million from the budgets of the CBC, Telefilm, the
National Film Board and the Canada Council?
Hon. Sheila Copps (Deputy Prime Minister and Minister of
Canadian Heritage, Lib.): Mr. Speaker, the figures quoted by the
member opposite are incorrect.
We must not forget the remarks made by the member for
Rimouski-Témiscouata on ``Midi Quinze'' regarding cuts to be
made to the budget. She said: ``If we are going to cut, there are
major cuts to be made at the CBC''. These were the remarks she
made on March 16, 1995.
Mrs. Suzanne Tremblay (Rimouski-Témiscouata, BQ): Mr.
Speaker, the minister thinks she has made a great discovery. I
repeat: the CBC needed trimming at head office, and Mr. Beatty
closed it. He understood.
For the third time, this government is promising the CBC stable
funding. Today it is again making this promise after hitting the
CBC with the hardest cuts it has ever faced in its history.
How can the minister think for one second that the people will
believe her, when her government has already twice reneged on this
promise? Does this new promise signal elections, which will the
permit the cock to crow for the third time and the Liberals to deny?
Hon. Sheila Copps (Deputy Prime Minister and Minister of
Canadian Heritage, Lib.): Mr. Speaker, clearly we had to make
cuts in government. I would like to look for a moment at the cuts
made to Radio-Québec. According to Le Soleil of August 20, 1995,
half the employees at Radio-Québec were cut.
It is true cuts were made, but what we have said is that, as of next
year, we will guarantee the CBC five years of stable funding up to a
maximum of $900 million. We have made a firm commitment to
the CBC, which none of the other parties has made, unfortunately.
Mrs. Suzanne Tremblay (Rimouski-Témiscouata, BQ): Mr.
Speaker, this is quite extraordinary, because the previous Minister
of Canadian Heritage promised the same guarantee, and it
prompted the resignation of Mr. Manera, who felt the government
was not keeping its word.
As regards Radio-Québec, Quebec contributes $7.50 per capita
to its television, whereas Ontario contributes only $5.50. The
minister should compare apples with apples and not with carrots.
Even with four former CBC presidents saying that the
Corporation can no longer fulfill its mandate, the minister in her
cynicism is promising stable funding, but after additional cuts of
$200 million and 4,000 jobs. This is a far cry from Radio-Québec.
What are the government's real intentions in promising stable,
insufficient and long term funding to the CBC? Are they to shut
down the regions, to run the French network into the ground or
simply to shut down the now redundant English and French
television networks of the CBC, as her colleague for national
defence has suggested?
Hon. Sheila Copps (Deputy Prime Minister and Minister of
Canadian Heritage, Lib.): Mr. Speaker, two facts have to be
First, when we took over the government we were faced with a
very difficult financial situation. Cuts were required which were
absorbed in all departments of government and to a lesser extent in
the cultural industries.
In fact, the CBC cut which caused a lot of pain and a lot of jobs
represented 23 per cent of their budget as against 50 per cent of the
Department of Natural Resources and 30 per cent of the
Department of the Environment.
The second point that I hope the hon. member would reflect on is
that this is the first time in the history of the fiscal framework that
the CBC will be given a guarantee that it will receive a stable
amount of funding for the next five years. That will permit
planning a movement to an all Canadian network.
Contrast that commitment in the fiscal framework to the
statement by the Reform Party that it would abolish CBC
television, to the statement by the Conservative Party that it wants
to get out of CBC television, and to the statement of the member
for Rimouski-Témiscouata that there is too much fat in the CBC.
* * *
Mr. Michel Bellehumeur (Berthier-Montcalm, BQ):
Speaker, yesterday, the leader of the official opposition asked the
Prime Minister when, in its decision making or legislative process,
the government had taken into account the meaningless resolution
that was passed by this House last year. This was a quite simple
question that the Leader of the Opposition asked, but the Prime
Minister did not answer.
Let me ask him the same question today. If indeed this resolution
is as important as he claims it is, could the Prime Minister give us
one example, one clear case where the concept of distinct society
has been used to give Quebec more power or to give legislation an
interpretation favouring the interests of the people of Quebec?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, the whole program we set out in the throne speech in
February of last year clearly shows this government's desire to find
common ground in many areas so as to provide for the respect of
jurisdictions, as requested by the people in Quebec.
Read the speech from the throne; you will see what we have
accomplished since then and the hon. member will have all the
examples he needs.
Mr. Michel Bellehumeur (Berthier-Montcalm, BQ): No,
Mr. Speaker, I only know one case where the concept of distinct
society, as the Prime Minister understands it, has been applied and
that is harmonization of the GST.
The maritimes have been paid $1 billion to harmonize it, but the
federal government still will not compensate Quebec, which agreed
three years ago to harmonize its provincial sales tax with the
federal GST. For the Prime Minister, Quebec is a distinct society
when it does not make any difference.
Will the Prime Minister not recognize that breaking so many
promises has made him an embarrassing ally for Quebec federalists
and all those who once thought it possible to reform the Canadian
Hon. Stéphane Dion (President of the Queen's Privy Council
for Canada and Minister of Intergovernmental Affairs, Lib.):
Mr. Speaker, may I take this opportunity provided by the
opposition to get to the crux of the debate?
In Quebec, polls show that 80 per cent of the population regard
themselves as Canadians. Outside Quebec, more than 50 per cent of
the population are prepared to recognize Quebec as an essential
part of Canada. Our role is to help these populations come to terms,
in spite of the official opposition's divisive philosophy.
* * *
Mr. Preston Manning (Calgary Southwest, Ref.):
Speaker, in the last election the Prime Minister promised
Canadians jobs, jobs, jobs.
This is the Liberal record that is etched on the minds of
Canadians: 1.5 million people unemployed; two million to three
million underemployed; 700,000 moonlighting to make ends meet;
one out of four Canadians afraid of losing his or her job. The Prime
Minister can try to ignore it, to explain it, to inflate it and excuse it,
but that is the Liberal's dismal record on jobs.
With a record like that how does the Prime Minister expect
Canadians to believe him when he promises jobs, jobs, jobs in the
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, we said our priority was to create jobs and to improve the
economy of Canada and that is exactly what we have done.
As I said yesterday, the Canadian economy has created more
than 700,000 new jobs since we formed the government and I gave
examples. It is recognized by everybody that we have done better
and we have created more jobs in Canada with 30 million people
than Germany, France, Italy and Great Britain together. That is a
fact. Of course we are never satisfied and we have to create a lot
We had to get to the bottom of the problem. We knew we had a
big deficit, that the costs of interest were exceedingly high. We had
to put the finances of the nation in good standing so that people
could find jobs because we were able to compete.
That is why today in Canada we have the lowest interest rates we
have had in 35 years. That is why we see today that housing, which
had been in great difficulty for many years, is starting up again.
More people are buying houses and new houses are being built
That is why people have a higher level of confidence today than
in the last number of years. We have done what has to be done to
make sure the deficit is under control and that we are respecting the
goals that we stated to Canadians. We have created more jobs and
we have made sure that the deficit is under control. That is exactly
what we have done.
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, if the Prime Minister wants to get to the bottom of the jobs
problem he has to eventually get to the tax problem. High taxes kill
jobs and the government's tax record is even worse than its jobs
Since 1993 the federal government has increased taxes 35 times.
The average family take home pay has been reduced by $3,000 and
the federal tax collector is taking in $24 billion more per year than
in 1993. That is the dollar cost of the Liberal tax policies. The job
cost is even worse.
Does the Prime Minister accept responsibility for all the jobs
killed by Liberal high taxes?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, there have been absolutely no tax increases since we have
Some hon. members: Oh, oh.
Mr. Chrétien (Saint-Maurice): I notice they are complaining.
Yes, we have changed some taxes because we plugged some
loopholes that were benefiting the rich. Yes, of course we have
increased some taxes. Yes, we have increased the tax on the banks.
If it is the type of tax that he is complaining about I will plead
guilty. We have plugged loopholes and we have made sure that the
banks would pay a fair share of the profits they are making.
There was no tax increase on the income of individuals. We have
reduced from $3.30 to $2.85 per $100 the employee contribution to
the unemployment insurance fund. We have reduced by more than
$500 million the level of taxes that were imposed at the border for
imports to comply with international obligations. I could go on and
Some hon. members: More. More.
Mr. Chrétien (Saint-Maurice): Mr. Speaker, I want to keep the
leader in good shape so I will wait for his third question.
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, the government's tax increases only deal with tax
Does the Prime Minister consider the tax on life insurance
premiums that was imposed by the government closing a loophole?
Does he consider the increase in the excise tax on gasoline as
closing a loophole? Does the Prime Minister consider increasing
the tax on tobacco products a loophole? Does he consider the
reduction on RRSP contributions a loophole? Does he consider
increasing the Canada pension plan premiums three times a
The tax increases imposed by his government have resulted in
the collection of over $24 billion more per year by the government.
Does the Prime Minister consider all of those tax loopholes?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, the hon. leader of the third party does not recognize that
there is a factor in the economy that we call economic growth.
Since we formed the government we have had growth in Canada
every year, and of course the revenues are better than before.
Now he is complaining that after we reduced the tax on tobacco
and we reintroduced some of it because we had to plug a big
Members remember when a lot of contraband was coming into
Canada. We wanted to make sure that the contraband was ended.
We had to make some moves but the fundamental taxes have not
been increased. They have been decreased. That is why the
economy is in better shape.
The hon. member does not recognize the fact that there has been
growth, that the economy is in better shape, that now interest rates
are lower than they have ever been, that we have to pay billions
of dollars less on interest because we have provided the people
of Canada with a good, responsible government in Ottawa.
* * *
Mrs. Pierrette Venne (Saint-Hubert, BQ):
Mr. Speaker, my
question is for the Minister of Intergovernmental Affairs.
When asked for his opinion on the Government of Quebec's
request to amend the Constitution so as to replace denominational
school boards with linguistic school boards, the Minister of
Intergovernmental Affairs told Le Soleil on December 9, and I
quote: ``If there is a consensus among Quebecers, then there is no
At a time when the Government of Quebec is asking to be
exempted from the denominational guarantees contained in section
93 of the Constitution, how does the Minister of Intergovernmental
Affairs react to the demands just made by the President of Alliance
Quebec regarding linguistic guarantees?
Hon. Stéphane Dion (President of the Queen's Privy Council
for Canada and Minister of Intergovernmental Affairs, Lib.):
Mr. Speaker, two and a half years ago, when the Liberal Party of
Quebec was kicked out of office, Quebec's anglophone and
francophone communities trusted each other. Relations were good.
I want to say that in English. The legal framework regarding
language laws was acceptable for both communities. They were not
in love with it but they found that it was an acceptable compromise.
Since then, separatist ideology has created a division between
the two communities. The Government of Quebec thought it wise
to tell its anglophone minority that there was legislation that it was
not to use or it would be taken away. That was what was done to a
The compromises made regarding access to health care have
since been questioned, or at least that is what people are being
given to understand. That is the situation facing us. We are
beginning a difficult debate with respect to education, language,
religion and the Constitution. I call on everyone to approach this
calmly and with trust. Both communities want a good linguistic
system. They must get together and find a solution that is
acceptable to both communities.
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, are we
to understand from the minister's remarks, which are confusing to
say the least, that the consensus already reached in Quebec and
expressed by MNAs is not enough and that the minister is also
requiring that the demands of Alliance Quebec be taken into
consideration, thus ignoring the legitimacy of the National
Hon. Stéphane Dion (President of the Queen's Privy Council
for Canada and Minister of Intergovernmental Affairs, Lib.):
Mr. Speaker, I had to give the hon. member a short course on the
Constitution. I must say that the Government of Canada is not
giving a right of veto to Alliance Quebec or to any other group in
Quebec. That is not the issue.
The hon. member must understand that the concessions also
exist in order to protect minority rights, that not all democratic
decisions are taken with 50 per cent plus one, and if she believes
that Quebec's anglophone community is not part of Quebec, let her
* * *
Mr. Monte Solberg (Medicine Hat, Ref.):
Mr. Speaker, every
time the Prime Minister opens his mouth he really demonstrates
how out of touch he is with ordinary Canadians. His latest
comments on the tax issue indicate he is clearly in denial.
The latest example of the Prime Minister's disconnectedness
with the Canadian people was last weekend when he gave an
interview to the Toronto Star. He indicated that he was proud of his
record on unemployment: 1.5 million unemployed Canadians; 20
per cent unemployment in Newfoundland-he is proud of that; 17
per cent youth unemployment. He is kind of like the captain of
Exxon Valdez being proud of his driving record.
Why will the Prime Minister not admit that he has clearly lost
touch with regular Canadians who now suffer from his record of
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, I have always said that I would not be satisfied until the
people who want to work in Canada get jobs. That is the goal of this
government, to make sure there is a situation where the people will
have occasion to find jobs.
But we have to compare our situation with others. From
December 1988 to 1993 the previous government created 126,500
jobs. In the same period, for the same number of months, from
November 1993 to January 1997 this government-no, not us, the
economy, because we created the conditions for them to create the
jobs-created 715,000 new jobs.
If we compare ourselves with the previous government we feel
satisfied, but we will never be satisfied until the people in Canada
get the work they want. That is why in all the budgets we have
developed so far, and the one we will present to this House a week
from today, job creation is a priority.
We have worked very hard on that. We have had some success
but it will not be enough until everybody who really wants a job
gets a job.
Mr. Monte Solberg (Medicine Hat, Ref.): Mr. Speaker,
someone should tell the Prime Minister that unemployment is a
problem in Canada and that his words are cold comfort to all those
unemployed people out there. It is pretty clear that the little guy
from Shawinigan has become the bubble boy from 24 Sussex.
Back on planet earth we have had record taxes, record personal
indebtedness, record bankruptcies and 9 per cent plus
unemployment for 76 months in a row. Why should we trust the
Prime Minister to fix the jobs issue when he clearly does not
believe we even have problem?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, we say all the time that we have a problem. I see the hon.
member downgrading the country. What we are telling the
Canadian people is that we have problems and we are working on
When we travel, the financial press from around the world
recognize that this government has done a very good job. All the
experts outside the government are predicting that in 1997 we will
see more than 3 per cent growth in Canada. It is the same thing for
next year. They are predicting that there will more than 300,000
new jobs created per year in the next two years for Canada, and
Canada is the country in the best financial position of all G-7
countries. I hope the hon. member will look at these facts once in
* * *
Mr. Yvan Bernier (Gaspé, BQ):
Mr. Speaker, my question is
for the Minister of Fisheries and Oceans.
On the eve of the seal hunting season in eastern Quebec and
Canada, many questions are being raised regarding the cruel seal
hunting practices shown yesterday on the Téléjournal. The video,
which will be shown around the world, could undermine the work
and credibility of the Quebec and Canadian fishing industry as a
Last year, when the seal hunting season opened, did the minister
have the necessary means to prevent such unacceptable behaviour?
Hon. Fred Mifflin (Minister of Fisheries and Oceans, Lib.):
Mr. Speaker, I thank the hon. member for his question because it is
a very important one. He makes reference to a video that was
shown at a press conference yesterday. It is really the annual effort
on the part of the IFAW to discredit the seal hunt.
I have to tell this House that my department is reviewing that
video to see what charges, if any, have to be laid against those
people in the video.
The hon. member knows Atlantic Canada and the Gaspé
fishermen involved in the seal fishery. The majority of the seal hunt
is conducted by responsible people in a responsible manner.
I find it passing strange that in its annual effort to discredit the
seal hunt, the IFAW, with metronomic regularity, tries to do things
to put the seal hunt down.
The hon. member and this House know that despite IFAW's
effort, the seal hunt is increasing and this year will have a total
allowable catch of 275 animals. This will help the people in
Atlantic Canada and it will help the recovery of the cod stocks.
Mr. Yvan Bernier (Gaspé, BQ): Mr. Speaker, to make sure
there is no misunderstanding, since the credibility of the whole
industry is at stake, will the minister pledge to order an
investigation and to bring those responsible for such cruel and
illegal acts before the courts? Fishermen and seal hunters from the
Gaspé region also told me this morning that the guilty parties must
Hon. Fred Mifflin (Minister of Fisheries and Oceans, Lib.):
Mr. Speaker, I think I indicated that and in my enthusiasm to
support the people who are involved in the seal fishery I said 275,
but of course I meant 275,000 seal carcasses.
With respect to an inquiry, I think I have indicated that my
department is reviewing the video and will do as we did last year.
We will see what is involved and if charges are to be laid, we will
I have to tell this House that the seal fishery this year, because
we are increasing the total allowable catch, and I know the hon.
member knows this, will be monitored like it has never been
* * *
Mr. Bob Mills (Red Deer, Ref.):
Mr. Speaker, not only do we
have allegations that the Prime Minister's friend Bob Fowler
shredded documents about the murder investigation in Somalia but
now we hear that when Kim Campbell tried to investigate the
murder, Fowler threatened her by saying that her actions could be
regarded at disloyalty to her department and could hurt her
All this Prime Minister continues to do is reward Mr. Fowler
with one of the top diplomatic postings available. Why will the
Prime Minister not hold Mr. Fowler accountable?
Mr. John Richardson (Parliamentary Secretary to Minister
of National Defence and Minister of Veterans Affairs, Lib.): Mr.
Speaker, as has been said many times in this House, the calling of
witnesses is still open until March 31 and any witnesses the
commission wishes to call can be called. It can also subpoena
documents. It is open.
This government is not going to get involved or interfere with
the commission's work.
Mr. Bob Mills (Red Deer, Ref.): Mr. Speaker, I think the
Canadian people are getting sick and tired of this sort of cover-up.
We have a former prime minister of Canada accusing a former
deputy minister of defence of covering up a murder. If this is not a
shocking enough revelation to get the Prime Minister involved,
what will it take, Mr. Prime Minister?
The Speaker: Remember, my colleagues, address all your
questions to the Chair.
Mr. John Richardson (Parliamentary Secretary to Minister
of National Defence and Minister of Veterans Affairs, Lib.): Mr.
Speaker, I would like to remind the hon. member that it was the
former defence minister who hired Mr. Fowler and kept him in that
That being said, we are not going to interfere, even with all the
provocations and all the name calling that is being brought forward
by this party, in the work of that commission.
* * *
Mr. Osvaldo Nunez (Bourassa, BQ):
Mr. Speaker, my question
is for the Minister of Citizenship and Immigration.
