GOVERNMENT ORDERS

EXCISE TAX ACT

Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, usually we say it is a pleasure to rise and enter into the debate. Frankly, I wish I did not have to give this speech today because it is one of such distress to Canadians. It is the one that turned the previous government on its ear and turfed it out. Primarily it was the imposition of the GST on the Canadian people that turned the people against the government of the day.

I would like focus on what this means to business. In order to do that, I have chosen to back into Hansard. It will be four years in March that the GST was being debated in the House. There was a bill brought forward which amended the GST rather substantially. That generated a lot of debate.

At that time the Liberals were in opposition. I went to Hansard to see what the Liberals said in the last Parliament about the GST, particularly about how it affects business.

There were several members who spoke about this. There are three people I would like to draw attention to. One is the Deputy Minister, another is the member for Broadview-Greenwood and the third is the member for York South-Weston.

I cannot help but have a great deal of sympathy for the voters of this country when they feel cynical about government. These three people very distinctly and explicitly gave the Liberal position on the GST. In fact, every one of these people took action on the side of the government when the GST had not been rescinded the way they promised during the election campaign.

I do not know whether the logic escapes Canadian people but, for example, the Deputy Prime Minister told the voters in her riding that she would resign if the GST were not abolished. There are really only two possibilities here. The first is that she, like millions of other Canadians, did not read the red book and the fine print in it. Therefore she actually fell into the group that really did not fully understand the Liberal policy. In that case, I recommend that she be considered quite incompetent because on such a major issue during the election campaign she should have known her party's policy. The second is she tried to deliberately deceive the voters in order to gain their vote without telling them the actual truth. We do not want to believe that but it is a possibility which should not escape our consideration.

I would like to talk about the member for Broadview-Greenwood who, previously in this Parliament, actually left the Liberal fold for a short time to sit as a Liberal independent, or whatever the name was that he chose, and then later on returned. I challenge him personally and all Liberal members to live up to what they committed themselves to in the campaign on behalf of the Canadian people in order to restore the trust and confidence that Canadians ought to have in this institution.

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I will quote from Hansard of March 12, 1993, pages 16902 and following. This what the hon. member for Broadview-Greenwood said: ``This whole GST operation by the government has been the worst initiative that any government has ever perpetrated on a people''. He said that the GST is ``a tax that has done a great deal to dampen and suppress entrepreneurial spirit and consumer confidence in this country. I know in my own riding it has practically cut the restaurant business in half, not to mention what it does to students who tend to work their way through either high school or college by working in restaurants part time. They count on not only this type of work in the restaurant-tourism business but on the tips. It has just gutted the hopes for half-decent, part time income for tens of thousands of university students right across Canada''.

Earlier today in question period we were talking about jobs and the jobless rate in Canada. The fact is that 17 per cent of our youth are actively looking for jobs. I know what that means. I have a son who for over a year has been looking for a job. He cannot find one. The economy does not say to him to come and work because it is

so depressed. Partially it is because of the pervasive effect the GST has had on it.

The hon. member for Broadview-Greenwood said: ``It has throttled people with this bureaucratic nightmare of a GST''. Those are the words spoken by that member almost four years ago. The hon. member for Broadview-Greenwood quoted the leader of the Liberal Party of the day, the current Prime Minister, by saying: ``My leader three weeks ago said that this GST will be scrapped. Make no mistake about it, the GST will be scrapped if we are given the trust to run the Government of Canada''. That is a direct quote from Hansard. Here is another one: ``This GST has done much damage to the retail business in this country. It has done much damage and caused much unemployment and welfare''.

When the hon. member for Broadview-Greenwood was on this side of the House, he identified the true implications of the GST. He made a great point of expressing those sentiments. He went on to say: ``If you developed a fair tax system in this country and if you put 400,000 or 500,000 people back to work, you could find $15 billion within four or five months, not to mention the fact that we would start giving people back their dignity. We have to understand that there are close to two million people in this country who are out of work''.

Listen to these beautiful words from that member. I am happy to quote him because he is right. It is unfortunate he has changed his mind. He said: ``I cannot imagine a single member of Parliament in any party in this House of Commons wanting to defend the status quo in terms of tax law in this country. In fact I have not met a member of Parliament who believes that the tax act of this country is fair, simple or efficient. We all agree that this 2,400-page document with its rules and regulations and its exceptions and its exceptions to exceptions is no longer intelligible. This tax act combined with the GST has caused an underground economy of cash deals in this country. Experts estimate that right now there are over $100 billion of cash transactions in this country''.

He continued: ``All kinds of schemes are going on in this country right now. The underground cash economy is just out of control''. He then went on to discuss this.

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It is very clear to me from this sample of three that there must have been many other members of the Liberal Party, but particularly these three, who said explicitly that they were going to scrap the GST. The fact that they have not done so and have changed their views, their words and their actions since they were elected to government is unconscionable.

The member for Broadview-Greenwood said that the tax act is so complex. He went on to say:

The GST has exacerbated that. No matter how many amendments or refinements the government brings in on this bill it cannot make a silk purse out of a sow's ear. The GST is a sow's ear and the Canadian public is never going to accept it.

I will quote again from Hansard. At page 16906 the same member said:

We have a situation today where the government wants us to support a bill to refine the GST. I am totally opposed to the GST. It is an inefficient, unfair tax. Small businessmen despise the GST. They want it replaced. They definitely want to make sure we do it in a responsible way. We cannot just snap our fingers and pull something out of the hat. There has to be a serious debate on tax reform, but they do not want us to defend the status quo which the Conservative government wants to defend. We are not going to defend the status quo. There is no way. There is absolutely nothing that could ever make me change my attitude toward the GST.

The Speaker: According to what I have hear the member's time is up.

Mr. Epp: I am surprised.

The Speaker: I am surprised too because I was enjoying it so much. I think we will pass on to the hon. member for Saint John.

Mrs. Elsie Wayne (Saint John, PC): Mr. Speaker, I would first like to say that I am pleased to be able to speak to the report stage of Bill C-70.

I would also like to inform my colleagues from the Reform Party, notably the member for Prince George-Bulkley Valley and the member for Medicine Hat, that the member for Saint John has spoken out against the HST on a number of occasions. I also brought the Retail Council of Canada to my riding of Saint John, New Brunswick for a luncheon with the board of trade and the business community. I have spoken in this House several times and have written several articles for the paper as well. I just wanted to clarify a couple of statements that were made in this House.

The concept of harmonization is worthwhile, however not this government's version. I cannot support a bill which will hide taxes, shut down stores in Atlantic Canada and kill jobs for our people. This bill is nothing more than a political solution to cover up the Liberal failure to scrap the GST. Who is going to pay the price for a promise made during the heat of an election? The people of Atlantic Canada.

The amendments made in committee and the amendments we are debating today do not address the problems because the bill is fundamentally flawed. This comes as no surprise when we have a government rushing to live up to a poorly thought out campaign promise before the election rolls around.

But it is more than just that. There were hearings up here on the Hill and no one informed our people back home in New Brunswick, Nova Scotia and Newfoundland that if they wanted to come and make a presentation, the government would pay their way. No one mentioned it to them. They did not know this because no one told them. Is that because the government did not want to hear from them?

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It is ironic that the majority of those affected by the HST have not had their say about this legislation. I am sure many Atlantic Canadians would have been delighted to come here to make it clear how much they oppose the legislation on this harmonized tax with tax in pricing. One also has to question why hearings were not held, as I have stated, in New Brunswick, Nova Scotia and Newfoundland.

One of the biggest problems with this legislation is the tax included pricing component. Retailers, businesses and restaurant owners to name just a few have explained what it will cost in dollars to switch to a tax in pricing system. More important, they have also explained the cost in real terms, in terms of jobs, jobs, jobs. Twelve stores have already stated that they will be closing down because of the harmonized tax and the tax in pricing.

It is also ironic that while the government is trying to make Canadians believe it has lived up to one campaign promise, it is reneging on the other promise of jobs. A representative from K Mart Canada said that the company will face an inevitable loss of jobs as marginally profitable locations become unprofitable due to increased costs.

One only has to look at the population of the area of Nova Scotia, New Brunswick and Newfoundland. Take a look. As the Retail Council of Canada stated, it is a much smaller population than central Canada, Quebec, or out west. It said that the profit there is very marginal and asked: ``What would you do if you were us? Would you stay there or would you just stop? Would you pull out?''

This is a very serious situation. Those who have come to see me up on the Hill are: the Hudson's Bay Company, Canadian Tire, Sears, Eaton's, Shoppers Drug Mart. The list is long and they are all saying that they may pull out of Atlantic Canada.

When the Liberal MPs from our area vote for this, they will be going against the wishes of their people. How can they possibly do that? How can any of the MPs from these provinces possibly vote for this when, as the hon. member from the Reform Party just quoted, they stated when in opposition that it was no good? They said that this was wrong and that if they formed the government, they would never do it.

The hon. member for Acadie-Bathurst, who is now Minister of National Defence and Minister of Veterans Affairs, said: ``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''. He also stated: ``The whole idea of visibility was seen by many Canadians as being a deterrent to free-spending governments which would just raise the tax, get the money it needs at election time for promises and spend it foolishly''. These were statements in Hansard in 1990.

How are Canadians to hold this government accountable when they do not know which position to believe because it changes from year to year? Perhaps the government members opposite could clarify their position and explain why it has changed so drastically now that they are the government.

It has just been brought to our attention that Assumption Life in New Brunswick must now charge HST on its management fees for segregated funds. However companies headquartered outside the harmonized zone do not have to charge the HST. If you were someone in New Brunswick, would you go to Assumption Life now knowing this? Any company selling mutual funds will choose not to locate in our area of New Brunswick, Nova Scotia and Newfoundland. Companies already in the harmonized zone would be better off relocating to a non-harmonized province which is what they are telling us every day.

This legislation will drive business away from the Atlantic region. We do not want to be have not provinces. We want to contribute to our country, but we cannot do this if this government continues to cut off our legs from underneath us when it brings in a tax such as this.

Representatives from One Voice, The Canadian Seniors Network came to see me. They explained that seniors will be paying more. One little senior called me and said: ``I have very little money but when this new tax comes in, I must pay it on my heating bill, I must pay it on my hydro bill''. She said further: ``I do not believe that I will be able to go to the hair stylist any more to get my haircut. I cannot afford any more, Elsie. I can barely meet the needs that I have today with the money and income that I have. In addition, some groceries and children's clothing will cost more''. This legislation is not good for the people of Saint John, my riding. It is not good for the people in New Brunswick, Nova Scotia and Newfoundland.

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One must ask oneself why only New Brunswick, Nova Scotia and Newfoundland agreed to the HST. Would it be because these three provinces are the only provinces left in Canada with Liberal premiers? Would it be because all three provincial governments received a substantial monetary gift from the federal government on agreeing to implement the HST? Did they have any choice, because of politics? Why would all other premiers across the nation

say no and only the three Liberal premiers say yes? The answer is quite obvious to all Canadians.

I will conclude by urging the government to rethink the legislation. Please do not make Atlantic Canadians pay the price for ill-conceived campaign promises and hasty attempts to live up to them.

Mr. Harold Culbert (Carleton-Charlotte, Lib.): Mr. Speaker, I am delighted to have the opportunity to join in the debate on this most important topic.

For the benefit of the House we should take the opportunity to review the famous GST and where it came from. As most members are well aware it is derived from the former manufacturers' sales tax. The previous administration decided that it would have a GST at 7 per cent across the country. Of course the proposal was that the government would use it to reduce the deficit.

We know the legacy that the Tories left us in paying the deficit, that each and every goal and projection that was set went in the opposition direction. For some reason instead of the deficit going down, it continued to go up until this government assumed office and assumed a $42 billion deficit at that time.

What happened to that $14 billion to $15 billion that was projected as new revenue from the GST? It went into the general revenue fund. The manufacturers' sales tax had disappeared. The new GST was here. Contrary to what others have said, and I admit I can only speak for myself, I know what the policy was of my party when I was campaigning. People did ask me what I thought would happen to the GST. Of course they loved it so much they wanted it left completely alone.

I said it would be changed to a fairer and more equitable tax system both for the small business people in our communities as well as for the consumers. I pointed out very clearly and in many cases said it twice: ``Hear me, it has to be replaced in order to provide approximately the same amount of revenue''.

Originally we were told that the GST would provide enormous additional dollars in revenue that would expedite paying down the deficit and we would reach a balanced budget much faster in the early 1990s.

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It was projected that the $14 billion or $15 billion that came from the manufacturers' tax which was replaced by the GST actually came to approximately $28 billion. When the rebates and the additional administration costs were taken off so we were back to the the $14 billion or $15 billion figure which was the level of income from the previous manufacturers' tax.

When the government looked at possible ways of replacing that revenue, the finance committee travelled across the country from one end to the other, including my home province of New Brunswick of which I am very proud.

In New Brunswick I listened to presenter after presenter. Some were from the business sector, some from the industry sector, some from agriculture, some from the education sector and some from the consumer sector. They said we had to have a simpler system. We had to come up with a harmonized system that would reflect the total of the taxes they are paying. I agree it has to be very up front and very forward.

Following all of the presentations and hearings across the country after some two and half years, the finance committee came forward with its recommendation to harmonize the two taxes, the provincial sales tax and the GST into a new harmonized sales tax.

The first three provinces that came on board, in addition to the province of Quebec that had the harmonized sales tax, were the provinces of Newfoundland, Nova Scotia and New Brunswick. Some have criticized and complained about the formula that was arrived at, not for those three provinces, but for every province in Canada to use. It is a formula that would be fair and equitable to all provinces and treat each and every one in the same fashion.

What does harmonization do for the business sector and the retail sector? I have talked to many business people. First of all it means that they have to keep one set of books instead of the previous two. It means that they have to issue one cheque instead of the previous two. It means that one tax auditor will come in and review their books instead of two. It is a much simpler system for every business person throughout the communities that are involved in the retail sector.

What does it do for the consumer? Report after report and survey after survey have indicated that the consumer does not want any more surprises when he or she arrives at the cash register and wants to know exactly what amount must be paid.

There is no intent to hide the total amount of taxation that would be paid on any product that is taxable at the cash register. As a matter of fact the proposal stated very clearly that consumers want it shown on the cash register tape the price of the product, the tax that is included and the total. On the shelf the consumer will see the price that is being paid which includes the taxes.

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It is not a hidden tax. It is a tax that is very up front. Right on the cash register tape is everything that is purchased. Let me look at some of the key elements.

It says: ``Consumer in participating provinces will benefit from the removal of the provincial retail sales tax from business inputs. This advantage, combined with the benefit of a lower rate and lower compliance costs for businesses, will lead to lower consumer prices on many goods. Tax inclusive pricing rules will ensure that consumers know the full price of the good or service before paying for it while keeping the amount of the rate of sales tax payable visible on the receipts''.

As I mentioned, it is simpler for the business community, simpler for the consumer and it provides the revenue toward decreasing the deficit that we know the government assumed at $42 billion plus. We know that Canadians want the government to put its financial house in order. That is exactly what is being done.

We are not the first government ever to set goals. There have been others. However, I suspect we are the first government in recent time to have been able to achieve those goals, to meet or exceed them in each and every instance and we will continue to do so.

Mr. Philip Mayfield (Cariboo-Chilcotin, Ref.): Mr. Speaker, I am pleased to join the debate on the report stage of Bill C-70.

Some members opposite would have us believe that the debate is about harmonization of the GST with the provincial sales tax in the Atlantic provinces. They would have us believe that the debate is about doing taxation better. That is not what it is about.

I take my cue from a headline on the Saint John Telegraph Journal editorial in January which said: ``Most people can hold their breath longer than the Liberals can hold their principles''. That is basically what the debate is about.

The debate we are having today is about integrity, about responsibility and accountability; the lack of accountability of the government to the Canadian people. The debate is about the government's failure to keep its election promise to scrap, kill and abolish the GST. It is about why Canadians cannot trust the government.

Integrity is important to Canadians. When I travel around my riding in British Columbia, people stop and tell me that they do not expect miracles from their politicians, but they do have some expectations. They expect politicians to show compassion, expect them to care and to set an example and to keep their word. The Government of Canada has fallen short of these expectations. It has not kept its word. It has broken faith with those who trusted it. Canadians cannot trust the government for three major reasons.

The first reason they cannot trust the government is because during a CBC town hall on October 18, 1993 the Deputy Prime Minister promised Canadians: ``I have already said personally and very directly that if the GST is not abolished, I will resign''. The Liberals refused to abolish the GST and it took months of denial, cover-up and flip-flops before the Deputy Prime Minister finally did resign to run again in a byelection. She resigned only after a poll told her that she would win. This is not resigning. This is not responsible action. This is not integrity.

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It is like saying ``you caught me this time, I will go through the motions but I still don't have to be accountable''. Canadians do not trust this government.

Let me share with members again the second reason why this is the case. The finance minister said on April 4, 1990: ``I would abolish the GST''. That is what he said. Instead of abolishing the tax and keeping his word after being elected, the finance minister tried to cover up his broken GST promise. He hid behind the coat-tails of the new tax he created, the harmonized sales tax.

Yes, the finance minister, instead of keeping his word, bribed three Atlantic provinces with about $1 billion cost to the rest of the country to harmonize their provincial sales tax with the GST. This is his way of saying that the GST has been abolished.

Mr. Szabo: Mr. Speaker, I rise on a point of order. I understand that debate does get a little hot, but the member has just imputed motive to the Prime Minister, talking about bribing the electorate with regard to the arrangements in the maritimes.

Would the Chair raise this matter with the member with the view to withdrawing that comment?

The Deputy Speaker: Perhaps the hon. member for Cariboo-Chilcotin would indicate what it was he said in the context of what has been raised by the member for Mississauga South.

Mr. Mayfield: Mr. Speaker, what I said was that the finance minister, instead of keeping his word, bribed the three Atlantic provinces with $1 billion to the cost of the rest of the country to harmonize the provincial sales tax with the GST and that this is his way of saying that the GST has been abolished.

The Deputy Speaker: The dictionary is on the table and if we look in it we will see that ``bribe'' means to give money to or induce somebody to do an illegal act.

I realize that we cannot get into a definitional fight over every word that is used, but I would ask the hon. member, if he accepts that definition, if he might consider rephrasing that.

Mr. Mayfield: Mr. Speaker, I would be happy to do that. The Deputy Prime Minister used the money of the rest of Canadians to enforce the GST, to entice the Atlantic provinces to accept this GST.

Canadians cannot trust this government. That member is one of the reasons why. Think for a moment about what $1 billion could do for the hospitals that are closing down in this country and for the

students who cannot go to school because their tuition is too high. Such is the price of a broken promise.

I know the finance minister apologized about breaking his GST-

Mr. Culbert: Mr. Speaker, I rise on a point of order. I apologize to stand on a point of order again, interrupting the speaker across the way. That is not my intent.

However, he referred to an individual member. I am not certain whether he is referring to my colleague who just spoke on a point of order with regard to comments that were made or if he is speaking about some other colleague. I would like to have clarification.

The Deputy Speaker: Incidentally, this time will not come out of the speaker's time. He will recapture the time that has been lost with points of order.

I was listening carefully this time to the hon. member and I do not think he was accusing the member for Mississauga South or any other member of doing something that was beyond the pale. I appreciate that the member for Carleton-Charlotte thinks he was but I am sorry, your Speaker cannot find anything that was said that is not within what happens here every day-the member may say unfortunately-all day in debate.

Mr. Mayfield: Mr. Speaker, with perseverance we shall endure. I know the finance minister apologized about breaking his GST promise, but saying ``I am sorry'' does not pay the bills. It does not help the sick. It does not help the most vulnerable in society.

The federal legislation for the harmonized sales tax is before this House today, Bill C-70. It should not be called a harmonized sales tax but perhaps a coat-tail tax or a tax that entices provinces with other people's money.

Bill C-70 is a reminder to all Canadians that the Liberals cannot be trusted to keep their word. Bill C-70 is a symbol of broken trust.

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Why cannot Canadians trust this government? The Prime Minister leaves us with a third and final reason. In October 1990, during an interview with the Toronto Star, the Prime Minister said: ``The Liberals will scrap the goods and services tax if they win the next election. I am opposed to the GST, I have always been opposed to it and I will always be opposed to it''.

In October 1993, just before the election, the Prime Minister spoke again about the GST: ``Yes, I will abolish it''. In May 1994, after winning the election, he said about the GST: ``We hate it and we will kill it''.

However, just yesterday in the Toronto Star, the Prime Minister said: ``I have always said we want to replace the GST with a harmonized tax''. Come on, let us speak the same language.

The Prime Minister not only told the Canadian public that he would scrap, kill and abolish the GST, he told the Liberal caucus the same thing. The member for York South-Weston told the House on December 12, 1996, from page 7467 of Hansard:

Mr. Speaker, I think what is compounding the problem is that the Prime Minister refuses to recognize what his promise was. He has now had the opportunity to review both the audio and video tapes. Not only did he promise Canadians that he would scrap the GST, he also promised caucus on a number of occasions that he would scrap the GST.

Compounding the problem over the next couple of days, the Prime Minister denied ever saying he would scrap, kill and abolish the GST. He said: ``We have not lied. We have always said there would be a replacement tax. I recognize that it is not always been clear and has remained a problem in public opinion''. It seems the Prime Minister at this point was trying to pass the blame for his broken promise on to the Canadian public but it would not fall for it. It knew he had broken his word.

Therefore the Prime Minister tried to set the record straight a couple of days later by saying the following: ``If I and others left the impression with anyone that we would be able to do away with the tax without replacement, I want to tell them I am sorry''. Only after experiencing incredible public pressure was the Prime Minister willing to admit he was wrong. Canadians can no longer trust this Prime Minister or believe his words.

This truth is reflected in public opinion today. Let me quote from a letter sent to me earlier this year: ``The CBC town hall meeting with the Prime Minister is the best of what CBC is all about. The Prime Minister again was not honest with Canadians. I don't trust the Prime Minister. I don't believe a word the man says''. This is what average Canadians are saying about the Prime Minister. Canadians cannot trust this government.

In closing, I want to say what a Reform government will give Canadians. It will give four tools to keep its elected officials accountable to their promises. These four tools are the following. First, free votes in Parliament so that MPs ultimately take their voting instructions from their electors, not the party whip. Second, the right to binding referendums so that Canadians have a direct say in issues affecting their interests. Third, the right to citizen initiatives so that Canadians can force an issue on to the referendum ballot if the government chooses to ignore it. Fourth and most important of all, the right to recall, to fire MPs who fail to keep their commitments to the people and lose their trust.

The GST fiasco has taught Canadians that they cannot trust this Liberal government. In fact, Canadians have learned that they can only trust themselves. If we give Canadians the tools that I just mentioned they will continue to build this great country. They will build a strong country, built not only on the foundation of peace, order and good government but on the foundation of integrity, responsibility and accountability.

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Ms. Jean Augustine (Etobicoke-Lakeshore, Lib.): Mr. Speaker, I am pleased to speak at report stage of Bill C-70. Despite the diatribe that has been heard before me, this debate is really about harmonization. This debate is about the new single harmonized tax system. This debate is about a simpler, fairer and more economically efficient harmonized tax system. This debate is about benefits that would be realized by individuals, communities and groups.

I will speak about five different areas in which the new single harmonized tax system will benefit consumers and businesses. I want to talk about the economic benefits it will have for all Canadians. I want to talk about the lower administrative costs. I want to talk about organizations such as colleges, schools, hospitals, universities and the registered charities which will benefit from this system.

My colleague spoke about consumers. He spoke about the benefits which will be realized as a result of the tax inclusive pricing rules inherent in Bill C-70. Those rules will ensure that consumers know the full price of a good or a service before paying for it, while keeping the rate of sales tax visible on receipts.

Another of my colleagues spoke about businesses which will have to deal with only one set of sales tax forms. There will be one set of operating rules. There will be one tax administration.

There is a business in my area run by Mr. Cinelli, a hairdressing salon. He has spoken about the time and the effort which he has to expend because of the GST. It is complicated and it affects his business.

There are benefits for Atlantic Canada. Members of Parliament from Atlantic Canada have spoken about the benefits the new system will have for business.