Since the Liberal Government was elected, the refugee claim
backlog at the Immigration and Refugee Board has risen to over
30,000, a 75 per cent increase, and more than half of these are in
How can the minister explain these unacceptable delays, and
what steps will she take to solve this problem as promptly as
Hon. Lucienne Robillard (Minister of Citizenship and
Immigration, Lib.): Mr. Speaker, it is worthwhile pointing out
right at the start that the Immigration and Refugee Board is a
quasijudiciary tribunal that is independent of the department and
that the chairperson of the board has just taken a number of steps to
step up productivity within the board.
That having been said, a bill is currently under study here in the
House with a view to helping them work even more efficiently: Bill
C-49. If the opposition gives us its support in moving this forward,
it will be enabling us to help the board enhance its efficiency, in
that only one board member will be required for cases to be heard
With all these measures, I can assure you that everything is being
done to try to improve turnaround time in the Immigration and
Mr. Osvaldo Nunez (Bourassa, BQ): Mr. Speaker, the minister
ought to put an end immediately to the patronage system currently
used to appoint IRB members.
Does the minister acknowledge that delays in processing files
are inhumane to claimants and their family members, and a heavy
burden to the taxpayers who have to pay for its inaction and
Hon. Lucienne Robillard (Minister of Citizenship and
Immigration, Lib.): Mr. Speaker, I must admit to you that I am
having trouble following the logic of the hon. member for
Bourassa, since we now have a selection committee independent of
the minister to evaluate the suitability of prospective board
appointees. If the hon. member for Bourassa has in mind any cases
of people who are not competent for their position, I trust that he
will have the courage to say so here in the House of Commons,
officially, before everyone.
That having been said, it is clear that we are working to ensure
that all those applying for refugee status get a reply within a
reasonable length of time. As you are well aware, however, we
have a quasijudiciary process in Canada; we plan to maintain it and
we intend to follow the rules.
* * *
Mr. Ronald J. Duhamel (St. Boniface, Lib.):
Mr. Speaker, my
question is directed to the Deputy Prime Minister.
What will the Minister of Canadian Heritage do to counteract
budget cuts such as those made at Radio-Canada and more
specifically those affecting the news program Ce soir. Could she
expand on that?
Hon. Sheila Copps (Deputy Prime Minister and Minister of
Canadian Heritage, Lib.): Mr. Speaker, as you know,
programming at Radio-Canada is the exclusive responsibility of
That being said, we are delighted to hear that following
representations by the FCFAC and president Michaud, and also
by the hon. member for St. Boniface and a number of other
members, Radio-Canada has decided to reconsider its decision to
terminate programming of Ce soir. In fact, programming in
Saskatchewan and Alberta would be maintained, which would
have a direct impact on francophones in Alberta and
* * *
Mr. Preston Manning (Calgary Southwest, Ref.):
Speaker, we do not feel that the government is treating the question
from the member for Red Deer with the gravity it deserves.
There is a former prime minister of Canada accusing a former
deputy minister of defence, the de facto commander of the
Canadian Armed Forces at the time, with participation in the
cover-up of a murder in Somalia.
The head of a commission that is supposed to be getting to the
bottom of this says that he cannot because of interference by the
My question is for the Prime Minister. Will he simply sit there
and ignore this matter or will he take some action to get to the
bottom of this accusation?
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, the Parliamentary Secretary to the Minister of National
Defence said that we have appointed a commission and that it is the
master of the situation. It can call any witnesses it wants. If it wants
to call the former deputy minister of the time, if it wants to call the
minister of the time, it can. It is up to the commission.
It is very well known that when we establish a royal commission
we do not tell it who to interview and who not to interview. That
would be a breach of the trust that we have invested in the
This news is known to the commission. It is up to the three
commissioners to decide, until the end of next month, who the
witnesses will be. They have had the occasion to do that in the last
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, the head of the commission to which the Prime Minister
referred said: ``It is not true that the inquiry has plenty of time to
call all the witnesses such as Mr. Fowler and Mr. Anderson.
Evidence on important matters presented without the possibility of
real or substantial testing risks producing a whitewash of the
alleged cover-up rather than an investigation of it''.
Just to be clear, is the Prime Minister saying that he chooses to
ignore the charge by a former prime minister of Canada that the
former deputy minister of defence was involved in the cover-up of
Right Hon. Jean Chrétien (Prime Minister, Lib.): Mr.
Speaker, that is exactly why we established the commission, to
look into what happened in Somalia at the time of the previous
We established a commission with three commissioners. It has
been in operation for more than two years.
It was the leader of the third party who requested that we finish
the inquiry in time for the next election. Now he does not want us to
fulfil that request.
The Minister of National Defence said very clearly that the task
of the government is to make sure the armed forces can resume
their work and operate as they should.
If the commission wants to interview anybody, it has the right to
do that. We have given the commission three extensions so far. The
Minister of National Defence told it to prepare a report and said
that it had three more months to interview people.
The commission has known since early January that it will have
to finish its work by the end of March. It still has the time to see
Madam Campbell, the former deputy minister or anybody else it
wants to see.
* * *
Mr. Louis Plamondon (Richelieu, BQ):
Mr. Speaker, my
question is directed to the Minister of Canadian Heritage.
According to the media, the fact that the Department of
Canadian Heritage and the Department of Industry do not share the
same views on copyright has further delayed progress on this bill
which would finally recognize neighbouring rights and a
compensation system for private copying for copyright owners.
Is the Minister of Canadian Heritage still being held hostage by
her colleague in Industry or will she, by the end of this week, be in
a position to bring back to the House for report stage and third
reading a bill that is crucial to creators in Quebec and Canada, so it
can be passed before the next federal election? Briefly, can the
Liberal ministers stop fighting so we can get the job done?
Hon. Sheila Copps (Deputy Prime Minister and Minister of
Canadian Heritage, Lib.): Mr. Speaker, cabinet is unanimous on
the importance of proceeding with a bill as vital as the copyright
bill. About 70 amendments have been proposed in committee, and
we hope to be able to table all new amendments in the House very
Mr. Louis Plamondon (Richelieu, BQ): Mr. Speaker, my
second question is directly related to the minister's answer. In
committee proceedings, the Bloc Quebec proposed a number of
amendments with which creators were very satisfied.
Is the minister prepared to protect the gains made in committee
against pressure from users who like to see those gains diminished?
Hon. Sheila Copps (Deputy Prime Minister and Minister of
Canadian Heritage, Lib.): Mr. Speaker, if I understood correctly,
the hon. member wants me to say in the House that I do not want to
see the amendments proposed by his colleague. If that is the case,
the hon. member's logic escapes me.
I think this is a good example of why we should take the time to
ensure that all the amendments are satisfactory, because the bill is
very important to creators. We want to proceed, and we also want
the hon. member to speak to his former colleagues in the Senate to
ensure that once the bill has been adopted by the House of
Commons, it will not be held up by the Conservatives in the Senate.
* * *
Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.):
Mr. Speaker, the grain shipping delays in western Canada have
created a disastrous situation that will cost our economy at least
$65 million, and the amount is growing daily.
West coast shipments are at their lowest level in a decade and at
least 38 ships are in port collecting demurrage as they await their
cargo. There is no accountability in the transportation system and
farmers are being held ransom.
My question is to the minister of agriculture. What specifically
does the minister plan to do besides just talk about the weather?
Hon. Ralph E. Goodale (Minister of Agriculture and
Agri-Food, Lib.): Mr. Speaker, this situation is very serious. It is a
situation that the government takes seriously, as I am sure do
farmers and all the players in the grains industry.
I would advise the hon. gentleman that histrionics and cute lines
do not solve the problem. The government is interested in
I have had the opportunity to discuss the situation with some of
the players in the industry, both on the grain shipping side and on
the railway side. In the course of the next few days those
conversations will continue.
I want to impress upon all the players that this situation is
critically important. It needs to be given priority. I am happy to see
that the railways have already taken some steps to bring more
locomotive power into the system. We all have to put our shoulders
to the wheel to find solutions rather than play word games.
Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.):
Mr. Speaker, the minister of agriculture is known in the industry as
a master of word games and he is considered to be a third rate
lawyer rather than a good minister who is interested-
Some hon. members: Oh, oh.
The Speaker: Without further preamble, the question now,
Mr. Hermanson: Mr. Speaker, I will appeal to the Prime
Minister. Will the Prime Minister hold his minister of agriculture
accountable for forcing farmers to pay for his mistakes? He had a
chance to pick the transportation system and he did not do it.
Hon. Ralph E. Goodale (Minister of Agriculture and
Agri-Food, Lib.): Mr. Speaker, one of the things that farmers
across western Canada notice is that this hon. gentleman and his
party seem unable to deal with any issue in a serious manner
without personal invective. Solutions are not found through insults.
That seems to be a fact that escapes the hon. gentleman. But
perhaps it is understandable that it should escape him since now in
the reshuffling of the Reform Party he did not make the A team and
he is seated so far back I confuse him with the NDP.
* * *
Mr. Gar Knutson (Elgin-Norfolk, Lib.):
Mr. Speaker, my
question is for the Minister of Indian Affairs and Northern
Development and relates to transportation to Christian Island in
Georgian Bay and Georgina Island in Lake Simcoe.
In 1995 the federal government and the Government of Ontario
agreed to joint funding to replace the ferry servicing these
communities. The new government in Ontario is refusing to honour
What is the federal government doing to ensure these
communities are serviced by a safe and efficient ferry service
which will promote economic development on the islands?
Hon. Ron Irwin (Minister of Indian Affairs and Northern
Development, Lib.): Mr. Speaker, I want to thank the hon. member
and the several members who have continually brought this to the
attention of the government.
I will take just Christian Island, but Georgina Island is in the
same situation. There are 400 aboriginal people and 2,200 non-ab-
original people living on that island. The ferry service is not safe,
that is in Lake Simcoe, and people die. There are only elementary
schools and the children going to high school have to come off the
island in the fall and away from their homes.
We agreed with the former provincial government to pay
one-quarter of the ferry cost of around $937,000, pay $1 million to
the dock facilities and an annual maintenance of $665,000. The
present Harris government without any notice pulled that deal
What we can do is stay at the table, stay committed, which we
are with our money. The Tories in that area, and there are several,
should talk to Mr. Harris and tell him to keep the commitment of
the provincial government.
* * *
Mr. Jag Bhaduria (Markham-Whitchurch-Stouffville,
Mr. Speaker, my question is for the Prime Minister.
It has been more than three years since he promised to eliminate
the most hated GST. Since he has not delivered on this promise to
Canadians, will the do nothing Prime Minister formally apologize
today in this House for his-
Some hon. members: Oh, oh.
The Speaker: I am sure the Prime Minister heard the question.
If he chooses to answer it, he may.
Colleagues, this will bring to a close our question period.
* * *
I draw the attention of hon. members to the
presence in the gallery of a parliamentary delegation from Kenya
led by the Hon. Bonaya Godana, Deputy Speaker and Chairman of
the Sub-committee of the Standing Orders of the National
Assembly, and five parliamentarians.
Some hon. members: Hear, hear.
The Speaker: On a point of order, the hon. parliamentary
Mr. Zed: Mr. Speaker, there has been some consultation among
the parties regarding a committee report that we would want to be
presented at this time. I wonder if there is unanimous consent to
revert to Routine Proceedings under presenting reports from
The Speaker: Does the hon. parliamentary secretary have the
permission of the House?
Some hon. members: Agreed.
Some hon. members: No.
The Speaker: Orders of the day.
The House resumed consideration of the motion that Bill C-70,
an act to amend the Excise Tax Act, the Federal-Provincial Fiscal
Arrangements Act, the Income Tax Act, the Debt Servicing and
Reduction Account Act and related Acts, be read the third time and
The Speaker: I think the hon. member for Charlesbourg had 14
Mr. Jean-Marc Jacob (Charlesbourg, BQ): Mr. Speaker, I
mentioned earlier that, with Bill C-70, the Liberal government was
trying to make us forget the promises made by the Prime Minister
and the Deputy Prime Minister.
I also drew a parallel between these and promises made by
Liberal Party guru Pierre Elliott Trudeau, who, in the late 1970s,
promised to abolish the gasoline tax. This most unfair and
inequitable tax was hampering economic growth. But when the
Liberal Party was elected, Trudeau, far from abolishing the
gasoline tax, raised it.
It is clear that this Prime Minister and his government have
taken a similar course of action with the GST. They had promised
to abolish it and, with Bill C-70, they are trying to disguise it
through the so-called harmonization process, thereby enabling the
Liberal government to renege on its promises. This also creates
some unfairness or inequity.
The agreement signed with the provinces provided for $961
million in compensation to be paid to the three provinces
concerned, namely New Brunswick, Newfoundland and Nova
Scotia. Since Quebec had harmonized its sales tax with the GST a
few years earlier, Quebec Deputy Premier, Bernard Landry, asked
for some compensation. He also wanted to know the specific
formula used to work out this $961 million compensation package
for the maritimes and what would be an equitable amount for
Some mentioned $1.2 billion, while others pegged the amount at
$1.9 billion or $2 billion. At any rate, it is clear that, in this case as
in many others, when Quebec asks to be treated as fairly and
equitably as the other provinces, its demands are inevitably denied.
Between 1972 and 1974, Quebec justice minister Choquette, a
Liberal minister, asked his Liberal federal counterpart, who is now
the hon. member for Notre-Dame-de-Grâce, for $1.3 billion or $1.4
billion to cover costs incurred for RCMP services. Costs were
incurred in all the provinces for the services of the RCMP and these
costs were paid by all the provinces together, even though Ontario
and Quebec made very little use of that police force.
As we all know, the RCMP has, for years, been acting as the
local police force in some municipalities. All Canadians pay for
this service, but Quebec and Ontario have their own provincial
police forces. A claim in excess of $1 billion was made. Again,
Quebec's request was rejected, even though it had been made by a
Liberal government to another Liberal government. It is clear to me
that Quebec does not receive equal treatment. This is again very
clear and obvious with the harmonization of the GST.
Why, when the maritimes decide to harmonize their tax with the
GST, do they get compensation or a subsidy? This system, in a
federation that is supposed to be fair, generates unfair competition.
Recently, during Team Canada's trip to Asia, the premier of New
Brunswick used some of the tax benefits related to the $400 million
in compensation his province will receive to attract Quebec and
Ontario businesses to his province.
This, to me, is unfair competition. When federal money is used
by a province to attract businesses from another province that does
not enjoy the same tax benefits, it can only be called federal
unfairness. And Bill C-70 is a good example of that.
I also want to discuss certain technicalities. It was mentioned
that an harmonizing process had taken place and that there would
be a four-month adjustment period, so that the tax could be
integrated into the price of the goods or services being sold. You
will remember that, around October or November 1994, when they
were still saying that the GST would be abolished, that it was
unacceptable to try to hide the GST in the cost of goods or services,
that Canadians had to know how much tax they were paying, so
they could see what the government did with their taxes.
The Liberals are now singing a different tune; they want to hide
the GST in the price of goods, which is just the opposite of what
they used to say. In any event, from what we can see, this
government often does the opposite of what it says, and here we
have the proof once again. I like to think, I am even certain, that
when another election is held the public will remember false
promises, hollow commitments that are not being respected.
All we have to do is look at the distinct society issue, the
wonderful declarations of love at Verdun just before the
referendum, this promise to scrap the GST, how the government is
being run, and so on.
Or even look at the Somalia inquiry, and their assurances that
they would get to the bottom of things. This even came up in oral
question period. It is certain that we will never get to the bottom of
things in the little time remaining, because the Department of
National Defence and the armed forces have boycotted this inquiry
for almost a year so as not to provide it with information. They are
boycotting the inquiry. They are getting ready for an election. They
hope to bury the promise to scrap the GST. They are winding up the
Somalia inquiry. They tried to cover up the tainted blood scandal.
They are spending millions to solve the Pearson Airport problems.
They even settled out of court with the former Prime Minister in
the Airbus affair.
They are busily getting ready to bury all the issues they have not
really delivered on, or that involve promises they want Canadians
and Quebecers to think they have kept when they have not.
I do not think these misrepresentations or supposed solutions are
going to wash with the public.
I would like to add in closing that companies such as Sears
Canada, Canadian Tire, Woolworth and others in the maritimes
which also do business across Canada point out that, if Bill C-70 is
passed as it is, despite the Liberals' becoming aware at a certain
point that the bill had been prepared in such a rush that 113
amendments had to be made-and even then there was not enough
consultation, it was done too quickly-they will have to prepare a
product pricing system for provinces where there is harmonization
and another for those where there is not.
When we think about the fact that the Canadian federation was
supposed to have a certain efficiency across its entire territory, how
can it be that, within different areas, standards are established
which do not apply to all locations? That is somewhat what we are
experiencing with this bill. When these companies attempt to have
a price with tax and a price without tax for the period of transfer to
the provinces where there will be no harmonization, they will be
forced to make new catalogues or to set up some new system.
We should not forget, when this measure comes into force, that
the government mentioned a transition period of four months with
respect to services. When a lawyer, a notary or a labourer
advertises an hourly rate, like a notary who works for $100 an hour,
he may include the HST, the harmonized sales tax. In that case he
would indicate $115, while his competitor, since he has three or
four months to adjust to the situation, can simply advertise a fee of
$100 an hour.
There are other examples. A plumber or an electrician who
works for $25 or $30 per hour has the option of including or not
including the tax, for a certain period of time. Imagine the
administrative headaches for all these small businesses, and
meanwhile, the consumer who tries to make sense of it all.
I am sorry, but I think this bill was drafted far too quickly,
without sufficient consultation. Large companies like Sears say
that it will cost them several million dollars more to make
adjustments in the catalogues that are distributed across Canada.
Parliament should at least think twice before adopting this kind of
legislation and make sure that all intervenors agree.
The Bloc Quebecois has repeatedly pointed out that not enough
time was allowed for debate. Just 24 hours before we started
second reading, 13 amendments were brought in. Now we have 113
amendments. We had only three days of public hearings. The
government decided that was enough. Enough said about the GST.
It is time the public was aware of all the so-called promises that
were not kept. And when they are not prepared to admit they made
a mistake, they create a diversion and try a different strategy.
In concluding, I want to say that the public will judge this
government on the commitments it was not prepared to keep and its
lack of respect for all intervenors who came to discuss this bill but
did not have sufficient time to express their views.
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, the
member who has just spoken on behalf of the Bloc has raised the
issue which the Bloc has raised since the outset of the discussion on
the harmonized sales tax, which is the demand for compensation.
I want to ask the member if he is aware of the input tax credit
situation with regard to the provincial component. The fact is that
Quebec effectively harmonized its federal and provincial taxes
some time ago. By moving toward a common base it has
effectively broadened the tax base for the provincial side and is
now taxing more at a provincial level which means that it has the
same impact as tax points or the transfer of tax points to the ability
On that basis alone, it would appear to me that the taxing
authority within the province of Quebec because of the
harmonization move has generated it billions and billions of dollars
of additional revenues which it otherwise would not have received.
Would the member not agree that the harmonization in Quebec,
which was done some time ago, has generated billions and billions
of dollars to the provincial coffers which were not available to
Mr. Walker: Mr. Speaker, on a point of order.
The Speaker: Before giving the floor to the hon. member for his
point of order, I want to ask whether he heard the question?
Mr. Jacob: Yes.
The Speaker: The hon. member for Winnipeg North Centre.
Mr. Walker: Mr. Speaker, the parliamentary secretary to the
House leader started off after question period and there was
confusion about reverting to Routine Proceedings. We just got that
confusion cleared up. There is a committee report to be presented
which now has the unanimous consent from everybody to be
presented. There is a committee meeting starting in a few minutes.
I wonder if I could have the indulgence of the House to revert to
Routine Proceedings with the consent of the House and present the
committee report now.
The Speaker: With the consent of the House we can do
anything. You understand what the hon. member is requesting.
Does the hon. member have agreement to put the request?
Some hon. members: Agreed.
An hon. member: No.
The Speaker: The answer is no.
Mr. Jacob: Mr. Speaker, in response to the hon. member's
question, I must say it is, once again, going overboard a bit to say
that harmonization has generated billions and billions of dollars for
Yes, I am aware that some input taxes are reimbursed, but as he
said himself, Quebec had to raise corporate taxes to compensate.
Businesses have been taxed more heavily than in the other
provinces, contrary to the situation in the maritimes, thanks to the
compensation and subsidies they are given.
Furthermore, I think it is completely wrong to say, as the hon.
member has, that harmonization has generated billions and billions
of dollars for Quebec's coffers. What has happened is that all of
this harmonization has been done at the expense of small and
medium sized businesses, with no financial assistance, as well as at
the expense of the Government of Quebec.
I would like someone to give me an explanation. The GST was,
and still is, 7 per cent, and that portion goes to the federal
government, as in the maritimes. When there is talk of having
harmonized the GST, that is not totally true. It is still 7 per cent,
except that the provincial sales tax has been harmonized with the
GST. If we look at Newfoundland as an example, its sales tax was
13 per cent, which was brought down to 8 per cent in order to make
a harmonized tax of 15 per cent. The shortfall in provincial tax will
be made up with equalization payments.
Is this what they call harmonization? The federal government
will make up the shortfall in provincial taxes with equalization
payments. That did not happen in Quebec with respect to input
taxes, because there were exceptions in that area.
I believe it is totally erroneous to state that harmonization has
generated billions and billions of dollars for Quebec's coffers. To
be fair, since $961 million was paid to the maritimes, the same
compensation would have to be offered to Quebec. Moreover, last
August, when the provincial premiers met in Jasper, they were all
in agreement that, if there were harmonization, compensation
would have to be equitable for all provinces, but that is not what is
Mr. Paul Szabo (Mississauga South, Lib.): Mr. Speaker, the
hon. member who just spoke has laid out a couple of points that I
want to address and put on the record. I will deal with three
The first has to do with the concept of the input tax credit as it
relates to the provincial taxes. Under the GST system there is an
input tax credit available so that businesses which incur GST in the
conduct of their business get to reclaim it when they file their GST
returns. Therefore in the system of a consumption tax, it is only the
end purchaser, the end user of the service who ultimately pays the
Under the provincial tax scheme, for instance in Ontario, there is
no equivalent input tax credit. There is provincial tax levied on tax
paid provincial items. In Ontario approximately 30 per cent of the
provincial taxes collected by the province are layered taxes. They
are taxes on taxes. As a consequence, when we shift to a
harmonized basis where both taxes are applied against the same
base, the provincial tax becomes eligible for an input tax credit.
That means the provinces involved will lose about 30 per cent of
the revenues they received under the former system.
This is a very important point that hon. members should be
aware of when discussing a consumption tax. Provinces are going
to lose the compounding or layering of provincial taxes. It amounts
to some 30 per cent in Ontario. That means if the provincial
governments are losing revenue, somebody is picking it up. Who is
picking it up? The businesses.
Businesses no longer have to absorb all the additional provincial
sales tax costs. Now they will be eligible for input tax credits not
only on the GST federal component of the harmonized sales tax but
also on the provincial. There will be a larger input tax credit for
The relevance here is with regard to the Quebec situation.
Quebec basically scooped the nation in terms of harmonization.
Quebec went forward with a fully parallel system provincially and
federally for its consumption taxes. It broadened the base and
started to apply and basically mirror the same elements.
This means that businesses have a lower cost of inputs because
of the input tax credits. It means they have been able to pass on
lower pricing to the ultimate consumers. Because exports are zero
rated that means this lower cost has translated into lower export
selling prices. It has made Quebec exports much more attractive
than the competition from other provinces.
It is one of the realities of a harmonized consumption tax system
that it is going to make Canadian exports much more competitive
than the competition abroad. Right now Quebec has a serious
advantage. The province of Ontario is going to have to deal very
quickly with the fact that Quebec is scooping up the export
marketplace because of the competitive advantage it has by getting
an input tax credit and effectively having harmonized its taxes
already. That is the first point I wanted to raise.
The second point has to do with a related matter, the
underground economy. Members will know that the government
has made substantial progress in concert with the provinces by
entering into information sharing agreements and by working
closely with a number of other agencies to ensure that every
attention is being given to the underground economy.
When the GST was introduced, there was a strong feeling that
the introduction of a consumption tax forced a lot of businesses
underground. That was because the 7 per cent tax which was now
visible to people was an inducement to offer an under the table
economic transaction without tax on it. It basically gave a 7 cents
on the dollar advantage over purchasing in the retail outlet for
instance. Under a harmonized basis, federal and provincial, the
amount of the input tax credit will no longer be 7 cents in Ontario
because the combined rate is 15 per cent. It is going to be 15 cents.
Upon analysis there is a strong view that the underground
economy in fact will shrink because there are many many
businesses out there that have not claimed economic activity to
claim back the 7 cents on the dollar because there is not enough
inducement for them to go after it. To add the additional 8 per cent
and say that 15 cents on the dollar of every sale that is made is
recoverable, at least with regard to the costs on the input credits,
there will be as a result of this harmonization a significant impact
on the underground economy. And Canadians know that if we all
paid our fair share, we all would pay less.
Finally I want to comment on the whole element of tax inclusive
pricing. I know it is very easy with a twist of words to make issues
sound or look like something they are not. I can recall when the
discussions first took place about tax inclusive pricing, the indict-
ment was that the government was trying to hide the tax so that we
would never know when it raised the amount of taxes. Let me
reflect on what happened when the GST replaced the former
manufacturers sales tax and introduced the federal sales tax.
What happened there was a real ironic situation in my view.
Under the former manufacturers' sales tax in the last year of its
operation it generated about $18 billion worth of revenue. In the
first year that the GST came in, it generated only $16 billion worth
of revenue which was a $2 billion decrease in revenue to the
Government of Canada.
It made me wonder that if taxpayers got a $2 billion tax break,
why is it that people were so upset with this consumption tax? We
know all the arguments about why the FST was unfair and
penalized corporations that in particular were involved in exports.
However, one of the most interesting things was that there was
an anger generated by Canadians that we have not seen on almost
any other issue to do with the taxation or operation of government,
a real anger to do with a commodity taxation.
Members have to try to understand why people were so angry
when the Mulroney government brought in this tax. It started off
suggesting that it would be 9 per cent but it ultimately reduced it to
7 per cent.
The one reason I can think of why people were so angry about
the GST was that when they went to a store to make a purchase,
when they looked at the shelf and saw the price there, their
traditional reaction was that there was where they made their
purchase decision. The anger came at the shock they got at the cash
register when the price they saw on the shelf was not the price that
they had to pay. It was not the amount of money they had to take
out of their wallet.
The purchase decision was made on one price and the amount of
payment was based on a totally different scenario. Through all the
hearings that the finance committee held, this issue came up time
and time again trying to eliminate that in your face agitation and
the aggravation of seeing one price on the shelf and more added on
at the cash register.
To deal with that, the consensus of the broad majority of those
who appeared before the committee over those 35 weeks was to use
tax inclusive pricing. That means the price people see on the shelf
is the price they pay at the cash register. It addresses the
fundamental aggravation and concern that consumers had
expressed when the GST first came in.
Many who want to be provocative in this place will say ``you are
hiding the tax and burying the tax''. The full recommendation and
implementation of the harmonized tax specifies that there will be
the full disclosure of the taxes included on the invoice or the sales
slip that the consumer receives. They will know precisely how
much is included in that purchase.
Still the fact remains that if it says $10 on the shelf, it will be $10
at the cash register. The composition of that may be something
different, but it is still $10 out of the person's pocket.
That is certainly a very important aspect that Canadians should
understand. That is not burying anything. Tax inclusive pricing is
really an effort on behalf of parliamentarians to say that this is a
way of getting the tax out of people's faces.
Nobody wants to pay more taxes. We all want to pay less. We
have to work at ways of improving our funds so that there is a basis
for tax reduction, which is the ultimate goal of any government. It
is to have an efficient government operating and have the amount
of taxes that we pay lowered as much as possible while still
providing the services that Canadians would like to have.
I am happy to speak in support of Bill C-70 at third reading. It
has been with us almost every day, as it were, since the House
commenced. Although there will be continued debate and
continued questioning of the issues, the most important thing right
now that members should consider is the experience of Quebec.
As a result of harmonizing its taxes, Quebec exports have
resulted in significant improvements in its export sales relative to
the rest of Canada simply because it has had the provincial input
tax credit component as financial leverage over other competitive
areas, including the other provinces of Canada.
Quebec knew what the right thing to do was. It made this system
more efficient. It made it simpler and it made sure that Quebec had
every advantage of a streamlined tax system, which is precisely the
objectives of the harmonized tax.
I simply would like to close by saying that I believe
notwithstanding that we will continue to see the debate, that the
proof will be in the streamlining of a system, one system, one set of
books, one set of records, one base and an efficiency which
Canadians in fact want to see within our government. I think it has
been proven time and time again by every provincial government
that streamlining the systems within our government is the best
policy and in the best interest of all Canadians.
Mrs. Elsie Wayne (Saint John, PC): Mr. Speaker, I have a
couple of questions for the hon. member.
Just today I received a number of phone calls in my office here in
Ottawa from people in Saint John, New Brunswick about the HST.
The one that I received prior to coming to question period was that
this gentleman, Mr. Phillips, had received a bill already for his HST
on his safety deposit box which he never had to pay before.
I would like to know from the hon. member how the
government can justify charging this when the bill has not been
passed in the House, when the premier of the province of New
Brunswick has not agreed. They have not reached an agreement
and yet even with having not reached an agreement with our
premier they have already given to him X number of millions of
dollars. That was done a long time ago and the auditor general
said that this is not proper, this is not right and this should not
have been done. Yet we are still doing it.
I would like to know from the hon. member if he is aware of the
anger that exists. The hon. member referred to anger about the
GST. Is he aware of the anger that exists? Is the hon. member aware
that people are very upset in Nova Scotia, New Brunswick and
I could buy a fur coat cheaper today because of this bill that will
be passed probably tonight but a mother who is having a difficult
time and a mum and a dad who have to buy the little snowsuit for
the child will pay more. This is what is happening and people are
I do not know if the hon. member is aware that insurance
companies which sell segregated funds, like mutual funds, and if
they are headquartered in those three provinces, the fund
management service will be subject to HST for the very first time
in those three provinces. The cost in the first year is estimated to be
$350,000. In subsequent years the cost will be $100,000 more. We
are hearing from everyone that anyone who is now looking for
mutual funds will go outside the three provinces.
I do not know if the hon. member is aware that my board of
trade, my business people in Saint John, who are real responsible
people, have gone to the province. They have gone all over the
province talking to the other boards of trade members because they
are so concerned.
Is this member aware of what was done when the last
government was in power, when the House of Commons finance
committee looked at the proposed GST in November 1989? The
Liberals said in this House: ``Since it would be easier for the
government to raise the GST rate in the future, if Canadians were
not aware of how much tax they were paying at the moment, it is
imperative that the GST be visible. The Liberal members cannot
support a hidden tax''. Then they stated: ``Canadian taxpayers have
a right to know what taxes they are paying. Any reform of the tax
system should be designed to help Canadians understand how
much and to which level of government they are paying their
They stated: ``The sign of the times is that so long as we have a
tax that is hidden from the consumer we are going to have problems
that are a lot more serious than we understand''.
This is all in Hansard. Can the hon. member tell us how he can
justify standing up and supporting it when his colleagues who were
then in opposition opposed a hidden tax at all times?
Mr. Szabo: Mr. Speaker, there is a number of questions there
which I thank the member for. I will answer them in reverse.
The first question is with regard to the hidden tax. The member
may have missed the last half of my speech in which I explained
tax inclusive pricing. I said that the invoice or the cash register slip
would show the breakdown that she has asked for. That question
has been dealt with. The information is there.
I personally oppose hidden taxation as the FST or the
manufacturers' sales tax was. Now we have a perfectly visible tax.
The member would agree that consumers make their purchase
decisions based on the price they see on the shelf. It is important
that consumers do not get that shock at the cash register. But I agree
with the member that it is also important that the amount of tax to
each level of government is currently shown on the documents, and
that is what the bill proposes.
Regarding the second question, it depends on the mechanics.
People in Newfoundland are presently paying a 19 per cent
combined federal and provincial sales tax. That will be reduced to
15 per cent. That is a 4 per cent reduction, almost a 20 per cent
reduction in the amount of taxes they will have to pay on each
On top of that, if the member had listened to the first part of my
speech when I talked about the provincial input tax credit, which is
now 30 per cent of all the provincial taxes collected-actually
taxes on taxes-she would know that businesses are going to get a
30 per cent reduction in the provincial sales tax costs formerly
included in their products. This means they should be able to pass
on lower pricing.
The bottom line is if businesses are responsible and pass on the
sales tax savings, the input tax credit savings on the provincial
component to the consumers, not only will Newfoundlanders go
down from 19 per cent to 15 per cent but that 15 per cent will also
be applied against a lower base.
Concerning the final question of why there is HST on a bill, the
legislation is effective April 1, as the member well knows. Pursuant
to the legislation that means any services that cross over that period
of April 1 will have to be charged the HST. The billings have gone
out at the time because they are usually billed on an annual basis
and it is a prorated amount from April 1. Should the legislation not
go forward, that would not be payable or it would be refundable.
Mr. Jay Hill (Prince George-Peace River, Ref.): Mr.
Speaker, I cannot understand the attitude of this member of
Parliament. During his speech he suggested that the reason the
Canadian people are so upset with the GST is, as he said, this in
your face taxation
where they were aware of it every time they went to purchase
If that is how out of touch this member and his Liberal
colleagues are with the Canadian people then they deserve to get
turfed out of office, as I am sure they will following the next
The simple fact is Canadian people are upset with the GST
because it is another tax and they are taxed to death. They are upset
especially in light of the fact that there have been promises
associated with the GST ever since the Tory government brought it
in. At that time the Tories said that they would only use it to pay
down the national debt. They would create a debt retirement fund
and all the GST revenues would go into that. Canadians now know
that is not true. That is not what happened.
Therefore, I would submit to the hon. member that he has
completely missed the point concerning why Canadians are upset
with the GST.
Mr. Szabo: Mr. Speaker, the member refers to the GST as
another tax. He well knows that the GST was a replacement of an
existing tax, the manufacturers' sales tax, the FST. The FST
generated some $18 billion of revenue in its last year of operation.
When the GST came in, it generated only $16 billion.
Although the basis on which the tax was changed, the amount of
revenue collected by the federal government actually went down in
the first year of operation of the GST. It was a replacement.
I will still continue to support the premise that one of the reasons
why Canadians did not like this tax is because they could see it on
each and every purchase every time they made one. It was different
from the shelf pricing. I think this is one, but not the only one, of
the components. I remind the member that the GST was a
replacement tax, not another tax.
The Speaker: The hon. member for Skeena. May I ask the hon.
for Skeena if he will be using the full 20 minutes himself?
Mr. Mike Scott (Skeena, Ref.): No, Mr. Speaker. I am going to
be splitting the 20 minutes with my colleague from Kootenay East.
The Speaker: Therefore, it will be 10 minutes and 5 minutes of
questions and answers.
Mr. Scott (Skeena): Mr. Speaker, just before I get into the text
of my remarks, I have to respond to what the hon. member from
across the way was saying.
The Liberal Party, if anything, is extremely acrobatic. It is
interesting to watch the flip-flops, pirouettes and the changes of
course and direction that this party takes whenever it considers it
politically expedient to do so.
I was in the construction business during the 1970s and I was
faced with the increasing FST remunerations that we had to make.
These were hidden taxes at the time. The finance ministers in those
days, Mr. MacEachen I remember and Mr. Chrétien who was a
finance minister back in the 1970s, loved this tax because it was a
way for them to increase their revenues without getting Canadians
upset. It was an invisible tax for most Canadians but it was
certainly visible to me, as I was in the construction industry and
had to pay federal sales tax on many of the goods that we were
purchasing and incorporating into our work when we were building
Now we hear that the Liberal Party supports the idea that taxes
should be visible. Frankly, I find that unacceptable. I just do not
believe that these people are serious when they talk about being
straight with Canadians.
That gets me into the text of my remarks which has to do with
broken promises and the broken promise we are debating today.
The Liberal government did not promise to harmonize the GST. It
did not promise to incorporate it with another tax. It said it was
going to kill, scrap and abolish the GST.
After the Liberals made that promise and were elected, they said
that they did not promise to kill, scrap and abolish the GST. They
held that line for a long period of time. They have finally come
around, after the Prime Minister's disastrous town hall meeting last
fall, and said: ``We are apologizing but not for breaking a promise.
We are apologizing because Canadians are confused about what we
have said and if we have contributed to that confusion we are
sorry''. That is typical of this government.
It is typical of this government to engage in obfuscation, mirage
and sleight of hand. It is typical of this government to say: ``Now
you see it and now you don't''. That is what has happened since the
election campaign in 1993 and the reality of the spring of 1997.