Would we in Ontario have such benefits? All Ontario members of Parliament are awaiting Premier Mike Harris' pledge to harmonize the system. We appeal to him at this point in time to get onboard and to consider the harmonized system which he knows will benefit the province of Ontario. It will benefit the businesses of Ontario, especially the businesses that currently have to deal with so much administration.

We have also heard from members across the way a whole series of difficulties they see with the system. They do not seem to understand the intent of harmonization. Or maybe they refuse to understand the benefits which a single, harmonized tax will provide for businesses. Economic benefits will flow from the removal of tax on business inputs. There will be lower administration costs.

A lot of time has been spent talking about the Prime Minister and individuals who spoke while in opposition without fully considering the low administrative costs which businesses will realize. The intent must surely be to ensure that Canadian businesses survive and grow and that administrative and economic benefits are provided to those businesses so they can provide jobs.

We have in Canada 73,000 to 75,000 registered charities. Four thousand of them are comprised of hospitals, universities, public colleges and schools. They are not for profit organizations engaged in charitable activities.

In my riding there are several hundred registered charities. They vary from small relief organizations, anti-poverty groups, benevolent groups, the cancer society to others like the children's aid society, the YMCA and YWCA. Those charities are small. They have unsophisticated accounting systems and rely heavily on volunteers. Those organizations will benefit from the harmonized sales tax system. The administration of those organizations and the workload of their volunteers will be simplified as a result of the harmonized sales tax.

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Bill C-70 is designed to significantly simplify that burden for charities. What I consider to be the four or five important measures that will assist those organizations-

The Deputy Speaker: The hon. member for Swift Current-Maple Creek-Assiniboia, on a point of order.

Mr. Morrison: Mr. Speaker, the hon. member's eloquence is being wasted here. There are only nine people in the Chamber. I call for a quorum.

The Deputy Speaker: Yes, the hon. member is correct. Call in the members.

And the bells having rung:

[Translation]

The Deputy Speaker: Since there are 20 members in the House, we can proceed.

[English]

Ms. Augustine: Mr. Speaker, Bill C-70, the new single harmonized tax system is designed to significantly simplify the sales tax rules for charities. The legislation includes measures to streamline the definition of charity to make the application of sales tax rules simpler. In speaking with several of the volunteer organizations and charities in the riding of Etobicoke-Lakeshore, those measures in Bill C-70 please them greatly.

The bill raises the existing small supplier thresholds applicable to taxable supplies and gross revenue, reducing the number of charities required to register for sales tax purposes. The measures the small charities in my riding see of benefit consolidate and simplify the rules governing the charities' taxable activities. These

measures within Bill C-70 are designed to assist charities. They are designed to ensure that volunteers can work productively within those charities without spending administrative time. These are benefits within Bill C-70. Another measure simplifies the requirements for filing returns and claiming rebates. Again we know the volunteer hours that are spent doing those two important tasks.

The overall effect of the changes are really what we should be focusing on; that is, simplifying the rules, reducing the workload that volunteers give of their time and effort. All of this would seem to be outside pure accounting and economic lines. Those are reasons that Bill C-70 needs to be supported.

It is also important to note in this debate that Bill C-70 speaks about efficiency, fairness and simplicity in the tax system. It calls on every one of us in this House on behalf of our constituents to ensure that we are providing them with the ways in which they are able to respond to bureaucracy, government measures, revenue issues and taxation. We are providing them with those measures.

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It is important that this is supported. All members on all sides of the House must realize the discussion is one that speaks to a harmonized system that would benefit our entire country. They too have spoken about a difficulty with the old GST, the difficulty in the system, the labour intensity in the system and the fact that it is a tax that stands in the way of businesses doing what they should do and could do for all Canadians.

I call on all members on all sides of the House to recognize that this debate is about harmonization. This debate is about a single harmonized tax system. This debate is about simplicity, fairness and an economically efficient tax system. I call on all members to focus on the debate and support the bill.

[Translation]

The Deputy Speaker: It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Leeds-Grenville-national gun amnesty; the hon. member for The Battlefords-Meadow Lake-agriculture.

[English]

Mr. Ed Harper (Simcoe Centre, Ref.): Mr. Speaker, I appreciate the opportunity to take part in this debate on the Group No. 3 amendments to Bill C-70.

The issue here is not the GST or the HST in debating the harmonization of the GST. The real issue here today in this House is accountability, integrity and responsibility. The issue here is damage control, damage to this Liberal government for a failed broken promise.

Earlier today, and I think it is the 27th time, this Liberal government brought in closure to cut off debate. Time allocation is the nice term that is used but it is a violation of the democratic process which would allow a full debate on an issue that is so important as this one.

This is one of two major broken promises made by this government. There may have been 170 or 180 promises in the red book but there are only two promises in that red book that counted heavily with about 90 per cent of Canadians who put their trust in this government. One of course was jobs, jobs, jobs and the other was the fact that the Liberals were going to scrap, abolish and get rid of the GST. We do not have the jobs and we do have the GST. We have the old campaign of say whatever to get elected and then once elected do whatever.

Let us talk about jobs before I get back to the GST. This government cannot run and hide from its failure in jobs. The UI stats prove monthly its ongoing failure to create the jobs that our children and grandchildren are looking for. The government cannot avoid that.

Three years have been spent trying to deal with that problem and with no success and still no understanding of what has to be done. This Liberal government has still failed to connect the fact that high taxes are what contribute to high levels of unemployment. The Liberals ran on a $6 billion infrastructure program that was supposed to kick start the economy and create the jobs that they had promised in the red book and they failed.

As a matter of fact the auditor general has criticized the $6 billion infrastructure program as a waste of tax dollars and a failure in creating the jobs. Unbelievably, the Liberals are looking at another one, only this time instead of being $6 billion which failed, apparently they believe that something less than that will be successful. Is there no one in the government asking the question: What we are doing is not working, why should we be looking for a better way?

(1625 )

The Prime Minister got up in the House today and talked about jobs. The only jobs that we can take credit for in this country right now really have come about because of free trade and NAFTA, two programs the Liberal government strongly opposed when in opposition. As a matter of fact, another red book promise was that the Liberals were going to rewrite NAFTA. Thank God they did not because it is creating a few jobs in this country.

Let me come back to the GST, the other major broken promise. I would like to quote the member for Mississauga South who in debate in the House on February 6 said that the Liberals had wrestled with this GST problem, debated it at great length, held

hearings and lo and behold, what did they discover? They discovered that the best replacement for the GST is the GST. Yes, the best replacement for the GST is the GST, as far as the member for Mississauga South is concerned.

The member for Mississauga South is a new member, like myself, new to this place and new to the debate. However, I would point out that there are 19 members in the cabinet of this government who were here in opposition when the GST was introduced. They knew what the chances were of harmonization. As a matter of fact the current finance minister opposed harmonization. He said it would be a terrible mistake.

We should look at some of the quotes from the Liberals when they were in opposition. Here are some of the things they said. I do not think we need to talk about the Deputy Prime Minister again. Canadians from coast to coast know very well what she said and then failed to keep her promise, or at least she failed to keep it until a poll was taken to show that she would be re-elected if she did keep her promise.

Back in 1990 the then finance critic, now the defence minister, said the Liberal Party would scrap the GST. The Liberals pledged that in a nationally televised debate with the then finance minister, Michael Wilson. He went on to say: ``The goods and services tax is a regressive tax that has to be scrapped and we will scrap it''. There was nothing about harmonization. There were no weasel words in there. It was very clear.

Here is a quote from the current Liberal House leader. Again back in 1990 when in opposition he said: ``Not only do the Liberals oppose the GST now, that opposition will continue even if the bill is passed. We are not interested in tinkering with the GST. We do not want it at all''. What is harmonization? Those are very strong words. No weasel words there. It is very clear. Of course the current finance minister said: ``I will abolish the GST''.

The leadership of that party when in opposition knew very well the problems they were facing in dealing with the GST. Now that we have heard quotes from the Liberals, let us look at what the provinces are saying about harmonizing the GST. The member for Etobicoke-Lakeshore talked about support in Ontario, which I have yet to identify.

Certainly the premier of Ontario has consistently claimed that the federal harmonization plan will cost Ontario consumers between $2 billion and $3 billion a year. With figures like that I do not know how it is going help charities in Ontario with a $2 billion to $3 billion tax increase because of harmonization. The premier of Ontario also went to say that the subsidization package given to the three Atlantic provinces represents a bribe and warned that more and more provinces are going to be disenchanted by this kind of bribery and this kind of government.

The finance minister of Ontario, Ernie Eves, said: ``It really offloads about $3 billion annually from businesses to consumers. This is not acceptable. I would say the issue is dead''.

(1630 )

Let us talk about the almost a billion dollars that was going to flow to the provinces to encourage them to harmonize. The federal government receives 41 per cent of its revenue from Ontario. One could make the argument that 41 per cent of any amount of money the federal government spends is Ontario taxpayers' money. It could be argued that Ontario will be subsidizing the $961 million bribe to the tune of $400 million. I do not think that is appropriate and I do not think that is fair to the taxpayers of Ontario.

The cost of harmonization to the typical Ontario family that earns $30,000 to $40,000 a year represents an additional $185 in taxes. I do not know how the members from Ontario who sit in this government can defend this very unfair tax grab.

This government was elected on restoring integrity. It knew the problem. I am sure its members heard of it at the same doors I knocked on. They even devoted a chapter in their red book to that subject. I will quote from one paragraph on page 95 where they recognized the problem and said they would deal with it by appointing an ethics commissioner: ``In particular, a Liberal government will appoint an independent ethics counsellor to advise both public officials and lobbyists in the day to day application of the code of conduct for public officials''. The ethics commissioners was to report to Parliament.

That is what it says in the red book. In fact, the ethics commissioner reports to the Prime Minister. What was to be a watch dog has become a lap dog. From that point on the promises in this red book went right down the drain.

This coming election will be about integrity. Canadians are looking for a party with a vision for the future. They know the government has no credibility, whatever it promises.

Mr. Brent St. Denis (Algoma, Lib.): Mr. Speaker, I am pleased to have the opportunity to participate in the report stage debate on Bill C-70. We are focusing on the harmonization of the provincial sales taxes and the GST in most of the Atlantic provinces.

It is important at this time, in view of some of the comments we are hearing from the other side, to review the big picture again. If we step back we can understand why harmonization of the GST and the provincial sales taxes where they exist is a laudable and extremely important objective.

It was a very interesting experience for me as a member of the Standing Committee on Finance to take part in the many weeks of

study and hearings on options and alternatives to replace the GST. This was in the spring of 1994.

The finance committee is an all-party committee. It listened to Canadians from coast to coast, here in Ottawa and in each of the provinces. They were asked some tough questions and in all cases they gave very honest and frank responses to the challenge of what was the best alternative to the GST.

Members of the other parties know that over 20 alternatives to the GST were studied. The vast weight of the evidence provided by the witnesses indicated that there was no other alternative that could be better than harmonizing the provincial sales taxes with the federal GST. The weight of that evidence was so great that even in the provincial campaign of 1995, the then leader of the Ontario PC party, now premier, Premier Harris, indicated his strong support for harmonizing in Ontario the PST and GST. The story we hear from Ontario now is a little different.

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I do not want to impute motives, but the fact is I agree with its campaign promise that harmonizing the PST and GST in Ontario would have many benefits for small, medium and big businesses, for consumers and for provincial and federal governments that I do not know why we are hearing such a fuss from the opposition.

Among the many things we heard in the testimony, much had to do with red tape. We all hear from taxpayers and businesses that there is too much government red tape at all levels. Therefore, the fact that the government has taken the initiative to tackle a challenging problem, the harmonization of these two levels of sales taxes, is something for which all Canadians will be grateful. Certainly the witnesses we heard from at the finance committee told us in no uncertain terms that it was the goal to aim for.

There was no question that there were going to be some challenges along the way. As my colleague from Carleton-Charlotte reminds me, when that finance committee, ably led by the MP for Willowdale, reported, the Reform Party was on record as supporting the notion of harmonizing the provincial sales taxes and GST.

An hon. member: That was piecemeal, ad hoc bullshit and you know it.

Mr. St. Denis: I am very sorry that he is leaving. I am very sorry that he will not be with us after the next election by his own choice. I have a great respect for him. However, his memory is as good as mine. He knows what the minority report of the Reform Party stated. It stated that Reformers supported the concept of harmonization. However, one cannot believe in a concept if one does not always believe that one has to go through tough steps to get to that final resolution.

Mr. Silye: No subsidization in three provinces.

Mr. St. Denis: We cannot get from A to B all the time by drawing a straight line. That is the simple way to look at problems. Sometimes one has to go over hurdles and around obstacles. That is what we are doing as a government. We are tackling the issues that face us each step of the way as we move toward the goal of harmonizing these two levels of taxes.

What are the benefits to Canadians? Let us start with the business sector, particularly small and medium size business. Now each of these businesses faces reporting both federal and provincial sales taxes, two sets of records and the possibility of having to be audited by two separate levels of government. Many businesses are operated by one or two people. They are very small operations where every hour spent on government red tape is an hour taken away from productivity, an hour taken away from selling more goods or providing service to their customers. To the extent that we can reduce the time commitment that any business person, especially the small business owner, has to government paperwork is something that we are adding toward the productivity of this country.

Therefore, I do not understand how the opposition can argue on one side, as it said in its minority report, that we should get to a harmonized situation, but on the other side it says that we should not tackle each step along the way with bigger creativity and determination. That is what leadership is all about and that is why I believe Canadians give us their support in October 1993. I trust when they look at the government closely again in the next election campaign they will feel that our leadership is what this country needs.

No government is perfect, there is no question about that. If we were perfect it would be the first time, I am sure, that any government in the world was perfect.

Besides the elimination of red tape, consumers will not only benefit from the fact that the costs of running a business will be reduced, but over time it will be reflected in the prices because the small business operator will be able to cut down his or her costs.

(1640 )

I happen to be one who believes in tax included pricing at the retail level, but tax included pricing with full disclosure on the receipt at the cash register. We heard, over and over again, that the concept of sticker shock or counter shock was hurting consumption. Canadians will like the idea that they can see something on the shelf that is priced at $10, go to the cash register, put down $10 and know that they have paid the full amount due for that commodity.

On the receipt will be disclosure of the amount of harmonized GST and PST that is in the product. That is fair. It will have the

positive impact on consumers that we need to have in this country to ensure the fullest level of employment possible.

We have been accused of saying that we would totally abolish, scrap the GST. I refer colleagues across the way to page 22 in what I call the well read book. Page 22 says that we will move toward harmonization of the provincial and federal sales taxes. That is what I said in my campaign. That is what I said door to door. I never varied from that commitment. As a member of the finance committee, along with my colleagues on this side of the House, we are taking steps in that direction.

It is the job of the opposition to try to divert attention but the fact remains that a responsible government knows that people cannot take $15, $16 or $17 billion of revenue and throw it out the window. A responsible government also does not promise to have a broad base tax cut that it knows cannot be afforded at this time-

The Deputy Speaker: The hon. member's time has expired.

Mr. John Duncan (North Island-Powell River, Ref.): Mr. Speaker, I am always amazed as I watch the government when it gets itself into a sticky political situation. To find its way out, it creates a scenario and then all members can unabashedly go out with a straight face and sell that story line.

What we have with this legislation is reflective of a very worrisome trend that we are seeing in legislation coming forward from this administration. Some words that come to mind are: responding to political events, balkanization, dividing the country, willy-nilly, knee-jerk, no vision, no principles, ad hoc.

The reason I say that is because this is not the only bill where the government is responding to a political situation, responding to a half-baked promise, responding to special interests that are promoting a particular point of view with the government.

I have been looking at two pieces of legislation that are going to be coming before the House. They have both been tabled. We have what has been called by some, Indian Act II. This is parallel legislation, if members have ever heard of such a thing, where people can opt in but they cannot opt out.

Mr. Fewchuk: What are you making fun of the aboriginals for?

Mr. Duncan: I am not sure what that comment was, but I am not making fun of anybody. I am stating a fact about two pieces of aboriginal legislation before the House.

The other bill before the House that has the same balkanization trend is the First Nations Land Act. Once again, it is national legislation from a national government that will deal with 14 bands only.

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What do we do the next time there are 12 or 14 bands that want something different? We have over 600 bands in the country. Are we going to have 35 pieces of legislation to deal with all of them? This is a very worrisome trend.

We have had a whole set of negotiations in this country dealing with an attempt to get rid of interprovincial trade barriers. In my view this BST bill is actually contributing to interprovincial trade barriers. It is adding to the cost of businesses in Nova Scotia, New Brunswick and Newfoundland in doing business with other provinces. Why we would want to go in this direction is absolutely beyond me. There is only one overriding reason, and we know what it is. The government got in trouble, it got hung on its own statements and in order to extricate itself it entered into this special agreement. Why else did the government have to come up with $1 billion to encourage people in those three provinces to participate?

The three provinces which are the net contributors to equalization in the country are B.C., Alberta and Ontario. Those three provinces do not want to have anything to do with this proposal. That is interesting.

The minister of finance for the province of Ontario has said that this way of arranging things would cost the province $3 billion in extra taxes. It is comforting to see that there is someone who cannot be bought.

There is a circumstance in the bill which would force federally regulated industries like the airlines and the banks to bury GST in their pricing across the country. I find that most interesting with the current transparency of taxation.

I have relatives who live in the United States. They have looked at ticketing from the United States through Canadian airspace to Canadian destinations. Travel agents in the U.S. are absolutely horrified at the level of taxation in Canadian air travel as compared to U.S. air travel. At least they know it is taxation which is creating the pricing. With this kind of provision no one will know. Is that not wonderful for the government's agenda of out of sight, out of mind?

There is another parallel. If they cannot blend it, then maybe they can obfuscate it. We can always see in the actions of this government where it is trying to maintain federal leverage but it wants to obfuscate how it achieves the leverage because it wants to do it at minimum cost. We have seen that in the blending of the transfers to the provinces for health, education and welfare during the term of this government. They were rolled into one transfer. It is much harder to delineate what is going where. Then the $18 billion transfer was reduced by $7 billion, but it cannot be tracked because it has a new name and it is blended. That is quite a parallel.

We have the Prime Minister, the Deputy Prime Minister, the Minister of Finance and scores of Liberal cabinet and caucus members who all made election pledges to eliminate and not blend the GST. We have a Deputy Prime Minister who said on this issue: ``A promise made by a politician seeking election is not really a promise''. Is that not wonderful?

(1650 )

An hon. member: What is it then?

Mr. Duncan: I would like to know what it is also.

The Retail Council of Canada estimates that by forcing stores to bury the tax the harmonization tax regime will cost retailers $100 million a year. What on earth is the government trying to do? I heard Liberals in this House say it will make business more competitive.

I will tell the House what will make businesses more competitive. A $95 billion federal government, not a Liberal $110 billion government. The Reform Party proposes $95 billion spending, excluding interest on the debt.

Ms. Clancy: What are you going to spend it on?

Mr. Duncan: Read our fresh start program and you will know what we are going to spend it on.

The western world is moving in new directions. The public is demanding balanced budgets and the provinces are getting there much faster than the feds. There will be a reduced incentive for provincial sales tax relief with the BST. There will be more leverage from the federal government on the provinces.

We have seen 36 tax increases from this government, taking $24 billion more from the taxpayers. If the feds really want to come to grips with a rational, focused, central government, they could indeed contemplate the end of GST. At least let us not put roadblocks in the way of eliminating the GST, and that is what the BST does.

Ms. Mary Clancy (Halifax, Lib.): Mr. Speaker, I am very pleased to take part in this debate today. I want to speak a little about some of the benefits that harmonizing the sales tax will bring, in particular to consumers in Atlantic Canada.

It is very interesting to know that in polling and in otherwise questioning consumers in the Atlantic provinces that have agreed to harmonize the sales tax with the federal government, over 79 per cent of persons polled-and I am happy to say that the major poll was taken in the city of Halifax in my riding-were in favour of tax inclusive pricing.

It is very important for people to realize, even some of the people on the other side, and really understand what is happening and what tax inclusive pricing means for consumers. It is something all of us as legislators have heard of since the first time the GST was brought in. The bottom line is that consumers want to know how much they have to pay before they get to the cash register.

Every single one of us has had the experience while shopping of seeing something that we want to buy for ourselves, a family member or whatever and thinking the price is reasonable and within the realm of what we have decided we want to pay. We go to the cash register only to discover that the tax bite has put it over the top of where we want to be. That of course is something that distresses consumers every day.

Mr. Hill (Prince George-Peace River): Are you saying that your constituents cannot figure out what 7 per cent is?

Ms. Clancy: Actually it is 19 per cent, to the hon. member from Kicking Horse Pass over there. I understand that he has always had a little difficulty with arithmetic, which does not surprise me.

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Mr. Hill (Prince George-Peace River): Your constituents cannot figure out 19 per cent either?

Ms. Clancy: The hon. gentleman appears to be making an untoward amount of noise. I must say that I am a little leery of making any comments that might in any way stir the beans on the other side for fear someone might start to undress in the House of Commons, which of course I would consider to be most distressing, not to mention unsightly. But of course unsightly premises are municipal law, not federal law.

At any rate, with regard to tax inclusive pricing, the participating governments developed guidelines based on extensive consultations with businesses and business associations.

In Halifax there have been long consultations with ever more increasing consumers, retailers, the Chamber of Commerce in Halifax. My colleague, the member for Halifax West, and I had a long and most productive meeting with the Chamber of Commerce in Halifax recently. As a result the word we heard most has become a hallmark of this legislation. That is guidelines that provide flexibility to ensure that businesses can comply without undue cost. That, of course, is of paramount importance.

Mr. Silye: It is going to cost $90 million.

Ms. Clancy: I am really concerned about the outgoing member for Calgary whatever over there. I am afraid that there may be a problem and I wonder if we could ask the page to bring him a glass of water. What he proceeds to do with the glass of water, of course, will be his own decision. Pouring it over his head would have to be a decision he took for himself.

His incredible response to the debate earlier today when I was in the Chamber, all he could talk about was how glad he was that he

would be out of here in a couple of months. I can only say that, collegiality notwithstanding, we too on this side will be glad to hasten his departure.

Mr. Hill (Prince George-Peace River): Not as glad as they will be about yours.

Ms. Clancy: I am glad the hon. member for B.C. brought that up.

Mr. Morrison: You are just trying to kill time. Why not speak to the bill?

Ms. Clancy: I have to respond to my colleague. I am still waiting to hear if a Reformer is going to run in my riding. Apparently not.

Tax inclusive pricing will be confusing for consumers. That is a myth. There is nothing confusing about tax inclusive pricing. Tax inclusive price is what is paid at the cash register. Indeed, the research that many of us have dealt with, those of us who understand it, shows that consumers will not be confused. They support tax in pricing and they support the options available to retailers.

Some of those options are to post the tax inclusive price only, to post the tax in and the tax out prices alongside each other, to use shelf or bin pricing so they do not have to resticker prepriced goods from the manufacturer, or use conversion charts so consumers can look at the tax included price for prepriced magazines, greeting cards, et cetera.

Many retailers already use these methods, particularly bin or shelf pricing. All they have to do is apply this common practice to tax inclusive pricing.

For goods priced individually by retailers business supply companies are producing stickers with the words tax inclusive price or tax exclusive price embossed right on the sticker. This will make it clear which price includes tax and which does not.

The thing I think most consumer realize is that prices change all the time in our retail establishments in this country. In fact, the idea that confusion will result is not true. Indeed, it will make life less confusing for those shoppers and consumers.

The second myth is that it will be difficult for consumer to comparison shop given that retailers may follow different pricing practices. I think with the greatest respect again there is a theory here that the Canadian consumer is somehow less willing and able to know what this is about. Most of these things are fairly easy to handle. My personal belief, in spite of what our friends on the other side will have us believe, is that the Canadian consumer is capable of handling this. It may well be that our friends on the other side are not capable of handling it. That I certainly believe. Again, I trust none of them will start taking off their coats.

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The reality on this supposed myth of difficulty is that what matters to consumers is what they pay at the cash and not how retailers display tax in prices. Consumers will know the difference between a price that includes the tax and one that does not. They will compare total prices and make their purchases accordingly. That is effectively what I was talking about when I said that consumers do not want surprises when they go to the cash register.