Let us just go through a few examples. The Liberals like to
manufacture facts about the health care system and their spending
on it. They paint themselves as defenders of the Canadian health
care system. They wrap themselves in the red cross every time they
can and say: ``We are concerned about health care for Canadians
and we want to make sure that universal health care of a high
standard is delivered to every Canadian from coast to coast''.
In reality the government has cut $3 billion a year out of health
care spending. It has cut $7 billion in health care spending since
being elected. It does not want to be held accountable for that so it
points fingers at everybody else. It says: ``these are the bad guys
over here, they're going to cut your health care, they're going to cut
your social programs and so on''. This government has done far
more cutting than any of the other political parties in this country
This is not a Reform promise. It is not a promise that the Reform
Party would make. The Liberals promised they were going to
maintain stable funding for the CBC. Once elected they gutted the
CBC's budget. They ignore the best interests of taxpayers in favour
of political expediency every time. Let me give a few examples.
The EH-101 helicopter was cancelled. A decision had been made
to purchase helicopters. A contract was entered into before this
government was elected. But this government in its infinite
wisdom said: ``This is not a good deal for Canada and we are going
to scrap it''. It cancelled the agreement to buy helicopters.
First of all, what was the cost of cancellation? It is not known for
sure but the figures seem to be coming in at around $500 million.
Not a single helicopter has been bought but the Canadian taxpayers
are out $500 million. We do not have one helicopter to show for it.
The Sea King helicopters are falling out of the skies. They are
unsafe to fly. There is not enough of them to do the job. I do not
have search and rescue capacity in my riding of Skeena because
there are not enough helicopters that fly to go around. That is the
reality of this government.
Now the government admits it has to do something so it is
looking at some kind of a replacement for the Sea King helicopters.
It is now talking about providing a helicopter that is substantially
smaller than the EH-101. There is conjecture that whatever
helicopter is picked it is not going to be able to do the job. That is
the reality of this government.
The Pearson airport cancellation, whether one agreed with the
deal or not, whether it was thought to be a good deal or not, was a
deal that was done and above board. I do not think any of the
inquiries that have been set up to look into this deal has ever shown
any impropriety on the part of the government or the people who
were contracting to do the deal. It was a political decision and the
Liberal Party was unhappy with the political decision, probably
because they did not make it and it was not their friends who
substantially benefited from it. It was a political deal but it was
The Liberals were elected and they said no they were going to
cancel this deal. Arbitrarily they are going to abrogate a signed
agreement. Can you imagine the arrogance of this government?
Can you imagine the arrogance of the people who made that
decision? On top of that, to protect themselves and insulate
themselves from any political repercussions, they tried to pass
legislation through the House that stated they could not be sued for
their actions. Can you imagine the arrogance of that?
If they really felt that they have made a good decision on behalf
of the Canadian taxpayers you would think they would be more
than willing to go to court to defend themselves, that the people
who felt they were wronged in this action had a cause of action and
wanted to sue the government. They knew immediately when they
cancelled the deal they were going to get sued. They knew they
were wrong. They knew they had violated a contract. What do they
do? They tried to pass legislation. Thankfully that legislation was
not passed and now they are going to have to face the music.
Unfortunately the Canadian taxpayers are going to end up footing
the bill. It is one more example of ``now you see it, now you
don't''. It is one more example of no political accountability for the
decisions that are made. It is one more example of putting politics
ahead of the best interests of the Canadian people.
Let me give another example, the Somalia inquiry. This
government has done its level best, along with senior officials in
the military, to pin the rap of the Somalia disaster on the lower
echelons in the army. They have done their level best to evade and
avoid any responsibility for either the events that occurred in
Somalia or for the mishandling and covering up of the events that
happened subsequent to it.
Now the Minister of National Defence has given the inquiry its
marching orders. He has told the commission to cut the inquiry
short and to report to the House in time for an election. When did
we start looking at proper public policy in the best interests of this
country based on the timing of the next election? Frankly, I find
that unacceptable. It is appalling.
The government promised jobs, jobs, jobs. The Prime Minister
partly delivered. Every Liberal of note from coast to coast got a job
in the last three and a half years. However, what about the 1.5
million Canadians who are unemployed? What about the people
who are out there pounding the streets, looking for work? What
will happen to the people who have given up, who do not believe
they will be able to find work? The Prime Minister just brushes
them off and says: ``Tough luck. Some people win and some people
Canadians are counting the days until they can hold this
government accountable for all of this and much more.
Mr. Jim Karygiannis (Scarborough-Agincourt, Lib.): Mr.
Speaker, I noted with interest the comments of my colleague. He
spoke about the EH-101 helicopters. He spoke about the Pearson
deal. He spoke about the Somalia inquiry. I cannot understand what
party he really represents, the Reform Party or the Conservative
Party. I would have expected that speech from a Conservative, but
the only Conservative member in the House is not the one who is
speaking. Is the member running for the Reform Party or is he
running for the Conservative Party?
The people of Canada clearly stated before the last election that
they did not want the EH-101 helicopters. They also said they did
not want the Pearson deal. If we listen to the member, we are
listening to the Conservatives of pre-1993.
I wonder if the Reform is going to pick and choose in which
ridings it is going to run and in which ridings it will not run. The
member has presented himself as a Conservative.
The member also spoke about the hidden tax and about taxes in
general. In England they have the VAT, the value added tax. It is 16
per cent. People know they are paying 16 per cent. In Canada we
have the PST and the GST. In the maritimes we are trying to
harmonize those taxes. Then, when people go to the till, they will
get a bill which will say the item is $100. They know they will pay
$100. At the end of the day they will be paying $100 for an item
and the taxes will be included.
My constituents know they will have to pay tax, whether it will
be 16 per cent as it is in England or 15 per cent as it will be in the
Maybe we could get the Harris government to come to the table.
A lot of its members have privately said they want to harmonize. I
know Mr. Harris is holding out because he wants a big buyout. If
we were to hold out to him $2 billion or $3 billion he would jump
and say: ``I want to harmonize at 13 per cent or 14 per cent''. If we
were to get the Harris government to the table to harmonize the
taxes, at the end of the day $100 at a tax rate of 14 per cent or 15 per
cent would still be $100. The member opposite would certainly
agree that Canadians would be happier with that than paying $100
and having the tax added on top.
My question for the member is very simple and clear. Is he
running for the Conservative Party or the Reform Party? I am
confused. The way he is carrying on, it sounds like he is running for
the Conservatives. If he is not running for the Conservatives, let us
make sure we get the Reform policy.
Mr. Scott (Skeena): Mr. Speaker, unlike my colleague from
across the way, I am running for something. I am running for
Reform. I am not running away from accountability like those
He talked about the EH-101 helicopter deal and he talked about
the Pearson airport deal. Those were contracts that were in place
when this government came to power. There is a longstanding
tradition in this country that succeeding governments honour the
contracts and the agreements that are in place. This government has
broken those longstanding traditions. It has abrogated these deals.
It has cost the Canadian taxpayers a billion dollars.
We do not have effective helicopters that can fly. And Pearson
airport in Toronto will be 10 years behind in getting modernized so
it can accommodate the passengers going through it. That is the
reality of this government: put political expediency ahead of the
best interests of the taxpayers, ahead of the best interests of the
people who want to fly to and from Pearson airport, ahead of the
best interests of the people who have to fly those helicopters for
search and rescue and the other activities they are used for. The
government puts their safety on the back burner in the hope that it
will gain some political advantage by doing it. Frankly, it stinks.
Mr. Jim Abbott (Kootenay East, Ref.): Mr. Speaker, I would
like to talk about pizzas and muffins. It seems to me that a lot of
times when we get talking about PST, GST, HST, BST there is a
sense of confusion regarding what the issue is really about. I would
like to return this debate to the issue at hand, which is the
harmonized sales tax for Newfoundland, Nova Scotia and New
In talking about pizzas and muffins, I am mindful that we are
talking here about the restaurant business. We have to remember
that at the introduction of the GST, in the first three years there was
a net loss of 46,000 jobs in the restaurant business. The government
should be concerned about this, having campaigned on jobs, jobs,
jobs. If it is going to be making any changes to the tax regime in
Canada, it really should be taking into account what the effect
might be on jobs in the area where it is going to be making these
Talking about pizza, we are talking about a really delicious pizza
at $14.99. That would be a medium size pizza at Pizza Hut. When
people went to Pizza Hut or any other food concession during the
recession which started around 1991, they were faced with the fact
at the till that this $14.99 pizza all of a sudden had an additional 7
per cent added to its price.
As a consequence, as a per cent of the Canadian food dollar from
1991 to 1996, restaurant revenue dropped from 42 per cent of the
Canadian food dollar to 38 per cent of the Canadian food dollar.
From 1991 at 42 per cent to 1996 at 38 per cent, we can see clearly
that the recession had a dramatic impact on the choices people were
making. Perhaps they were deciding that rather than spending
$14.99 on a medium pizza, they might go to a smaller pizza and get
away at $11.99.
The identifiable reality is that the GST cost jobs in the restaurant
market. Why do we know that? Why can we not just say that
perhaps the situation occurring was that people were deciding that
they were going to be staying home more as a result of the
recession. That was part of it but this is interesting. In a comparable
economy in terms of the behaviour of people with respect to eating
out, that of the United States, from 1991 to 1996 the per cent of the
American food dollar increased from 42 per cent, which is where
the Canadian percentage started, up to 46 per cent.
What was the one fundamental difference between the American
and Canadian economies and American and Canadian consumers?
There is one fundamental difference. I suggest there may be more
but probably the most over arching was the fact that there was the
application of the GST.
When people arrive at the till in Newfoundland, Nova Scotia or
New Brunswick they end up paying $17 or $18 for this $14.99
pizza. A pizza is not essential to have; it is not a have to have
product and therefore it is very price sensitive. What happens now
that we are looking at inclusive pricing? Pizza not being an
essential product, people are going to go into a Pizza Hut in Prince
Edward Island and come across a pizza for $14.99. True, they will
pay $17.24 when they arrive at the till, but the fact still remains that
they will see $14.99 on the menu. When they go into Fredericton,
Moncton, St. John's, Halifax or Sydney, they are going to be faced
with a menu that indicates $17.24 instead of $14.99. What effect
will this have?
Most Canadians have the good, or bad, fortune of always being
concerned about what they are eating, this by comparison with
third world countries and indeed some of the people in this country
who have difficulty even obtaining food. Suppose I go into a
restaurant. I am in there for a cup of coffee and I see that the low fat
muffin has only 285 calories and four grams of fat. As I sit down
and I happen to notice the overlap of my belt I ask myself whether I
really need those four grams of fat. I decide while I am in this
healthy mode that no, perhaps I do not even need this muffin
because it is telling me it is going to give me four grams a fat and I
think I will pass on it.
The next day I go into another restaurant and they are a little bit
smarter. They do not tell me anything about low fat muffins or high
fat muffins. They just tell me that the muffin is going to cost me
$1.49. It looks really good and it probably will go down really well
with a cup of coffee. The difficulty though is that particular muffin,
unknown to me because I choose not to ask, instead of having 285
calories has 600 calories and instead of having four grams of fat
has 21 grams of fat.
That is a reality in the marketplace. We subject ourselves to this
in that we say: ``Just a second, I do not really need this
information''. Now, when people go into my friend's restaurant in
Saint John, they are going to be faced with a $17.24 pizza. They are
going to be making some judgment calls at that point which they
would not be making if in fact they were faced with a $17.24 bill
when they arrived at the till. That is the reality.
What is this going to do to advertising? First off, the advertising
that currently occurs in the maritime provinces is going to be
thwarted seriously. If we stay with the pizza example, when Pizza
Hut wants to advertise in Nova Scotia or New Brunswick, there is a
spillover from ATV and other networks into Prince Edward Island.
Suddenly it cannot advertise a $14.99 pizza; it has to advertise a
$17.24 pizza. What about national advertising? How will that be
What we are talking about here is just one very small segment of
the economy that the Liberals have shown a gross insensitivity to:
the entry level jobs within the restaurant business. Many people,
unfortunately in my judgment, have negative things to say about
McDonald's but outfits like that are terrific. They bring people into
the marketplace. They train those people and get them into the
workforce. Restaurants and fast food outlets have the ability to give
part time work to homemakers who want to or perhaps have to
supplement their income. They provide the opportunity for part
time work for seniors.
What we are talking about here is the Liberals' unfortunate gross
insensitivity to what this HST is going to be doing to the people of
Nova Scotia, New Brunswick and Newfoundland. It is going to
make a difference and not just in the food sector.
What about the barbeque that might be an incidental purchase at
Canadian Tire? Instead of paying $149.99 which is the price point
for a modest barbeque, suddenly it is going to be $172.40 on the
sticker. It is going to have an impact on Canadian Tire, Home
Hardware and all of those places. What about purchasing an
automobile and the advertising relative to purchasing an
It can be argued, and perhaps some would, that the money will
ultimately be paid anyway so why not tell people about up front? It
is a fact of life that there will be discontinuity between the three
provinces and their merchandising practices and the other parts of
Canada, including Prince Edward Island. The way in which
business is conducted will be different. It will be a patchwork quilt
from coast to coast to coast.
Even candy bars at the 7-Eleven, in those very tempting bins that
sit by the door selling three chocolate bars for 99 cents. I am hoping
my wife will never read this Hansard but I am tempted from time
to time. All of a sudden it will not be 99 cents. It will be $1.14 and I
am going to think that maybe I should not have those chocolate
bars. This is going to impact people at the most simple level in
those three provinces, walking in and out of 7-Eleven stores,
buying an automobile or ordering a pizza.
It cannot stand that the government will allow there to be the
confusion of different standards from province to province. We
have seen the impact that the dislocation of the GST has created in
the restaurant and bar business and the three years that it took to
bring it up to speed and to get back to even a small semblance of
normality. It really never has recovered.
How much is this HST, this patchwork quilt, this kind of
backhanded way of wheedling out from under the GST promise
going to cost the people in that area of the country? It is a scandal
that the government has decided it is going to ram, jam, cram this
bill through the House at the people in those three provinces.
Mrs. Elsie Wayne (Saint John, PC): Mr. Speaker, I thank the
hon. member and I concur with his statements. However, I want to
ask him if he is aware of what just happened in New Brunswick.
Is the member or anyone in the House aware that those who own
restaurants and pubs in Saint John and the rest of the province of
New Brunswick who buy their beer and wine at the wholesalers
have been told that there will be an 11 per cent surcharge added on?
They thought they were going to get a bargain with the HST
because it was coming down from 18 per cent to 15 per cent.
That is why I say that when you hide it we are in trouble because
that is just the beginning. It could not be put on the HST because
two premiers have to agree to increase it and to decrease it all three
premiers have to agree. However, it will be hidden another way and
we have it already.
I have to say that those restaurant, pub and tavern owners in my
city are absolutely furious about this. This is a serious situation and
I wonder if hon. members had heard anything about it. The people
have talked to me.
Mr. Abbott: Mr. Speaker, I can advise the member that I was not
aware of it, but it is very typical of what happens with taxes.
In the province of British Columbia we have the situation of the
forest renewal fund. That fund was never ever going to be touched.
The NDP told us: ``Oh, my goodness, the sky would fall before that
was ever touched''. What happened when they ran short of money
is they turned around and grabbed it.
I do not believe for a split second that the Liberal government or
its successors, unless it is ourselves, would not twist things around
ever so slightly, just a little bit here and just a little bit there so that
it would end up with the tax not appearing, as the legislation
currently calls for, on the sales receipt. That would disappear. Over
a period of time it will disappear and once again it will be a hidden
I concur with the member. It is just taxes, taxes, taxes. Canadians
are absolutely sick and fed to the teeth with taxes.
Mr. Keith Martin (Esquimalt-Juan de Fuca, Ref.): Mr.
Speaker, I would like to commend my colleague from Kootenay
East for a great speech and also the member for Saint John, an
individual who lives in the maritimes. She obviously knows
firsthand what is going on with respect to the effects of the HST on
the people in the maritimes.
When the government was elected three years ago, it had an
excellent opportunity, a golden moment, to simplify the taxation
system so that it would benefit all Canadians and kick start the
economy. What did it do? It brought on a harmonized sales tax
about which the federal institute of private businesses has said very
clearly will cost jobs. It will put companies out of business. It will
increase the cost of doing business. Worst of all, it will hurt those
people who are most dispossessed and of the lowest socioeconomic
groups in our society. In particular, it will affect people in the
maritimes, an area that all of us know has been extraordinarily hard
hit economically over the past 10 years.
This is an absolute outrage. I hope the public will get involved
and provide constructive submissions to the Minister of Finance,
the Minister of National Revenue and the Prime Minister in an
effort to demonstrate what good, concrete, effective solutions can
be put into place to provide a simplified tax system, a lower tax
system, a fairer tax system to kick start the economy that will not
hurt those people who are the worst off in our society but rather
will improve the economy of the maritimes and the country.
What would the hon. member do to provide for a sensible
taxation system that could kick start the Canadian economy?
Mr. Abbott: Mr. Speaker, we would first have to get our deficit
to zero. We have to stop spending more money than we are taking
in. At that point we would have the option to ask what we would do.
The Reform Party has proposed to offer the average family of four
in Canada $2,000 by the year 2000 in a tax reduction: $2,000 by
2000 will become a battle cry of people across Canada.
Second, we would make all sorts of changes in the area of
personal exemptions so that the people at the low end of the scale,
the single parent families that are presently continuing to pay tax
would be taken off the tax roll. It is our projection that for those
people earning $30,000 and under, we could remove 89 per cent of
the taxes those people are paying.
By lowering the taxes of people at the bottom end of the scale,
the people in the lowest income decile, we would have the
opportunity to give them the ability to make decisions about their
own lives with their own money. That money, interestingly, would
end up back in the economy immediately because obviously a
family of four with an income of $20,000, $30,000 or $40,000 will
be spending all of its income on the essentials and the necessities of
life with a few frills. The family of four with a $100,000 income
will of course have choices.
The beauty of our idea is that by making sure the taxes stay
in the hands of people in the low income decile or the low income
area, those people will spend the money and put it back into the
Once again we come back to pizzas and muffins. We end with
more pizzas purchased. We end up with more muffins purchased.
We end up with more barbeques purchased. We end up with more
chocolate bars purchased. In that way we end up with more people
working. It is a direct way for Canadians to help themselves with
their own money rather than the government helping them with
their own money.