Harmonization is something that will benefit both retailers and consumers. Another myth is that tax inclusive pricing will be costly for businesses that will pass on the increased costs to consumers in the form of higher prices. In reality governments have developed a flexible and simple set of options to ensure that businesses can implement tax inclusive pricing at a minimum expense.

For example, the need to reticket inventory will be limited and the need to reprogram cash registers will be minimal. Many of the costs associated with implementing tax in pricing are one time costs. Other expenses will be absorbed into the ongoing cost of doing business.

Harmonization will also benefit retailers in several important ways. It will permanently reduce their costs because they will no longer have to pay sales tax on their business inputs. This will save retailers in the participating provinces $30 million.

Harmonization will mean a substantial reduction in sales tax rates, about 5 percentage points lower in Newfoundland and Labrador and 4 points lower in the provinces of Nova Scotia and New Brunswick. Both these factors will mean lower prices for consumers, between 3.5 per cent and 5 per cent lower which will translate in higher sales for retailers.

Another myth is tax inclusive pricing will result in a hidden tax. With the tax clearly shown on the receipts the sales tax cannot be hidden. Consumers believe that showing the tax on the sales receipt is sufficient to ensure that they know how much tax they are paying. Indeed, in polling done, 71 per cent agreed in a survey in the participating provinces that this was both comprehensible and an acceptable way to do it.

The harmonized sales tax is something that-

Mr. Silye: A blended sales tax.

Ms. Clancy: Here they go again attempting to correct my usage in the House and suggesting that I use a term that is both agricultural and faintly scatological.

The Deputy Speaker: I want to inform the hon. member that her time has expired.

Mr. Lee Morrison (Swift Current-Maple Creek-Assiniboia, Ref.): Mr. Speaker, I understand that the Prime Minister and the Deputy Prime Minister have been busily writing a new dictionary. I do not know whether it is going to have a red cover or not but I suppose it will. It is going to be called ``The Liberal Lexicon of Misinformation and Mendacity''. They have come up

with some new synonyms for scrap, kill and abolish. These are hide deviously, infuriate citizens, kill jobs-not a tax but jobs.

This is supposed to be, or at least I thought it was when I came down here, a place where we sit down and reason together. Boy, did I get an education.

It is sad. The member for Calgary Centre is one of the few people in this House who has the competence to understand the ramifications of this bill and who actually looks at taxation from the point of view of the victim. When he tried to make his points he was subjected to the usual yahoo comments from the people in the Liberal nosebleed section. However, when it comes to real debate only three members from Atlantic Canada have been willing to face the wrath of their constituents by speaking on behalf of hiding the hated GST.

The members for Cumberland-Colchester, Carleton-Charlotte and Halifax should be commended for volunteering to commit political suicide. Their Atlantic colleagues are wisely keeping their heads down.

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Some place in the rubble I have an editorial which I would like to share with the House. Believe it or not it is from the Saint John Telegraph Journal. The last time I looked Saint John was in the maritimes. It says: ``To keep the GST hidden from Canadians is despicable,' said Robert Nault, a Liberal opposition MP to the Conservative government in 1989. The government is telling Canadians, `trust us'. There is no trust in this government and there is no integrity in this government''. My, my, how things stay the same.

``Seven years after Mr. Nault's righteous tirade against hidden taxes, a principle championed by the Liberal opposition in those days, the government of the Prime Minister is demanding that its own sales tax be hidden in retail prices''. Imagine.

Consider this. The harmonized sales tax legislation would make not hiding the tax a criminal offence. In spite of what one of the members opposite said a while ago, it will still-even with the amendments brought in at committee-make hiding the tax a criminal act. The only difference is that now it will be possible to get an absolute discharge if you do not remember to show the tax when you sell a chocolate bar.

I quote again from the editorial: ``Any law that hides the tax from those who are paying it is draconian and any government that opposes such a law is practising deception. In the moments when we all stop giggling at the government's silly contention that it only wants to hide the HST in prices to make it easier for shoppers to know how much things cost, it's clear that the only people who will benefit from a hidden GST are the politicians who are doing the hiding''.

I am really gratified that there are people in Atlantic Canada who can speak so eloquently to this subject. They bring the views of ordinary Atlantic Canadians to this House even though they have to do it through a member from Saskatchewan. Of course their own members do not have the fortitude-if I may use that semi-parliamentary word-to stand up for their constituents. They are too busy polishing the apple of the Prime Minister.

I return to this wonderful editorial: ``The government, which has no proof that consumers are crying for a law to impose tax inclusive pricing, cannot deny that Canadian business is uniformly against a hidden HST''. The government should be listening to people who think about these things, like the Canadian Federation of Independent Business, the Canadian Labour Congress, the Canadian Chamber of Commerce, all of whom say that the hidden tax should be withdrawn.

Is it not interesting that way back in 1990 the now minister of defence rose in this House as a Liberal finance critic, attacked the government's GST bill and said that this tax should be withdrawn. How times do change. Apparently there is a big difference between being here or over there. It is a sea change in attitudes; it is a sea change in integrity.

Integrity is what we are talking about here. We are not talking about taxation. We are talking about a government which cannot be trusted, which does not stick to its principles and which does not keep its word.

(1710 )

Getting back to the nitty-gritties, the Retail Council of Canada has studied this BST-HST at great length. It states that forcing stores to bury the new tax in prices will cost retailers at least $100 million a year. The Retail Council of Canada has no vested interest in telling a government how it should collect its taxes. It has a very large vested interest when the government's proposals are going to crucify its members in Atlantic Canada by forcing all this new and unnecessary bookwork on them. It is going to cost jobs. I do not know how many people have brought this up today.

The Halifax Chamber of Commerce, which I believe is also from Atlantic Canada, predicts that the harmonized sales tax will push up the prices on new housing by 5.5 per cent. It will also force municipalities to raise property taxes. The Canadian Real Estate Association says that harmonization will increase the cost of a new house by $4,000 in Nova Scotia and Newfoundland and $3,374 in New Brunswick.

To get all these wonderful benefits, we are going to send almost a billion dollars of federal tax funds, taken out of the hides of the rest of us, preferably western Canada I presume since we are the usual whipping boy, to bribe, if you will, the premiers of those Atlantic provinces to accept the fiat from Ottawa.

Hon. Douglas Peters (Secretary of State (International Financial Institutions), Lib.): Unfortunately, Mr. Speaker, it is not God that is here. It is just the secretary of state.

I am delighted to speak on this subject. Having listened to my colleagues, especially my colleague from Halifax who just recently spoke, about the effect of this tax on consumers, I would like to see if the opposition parties might think about the business aspect of this.

I know the Reform Party would not be interested in the fact that businesses are going to improve their efficiency with this thing, that there will be one set of rules instead of two. No, the Reform Party wants two set of rules.

Mr. Silye: Tell us about Carleton Cards.

Mr. Peters: I hear the Reform Party member telling me that he does not want two sets of rules. He wants a provincial set of sales tax rules and a federal set of sales tax rules. Instead of that, under a harmonized sales tax rule we will have a single set of rules. A single set of rules will be applied to all business.

I was in London, England where I walked into a store and bought an article. I went to pay for it and it cost five pounds. I down my five pounds and asked how much more I needed but that was all it cost.

Mr. Silye: I'll bet you liked that.

Mr. Peters: I think a pack of yahoos have infiltrated the Reform Party benches.

I asked the clerk: ``What do you know about the taxes?'' He said: ``I don't know anything. I don't have to know anything''. However, if we go into any Canadian store and ask the clerk if they know about the sales taxes, they will answer: ``Yes, there is 8 per cent and 7 per cent in Ontario. There is a different one in Newfoundland, a different one in P.E.I. and a different one in Nova Scotia''.

This harmonized sales tax will be of serious benefit not just to consumers, who will know when they see the price, but it will be of real benefit to business. Businesses will not have to register for the harmonized sales tax. It will be already registered. Everyone who has registered for the GST will be registered again.

(1715 )

How will a new business be treated? Instead of having to register for a provincial sales tax and a federal sales tax, it will have to register for one sales tax.

Reform Party members have quoted a number of people. Here is a GST quote. This is from The Atlantic Provinces Economic Council: ``The potential benefits of harmonization can be easily laid out. By broadening the base of taxation, harmonization will make the system more equitable and reduce the incentive for tax based consumption or investment decisions. Harmonization should also simplify tax collection procedures, reducing the red tape required to administer the sales tax for both business and government. A common system among the three provinces with a full system of input tax credits will also result in the removal of a barrier to interprovincial trade and may reduce the amount of activity in the underground economy''.

An hon. member: Give us a date.

Mr. Peters: Mr. Speaker, it seems that our friends over there are not interested in reducing the underground economy. They are not interested in efficiency. They are also not interested in being quiet.

The Atlantic Provinces Economic Council has given a clear indication of how favourable this harmonized sales tax would be. Another quote comes from the Deveau family which owns Acadian Seaplants in Dartmouth. It landed an order from Thailand recently during the Team Canada sales mission. It told the law amendments committee hearing on the BST that its competitors already have a full refundable tax system for business: ``What the harmonized sales tax does for us is to level the playing field when we compete with the Europeans, who already have the advantages of a value added tax system. The harmonized sales tax means we have lower costs and that means we can have lower prices, win more contracts and hire more people''. That is a quote from the material provided by the Nova Scotia department of finance. It is obvious that the harmonized sales tax will be a strong plus for business in the Atlantic provinces. The Reform Party does not have any members in the Atlantic provinces so it cannot be very interested in business in the Atlantic provinces.

This government is to be commended for putting the harmonized sales tax forward. It will have many advantages for business in Atlantic Canada. It will return the structure of the sales tax system to a proper order so that business in the Atlantic provinces will have a serious advantage in selling their products, not just locally and nationally, but internationally as well. The consumers will also have a serious advantage. They will know the price of the goods they are buying. It will be on the item. That will be what they will pay at the cash register.

Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.): Mr. Speaker, it is February 1997 and we are still talking about the GST. I remember when I first started taking interest in the federal political system. It was during the beginning of the GST debate. I got involved in Canada's political life about the time the GST was beginning to be debated.

I remember attending anti-GST rallies. They were held across Canada. I remember people from the various political parties speaking about the GST. There were members from the Liberal Party who spoke against the GST. I remember in particular a rally in Saskatchewan. I believe it was in Weyburn, Saskatchewan. The current Minister of Foreign Affairs was there. He was representing the Liberal Party. At that time he was an opposition member. He said ``I see they have named this rally after me''. It was the axe the tax rally. He came in with a bluster and a flurry and said how

terrible the tax was and how the government should not be spending so much money. Of course, as Canadians know, the Minister of Foreign Affairs is one of the biggest spenders we have ever seen.

The public sentiment against the GST began to increase. Canadians began to realize that this was not just a replacement tax for the manufacturers' sales tax but that it was a plan of the Conservative government to tax Canadians more intensely.

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It was an easier dial to turn to tax the hides off Canadians. They also recognized and realized that the Conservative line that this was a tax that would be applied against the deficit to reduce the deficit was a bunch of baloney. They began to oppose the tax even more strongly.

The Conservatives got into a lot of trouble over the GST. They were having trouble in their riding associations. Their members were coming back to find that they had rebellion in their riding associations. There was talk of nominating new candidates to run in the next election. There were defections even in the Conservative caucus, members leaving to become independents or to join other parties.

It was not a very happy time for the Conservatives but power at any cost was the motto of the Progressive Conservative Party. It decided it was going to get this thing through. It rammed it through the Parliament of Canada. It rammed it through this House.

The Conservatives had a majority government, just like we have a majority Liberal government today. It gets its way. It just forces the MPs to vote in line with the Prime Minister's wishes, the PMO's wishes.

The Conservatives got that GST through the House of Commons. There was the filibustering. There was the indignation and all the routine we see in the House of Commons. The Conservatives had a pretty strong and pretty long whip. They whipped their members into shape and got that bill, eventually, through the House of Commons.

Then they sent it off to the Senate but the Conservatives had a bit of a problem in the Senate, sort of like the Liberals have had in the past two or three years where they were not always sure of getting their legislation passed through the Senate.