Mr. Ghislain Lebel (Chambly, BQ): Mr. Speaker, this is the
first opportunity I have had to speak to the bill on the
harmonization of the GST.
I have heard a number of noteworthy and notable speeches by the
Liberals to justify the appropriateness of this bill. I cannot agree
with them. This bill represents the Liberals' acknowledgement of
failure to my mind. During the election campaign, and even before,
when the Conservatives thought they had found the magic formula
for getting out of hot water and halting the growth of the deficit, in
short, for better selling themselves to Canadians, they came up
with the GST formula. I recall the Liberals, who were in opposition
at the time, being all in a lather over this tax, which was to be added
to the Canadian tax system.
The current Prime Minister, who was then the Leader of the
Opposition, did not want to outdone. He said: ``I will scrap the
GST. We hate this tax and we are going to eliminate it''.
Recently, confronted with the remarks he made at the time, the
Prime Minister tried, as we say, to put the toothpaste back in the
tube and discovered that it was no easy task. First he denied, then
he softened his denial increasingly and finally he said that
Canadians had been a bit slow in not understanding, that it was not
what he wanted to say.
However, if the words ``I will scrap the GST'' are given their
usual interpretation, nothing other than ``dump out'' for ``scrap''
comes to mind. That was what the then Leader of the Opposition,
who hoped to become and has since become the Prime Minister,
Speaking of failure, upon taking office, the Prime Minister gave
its finance committee the mandate to look for a viable alternative to
replace the infamous GST, the goods and services tax. The
committee held hearings, heard witnesses, summoned accountants
close to the Liberal Party of Canada and came up with a couple of
alternatives before ending up with the HST. Since the first two
options were rejected, we are left with the HST.
Let us look at why the government is trying so hard to distance
itself from its election promises. Having put out feelers and
considered various options, why come up with this HST?
Several answers can honestly be given to this question. First, we
have seen that not everyone was happy with the human resources
development reform in Canada, the employment or unemployment
insurance reform. In fact, I dare say the hardest hit were seasonal
workers in the maritimes. I personally visited the maritime
provinces twice in the past two years and I could see that, in the
fishing communities, boats were put away. In every backyard on
Lamèque Island, there is a boat that has not been used once in the
last two summers. This has caused discontent.
I can remember the hon. member for Beauséjour and the
Minister of Human Resources Development going back to their
ridings to try and sell their so-called employment insurance reform.
They had to be placed under the protection of the RCMP. When a
member or a minister needs a police escort to sell any bill or policy
to their supporters, there is a problem.
The members concerned probably realized there was a problem
and managed to convince the Prime Minister he should admit it.
This, I think, is where the reform and harmonization of the GST
really originated. The government wanted to pay off the maritime
provinces, where 32 of the 33 ridings are held by Liberals. The
federal government wanted to preserve that, particularly in light of
the fact that a maritime province just elected a Conservative
government, something which was totally unexpected. So, the
Liberals said: ``We have to do something, otherwise maritimers
might turn against us''.
This is how the idea of harmonizing the GST came about. I
listened to the hon. member for Scarborough-Agincourt, who said
in his speech: ``This harmonization is great. It means that, in some
provinces, the combined federal and provincial taxes will go down
from 19 to 15 per cent, a 4 per cent reduction. People will be
Sure. However, that 4 per cent represents the $961 million that
maritimers will no longer pay, but that the rest of Canadians will
still have to pay, that is to say, taxpayers from Quebec all the way
to the Pacific. This $961 million represents what we will have to
pay, because maritimers will no longer do so, thanks to their lower
combined tax rate.
The government should admit this to Canadians from the other
provinces who will have to make up for this $961 million shortfall.
There is no doubt in my mind that Quebecers, like the others, will
pay their share, if not more, because it can no longer be said that
this $961 million will be prorated. It is not true. We can already
exclude three provinces that will not contribute. There are players
Instead of dividing that $961 million by ten, since there are ten
provinces, it will be divided by seven, because three provinces will
not pay. Instead, they will benefit from that measure. Quebecers
have traditionally paid around 23 or 24 per cent of federal taxes. In
this case, their actual contribution could go as high as 30, 31 or
even 32 per cent of this $961 million. This is what is so unfair.
This is probably an attempt to make people forget about the
closure or downsizing of military bases in New Brunswick and
Nova Scotia. In any case, the government wanted to redeem itself. I
listened to the members opposite, particularly the hon. member for
St. Boniface. These defenders of every possible Liberal cause told
us that this HST was the greatest thing since sliced bread, that
Canadians should rejoice forever, and that the Liberals would
definitely make it to heaven now.
You will understand if I have my doubts, particularly when you
never know who or what this tax is going to hit next, and when it
makes no allowance for soft sectors such as culture, and other
sectors such as restoration. These are sectors that need a break, if I
may put it that way, sectors that need general and regular support
from the government.
Fine. The minister made a compromise that he thought was
commendable but that I call almost insignificant, by exempting
universities and schools from paying GST on books. The GST on
books was being paid by him, or by governments. So he was doing
himself a favour, or at least reducing the amount he owed himself.
This is not something that is going to help industry. A tiny part of
the book industry sells books in schools or in municipal or public
But think of all these writers, all those who publish. I will give
you an example. Take sheet music. Music is not a profitable field,
and even less so when it comes to writing it down on paper. An
entire printing process has to be set in motion in order to sell 60, 70
or 100 copies of a musical score across Canada.
It can easily cost $2,000 for the printing setup and perhaps 100,
150 or 200 copies in certain cases of the musical work in question
will be sold. If we want to respect copyright, something which has
not yet been recognized, the place where an artist may sometimes
derive some sort of benefit or profit is on the performance of the
musical work, not through circulation of the paper on which it is
written. This is a way of publicizing the musical work, but it is
generally more profitable when it is performed, when it is heard,
when it is broadcast.
This is where the artist can make a bit of money, when it is
performed by orchestras, be they chamber, symphonic or
philharmonic. Printing music is expensive and often cuts into the
profits of the composer, the person who wrote it, the author. But
now they have decided to squeeze him dry, to make his life more
difficult. If he sold 80 copies, the Minister of Finance would
perhaps be jealous because he cannot sell his copies of the budget
for very much. But you can be sure printing his budget costs plenty.
What I can tell you is that the poor people are being put through the
wringer. This is at the root of our cultural industry and the Liberals
could care less.
They are much keener when it comes to doublecrossing people,
as they did in the Peason affair. They cancelled a contract and, in
the end, it is going to cost us just as much as if it had been
honoured. And the promoter will not have any of the financial risks
that are typical of this kind of undertaking.
When we had the debate in June 1994, I said as much to the
minister, the current Minister of Defence who was then Minister of
Transport and who was in charge of the Pearson airport case. At the
time he said the hon. member for Chambly was exaggerating, and
that is on the record. And all this was supposed to cost us $20 to
$25 million, those were the figures he mentioned, but certainly not
more. We are not going on a witch hunt, and we must look to the
future, the minister said at the time.
Almost three years, or at least two and three-quarter years later,
we see nothing, absolutely nothing has been done about the Pearson
airport case. And now, the government is facing a law suit totalling
between $650 and $700 million in damages.
Recently, we read in the media that there might be an
out-of-court settlement, something like the offer they made to the
former Prime Minister of Canada. I do not know whether apologies
will be forthcoming this time. It seems that $70, 80 or 90 million is
the offer they will start with, but negotiations are not over yet.
Actually, the Liberals are delighted that they managed to do
indirectly when they could not do openly, which is to take care of
their friends. They argue that if they do not settle, it will cost the
government a lot more, and they use this argument as a sword of
Damocles. Quite some case. So how do people manage to do
favours for their political friends when they are in power?
Take for instance in my riding, we have a thriving industry called
Unibroue. Unibroue was established by people who decided to
ignore the rules and regulations of federal and even provincial
legislation and start brewing beer, good beer, outstanding beer:
Raftman, Blanche de Chambly. I know my friends in the Bloc have
sampled and enjoyed them all-
Mr. Bernier (Mégantic-Compton-Stanstead): In
Mr. Lebel: Unfortunately, I know that Ontarians did not have
that pleasure because Unibroue, which makes Blanche de
Chambly, Raftman, Eau bénite and la Maudite, which are specialty
beers, does not have access to the Ontario market: André Dion,
my friend from Chambly, and I salute him, cannot sell his beer
It is sold in Australia, in France, in Belgium, in Germany, in
Luxembourg. It sells like hotcakes in the United States, they cannot
keep up with demand. I think it is sold in Japan too, but not in
Ontario. None is sold in Ontario, because the big buddies of the
present federal regime control the distribution of alcohol
So Unibroue, from whom astronomical sums were demanded for
sales in Ontario, finally was never able to sell a single bottle there,
was never able to get it displayed or promoted by the Liquor
Control Board of Ontario, because it was a Quebec product. I see
my Ontario friends over there are appalled, but they are nodding in
agreement. What I am saying is the truth.
The Peace Tower has been restored. In my riding, there is an
industry by the name of Ferco, owned by Armand Rainville. It
could have been involved in the renovations to the centre block
here. Mr. Rainville invented a platform with a retaining wall, which
could have been moved up and down the tower. Use of this
platform would have reduced the costs of renovations. This is a
good product, the proof being that the company rented out their
equipment to construct the Atlanta stadium for the Olympics. Their
machines are in Thailand, and just about everywhere in the world
except Ottawa. They could not place one to Ottawa, because they
are not buddies of the regime, friends of the Liberals who paid
$3,000 for the privilege of attending a little supper in Westmount
where the Prime Minister would deign to look upon them and greet
them. That is another way of giving the advantage to one's friends.
That is what politics is all about.
People tell me that, deep down, ministers have a bit of a
masochistic streak. They have to reveal their private life and all
their assets and fight an election campaign. They often get their
ears boxed. They get accused of this or that. You really have to
want power to subject yourself to all these things and push to be
elected and become a minister. I say they are not there for
themselves but for their friends. It is their friends they can gratify,
provide pleasure and accord certain honours to.
Consider the distilling industry in Canada. Try to start up a
distillery in Canada-legally, I mean-to develop a recipe for a
fine gin, rye, whiskey or what have you, try to set up shop, with a
license and everything. You will never manage it.
Those who have the manufacturing monopoly in Canada are
pretty much those we allow to run off with $2 billion in family
trusts. These are the little privileges that the major parties in power
offer their friends in exchange for a contribution to election coffers.
The maritimes are no exception. They began to think about
blowing off steam perhaps and letting it be known that they had had
enough. I saw the Minister of Human Resources Development in a
room trying to strut his stuff and being escorted out by police
because there was a guy there who was a bit of a bruiser and who
was threatening to rough him up.
They will be going after this guy's vote in the next election. We
know it is coming. It will be in June. They want his vote and they
think they will get it with Bill C-70. They cut his fishing quotas.
They lowered his unemployment insurance and made him work
longer to get it. They cut his pay. Still they will go after his vote.
With $961 million, they are good until June. In the meantime, they
will convince him to vote for the Liberal Party of Canada. That is
This approach does not fool Canadians and Quebecers. They will
make it very clear to the government that this kind of attitude, I
might say, this sort of legislative scheming is not acceptable.
Canadians and Quebecers are no fools. In the next election, they
will do as they did in October 1993: they will again sweep
members of the Bloc into power. I add that, if we had members in
the maritimes, they too would be re-elected.
Mr. Speaker, I know you agree with me, although I will not make
you say so.
I add that the Bloc Quebecois will vote no, and especially the
member for Chambly.
The Deputy Speaker: Before we move on to the period for
questions and comments, I must point out that the Speaker always
agrees with what is said in this House; he is neither for nor against.
Mrs. Beryl Gaffney (Nepean, Lib.): Mr. Speaker, I listened
with great interest to the statement of the member from the Bloc
with regard to the GST and the harmonized sales tax in particular.
He seemed to have a great deal of difficulty dealing with the
business portion and how businesses in Canada would be far better
off under the HST than what they presently are under the GST.
It would almost lead one to assume that the member is
anti-business. How can you say that when businesses will have to
deal with only one sales tax? There will be one sales tax rather a
federal and a provincial tax? How can you be against that? Is that
not to the benefit of businesses? Of course it is. It will reduce the
businesses. Their costs today are far higher than what they will be
under the HST.
If you look at the participating provinces that have already
agreed to the HST, these businesses we already know are far better
off under this system than the provinces that have not signed up.
What does the member have against businesses and trying to
help businesses in every province in this Canada, not just in
Quebec? Quebec is a province in Canada.
Mr. Lebel: Mr. Speaker, I have nothing against the principle
whereby governments have to dig into the taxpayers' pockets to
maintain services. The hon. member for Nepean should realize
What I do have a problem with is doing it in a roundabout way
that is not obvious to the people. It is a pity that she is not a member
of my party, because she is criticising me for being against
business, the business they are crushing under loads of paperwork.
Furthermore, not only will harmonization not help business, this
harmonization proposal introduced today will have the exact same
effect as the GST, except that you have changed the G for an H.
When I had my practice as a notary, people would come to see
me and say: ``The GST is going to put an end to the underground
economy, you know. It will not be in anyone's interest to hide the
GST because, in the end, they will collect over there''. But look at
what happened to jobs, jobs, jobs. The GST may well be the main
reason for this mess. On account of the amount of paperwork and
related administrative constraints, from the very beginning, people
decided to work their way around the tax. When the government is
unable to collect the GST at the front end, it is just too bad, as they
say, but it will not be able to collect it at all. That is how, Madam,
the underground economy is encouraged. In a word, I am against
the underground economy and for business. And I hope you will
The Deputy Speaker: My colleagues, if you could make a point
of addressing your comments to the Chair instead of to one another,
this would prevent all kinds of problems, as we have seen recently.
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): I would have a very brief question, Mr. Speaker.
Strangely enough, remarks by Bloc members always include a
reference to the fact that they are against harmonization.
I would like to know if harmonization is somewhat successful in
Quebec. My question is simple: Does harmonization work in
Quebec, yes or no?
Mr. Lebel: Mr. Speaker, I would like to reassure my learned
colleague that, indeed, collection of the GST and QST is working
well in Quebec. But the federal government did not have to fork
out $961 million for it either.
The Government of Quebec willingly harmonized the taxes; it
was not ordered to. It acted on its own, as it quite capable of doing,
and as the maritimes, apparently, are not.
Under federal government schedules, the Government of Quebec
should be entitled to fair compensation for the work it did on its
home ground that benefits the federal government. As always,
Quebec will not be compensated, but the maritime provinces will
Mr. Campbell: Mr. Speaker, I would like to know if this means
the Bloc member supports harmonization.
Mr. Lebel: Mr. Speaker, not at any cost. This is not
harmonizing, it is a disguised form of welfare. The government
calls it harmonization, but it is nothing short of a hold-up. It takes
$961 million from the pockets of some taxpayers, puts it in the
pockets of others and calls this harmonization.
Instead of giving it to the poor, to the fishermen to whom I
referred earlier, the one receiving that money will give it to the
businesses moving to his province, as the premier of New
Brunswick did. You are using our money to compete with us and to
attract industries, a sector so dear to the hon. member I was told not
to look in the eye. But that is the problem.
Mr. Campbell: Mr. Speaker, the hon. member opposite, in
response to what I said, has talked about this issue of adjustment
It is interesting because we have had this discussion several
times in this House. I wonder if he is really aware of the manner in
which the Government of Quebec harmonized with the GST, the
number of years that it took and, as a result, the province of
Quebec, I am sorry to say this but it is true, operated two parallel
systems and as a result saw enhanced revenues in those years, not a
decrease in revenues.
The formula that results in adjustment assistance being paid to
the Atlantic provinces which are harmonizing states that any
province that loses 5 per cent of its retail sales tax revenue during a
transitional period as a result of moving to harmonization will
receive this adjustment assistance.
The fact is if Quebec, under that formula, would not have
qualified then it would not qualify now and that is just the way it
works. If Ontario or British Columbia were to harmonize now they
would not be entitled to compensation either but other provinces
would be. It is a formula that recognizes that there are some
adjustments in transitional costs that result when one harmonizes
overnight, April 7, 1997. Quebec took several years to harmonize,
operated two systems in parallel and saw an enhancement in
revenue, not a decrease. I wonder if the hon. member knows that.
Mr. Lebel: Mr. Speaker, I would appreciate it if you let the hon.
member know that Quebec did not get rich with its own
adjustment. Quebec made the adjustment to maintain some
administrative and financial logic. It had to adjust to the conditions
imposed by the federal government, which encroached on direct
taxation in an area of provincial jurisdiction.
We are now being criticized for having moved to let the
steamroller go by. It is the Liberals in Quebec that did that. The
hon. member is wrong. Let him show us his criteria. Let him tell us
why the maritime provinces were compensated, while Quebec was
not. Let him do a point-by-point comparison between the two
Instead, the member is complaining, saying that Quebec is not
entitled to compensation. But based on what? How could we be
eligible if we are not? The member simply cannot answer that
question. He should just answer it, instead of wasting hours of
debate. When we are a little too blunt with the Liberals, they gag
us, as they did today.
The Deputy Speaker: It is my duty, pursuant to Standing Order
38, to inform the House that the question to be raised tonight at the
time of adjournment is as follows: the hon. member for
Burnaby-Kingsway, Canada Pension Plan.
Mr. Bill Graham (Rosedale, Lib.): Mr. Speaker, I am very
pleased to stand and debate the issue today, although it obviously is
a matter which concerns our colleagues in the Atlantic provinces
more than the rest of Canada directly. In fact, it concerns all of us in
Canada. What we have here in this proposition is a superior model
for dealing with the problem of consumption taxes throughout
We have heard the member from the Bloc, the previous speaker
from the province of Quebec. We know that Quebec has
harmonized its tax system for obvious reasons. I will return to that.
The fact of the matter is this government has spent the last three
years struggling with the problem of how to have the intelligent
application of a consumption tax in the country. Every tax expert,
anybody who knows anything about the way modern taxes work in
a modern society, particularly one which is subject to globalization,
knows very well that there is a proper mix of income taxes and
consumption taxes that must be applied.
Why did we end up where we did with the GST, which we in the
House have spent so much time talking about? We as citizens and
members of Parliament have been trying to deal with the
unfortunate hand that was dealt us by the last government.
The reason the GST was brought in was that the former
manufacturers' sales tax which applied to manufactured goods in
the country was no longer sustainable once tariffs were moved
down to what they were after the war when originally they were
around 50 per cent and then dropped to an average tariff today of 7
per cent. The manufacturers' sales tax only applied to goods which
were manufactured in Canada. The consequence of applying that in
today's world would have been totally impossible. It would have
inhibited manufacturing in Canada and given benefits to imports.