The bill got stalled in the Senate. Mr. Mulroney had to have power at any cost. He had to get this GST through. He had to have the source of revenue. His pride was on the line. What did the prime minister of the day do? He took a very arrogant step of expanding the Senate by eight members. This was unprecedented in Canadian history. He added eight extra seats. We call them the stacking stools. The Senate went from 104 to 112 senators.

Just the other day one of those senators from Saskatchewan was charged. I am sure members are aware of the charges that have been laid against one of those stacked senators, Senator Berntson. We do not know whether he is guilty or not. It just reminds Canadians of that old Conservative air where power had to be had and power had to be maintained at any cost. Tamper with democracy. Tamper with the parliamentary system, but we have to get this GST through. We cannot be stymied by Canadians. We cannot listen to Canadians. We have to have our way.

We know what happened to the Mulroney Conservative government. Those few Tories who are left today are still admiring his government. I do not understand why even the current leader today seems to think Mulroney was a great prime minister. I guess he liked his heavy handed ways.

Nevertheless, the Tories were defeated in 1993 because another party had come along. The official opposition said ``we're going to scrap the GST, we'll kill it, we'll get rid of it for you''. We have seen the video tapes. We know that is a fact. That is what happened.

Then the Liberals inherited the problem. They were not prepared to reduce the size of government. They like to spend over $100 billion on government programs. They wanted to increase revenues, not reduce revenues. They like big government. If there is big government, there is control, power and maybe Canadians can be manipulated.

The Liberals suddenly found themselves in a very awkward position, having made a promise that they were not particularly keen on keeping.

What did they do? They tried to avoid the problem. They pretended that it was not a problem. They pretended they had not said what they said. They tried to camouflage it with some wording from the red book even though Canadians knew they had campaigned and promised to scrap, abolish and kill the GST.

It finally got so bad they thought they would sacrifice one of their own to try to appease Canadians and make them forget they made this promise. The Deputy Prime Minister did some polling. She figured she could get re-elected. After they had carefully calculated everything, she tearfully resigned to keep her promise to scrap and kill the GST.

Then she went stomping back in the by-election and was re-elected and reinstated as the Deputy Prime Minister by the current government.

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The problem did not go away. The government by this time is bringing in Bill C-70 that we are debating today, this blended sales tax. It does not eliminate or scrap or do anything with the GST other than try to heap its many implications on the provinces in a blended form with a provincial sales tax.

In Saskatchewan we have a provincial sales tax. It is far too high. It is the old NDP motto you have to tax them hard and often. We certainly pay in Saskatchewan with our provincial sales tax, but this sales tax is not on everything. If we blend this sale tax with our GST, suddenly our tax bill is going to go up substantially in Saskatchewan and it is not going to sell very well.

It was not going to sell very well anywhere in the country. This is becoming very embarrassing to the Liberal government, so it decided: ``We have three friends in Atlantic Canada, three premiers and perhaps we can strike a deal; how much is it going to cost us?'' That is the old Mulroney approach. ``Let's sit down and make a deal. Is it going to be $200 million or $300 million or maybe $100 million a province to sign up for this blended sales tax''. They are Atlantic premiers and they know how to wheel and deal. By the time the dealing was done it turned about to be $1 billion for three provinces to agree to a harmonized sales tax.

Where does this $1 billion come from? It happens to come from taxpayers, some of whom are from Atlantic Canada. I understand Atlantic Canadians are not very happy about this blended sales tax. They realize now when they go to the cash register it is costing them a lot of money. They also realize that federal taxes and federal revenues have increased and government is still large. The government is not only operating a blended sales tax but it is still operating the non-blended sales tax where provinces are not co-operating. The government has a mighty mess on its hands.

So what does the government do? Today here we are in the House of Commons and it has moved closure. I do not know how many times this federal government has moved closure but it is just the same way the Mulroney government operated. Power at any cost, control at any cost, to heck with Canadians, they do not matter. All they are good for is writing the cheques. As long as we can keep this big monster going, $115 billion government going every year, borrow money if we have to, but we do not care what we promise Canadians, we have to have this GST. We have to keep it because we have an insatiable appetite for money.

The Mulroney government fell flat on its face because it failed to listen to Canadians regarding the GST. I predict that the Liberal government will be even damaged more than it already has been. We know that its popularity is starting to sink like a stone in water simply because Canadians recognize it has broken its promise regarding the GST. Bill C-70 is as poor excuse for trying to keep a promise that has been broken.

[Translation]

The Deputy Speaker: Is the House ready for the question?

Some hon. members: Question.

The Deputy Speaker: The question is on Motion No. 118. Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Deputy Speaker: All those in favour of the motion will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion, the nays have it.

And more than five members having risen:

The Deputy Speaker: The recorded division on the motion stands deferred. The recorded division will also apply to Motions Nos. 119 and 121 to 124.

Mr. Yvan Loubier (Saint-Hyacinthe-Bagot, BQ) moved:

Motion No. 125

That Bill C-70 be amended by deleting Clause 270.

Mr. Campbell: On a matter of clarification, Mr. Speaker, I am not sure if this is correct. There is another motion, Motion No. 120, and I want to make sure that we do not forget it because the government is in favour of Motion No. 120. It is a government motion.

The Deputy Speaker: On Motion No. 120 I believe that the vote is necessary on that one only depending on the result of Motion No. 118. Depending on how the vote goes, we may have to go back and vote on Motion No. 120.

(1730)

[Translation]

Mr. Loubier: Mr. Speaker, when it is a Liberal lawyer, it gets even more complicated, you can be sure.

I am pleased to speak to the motions in Group No. 4 concerning harmonization of provincial sales taxes in the maritimes with the federal GST. Earlier, I was listening to my Liberal colleagues speak to the motions in Group No. 3, which dealt with substantially the same issue. They are living on another planet, I told myself. They

spoke of harmony, and said that taxes must be harmonized in order to promote trade and improve economic growth over what it is right now, with the end result being job creation, that the taxation system must be modernized, and that the agreement signed between the federal government and the three maritime provinces must become a model, imagine, a model for Canada as a whole.

They have no idea what they are talking about and they are living on another planet. Right now, contrary to what they would have us believe, the situation in the maritimes is chaotic. For three days now, here in Ottawa, the finance committee has been hearing witnesses from the maritimes. The chairman of the finance committee and all the Liberal members were expecting praise for the wonderful $1 billion paid as a reward for agreeing to a new scheme to harmonize the GST with provincial sales taxes, but that was not what they got.

They took it from all sides, and they richly deserved it furthermore. Do you know why? This plan to harmonize the GST with provincial sales taxes in the maritimes is half baked. It is half baked on all counts: because of the harmonization process as such, and because the government had credibility problems when discussions first began with the governments of the maritime provinces. Everyone was reminding it of its election campaign promise to scrap the GST, and was asking why it was doing nothing about it.

Rather than talk about scrapping it, rather than get the public and the opposition riled all over again, they preferred this ruse, and decided to offer up an agreement that was billed as the event of the century as a replacement for the GST.

It is also half baked because, in order to come up with a harmonization plan that is so appealing for business and Canada as a whole, they had to dig into our pockets, dip into our money, for the $1 billion they paid the governments of the three maritime provinces who signed this agreement.

If this harmonization process was so wonderful, if it was going to contribute to greater economic growth and boost job creation, why was it necessary to pay the maritimes $1 billion? Why was it necessary to take money from people in Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia in order to hand out compensation to the governments of three provinces, including New Brunswick-more about that in a few minutes-so that they would sign. Half baked, I tell you.

The picture is no better when it comes to the mechanisms for introducing the new tax and having business implement it. The political reality of the Minister of Finance, the Prime Minister and the Deputy Prime Minister, who had promised to scrap the GST, and the economic reality which businesses have to face are two completely different worlds.

This is the reason why I have just stated that, during the three days of finance committee hearings, representatives of large and respectable businesses, which have in the past made a consistent contribution to economic growth and job creation, and continue to do so-I am thinking of Sears Canada, Canadian Tire, all those big businesses with nation-wide operations-came and told us that application of this new system in the maritimes had to be suspended. And why? For a number of reasons, but I shall go into only some of them, since I have just a few minutes left to give an overview of such a major issue.

Mr. Speaker, you indicate that I have five minutes left, and I just happen to have five reasons.

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The first reason has to do with the implementation of this new harmonization system which, let us not forget, is not a Canada-wide operation as it only affects three small maritime provinces. This new system will cost businesses in those three maritime provinces $100 million to implement, a considerable amount.

Second, not only will it cost $100 million to establish this new taxation system, but in addition businesses like the ones I just referred to, as well as the medium sized businesses which deal with consumers across Canada, will have to pay some $90 million yearly in recurring annual adjustment costs.

This means that, for as long as these companies continue to do business, they will have to bear additional costs of $90 million annually, costs they would not have had to bear if there had not been that political agreement designed to help a Minister of Finance with a taste for the limelight and a Prime Minister in trouble because of his unkept promise to abolish the GST and make them look good. Ninety million dollars a year.

One of these costs is fairly obvious. Take Sears Canada or Canadian Tire, major companies which tend to have huge centralized warehouses in some regions of Canada, where they put price labels on merchandise before they send it out to retail stores. In other words, these huge warehouses contain the tires, household appliances and all the other products sold by Canadian Tire, Sears or other stores, and this where the pricing is done.

The problem with the agreement with the maritimes is that the products will have to be divided into two groups: one for all of Canada, showing only the selling price to be used in the branch stores of these major retailers and, on the other side of the warehouse, the same products but with a label that will also show the retail price of the product, but with the new sales tax, the so-called harmonized tax, for the maritimes.

This is the sort of cost that the government did not assess. And I will tell you that, when the representatives of these businesses came to express their dissatisfaction to the Standing Committee on Finance at a special meeting in January, the committee chair was busy expecting accolades for the excellent work of his excellent government in the matter of the GST, which is excellent for us, but not for them. When people came to say the opposite, when they said the bill made no sense, that it was hastily thrown together and

costly and would generate annual adjustment costs, the Liberal members of the committee were stunned. They then realized that the Minister of Finance had done a job that looked good politically, but appearances are what the Minister of Finance is about, always looking good. However, in practical terms, he won nobody over with this new agreement.

Mr. Speaker, you are giving me the peace and love sign? Oh, you are indicating to me that I have two minutes left. So he won nobody over with this new agreement. The fact that the Retail Council of Canada, which represents 65 per cent of retail business in Canada, appeared before the finance committee to say, and I am quoting from their brief, that to include the tax in the sales tax in the maritimes would increase costs and confusion. Instead of making things more harmonious and easier for business, this so-called harmonization policy increases confusion, uncertainty and costs.

I ask the government to reverse its decision and to put off implementation of this senseless agreement, which is costing Canadians and Quebecers $1 billion and which, in addition, will cause disorder and discord in the maritimes, rather than improve things. Perhaps it is time to take a better approach, to think and for once set aside partisan politics so we can implement things that make sense.

[English]

Mr. Barry Campbell (Parliamentary Secretary to Minister of Finance, Lib.): Mr. Speaker, we have been debating these motions for many hours.

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A number of themes have been repeated over and over again because they strike members of the opposition as good sound bites, ways to attack the government. Who can fault them for that? That is what they are here to do. The trouble is that it distracts this House and people who may be viewing this debate from considering the real issues at hand.

What we are doing in this harmonization agreement with the provinces that are coming onboard now is we are moving to a system of sales taxation that is coherent, is in the interests of consumers, and is more efficient and easier for businesses. It is a win all around.

It is interesting, particularly as I rise after a member of the opposition, the Bloc Quebecois, to hear the unrelenting criticism of harmonization from that side of the House. One has to ask why that might be. Consider that in the province of Quebec we already have harmonization. So how can it be that members of the official opposition have been in this House day after day attacking harmonization?

[Translation]

As I just said in English, Bloc members are against harmonization, which is very odd because they have harmonization in Quebec. Everyone knows that. Is it because they want to keep the benefits of harmonization for themselves, for their own companies and consumers?

[English]

Could it be that they want to preserve for their businesses and their consumers the benefits of a more efficient harmonized sales tax system? I looked at a map of Canada the other day, which one should do from time to time, to remember that Quebec borders New Brunswick. If New Brunswick goes to harmonization and has the benefits of that, then Quebec loses some of the comparative advantage it has had through harmonization. Those advantages will now be available in Atlantic Canada and eventually throughout the country. It is the right way to go for business and it is the right thing for consumers.