Of course we had to move to a consumption tax which could be
applied at the level which would hit imports the same as
domestically manufactured products. That is why a consumption
tax must be regarded as a tool of any modern economy.
When we ran for the Liberal Party in the last election, we spoke
of the need to deal with the problems of the GST. We spoke of the
need to harmonize it. We spoke of the need to deal with the
inequities in the system. We spoke of that in the last election in
spite of what the member opposite has been crying out, saying
``election promises''. That was the election promise of the
government, to deal with the serious problems that were inherent in
the tax. That is what we have sought to do since we were elected.
An hon. member: Do video tapes lie?
Mr. Graham: We are not talking about video tapes here. We are
talking about taxation and we have been seeking to deal with it
since were were elected. The finance committee has met
innumerable times and we have spent hours and hours of individual
members' time from all parties of the House to come to grips with
what is a very serious problem. Instead of cat calling back and forth
about it, we should be trying to wrestle with it.
I believe members opposite are saying they want a rational
solution to the problem. Let us try to find a rational solution to the
problem rather than saying scrap it. The party opposite says scrap it
and at the same time wants to see the deficit reduced. How can we
deal with a deficit of $17 billion? Take it out of the taxes and put it
into the income tax system? This is not realistic.
We are seeking a realistic solution to a very complicated
problem. There is a realistic solution that I think we can be proud of
when we look at the Atlantic provinces. What have the Atlantic
provinces achieved by agreeing to harmonization? This is the way
to deal with it.
In my province of Ontario we have two different systems of tax
being collected differently. Some apply to services and some do
not. It is an irrational system to have two different levels of
consumption taxes applied, collected differently and imposed
particularly on small and medium size businesses that have to bear
the extraordinary input costs of dealing with this system. It just
does not make any sense.
The Atlantic provinces have been willing to grasp this nettle in a
way that deals with many problems. It deals with the problem of
the small business which looks at the fact that its cost to apply this
tax will be less. It deals with the problems of the manufacturers in
the general economy by insuring that the proper input credits will
be given both in respect of PST and GST. That would eliminate one
of the most serious macro economic problems about this tax, which
is its inefficiencies and the way in which it interferes with rational
economic planning and manufacturing.
It deals with the problem of the consumer, who in the end really
does not want a system as complicated as the present one. That
makes a lot of sense.
I suggest that if we in the province of Ontario would be willing
to look at a similar solution, and if the rest of the provinces would
be willing to look at a similar solution, it would be of extraordinary
benefit to the country. In the first place, it would remove what is a
very serious non-tariff barrier to trade within the country. We
cannot ignore the fact that at present the tax structure of the country
inhibits people from moving back and forth and offering their
services in different parts of the country.
I happen to know of service providers in the province of Ontario
who will not go to the maritime provinces at this time because the
cost of having to calculate what their services would be and how
they would pay the tax is not worth their while. As a result, the
maritime provinces are losing the benefit of the input of those
people and the people of Ontario are losing the opportunity to
compete in those marketplaces. It is inefficient. It does not make
sense. The maritime provinces have provided an opportunity for
the rest of Canada to follow.
The tax will deal with the problem of proper management. It will
deal with the input level issue. It will deal with the question of
services which today account for 60 per cent of the economy. It is
totally a modern solution to the problem. This is the only way we
What I find a bit odd is that it is members from Quebec who are
protesting a system that is ultimately the same as the one in their
own province. They have harmonized their PST with the GST.
Why? Is it because Quebec's representatives at the provincial
and federal levels have recognized that it is in the interest of
Quebec taxpayers to harmonize? Having done so, they are asking
the rest of the country why they are following suit. ``You are nuts to
harmonize your provincial sales tax with the GST,'' they say. I do
not understand this reasoning at all.
I am surprised that Bloc Quebecois members are not saying: ``At
last, the rest of the country is recognizing that what we did makes
sense. We congratulate the rest of the country for following our
example and we urge the Province of Ontario and the other
provinces to follow suit. And in the interest of Quebec taxpayers,
we are going to eliminate the non-tariff barriers between Canadian
provinces for the greater benefit of all Canadians, not just in
Ontario, but in Quebec and the Atlantic provinces''.
We in this country no longer have the privilege of living in an
isolated world. We live in a world in which our goods and services
compete in international marketplaces. Furthermore, our goods and
services compete in international marketplaces not just when they
are exported but they compete in international marketplaces within
our own country, within our own jurisdictions, because we have
competing goods and services coming in.
We have to face the fact that in 1998 when the NAFTA comes
into effect goods and services will move across the borders of
Canada, Mexico and the United States much more freely than they
do today. We have to recognize that we need in place a tax system
which will recognize that reality and not be an inhibition to the
productivity of our citizens, our manufacturers and our sales people
in this country. Otherwise we are going to be in real trouble.
The harmonization solution which will be implemented in the
Atlantic provinces will go a long way in dealing with a lot of these
The members of the foreign affairs committee have had the
opportunity to travel and meet people, for example, in the
European Union. People in the European Union have spent the last
30 years trying to harmonize their taxes.
When I was a law professor at the University of Toronto years
ago, I remember meeting experts from the European Union who
said: ``You created a tax system with different rates in different
provinces? You have a PST in some provinces, different from the
GST? How could you possibly invent a system that is not
harmonized? We have spent 30 years trying to harmonize our
system and you have created a system that is a nightmare''. That
was in 1986.
The government is trying to cure the nightmare that was created
by the previous administration. Instead of the members opposite
screaming and yelling and saying: ``This is crazy. Did you watch
last night's video?'' why not say: ``Let's pull together. Let's look at
this mess. Let's find the best solution possible''. The finance
committee has looked at this. We have all looked at this. The
harmonization proposal for the Atlantic provinces is finally ad-
dressing in a concrete, positive way a tremendous problem that we
have as Canadian citizens.
Speaking as a member of Parliament from the province of
Ontario, I hope that the members of Parliament from my province
and the premier of the province of Ontario will have a look at it and
say: ``This is the way we should go. This is for the benefit of
Canada. This is for the benefit of the citizens, not only of the
Atlantic provinces, but Ontario, British Columbia, Alberta, Quebec
and every other province in Canada''.
Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ): Mr.
Speaker, the hon. member for Rosedale is most eloquent, but it
would be even better if what he said made sense.
What he did say positively made my hair stand on end. When he
said that the new tax system-I see you are smiling because of my
hair, and I realize it is somewhat sparse-when he said that
companies in the maritimes would benefit under a system that
would increase their efficiency and performance and reduce their
production costs, he is on another planet. We are certainly not. We
had three days of hearings before the finance committee in January,
and while the hon. member for Rosedale was probably on the ski
slopes, we were working.
We heard testimony from representatives of large Canadian
corporations, average Canadian companies and small retailers.
They came to see us, and they said: ``You must postpone
implementation of this bill; you must postpone the implementation
of this harmonized sales tax system because it will create
considerable problems and the cost will be exorbitant:
implementation costs, $100 million; recurrent annual
administrative costs, $90 million, to be absorbed by maritime
What the government told us was nonsense. There will be no
improvement. At the present time in the maritimes it is total chaos.
So much so that the Liberal government no longer knows what to
do with this hot potato. It thought that by sweetening the deal for
the three provincial governments of the maritimes, by giving them
$1 billion, a $1 billion gift, there would no longer be a problem.
But that is not the case.
As far as Quebec and harmonization are concerned, if the
government thinks so highly of the kind of harmonization we
achieved in Quebec in 1991, it should pay us. If it works, we should
be paid for it. We should get exactly the same treatment the
government gave the maritimes. One billion for this agreement.
I have a question for the hon. member. Considering the message
he heard God knows where and what is really happening down
here, which is total chaos, and that representatives of businesses in
the maritimes are putting pressure on the government to refrain
from implementing the system, why is the hon. member on the
government benches unaware of the utter confusion caused by our
charming Minister of Finance with Bill C-70? Why does what he
says not reflect real situation?
Mr. Graham: Mr. Speaker, I am beginning to understand why
the member has so few hairs on his head. He has split them so often
in the debates in this House that he only has a few left. If he really
wants to have his feet on the ground and not be out in space, I
suggest that he keep the hair he has left by focussing his remarks on
the real issues.
He has raised no real issues here. Look at what took place in the
committee of which he is a member. The proof in committee was
that we will now save $700 million in subsidies to businesses in the
maritimes, $140 million of which will be in the retail sector alone.
These are all benefits to consumers, finally. This is what it
means to have your feet on the ground, to be realistic and to look
out for the interests of consumers in this country. I suggest to the
hon. member that he look at benefits to consumers in this country
instead of looking at the world through the rose coloured glasses of
his party on the ski slopes of Quebec.
Mr. Jay Hill (Prince George-Peace River, Ref.): Mr.
Speaker, it is a pleasure to have the opportunity to put a question to
the hon. member.
He spoke long and eloquently about what makes sense and what
does not make sense in our tax system. Therefore I would like to
put to him a problem that has been presented to me as a member of
Parliament, and I believe probably has come to all members of
Parliament, and that is the problem doctors in Canada have
experienced with the GST.
I would like to read in the little time I have from a submission
that was made to me by Dr. Laurie Cook, a doctor in my riding in
the city of Prince George. In his letter he states: ``Enclosed is a
copy of the Canadian Medical Association review of GST as
regards physicians in private practice. My guess is that I have lost
about $2,000 a year since 1991 as a result of GST paid but not
In the submission from the CMA I note a couple of points. It
states: ``Doctors are not asking for special treatment. Doctors are
asking to be treated like other self-employed Canadians and small
businesses. If doctors or self-employed individuals are considered
as small businesses for tax purposes it seems reasonable that
doctors should have the same tax rules apply to them that apply to
other small businesses. This is a question of fundamental fairness''.
Further it states: ``It is estimated that the 55,000 doctors employ
up to 100,000 Canadians. Physicians play an important part in job
creation. The effects of the GST and a proposed harmonized sales
tax could have an effect on individuals employed by doctors''.
In light of that, since the hon. member has spoken so long and
eloquently about fairness in the tax system, I wonder what his
feeling is about this particular issue. Will he support the doctors
being zero rated for GST purposes?
Mr. Graham: Mr. Speaker, the member raises a question which
I understand has been discussed before the finance committee. It is
a concern. There are always problems in any tax system which will
create a glitch here or there. The one about the doctors is one that
has to be faced.
As the hon. member well knows, doctors are paid at rates set by
the provinces. The integrated tax is a tax that is being developed by
both the province and the federal government together. It seems to
me that where this must be addressed, and where it would be
equitable for it to be addressed, would be at the provincial level.
The provincial governments in question should be looking at the
impact of the tax-after all they are party to this-on the medical
profession and ensuring that the medical profession will be
properly compensated for any inequities that are being imposed on
them from the tax.
I do not see why this poses any problem. There might be some
eventual time difference in terms of finding the correct solution to
this, but there is no principal problem that the tax itself imposes.
There is the need for a political recognition that this is an issue
and has to be addressed. It does not have to be addressed through
the tax itself. It has to be addressed through the proper
compensation scheme set by the province. I think that is the answer
to that problem.
Mr. Philippe Paré (Louis-Hébert, BQ): Mr. Speaker, generally
the member for Rosedale shows less partisan politics and more
rigour, as well as weighing his words a little more carefully.
To hear him speak just now, one would have thought we were
listening to the Prime Minister defending the fact that he had never
made promises. In the debate at hand, they are trying to have
people believe that the Bloc members are against harmonization.
That is absolutely not what it is all about. What it is about, is that
their party made commitments during the election campaign.
One of its commitments was to eliminate the GST, because this
was a detestable tax. This is not fabrication on our part, the Prime
Minister said so.
The Bloc Quebecois is not against harmonization. I wish to ask
him the following question, however: if harmonization of the two
taxes in the maritime provinces is so desirable, and so favourable to
economic development, why did he have to sweeten the pot to the
tune of $961 million to get harmonization?
Mr. Graham: Mr. Speaker, first of all, I would like to thank my
hon. colleague for his question. The first part of his question was
probably more of a comment than a question. I am delighted to hear
that the Bloc Quebecois is not opposed to harmonization. This
means they will vote for this bill.
If I am not mistaken, they have a problem with the last election
campaign. There is an election campaign coming up, let us see how
it goes. But as regards the bill before us, if I understood correctly
what my colleague, the hon. member for Louis-Hébert, said in his
remarks, his party is not against harmonization. That is good and I
am pleased to hear it.
As for the $900 million, if I got the point right, and I am the first
to admit that I am not an expert in this matter, which may be a
source of merriment to my hon. colleague across the way, any time
a new tax or system is introduced, there are always transaction
costs involved. They cannot be avoided.
In this case, the $900 million referred to are a form of payment
designed to help in the implementation and integration of the new
tax. Given the benefits to the local and Canadian economy, I would
say that $900 million is an entirely reasonable amount,
proportionate to what this tax will accomplish. That is all I can say.
The hon. member for Elk Island has the remaining three minutes.
Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I will use those
three minutes as wisely as I can.
Soon we will be seeing a spectacle in this House. A whole bunch
of members of Parliament who were elected by their constituents
are going to stand up one after the other, and they are going to vote
the way their whip tells them to vote. They are not going to listen to
what their constituents back home have to say on the GST and
harmonization. Instead, they will do as they are told like a bunch of
bleating sheep. I am disgusted with that.
I want to read from the speech of the member for Burin-St.
George's on March 12, 1993 when he was on this side of the House:
``Let me say how we in this party propose to deal with the issue. We
have said we would wipe out the GST. We intend to do that''. He
said that right in the House. They said it in the House, they said it
on the hustings, and what are they doing? Garbage.
``We have said that during the first year of our mandate we will
consult Canadians, which is more than this administration has
done''. He was referring to the previous Conservative government.
Have the Liberals consulted? Have they listened? No, they listen to
their whip. They will vote so they can get re-elected, so the Prime
Minister will once again sign their nomination forms. Then they
will be able to collect their MP pension plans. This is ridiculous.
He said: ``I want to tell Canadians who were not consulted last
time that this time they will be consulted''. That is so much
garbage. I am ashamed of the members opposite who do not have
the fortitude to stand up for the people but who will stand up for
themselves and vote the way they are told. I challenge them, do
they have any fortitude?
When that vote is called in a few minutes will they stand up and
speak for the people of Canada or will they speak for themselves?
Will they speak for their Liberal government which has totally
flip-flopped on this issue since coming into power? Will they do
that? I challenge them to do that. I do not believe they will but I am
going to ask them to. I am going to ask them sincerely. I am asking
My challenge is there. We will be watching carefully and so will
the Canadian people not only later this evening but in the next
The Deputy Speaker: Pursuant to order made Monday,
February 10, 1997 it is my duty to interrupt the proceedings and put
forthwith every question necessary to dispose of the third reading
stage of the bill now before the House.
Call in the members.
(The House divided on the motion, which was agreed on the
(Division No. 221)
Axworthy (Winnipeg South Centre/Sud-Centre)
MacLellan (Cape/Cap-Breton-The Sydneys)
McLellan (Edmonton Northwest/Nord-Ouest)
Harper (Simcoe Centre)
Hill (Prince George-Peace River)
Martin (Esquimalt-Juan de Fuca)
Mills (Red Deer)
White (North Vancouver)-73
LeBlanc (Cape/Cap-Breton Highlands-Canso)
The Deputy Speaker: I declare the motion carried.
(Motion agreed to, bill read the third time and passed.)
The House resumed from Friday, February 7 consideration of the
motion and amendment.
The Deputy Speaker: The question is on the amendment.
Mr. Kilger: Mr. Speaker, if the House would agree I would
propose that you seek unanimous consent that members who voted
on the previous motion be recorded as having voted on the motion
now before the House, with Liberal members voting nay.
The Deputy Speaker: Is there unanimous consent of the House?
Some hon. members: Agreed.
Mrs. Dalphond-Guiral: Mr. Speaker, members of the official
opposition will vote nay.
Mr. Strahl: Mr. Speaker, Reform Party members present will
Mr. Solomon: Mr. Speaker, the New Democratic Party members
present this afternoon will vote yes on this motion.
Mrs. Wayne: Mr. Speaker, the member for the PC party will be
Mr. Bernier (Beauce): Mr. Speaker, I vote with the government.
(The House divided on the amendment, which was negatived on
the following division:)
(Division No. 222)
Harper (Simcoe Centre)
Hill (Prince George-Peace River)
Martin (Esquimalt-Juan de Fuca)
Mills (Red Deer)
White (North Vancouver)-31
Axworthy (Winnipeg South Centre/Sud-Centre)
MacLellan (Cape/Cap-Breton-The Sydneys)
McLellan (Edmonton Northwest/Nord-Ouest)
LeBlanc (Cape/Cap-Breton Highlands-Canso)
The Deputy Speaker: The amendment is defeated. The next
question is on the main motion.
Mr. Kilger: Mr. Speaker, you will find there is unanimous
consent to have the members who voted on the previous motion be
recorded as having voted on the motion now before the House, with
Liberal members voting nay.
Mrs. Dalphond-Guiral: Mr. Speaker, members of the official
opposition will vote yea.
Mr. Strahl: Mr. Speaker, the Reform Party members present
will vote yes.
Mr. Solomon: Mr. Speaker, New Democratic Party MPs in the
House today will vote yes on this motion.
Mrs. Wayne: Mr. Speaker, the PC member will be voting yes.
Mr. Bernier: Mr. Speaker, I vote as I did earlier.
(The House divided on the motion, which was negatived on the
(Division No. 223)
Harper (Simcoe Centre)
Hill (Prince George-Peace River)
Martin (Esquimalt-Juan de Fuca)
Mills (Red Deer)
White (North Vancouver)-73
Axworthy (Winnipeg South Centre/Sud-Centre)
MacLellan (Cape/Cap-Breton-The Sydneys)
McLellan (Edmonton Northwest/Nord-Ouest)
LeBlanc (Cape/Cap-Breton Highlands-Canso)
The Deputy Speaker: I declare the motion lost.
PRIVATE MEMBERS' BUSINESS
Mrs. Daphne Jennings (Mission-Coquitlam, Ref.)
That the Standing Orders of the House be amended by adding the following:
``97.1 A standing, special or legislative committee to which a Private Member's
public bill has been referred shall in every case either report the bill to the House
with or without amendment or present to the House a report containing a
recommendation not to proceed further with the bill and giving the reasons
She said: Mr. Speaker, it is a great privilege to lead off debate on
Motion No. 267. This motion is designed to continue parliamentary
reform, a matter that began shortly after we came to this House in
1994 and has continued to the present day.
I want to begin by thanking the subcommittee on private
members' business for deciding that Motion No. 267 should be
votable. I also want to thank the member from Peace River who
appeared before the subcommittee on my behalf and spoke so
successfully that my motion should become votable.
As I said before, the motion is designed to continue the
parliamentary reform, which has taken place already in this House
of Commons. At the beginning of this Parliament, I argued in
favour of freer voting by members of this House. I argued that the
whips should not always be on government and opposition
members, that there is nothing inherently wrong with members'
voting occasionally against the party line.
Freedom of the private member had occupied a great amount of
space in the seminal report on House of Commons reform. That
report of the committee was chaired by the former member for St.
John's east, Jim McGrath. He tabled it in this Chamber in June
In the ensuing years, little has been done to implement this part
of the report. However, with a new Parliament with a decidedly
new look it might be possible to introduce some freer voting.
After some debate, a motion was passed unanimously in this
Chamber calling for freer votes, some bills to be sent to committee
before second reading and other changes designed to give the
private member some influence over the policy making process.
I am very pleased to say that we have made progress. I have
never hesitated to give the government credit when it is due, and I
must say that I have been pleasantly surprised that the government
members have been freed up by the whips to vote as they like
during Private Members' Business.
We have not yet reached the point where government members
are free to vote against the party line with reference to government
legislation. Unfortunately we are still faced with the scene of the
Prime Minister disciplining members of caucus who have dared to
vote contrary to the whip's orders.
An hon. member: Where is Jan Brown?
Mrs. Jennings: I think I am being hassled a bit, Mr. Speaker.
But at least we have moved in the area of freer voting in this
Chamber if only with reference to Private Members' Business.
The problem which this motion seeks to address is that while
freer voting may be in the Chamber, the whips are still on the
committee. They are on the committee with startling evidence.
What this motion seeks to accomplish is to require a committee to
give reasons in a report to the Chamber as to why it had decided not
to report the bill back to the Chamber.
I will use my own private member's bill, an act to amend the
Divorce Act to facilitate access of grandparents to their
grandchildren, as the example which shows the need for passage of
this motion and subsequently a change in the standing orders of this
Bill C-245, previously known as Bill C-232, was subjected as a
votable bill to three hours of debate in the House of Commons.
During that period a number of opinions were expressed but in the
main there was positive support from all sides. I must say to be fair,
the member for Nepean, the member for Ottawa West and the
Deputy Prime Minister were all supportive of this bill.
It received unanimous approval from the Chamber at second
reading and was sent for study to the justice committee. Again at
that committee opinions were expressed both in support of the bill
and in opposition to it, but at least to my mind no overwhelming
reason was presented as to why this bill should not become law. In
fact, the three family law lawyers at that time in committee as
witnesses spoke strongly of the need for such a bill.
However, when it came to clause by clause review of the bill in
committee the clauses were defeated and it was decided not to
report the bill back to the Chamber. The government had decided
the bill was not going to pass into law.
Quite frankly, that is the government's decision to make. If the
government does not want a law passed which makes it easier for
grandparents to gain access to their grandchildren and for
grandchildren to see their grandparents, then it is its right. The
government has a majority and we have not yet reached the stage in
the evolution of our parliamentary process whereby free votes can
take place in committees.
The consequence is that the bill gets mired in committee. This is
what is so distressful. It is also very destructive. It is destructive to
the democratic process.
The House is in favour of the committee process and yet in spite
of the rules and regulations of this House when a bill is sent to the
committee and not returned, we really have no recourse. We can
make a motion in the House whether the members would support
the bill's being returned, but if it is voted down there is no recourse
apart from that.
I think it is important to point out to the members of the House
right now that in this situation House members were unanimous in
their consent of this bill. We are talking about my bill, but it could
be any bill that gets unanimous consent. The committee members
completely ignored the good witnesses on this bill in the committee
This all took place in front of grandparents who could not
believe what they were hearing. They were in the gallery the day it
passed. They had just seen full support from the House of
Commons. They could not understand why it was buried in
More than that, I then had to go out across the country and speak
to grandparents groups. I had to try to explain to them why this bill
was not returned to the House. Really I had nothing to say. I was at
a loss. Nobody had given any reasons. In the clause by clause
nobody discussed the information that witnesses had given them in
support of the bill. I really could not do my job as a member of
Parliament. I was stymied.
If we do nothing else we have to be able to do our jobs as
members of Parliament. We have to be able to report the business
of the House back to the House so the House can then hear it and
we have to know the answers.
Through the adoption of Motion No. 267 I believe the people of
Canada would be able to find out why this particular bill got
stopped in committee.
In preparing these remarks I took a look at the rules in effect in
Great Britain, Australia and the United States to see if anything
similar to what I was proposing was in effect in those jurisdictions.
I can report that nothing similar exists but I would argue that it does
not need to exist.
In the United States, because of the loose party allegiances, a
great many bills are reported out of committee by votes which
cross party lines. A great deal of brokering must take place before a
bill is reported back to the floor of the Senate or the House of
Representatives. These loose coalitions which can form are
composed of Democrats and Republicans, both supporting the
cause. So there is not really a need for this legislation because they
already have something that is working in their area.
In Great Britain it has become common to vote against the party
line even on matters of government business. This tradition began
during the Heath administration and it continues to this day. This
willingness among MPs to disregard the wishes of the party whips
is also manifest in committees.
The present committee system in use at Westminster in England
was introduced in 1979. One important feature for our purposes
was that membership selection was taken out of the hands of the
party whip. Members are chosen by a group of backbench MPs.
Members are also free to elect their own chairpersons. We find this
quite different from what we have. It is not unusual in Westminister
to have a significant number of committees chaired by opposition
members. I remind members that in this House we have problems
even getting opposition members as vice-chairs.
In Australia and New Zealand voting against the party line is
tolerated but the influence of the backbencher is at its greatest
when there is a labour government. It sounds most unique certainly
to any of us in Canada that in Australia the caucus elects members
to sit in cabinet and the Prime Minister assigns the portfolios. This
leads to constant interaction and communication between members
and cabinet. Therefore there is little fear of sanctions being
imposed if one votes against the party line in committees.
This international comparison illustrates that we are not near the
point where the influence of the party whip will be lessened in
committee. Having said this, what do we do with bills that pass
through second reading, that are approved in principle in the House
of Commons and then are virtually killed in committee?
It is my suggestion that our rules should be changed to require
the committee to report its actions and to give reasons. We owe this
as members of this place to those who sponsor bills and we owe it
to the people of Canada.
I am aware that I have some good speakers on this motion and I
would certainly like to give them a chance to speak.
Mr. Paul Zed (Parliamentary Secretary to Leader of the
Government in the House of Commons, Lib.): Mr. Speaker, as
we open this debate I would ask members to bear in mind that this
is the first hour of consideration on this item. I encourage members
to refrain from making quick judgments one way or the other. As
straightforward as the motion may appear and as my hon. colleague
who moved the motion would understand, the motion entails the
removal of an authority which our predecessors undoubtedly with
good reason saw fit to delegate to committees. That is the authority
to decide that a bill would not be reported back to the House and
equally that a report to the Chamber was not necessary.
That is not to say that the proposal is without merit. On the
contrary, I believe it may find support from all sides of the House. I
only wish to draw my colleagues' attention to the seriousness of the
question that is before us. Let us take a moment to examine this
The motion proposes a carte blanche requirement that
committees of this House report back all bills referred to them for
consideration or that they submit a report with a recommendation
not to proceed further with a bill. Clearly, this would impose a new
restriction on the freedom of committees to determine issues
If I understand it correctly, it would also tie the hands of a
sponsoring member who, having succeeded in moving a bill to
committee, discovered that it was substantially or politically
flawed and wished to withdraw it. Under the terms of the motion,
that member, the very person who brought forward the idea, could
not secure the committee's agreement to set the item aside. No, as
today's motion now reads, the committee would be obliged to
prepare a report with its incumbent costs. Once submitted, that
report could be subjected to a concurrence debate using up still
more resources and precious time. Alternatively, it is not too
difficult to imagine situations where a committee might insist on
reporting a bill back to the Chamber despite the sponsor's wishes.
Do either of these scenarios represent the intent of the sponsor of
this motion? What would be the impact upon the other private
By its very nature, if adopted this motion will increase the
number of committee reports and very possibly the number of bills
reported back from committee. In the absence of other balancing
changes to private members' business procedures, this gives rise to
the possibility of a situation developing where once a session is
under way and committees begin reporting bills back to the House,
bills at report stage and third reading would block the access of
private members' bills to the order of precedence for extended
periods. I trust that this was not our colleague's intent.
This motion also leads to consideration of another well known
but little acknowledged difference between private members' and
government bills, namely, the level of scrutiny to which each kind
of bill is subjected.
Each of us knows firsthand or through conversations with other
members the energy which is required to bring a private members'
bill to the House. Each bill is, I believe, a triumph to the sponsor's
determination. Each of us also knows that no matter how much
time and effort we put into a bill we cannot begin to match the
resources, the time and the energy which goes into scrutinizing
each phase of a typical bill that is sponsored by the government.
Bills pass through distinct phases of research, policy
development, consultation, consideration of options and peer
review and parliamentary study. Each government bill must
successfully pass through intensive filters at each of those stages
before becoming law.
Try as he or she might, an ordinary member developing a bill
simply cannot match the minute level of scrutiny which
government bills undergo. Yet despite this difference, each private
members' bill has the potential to have the same impact on the day
to day lives of Canadians as any government bill.
I must therefore ask: Is it really our desire that committees report
on all the bills that are referred to them? Is it possible that some
bills should stay in committee? Is it possible that some members
wish to have their ideas expressed in the form of a bill considered
by committee but do not wish to proceed further?
There are few among us who have not wrangled at the way this
place works from time to time. Members on all sides have
experienced the frustration of having what seemed to be perfectly
good ideas stuck or worse, lost. But the disappointment of a few
members of Parliament does not necessarily justify the change
which is proposed today.
The simple fact is that this Parliament has made a great deal of
progress with respect to private members' business. All votes on
private members' business are now the subject of a free vote.
Under this system 13 bills have completed passage in the past three
years, including a private members' bill which required and for the
first time in Canadian parliamentary history received a royal
recommendation. Members may wish to note that in the eight years
prior to this Parliament, only eight private members' bills
completed the legislative process.
It is important to consider that within the context of this current
Parliament. Each time a change in the standing orders is proposed,
we need to stop and remind ourselves that this system is the
product of hundreds of years of parliamentary practice and
Ultimately we may decide to support this motion or improve a
version of it, but I for one am reluctant to do so at this point in time.
As we have benefited from changes implemented by our
predecessors, we of this Parliament have an obligation to ensure
that any changes we make would make improvements as well.
Would this motion, as it is currently worded, represent an
improvement? Does it recognize the inherent ability and
inventiveness of committees to develop their own solutions to
issues associated with the review and reporting of private
For example, I understand that at least one standing committee
has implemented a monthly review of all private members'
business referred to it. I would remind the House that we have
already asked one of our own committees, the Standing Committee
on Procedure and House Affairs, to examine private members'
business procedure. That committee has already heard from several
witnesses on a number of topics, including committee study of
private members' bills.
In conclusion, I would like to see that committee examine some
of the issues associated with the hon. member's motion. As a
matter of fact, I think it would be both consistent and a courtesy to
our colleague to ask that the committee include this motion in its
Mrs. Suzanne Tremblay (Rimouski-Témiscouata, BQ): Mr.
Speaker, I am really a bit disappointed in the speech by the member
for Fundy-Royal. In one way, I was expecting the member to be
truly democratic and open to a proposal, a motion that strikes me as
just as essential as the one presented by the Reform member.
It is sad to hear a recent arrival in the House of Commons, a
young person, doing everything he can to have us move backwards
and be less democratic.
Mr. Zed: That is not true.
Mrs. Tremblay (Rimouski-Témiscouata): That is the
discourse we have just heard. You did not perhaps write it yourself,
but that is what we heard. It is backward and antidemocratic and its
purpose is to prevent members from doing their work seriously.
Forcing a committee to table a report in the House is the least of
it. The committee should examine the bill. The member has left,
and he will be even more furious if he hears this from his office, but
I am going to propose an amendment shortly, at the end of my
speech, to force committees to work to reasonable deadlines.
I think it is extremely important that they stop making fun of
people. We are here as legislators. What matters is that we make
legislation. The government makes legislation, imposes gags, goes
to committee, expedites studies, clause by clause. We can have
bills with 272 clauses, like the one we have just debated on the
GST. The government has done its work so badly that it is
proposing 100 amendments in committee that we must examine
one after the other. Even at the very last minute, before tabling the
report in the House, they found a way to table another 13
What has happened to Bill C-234 is simply disgraceful. The
House sent this bill to committee. The committee was to examine it
clause by clause and we do not even know if the committee did its
work. It never reported back to the House. We are not asking the
committee to agree with the bill, but it is not up to a few individuals
sitting around a table in a committee with a government majority to
decide if the bill deserves to go to second reading, third reading, the
Senate or royal assent. It is not up to three, four, five or six Liberals
to decide for 295 members. This is the forum for democracy. It is
here that we must sit. It is not up to the committee to decide for
The decision has to be made here. And I think it is too bad the
hon. member for Fundy-Royal decided to argue in favour of the
motion. However, he did not manage to convince me, because I
could not go along with what he had to say.
The question of privilege raised by the Reform Party is, in my
opinion, essential to the problem. Unfortunately, the Chair
rendered an impartial ruling, very middle-of-the-road, saying that
our rights were not breached when a committee decided to keep our
bill. But this may be a way for committee to sabotage a service that
is available to every member of this House: to introduce private
So there should be a way to force the committee to report back to
the House. Private members' bills often address issues raised by
constituents who want the matter dealt with through legislation. Or
maybe they reflect the concerns of members, of a party, of a group
of people, a riding, a region, whatever. But we must not forget that
if we are here to pass legislation, we also have the right to draft
private members' bills. We have the right to debate them in this
House, and we have the right to take them through all stages until
eventually they can become law.
To kill a bill in committee shows an utter lack of respect for the
members of this House and for our constituents who sent us here to
work for them. It is also a way to gag the opposition. All sorts of
ways to muzzle the opposition have been found, and now another
one has been developed: bills sent to committee are left to die
there. Sometimes they die on the Order Paper. This one will die in
committee-it will be given a first class burial in committee-and
a committee, we must remember, comprises a majority of
This is also a way to kill a bill of a member of government who
has introduced a private member's bill that does not suit the
government. So it gets muzzled too. We are talking about an
ordinary backbencher, whose opinion differs from that of the
majority, so arrangements are made for his bill to remain in
Statistics show that, since the Liberals formed the government in
1993, fewer private bills have come to a vote in the House. Things
were better under the Conservatives. So it is important that the
government realize that opposition members are just as entitled as
government members to avail themselves of the possibility of
introducing private member's bills.
Of course, the government wants to avoid dissension within
caucus and it does not want this dissension to become public. We
saw this recently with a bill introduced by a member of the
majority; the majority of members voted in favour of this bill,
leading to dissension within the government. The ministers, in
particular, did not want to vote in favour of this bill.
So I feel it is important to point out that, in the motion presented
by the Reform Party member, all that is being requested in the end
is a change to the Standing Orders.
A standing, special or legislative committee to which a Private
Member's public bill has been referred must in every case either
report the bill to the House with or without amendment. How has it
been examined? What are the results of this study in committee?
Let it provide us with a report.
If the report says that the members of a committee have
thoroughly studied the bill and that it is not logical, would be too
costly, or ought not to be proceeded further with, the committee
would be entitled to do this. The members of the House would learn
to work very seriously in this connection and would take
committee reports seriously.
If only it was felt that the government was open to having all
members, even the backbenchers on its side, work on improving
the legislation we have, in order to solve the problems we are
experiencing in each of our ridings.
The committee would be required to make a report, to present to
the House a report in which it would recommend whether or not to
proceed further with the bill and give the reasons for
recommending the one course of action over than the other.
I hope that we shall debate this motion and that the necessary
lobbying of all members will be done to ensure that they really
understand the meaning and importance of this motion. The Bloc
Quebecois is in favour of this motion and we are adding an
That the motion be amended by adding after the words ``in every case'' the
following: ``, within six months from the date of the bill's reference to the
We are adding to the Reform member's motion the words
``within six months''. Let me explain our amendment. After six
months, the committee must report to the House. Its report could
say that it had not finished its examination. This gives enough
leeway to allow follow up on all bills tabled in the House in order
to develop a more open-minded atmosphere and mechanisms
which would encourage democracy.
The Deputy Speaker: I declare the motion in order.
Mr. Roger Gallaway (Sarnia-Lambton, Lib.): Mr. Speaker, I
am pleased to be here this evening to speak in favour of MotionNo. 267. I understand that it is a motion which speaks to Standing
Mr. White (North Vancouver): Mr. Speaker, a point of order.
Did I miss something in the speaking order? Would I not be next as
the member for the Reform Party?
The Deputy Speaker: The hon. member is on my list to speak
after the member for Sarnia-Lambton.
Mr. Gallaway: Mr. Speaker, I am speaking in favour of this
motion, which would amend the standing orders, specifically
Standing Order 97.
As I understand it, the hon. member for Mission-Coquitlam
wishes to require that a private member's bill, if defeated in
committee, be reported in the House that, first, it was defeated and,
second, why it was defeated.
I listened to the amendment proposed by the member for
Rimouski-Témiscouata. We are talking about two subjects here.
As the standing orders now stand the rules allow that a bill, if
defeated in the committee, the committee need not report back to
the House that the bill was defeated. The chair of the committee is
instructed not to report it to the House. This is, in effect, not
At the same time, I have to acknowledge that this whole business
of private members' business is being studied by a House
committee. A process of evolution is occurring. Since 1986 when
private members' business was given an earlier statutory
amendment, it has evolved a great deal in the last 11 years.