I travelled across the country with the finance committee. Members of all parties, even the third party, supported harmonization, but we would hardly know it from listening to the debate of the last few days. We travelled across this country and Canadians said: ``While you are fixing the GST please do something about this anomaly. We are the only country in the world that has 10 sales taxes: nine provincial sales taxes and one federal tax''. Travel anywhere in this world and try to find that. You will not.

I will speak to one other misconception that has been advanced in this Chamber, which is the issue of hiding tax. Consumers said to us overwhelmingly-and I will have more to say about this in later stages of the debate-that they wanted tax inclusive pricing. As for those who said they did not want the tax to be buried, I asked them if they had ever travelled outside North America and had looked at a cash register receipt in almost any country of Europe or if they had looked at a receipt from the gas pump, whether it was in Alberta or Quebec City and had seen the amount of tax indicated on the receipt. I did not hear a great hue and cry about hidden taxes in gasoline prices in this country. And I have yet to run into anybody in Europe who says: ``The Government of France is hiding the tax from me''. It is right there on the receipt, as it will be in Atlantic Canada.

I have taken these few minutes to come back to basics. I look forward to hearing what the members opposite have to say, particularly if it is something new and not something that has been said over and over again without looking at the substance of what is being done here, about the wishes of consumers and retailers in Atlantic Canada about what makes sense for economic efficiency in this country. It makes sense in Quebec where they have been doing it for years. It must make sense for the rest of the country as well, and indeed it does.

Mr. Jim Silye (Calgary Centre, Ref.): Mr. Speaker, I rise on this set of motions to add a few more arguments to this debate.

(1745 )

I understand the member who just spoke is the vice-chairman of the finance committee and does a good job chairing the committee meetings. However, I do sometimes question the ideas and philosophy he supports because I do disagree with him.

First he says that if it is good enough for Quebec, it should be good enough for the rest of the country. Let us put the Quebec issue in perspective. With everything the federal government seems to do and wants to run as a federal government, the provincial governments of Quebec have always said: ``No, no, no. We will do it. We will handle it. We can do it better than the federal government. We will look after our own pensions. We will look after our own sales tax and harmonization. We will do it ourselves''. Quebec implemented a harmonized system right from day one. Whether or not that tax is popular in that province I will leave for Quebecers to decide.

One thing the members of the Bloc Quebecois are doing right now in objecting to this bill is they are saying loud and clear that the Bloc Quebecois representing Quebecers objects to the fact that the Atlantic provinces received a lump sum payment of $964 million or $971 million, somewhere in there. Let us round it up to $1 billion because by the time they exchange all these cheques that is what it is going to cost. These three Atlantic provinces received a $1 billion lump sum payment. Why? The government says it is in order to make up for the shortfall in revenues the provincial governments will have. Who pays for it? All taxpayers. And the majority of taxes are paid outside those three Atlantic provinces.

Some people call it a bribe. I myself call it a bribe, an inducement or an enticement to participate in something that looks good on paper: ``We can lower your taxes from 18 or 19 per cent down to 15 per cent and for the loss in revenue we will supply you with $971 million to do that. You are in, you look great. How can you argue against lower taxes? It is going to help your economy. Harmonization, what a wonderful word. Everybody will be co-operating. We will harmonize and have one tax. It will be easy to administer. It will be a lower cost. It will just be wonderful. You guys will be elected for years. You will be heroes. And you are helping us as the federal government to keep our election promise to abolish the GST. You will be helping us to keep our election promise in the red book because we went door to door and said we would harmonize the sales tax''.

The Liberals said they would get rid of the GST. They said they would not take money out of the back pockets of Canadians with the GST but out of their pockets with a harmonized sales tax. At the door, the Liberals said that if in any province the combined tax was higher than the 15 per cent, or whatever the combined tax rate is, they would give them a lump sum to make up for that lost revenue.

Every Liberal in Ontario said they would do that. I know because I have friends who live in Ontario. They know that the Liberals promised to replace the GST with a harmonized sales tax and to give lump sum payments to provinces to induce them to participate. I know they said that. That is exactly what they said and what they promised.

The Quebec representatives in the federal House here, the Bloc Quebecois, are angry and upset. They are demanding their chunk of the money that was given to the Atlantic provinces. Therefore, do not stand here and tell us, as the member on the Standing Committee of Finance just did, that if it is good enough for Quebec it is good enough for everybody.

We have heard a number of times where the Reform Party supported harmonization. Let us put this into context. This party likes to have quotes in context. It does not like to have things piecemeal, ad hoc and out of sync. When the Liberals said that we supported harmonization, we were on a big committee reviewing how to help this government get rid of the GST. We were actually trying to help it keep a promise. We listened to all the people and a lot of suggestions were made.

The first thing this government wanted to do was to bring in a shoe box business transfer tax. That is what it was supporting. It then came around to this other form of tax. It talked about a national sales tax. In this context of a national sales tax, it does not mean three provinces out of ten; that is not national but regional. A national sales tax is where we could have just one tax at the lowest possible rate. Yes, we do support that and every one of the Reformers who are here today would support that.

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Anytime we can eliminate taxes, get rid of one set of taxes and replace it with another, especially if we replace it with one that is lower, you bet we would support that. That is what is in our minority report. If we had one blended sales tax, if it was a national sales tax and not a regional piecemeal, ad hoc tax like this one, we would support it. If it had the lowest single possible rate-single possible rate, we were hinting at 9 per cent or 10 per cent-we would support it, but not 15 per cent.

I was taunting the Liberals earlier today about why the Ontario government is not supporting it. It is so obvious. For Ontario a 15 per cent combined sales tax, the GST and PST, would be revenue neutral. Why would Ontario not support it? One tax, harmonized and blended. Call it the HST or the BST, it does not matter. It has to be good for Ontario business people. It has to be good for Ontario because it will simplify the tax system.

Why are all those arguments not being bought? It is quite obvious. First of all, just to get the Atlantic provinces to play the game it is going to cost Ontario taxpayers $400 million, their share of the $1 billion bribe.

Second, yes you are making it easier for retailers. Yes, you are making it a little bit easier for consumers not to get that shock price at the wicket. But what you are doing is transferring the costs that will now be on the goods and services that were not there before with the provincial sales tax, on to the GST along with it. Now the price of some goods and services will be raised that were only taxed at 8 per cent. Now they will be taxed at 15 per cent. Transferring that cost to the consumers of Ontario according to their finance minister will cost $2 billion to $3 billion. That is what is not in the cards for Ontario and that is what members of this Liberal government cannot get through their thick heads as to why Ontario will not take it.

Talk about something new and talk about something that is despicable as far as I am concerned what frustrates me is they introduce it at the last minute through their regulations. They have this white paper and they introduce changes. It is always an excise book, an excise act. It looks something like this one which relates to alcohol and tobacco products. They have it for the GST. In the fine print they put in that tax inclusive pricing is mandatory. Then they say how and where it has to be done.

I am sure the committee went through hell. We read about it in the newspaper all through January. There were complaints from the Atlantic region and all these people who supported them. The Canadian Federation of Independent Business and the retailers association, they all turned on them and turned against them because they did not want this tax included pricing the way the Liberals wanted it. It hurts the most now.

I do not know if Canadians know this but every related agency that gives a service from the federal government all across Canada is going to have tax included pricing. This is going to confuse airline tickets. It is going to confuse a lot of financial services although they do not have much, just safety deposit boxes.

It is ridiculous to make all these businesses go through the high cost of changing computers in order to have two prices all across Canada, one in Atlantic Canada, especially national retailers such as Eaton's or companies like Carleton Cards. They came before the committee and said: ``We are going to lose money. It is going to cost millions of dollars. We are not sure if we can pass along these costs for this product because all we sell are cards''.

The government is not listening. For some strange reason the Liberals insist on proceeding. They believe that if they get Atlantic Canada to use the harmonized blended sales tax for a couple of years-and this is where they are going to find it wrong-they think that by forcing all government related agencies to also include this tax included pricing across Canada, they will embarrass, force, coerce or browbeat everybody into participating with our own money, with our own tax dollars and then they will have kept their promise to eliminate the GST.

What they have done is entrenched the GST according to the finance minister, the master of myth, the minister who said one thing on this side. He lost some integrity when he walked across to the other side and now is saying another thing.

It is like the infrastructure spending. There is only one taxpayer and darn it and damn it we are paying for everything all across this country. For programs they say that this is federal and this is provincial and it is not. Infrastructure comes out of our pockets. It is ridiculous.

Even if the premiers of Alberta and Ontario, these people who are in control of their budgets, support infrastructure-Alberta just signed on-it is absolutely ridiculous. Alberta is making a mistake because if Alberta with a surplus wants to improve its infrastructure it has the money to do it. Taxpayers across this country could be saved some money but no. It is all a fight over budgets: ``This comes out of the federal budget, so we will take some. This comes out of our budget and this comes out of the municipal budget. Let us go one-third, one-third, one-third''.

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We have to stop this kind of extravagance which is at the expense of taxpayers.

Mr. Dan McTeague (Ontario, Lib.): Mr. Speaker, I am pleased to speak today in the context that my hon. colleague for Calgary Centre has just alluded to.

I do not know if he is an expert on the GST or matters of taxation. I certainly did not believe that the hon. member was one who felt it was important to recognize that there is one taxpayer and at the same time not move toward something that is both symbolically and realistically an attempt at addressing the fact that the one taxpayer deserves a one tax system in this country.

It compels me to wonder and worry aloud about the hon. member and the other member from the third party, the hon. member for Simcoe Centre who spoke very passionately, although not necessarily always accurately on this very important debate of C-70 with respect to the harmonization of the GST. If the hon. member and his colleague who spoke earlier believe in this issue so strongly, it is unfortunate that they may not be able to join us here in the next Parliament. I know there are problems in that party and they are not just the problems evidenced by some of their policy issues they have had in the past. I think it is abundantly evident with this issue of the GST.

The name of my riding, Ontario, is fitting certainly in the context of the debate. I believe the hon. colleague who spoke before me was completely wrong when he said that this is about politics.

The record will show that the current premier of Ontario, Mike Harris, was very emphatic the day before he was elected in June 1995, that he would work with the federal government to harmonize and to make a better sales tax regime in this country. I know that may be hard for my friends in the third party to recognize. I see them shaking their heads, probably because they are not sure whether the Harris government is a Conservative government or a Reform government. Either way, we know it is a hopeless government.

When discussing the issue of taxation there are very few opportunities to discuss it in the context of virtue. Everybody has their own idea on taxation. All of us in this country would not want to pay taxes or would want to minimize them.

The experience in Ontario is a telling one that I want to relate to my friends in the third party. Budget cuts based on the presumption of reducing taxes are being made to the direct detriment of the poor, the people who are the most defenceless in our society and people who do not have an agenda to hurt other people.

There are politics and policies and there are dangerous politics and dangerous policies. I suggest any party that wants to undertake an ideological view of their politics with respect to taxation must first take into account that one of the most symbolic, rallying points of our nationhood is our ability to look out for the weak, the defenceless and those in our society who through no fault of their own find themselves at the low end of the scale. This consumption tax, the tax to be blended in the maritime provinces, is a positive step forward. It takes into account the recognition that there is indeed one taxpayer.

A very important point is that it takes into account from an international perspective examples of consumption taxes in those countries with one single sales tax regime, one retail sales tax regime. We have spoken to the chambers of commerce and the boards of trade in my riding and across the country. We must make sure that we do not have 13 or 14 different sales tax regimes such as we currently have.

(1800 )

If members are truly interested in representing the interests of their constituents they would be working beyond and above to transcend the politics on which this debate seems to founder to one of trying to find a co-operative, harmonious approach. I believe the best way for us to do that is to follow through on taxation, but taxation that permits individuals at the end of the day to have a system that is far more efficient and that makes more sense for business and consumer alike.

I have had over 46 public forums in my riding since I was elected. That is virtually one for every month that I was elected. It seems to me that while there are those who would like to make the GST a big issue and certainly there is plenty of cannon fodder on both sides for that, I do not think there is anyone in this House who has not given that subject some consideration or who has not been outspoken on that issue.