The member in question for Mission-Coquitlam was the author
and sponsor of Bill C-245, which was an act to amend the Divorce
Act. As a member of the justice committee, yes, it was rejected by
the committee. I was the person who moved that it not be reported
to the House because the clerk of the committee told us that the
rules only allowed that when a bill was defeated. There was no
other alternative. We had no choice but to move that once the bill
Also, this was a bill that was not whipped. There was no
intervention or interference from the whip's office. It was a bill that
was not discussed in the sense that, on one side of the table, we
arrived at a consensus. It was a vote based on the merits of the
legislation as proposed.
I would suggest that Bill C-245 was rejected for two reasons,
namely, that the Divorce Act already has a provision for
grandparents' access and that Bill C-245 was fundamentally flawed
in that it would include custody and access rights equivalent to
parents at the time of the divorce when those grandparents did not
have those rights prior to the divorce writ being issued.
It seems to me that, as a parent, we would not want to give rights
greater to grandparents than what they had prior to the divorce. No
one would want to engage in litigation when a divorce, which
becomes a rather crazy piece of litigation at best, could have added
another four petitioners or respondents to that type of action.
Although the intent of the sponsor of that bill was correct and
undoubtedly there is some room for amendments to the Divorce
Act to accommodate that, nonetheless I voted against the bill
because it was not the best piece of legislation.
The fact that the bill was never reported back to the House is the
sad part of the process. I, for one, can speak from personal
experience that a private member's bill is a lot of work. A lot of
heart and soul is put into it. The House agreed in principle that this
was an idea worth examining. The fact is that it went to a
committee and the committee did study it. Then we add the
ultimate insult not only to those on the committee but to the
sponsor of that bill by saying we cannot under the rules report the
bill to the House is a great tragedy.
In the end it was the House that referred this bill to the
committee, and the committee should be given the right and the
authority to refer it back to the House and to say that yes, in this
particular case the bill was defeated and here are some of the
reasons why it, independently or collectively, defeated a bill. Then
let the House decide if it was a good and valid reason.
Obviously the committee system in this place is not intended to
be the terminal point of pieces of legislation. Committees are there
to examine legislation at greater length than can possibly be done
in this House. They are there to summon witnesses and experts and
to determine if there are flaws, shortcomings or problems that were
not contemplated in the House which should be considered. They
are there to consider if legislation should be fine tuned, amended or
After the committee makes its collective decision obviously the
House which sent it there would like to hear what the collective or
individual opinions of those members might be with regard to the
meaning of legislation, apparently or unintended.
To terminate a piece of private member's legislation in a
committee is wrong. It is not proper; it is not fair. We have a chance
now to do that which is proper, right and fair. We can move to
amend the standing orders so that in the end we give to the House,
not to the committee, the right to decide whether the committee
was correct or whether the committee had enough evidence or
whether the committee, based on the evidence presented to it, came
up with the right conclusion.
We have a lot of boards in this country. For example, in Ontario
we have boards to determine whether an individual should be
issued a liquor licence. If the board turns the application down, the
individual can at least appeal to another body which can ask based
on the evidence before that board, did it follow the rules and arrive
at the right conclusion. That is what the courts are for and that is
why we have laws dealing with administration. The administration
act in Ontario deals with this.
It seems strange that fundamental laws of justice that apply in
the courts of this country are in some way short circuited. I do not
think it is a deliberate attempt, but the ultimate consequence is that
a committee can short circuit the collective judgment of this place.
I do not believe that was intended but that is what is happening,
which is why this motion should be adopted.
I have heard the other argument about the amendment that it
should be in six months. In the justice committee we have a rule
that every month private members' business will be reviewed by
the committee with respect to the status of items, including when
we will deal with them. I believe that is what the member for
Rimouski-Témiscouata was talking about.
We must also give private members' business the courtesy it
deserves. We should ensure that committees deal with it. In the
justice committee it works. I was the sponsor of that motion before
the committee, and the motion passed. At least private members'
business does not die in the in basket. In fact, it is dealt with. Not
everybody likes the results of how the committee deals with it but
if we follow this motion things will at least circuit back to the
House where we can let the House collectively deal with them.
This motion has great merit and I urge others to examine it and to
Mr. Ted White (North Vancouver, Ref.): Mr. Speaker, I am
pleased to rise to speak in favour of Motion No. 267. I would first
like to agree with the member from the Bloc who indicated she was
quite disturbed by the speech given by the first member on the
government side, the member for Fundy-Royal. It seemed like a
very aggressive attack on the intent of this motion.
The member for Mission-Coquitlam spoke at length about the
changes that have happened in other parliamentary democracies to
free up the process. They have abandoned the restrictive practices
that we still see practised here in Canada. Even the mother of our
own Parliament in the U.K. has abandoned a lot of these restrictive
practices we still see in this place.
What the member for Fundy-Royal called hundreds of years of
parliamentary tradition is more like hundreds of years of
parliamentary repression. We really need to break through that
cloak of protection that the government has and get some of the
people's business on the table.
Motion No. 267 addresses a very serious problem and I am sure
it is one that has touched almost every member of this House in one
way or another. All too often a votable private member's bill gets
shuffled off to a committee never to be seen again, making a
mockery of the entire parliamentary process.
In addition, because deliberations at the subcommittee, which
determines which bills are made votable, are held in secret, no one
ever knows why the bill was or was not made votable in the first
place. Frankly, the frequency with which these tactics of repressing
private members' bills are used is alarming, particularly when one
considers that it was this government that promised during the last
election campaign that it would overhaul the processes of the
House and make Parliament more transparent and democratic.
It is all very well for the government side to allow its MPs a free
vote on a private member's bill in this House, but now it is using
the committee to stall the bill instead of stalling it here on the floor
of the House of the Commons. What did we really achieve? If
anything, all it has done is put it behind closed doors so that the
public cannot see the government side rejecting it or manipulating
In fact, this entire problem that we are discussing here today is
only a symptom of a larger malaise which has plagued this House
for decades, namely that almost all the power is wielded by the
Prime Minister and a small group of people around him, leaving
the rest of us, and unfortunately our constituents along with us,
having almost no say in the way the country is governed.
I am frequently reminded of the sorry state of democracy in
Canada when constituents ask me whether MPs are actually able to
serve any useful purpose if they are not allowed to act
independently of the leader or the party when they need to
represent the views of their constituents. When I am asked that
question, it is pretty difficult to identify any situation in this House
where a voting machine could not produce exactly the same result.
It seems to me that maybe the entire government side could be
automated and connected to the Prime Minister's chair and not
even bother turning up. There could just be one button for the
Prime Minister to press.
This is precisely the kind of arrogant, patronizing, top down
control that the people of Canada are starting to reject. We really
have to see the system opened up a bit.
Not only are ordinary Canadians pretty well unable to participate
in the legislative process, they are not even informed of the reasons
behind the decisions that are made. Bills put forward on their
behalf by us, their elected representatives, often simply disappear
into committee, as most of the members have said here today,
whether or not they are made votable.
It is time to bring a measure of true democracy to our
parliamentary system and open the entire private members'
business to public scrutiny. That means the subcommittee that
decides whether or not a bill should be votable should also be open
and we should
see its decisions so that our constituents can find out the reasons
why our bills are not made votable.
I have an example of my own, Bill C-333, a bill which would
deport criminal refugees in lieu of sentence when they are found
guilty of breaking Canada's laws. That bill was put together with
the assistance of the lawyers of this House and by a crown counsel
in my riding, a Liberal supporter, a person who has put himself
forward for nomination as the Liberal candidate in my riding, an
experienced person who knows how the system works. What
happens? The bill is made non-votable. I do not know the reason
why. I have no idea. I write to the minister to ask for support for the
bill and I get a non-committal letter back saying how interesting it
will be to hear the debate.
There should not be a situation where skilled people put together
a bill that is warranted, that needs discussion in this House and we
cannot even get it votable.
This sort of action allows the government to put a stop to private
members' bills without going through the embarrassing process of
actually voting on them. If the government wants to defeat a bill, it
should do it right here in the public view where everyone can see
what is happening, instead of it being restricted as it was in the case
of the member for Mission-Coquitlam to a few grandparents who
were able to travel all the way to Ottawa to sit in on a committee
meeting and see what happened in that place.
All I can hope for is that they have gone back to their ridings, to
their groups and organizations and are telling people the travesty of
democracy that can occur in these committees.
Too many pieces of good legislation that have passed through
this House are mired in committee proceedings and never come
The single most powerful argument in favour of this motion is
that when a bill receives approval at second reading, the elected
representatives in this place are approving it. We have given a
message to the people of Canada openly in public in this place that
we approve of this legislation. It should not be up to the committee
to find personal reasons, as we heard with due respect from the
member opposite, why committee members do not like the bill. It
should be their job to make it work.
In the instance of the bill of the member for
Mission-Coquitlam there were witnesses before that committee,
lawyers, who said this bill is needed, which contradicts the
personal opinion of the member opposite. There were plenty of
examples from the United States where similar legislation works.
It is not up to a committee to thwart the will of the House. The
committee should have reported this bill back with amendments, if
necessary, ways in which the legislation could be made to work,
not a rejection of a decision of this House.
While Motion No. 267 will not solve all the problems associated
with our parliamentary system, obviously there are many areas to
fix, it does take an important step toward making the committee
process and the private members' business process much more
The motion, if passed, will be of benefit to all MPs, indeed all
Canadians and as such I urge all members of the House to support
it. My only fear is that the motion, if passed, will end up in a
committee somewhere and have the same fate that so many bills
before it have had, which is to disappear forever and to make no
difference at all to the way this place operates.
Mr. John Bryden (Hamilton-Wentworth, Lib.): Mr.
Speaker, it is a pleasure to rise to speak to this motion which I think
is a very good motion. I do support it in principle.
However, I am not sure that in addressing a very serious and
important problem it actually has all the answers. So when I
support the motion, when I vote for the motion, as I expect to do, it
will be with some qualification.
I am a player in this debate in the sense that I also had a private
member's bill that passed second reading and went to committee. It
was Bill C-224. It was a bill that would require charitable
organizations to disclose the salaries of their executive officers.
That bill left this Chamber to go to committee with the unanimous
consent of the House, so it had the full support of the House.
When it got to committee it caused a great deal of controversy.
Many witnesses came before the committee, some for and quite a
number, I am sorry to say, against it in principle. I was actually in
the course of a private member's bill before a standing committee
subject to attack ads in the Ottawa Citizen. It was a full page that
read: ``Do you have no sense of decency, Mr. Bryden?''. It was
perceived by some people that wanting charities to disclose the
salaries of their executive officers would cause disclosures that
some charities were not prepared to endure.
The original bill that I put through to the committee received a
lot of support in committee but it was seriously flawed.
Consequently I went back and with the committee's co-operation I
made a number of very important amendments to the bill.
But such was the controversy that the bill raised that the
government pre-empted the amendments that I was to bring
forward for my bill and implemented the changes by regulation. I
found myself in the situation where I had actually achieved my
target. In fact, Revenue Canada stiffened up the procedures for the
reporting by charities of their executive salaries. As a matter of
fact, Revenue Canada improved the measures which were proposed
in my bill.
Suddenly I was faced with the situation where the bill need not
go any further than committee. I spoke at committee to this
dilemma. I approved of what the government was doing. It did not
provide the penalties which I proposed in the bill. My bill
addressed only one fragment of the problem of the accountability
of not for profit organizations. I could not see going forward with a
bill that was incomplete in addressing a wide array of problems
when 90 per cent of the bill, such as it was, was addressed by the
government in its changes to regulations.
My colleagues on the committee, on all sides, concluded with
my agreement that the bill would go no further.
We were left with a dilemma. How would we tell Parliament?
How would we tell the world who saw the attack ads and who were
aware of the news stories that I had brought in with this
controversial private members' bill? How would we tell the world
that the government had been very accommodating and that in fact
my private members' bill had succeeded?
As it turned out, there was no way. We discussed in committee at
some length the possibility of my submitting a member's
statement; at the beginning of question period each member has an
opportunity to speak for one minute on any subject. I still felt that I
would not be returning to Parliament with the message that the
committee had considered the bill and had come to some decision
with respect to the bill.
The more we examined the issue, the more it became very clear
that there was no easy way to take the message back. As a
government MP, the irony was that there was no effective way for
me to report to the people of Canada that my government had paid
attention to a private member's bill.
So often we hear the criticism that private members' business
does not go anywhere, yet my bill was an example of private
members' business achieving something substantial. However, I
could not in any way effectively tell Canadians that the government
gives great weight to private members' business and in this
instance acted in my mind very responsibly and very promptly to
the initiative proposed in Bill C-224.
The reason I have reservations about the motion and why I
support it in principle but not necessarily in content is that the
parliamentary secretary raised the issue that if we report back to the
House, then the House has an obligation to consider the report and
there would be further debate. That raises the very real issue of
House time. If we take up House time, then other members who
may have similar private members' bills to put forward will not be
able to do so. If I take up House time with debate that is no longer
necessary, then I am depriving my colleagues of an opportunity to
do exactly what I did and have the same success which I achieved.
This is a very serious problem. As I understand it, there is a
committee of Parliament studying the whole issue of private
members' business. I want to say that private members' business is
very important in Parliament. Previous Parliaments have not given
it the place which is its due. They did not exploit the contribution
which private members can make to the legislation of this country
by introducing bills which do not come from the bureaucracy,
which do not come from government, but which come from
individual members who reflect the interests of their constituents.
Private members' business does need to be reformed. This
motion addresses an area of reform to which we should give due
attention. While supporting this motion, I hope it will lead perhaps
not to the implementation to the actual letter of the motion, but that
it will lead to a furthering of the examination of the problem.
Perhaps in the very near term we will come to a solution that will
accommodate the concerns very legitimately raised by the member
The Deputy Speaker: If the hon. member for
Hamilton-Wentworth wishes to proceed next time he will have
about three minutes and five seconds left. The member has
indicated he is finished.
The time provided for consideration of Private Member's
Business has now expired. The order is dropped to the bottom of
the order of precedence on the Order Paper.
A motion to adjourn the House under Standing Order 38 deemed
to have been moved.
Mr. Svend J. Robinson (Burnaby-Kingsway, NDP):
Speaker, I rise to speak out on the very important issue of the
federal Liberal government policies on pensions for Canada's
In October 1996 I questioned the Minister of Finance concerning
proposals by some provinces to cut pension benefits to seniors by
taking away full inflation protection. At the same time some
members of the Liberal caucus have suggested that it may be
necessary to cut the benefits of current pensioners in order to make
the Canada pension plan sustainable.
I questioned the Minister of Finance at the time as to whether or
not he was prepared to reinforce the commitment of the Liberal
government to the basic principles of the Canada pension plan and
in particular whether he would support proposals made by the NDP
governments of Saskatchewan and British Columbia which would
strengthen the plan and ensure its viability.
Unfortunately we still have no indication of in which direction
the Liberal government is moving on the fundamentally important
question of reform to the Canada pension plan. At the same time
many seniors in Canada are deeply concerned about the
government's proposed changes to the old age pension and the
guaranteed income supplement.
What the Liberal government proposed in the last budget is to
effectively abolish the universal old age pension and as well to get
rid of the annual age credit and the annual retirement income tax
credit. This would take us back to the days when pensions were
effectively a form of welfare. Clearly that is totally unacceptable.
The seniors benefit would eliminate universality and income
support for seniors. At the same time it would seriously erode the
autonomy of Canadian women. It would mean that the split which
currently takes place in which women are entitled as a right to their
pension would be ended by the calculation of family income.
I want to voice very serious concerns on behalf of my colleagues
in the NDP on those proposals. Certainly I hope that when the
government tables its legislation on the seniors benefit that it will
back off on that serious assault on the basic longstanding principles
of the old age security system in this country.
On the Canada pension plan, I want to suggest to the government
that it slow down this rush to suggest that the Canada pension plan
is in a state of crisis and instead that it adopt the proposal of the
chief actuary in his 15th report on the Canada pension plan. He
suggested that there be some modest changes to the CPP
contribution rate. In fact the proposal would result in a combined
employer-employee contribution rate rising to 13.91 per cent of
contributory earnings by 2030, just under 14 per cent in some 35
years time. I point out that combined level of contribution is
already significantly lower than that in many other OECD
I suggest that we put the plan on a very firm financial foundation
by adopting that recommendation of the chief actuary. At the same
time there are a number of other proposals that have been made
which the government could look at. An example is the proposal
that has been made by British Columbia finance minister Andrew
Petter and supported by Saskatchewan finance minister Janice
McKinnon to broaden the contributory base. There are a number of
It is fundamentally important that we acknowledge that we
should be strengthening public pensions in Canada. If that means
that we have to look at the current very generous tax benefits for
private pension plans and for RRSPs at the top levels, then I think
the basic objective should be to strengthen public pensions. This is
particularly important at a time when more and more Canadians are
relying on public pensions. Many Canadians simply cannot afford
to make contributions to RRSPs. Record numbers of Canadians are
cashing in their RRSPs and fewer and fewer workers are employed
at jobs in which they actually have workplace pension plans.
In closing, I want to appeal to the government to strengthen the
Canada pension plan, to scrap the regressive elements of the
seniors benefit and, more importantly, to look at the impact of its
proposals on the retirement income of elderly Canadians. This is
tremendously important because so far all that has been looked at is
the spending side. The government should recognize that the
impact of its proposals will be particularly serious to women and
other people who are disadvantaged in the work force.
Mr. Barry Campbell (Parliamentary Secretary to Minister of
Finance, Lib.): Mr. Speaker, the federal government is not trying
to push a particular package of cuts to the CPP, including changes
The federal government is trying to find changes which will
ensure that the CPP will be there for Canadians when they retire,
something all Canadians want and deserve. I must remind the hon.
member that the responsibility for the CPP is shared among the
provinces and the federal government. Therefore, changes require
the agreement of two-thirds of the provinces with two-thirds of the
population. The federal government is, therefore, working with the
provinces to find a package of balanced changes which all
provinces, including British Columbia, Saskatchewan and the
federal government can accept.
We cannot simply side with one or two provinces, as the hon.
member suggests, and expect to obtain the support of the other
provinces which are necessary to amend the CPP. That is not the
way we will find federal-provincial consensus.
However, the federal government has acted clearly and
decisively in its own jurisdiction for old age pensions, old age
security and the guaranteed income supplement with the new
seniors benefit, which when implemented in 2001, will continue to
be indexed 100 per cent to inflation. It is a response to concerns
about the sustainability of those supports. Most seniors, and most
particularly senior single women, will be better off under the new
I therefore suggest that the hon. member take these matters into
The Deputy Speaker: The House stands adjourned until
tomorrow at 2 p.m.
(The House adjourned at 6.57 p.m.)