The far greater and more important problem is the one of getting our financial house in order and at the same time making sure that we can provide an environment that helps people get back to work. Anything else in my view, and I think in the view of those in my riding, is simply nonsense.

While it is important for a government to proceed with the question of harmonizing these taxes, I think credit must be given where credit is due. The Minister of Finance, in concert with the people who worked on the committee on both sides, have tried to hammer out the best of all worlds in a situation where we understand that the current sales tax regime is not one that is acceptable to people.

The hon. member just yelled something. I am not exactly sure what it is he said but that is very consonant with the views of his party.

The arguments in favour of a sales tax are one, we certainly appreciate-

[Translation]

We could perhaps for the first time discuss getting rid of taxes in this country. In a perfect world, people can always make that kind of promise. In my opinion, however, a responsible government, a government that wants to show leadership, has to manage its affairs so that, at the end of the day, it can honour its commitments and be accountable to the consumers we represent. It must do everything in its power to build a tax system that protects the interests of both consumers and entrepreneurs.

In the case of the Atlantic provinces, we are looking at both sides of the question: will harmonization mean that a range of goods will be taxed that would not be taxed without harmonization? I think we have the ability to make arrangements to ensure that these people will be protected.

We also have the ability to find a balance. This balance exists in paying a tax which is not 7 per cent plus 8 per cent, that is 15 per cent, but is somewhere around 12 or 13 per cent, as in the maritimes.

[English]

This Parliament has undertaken many contentious issues. There will be many more in the days to come. The GST, the harmonization of the tax with provincial taxes is an excellent first step, but I hope that the House and those who are seeking to make political points and profiting from the rhetoric understand fully that they are profiting at the direct expense of individuals, of people in our constituencies across the country who expect leadership and expect

us at the end of the day to do what is right. Doing what is right is trying to do what people expect you to do.

Harmonization is an excellent first step but it requires the provinces to get on line. Let us not break down on the question and the subject of partisanship. Mr. Harris, I am calling on you this evening, as they have done in the province of Ontario to do the same.

The Deputy Speaker: I ask the hon. member to please not call on people other than the Speaker in this House.

Mr. McTeague: I am sorry, Mr. Speaker. I was referring the premier of the province of Ontario.

Mr. Ian McClelland (Edmonton Southwest, Ref.): Mr. Speaker, as this debate winds its way to a close, the member for St. Paul's earlier said that this is an occasion for marvellous sound bites and it is. It is an occasion for the Liberals opposite to rest uncomfortably in their chairs as the odour of this particular piece of legislation wafts through the country.

(1805)

The hon. member for Ontario, who just concluded his comments, suggested that this is legislation that is really very good for the country, that it has no detrimental effects and that the rest of the provinces should get on with it and harmonize the GST.

As Canadians know, this bill will put the legislation through the House to finalize the deal with the three Atlantic provinces. The three Atlantic provinces are the barber shop trio. They are singing in harmony with the federal government. They are singing in harmony with the Liberal government because they have been bribed, as earlier speakers have indicated, with our money.

The problem is this. The reason this issue raises the ire of Canadians and has raised the ire of the opposition is that the Liberal government has a majority. The majority is in good measure because of the government's promise during the election campaign to scrap and abolish the GST. The number of seats that the Liberals were able to achieve during the last election and the number of votes they were able to achieve, which may well have swayed some of the other votes, which would have affected the official opposition in the country, is the direct result of the Liberal promise to scrap the GST.

The Liberals were very vocal about it in the 34th Parliament. They knew full well when they made the promise to scrap the GST that they could not. The country had to have that revenue. If they went on the hustings and were elected on a promise to scrap the GST, to abolish the GST, the hated tax, which they failed to do while in opposition, then it logically follows that the government was elected on a fraud. It should not be sitting here in the first place.

Our responsibility is to ensure that Canadians understand full well that the Liberal government did not tell the unvarnished truth during the election campaign and it should not get away with it.

In politics in our country we should expect our politicians, when they knock on the door, and our Prime Minister, when he looks us in the eye on television, to tell the truth. Is it too much to ask that our politicians, the highest elected officers in our land, tell us the truth?

A few months ago I read an article in a newspaper which said that Canadians do not really expect the people who they elect to tell the truth. Therefore, why should we be surprised when they do not? That article was written by a respected pundit of this country. It went on to say that people should not expect politicians to keep their promises because circumstances and situations change. The situation and the circumstance of the GST did not change after the election. The circumstances were exactly the same. That promise should have been kept.

What kind of a country do we have when the end justifies the means? Should we not go into an election prepared to tell the voters exactly where we stand, exactly how we feel about an issue and then be held accountable for it? That is what the real issue is. The real issue is not the harmonization of the GST. It is the fact that the Liberals were elected on a promise to scrap the GST. They did not, and now they are trying to crawl out from under it.

(1810)

It will cost us roughly a billion dollars in a bribe to the Atlantic provinces. It will cause untold grief, untold extra work all across the country, but that does not matter. What matters to the Liberal government is its ability to say that it kept a promise, to whitewash this whole issue.

I would hope that when the Liberals come knocking on the door asking for the support of Canadians in the next election, every single Canadian will look them in the eye and say: ``Did you keep your word? Did you do as you promised to do prior to the last election?'' They will say: ``Oh yes, we harmonized the GST''. Then, Mr. and Mrs. Canadian, look them in the eye and say: ``Where in your election platform did you say anything about harmonize? You said scrap. You said abolish. You said get rid of. You did not say harmonize''.

Every single Liberal should be taken to task, even the member for Broadview-Greenwood who is certainly no friend of the GST, whether harmonized or not. Even the member for Ontario who spoke so recently is no friend of the GST and neither is the Deputy Speaker who changed political parties because of the hated, despised GST. Members can imagine how uncomfortable that hon. gentleman feels as he stomachs that hated GST.

There are two aspects to a consumption tax. Most people, in fairness, will say that a consumption tax is not a bad way to tax. It is incremental. It is broadly based. It means that everybody pays on everything. People cannot get out from underneath paying the tax. However, there are two aspects to it. There is the rate, that is, whether 8 per cent or 7 per cent.

That was the problem with the old manufacturers' sales tax. People were afraid to go to sleep at night because they knew the federal government would raise the tax because it was hidden. That is why it has to be visible.

There is the rate and there is the base. The base means to what is the tax applied. This is never brought up. The problem is that the base, the products to which the taxes are applied in the provincial sales tax is quite a bit narrower. Not nearly as many products are taxable under a provincial sales tax.

When the tax is harmonized, it becomes a question of applying it on as broad a base as can possibly be done so that the rate is as low as it can possibly be. It is a combination of low rates and wide base that makes sense. To apply it on a narrow base but at a very high rate is counter productive.

As this debate winds down-I recognize that I may be the last person to speak on this-I want once again to make sure that all Canadians are reminded of the hypocrisy, the duplicity, the outright lie on which the Liberal government was elected. It should be ashamed and ashamed for a long time to come.

(1815)

[Translation]

The Deputy Speaker: Pursuant to order adopted earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the report stage of the bill now before the House.

The question is on Motion No. 125. Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Deputy Speaker: All those in favour will please say yea.

Some hon. members: Yea.

The Deputy Speaker: All those opposed will please say nay.

Some hon. members: Nay.

The Deputy Speaker: In my opinion the nays have it.

And more than five members having risen:

The Deputy Speaker: The recorded division on the motion stands deferred.

The House will now proceed to the taking of the deferred divisions at the report stage of the bill. The first question is on Motion No. 1.

Call in the members.

[English]

During the taking of the vote:

Mr. Strahl: Mr. Speaker, on a point of order. I apologize. There was a lot of up and down here and confusion on the yeas and nays. We are voting nay at this time.

The Deputy Speaker: The problem was created by the hon. member for Beauce. We were trying to fit him in. That is the problem that was created and it is the fault of the Chair. I should not have interrupted the vote. The hon. member is voting no.

(1845)

[Translation]

(The House divided on Motion No. 1, which was agreed to on the following division:)

(Division No. 217)

YEAS

Members

Sheridan
Simmons
Speller
St. Denis
Steckle
Stewart (Brant)
Stewart (Northumberland)
Szabo
Telegdi
Thalheimer
Torsney
Ur
Valeri
Vanclief
Volpe
Walker
Wood
Zed-114

NAYS

Members

PAIRED MEMBERS

The Deputy Speaker: I declare Motion No. 1 carried.

[English]

Mr. Kilger: Mr. Speaker, I believe that you will find consent to apply the results of the vote just taken to Motions Nos. 4, 5, 63 and 120.

[Translation]

The Deputy Speaker: Is it agreed?

Some hon. members: Agreed.

[English]

[Editor's Note: See list under Division No. 217.]

The Deputy Speaker: I declare Motions Nos. 4, 5, 63 and 120 carried.

[Translation]

The next question is on Motion No. 2.

Mr. Kilger: Mr. Speaker, you will find there is 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 no.

Mrs. Dalphond-Guiral: Mr. Speaker, members of the official opposition will clearly vote yes.

[English]

Mr. Strahl: Mr. Speaker, Reform Party members present will vote no.

Mr. Solomon: Mr. Speaker, New Democratic members will vote yes on this motion.

Mrs. Wayne: Mr. Speaker, the PC members in the House will be voting yes.

[Translation]

Mr. Bernier (Beauce): Mr. Speaker, I vote no.

(The House divided on Motion No. 2, which was negatived on the following division:)

(Division No. 218)

YEAS

Members

Plamondon
Robinson
Sauvageau
Solomon
Taylor
Tremblay (Rimouski-Témiscouata)
Venne
Wayne -30

NAYS

Members

PAIRED MEMBERS

The Deputy Speaker: I declare motion No. 2 lost.

The next question is on motion No. 3.

(1850)

Mr. Kilger: Mr. Speaker, you will find there is 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 no.

Mrs. Dalphond-Guiral: Mr. Speaker, members of the official opposition will vote yes.

[English]

Mr. Strahl: Mr. Speaker, Reform Party members present will vote yes on this motion.

Mr. Solomon: Mr. Speaker, NDP members in the House tonight will vote yes on this motion.

Mrs. Wayne: Mr. Speaker, the PC member in the House tonight will be voting yes.

[Translation]

Mr. Bernier (Beauce): No, Mr. Speaker.

(The House divided on Motion No. 3, which was negatived on the following division:)

(Division No. 219)

YEAS

Members

Guimond
Harper (Simcoe Centre)
Hill (Prince George-Peace River)
Jacob
Johnston
Langlois
Lebel
Leblanc (Longueuil)
Loubier
Manning
Marchand
Mayfield
McClelland (Edmonton Southwest/Sud-Ouest)
Mercier
Meredith
Nunez
Paré
Picard (Drummond)
Plamondon
Robinson
Sauvageau
Scott (Skeena)
Silye
Solberg
Solomon
Speaker
Strahl
Taylor
Tremblay (Rimouski-Témiscouata)
Venne
White (North Vancouver)-51

NAYS

Members

PAIRED MEMBERS

[English]

The Deputy Speaker: I declare Motion No. 3 negatived. I therefore declare Motions Nos. 6 to 14, 16 to 53, 55 to 59, 61, 64 to 100, 102 to 113, 115 and 117 negatived.

[Translation]

Mr. Kilger: Mr. Speaker, I believe the House would give its consent to applying the result of the vote just taken to the following motions standing in the name of the hon. member for Saint-Hyacinthe-Bagot, in other words, report stage Motions Nos. 114, 118 and 125.

The Deputy Speaker: Is it agreed?

Some hon. members: Agreed.

[Editor's Note: See list under Division No. 219.]

The Deputy Speaker: I declare Motions Nos. 114, 118 and 125 negatived.

Hon. Lloyd Axworthy (for the Minister of Finance) moved: That Bill C-70, as amended, be concurred in at Report stage (with amendments).

[English]

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 yea.

[Translation]

Mrs. Dalphond-Guiral: The members of the official opposition will vote no.

[English]

Mr. Strahl: Mr. Speaker, Reform Party members present will vote no unless instructed otherwise by their constituents.

Mr. Solomon: Mr. Speaker, New Democratic Party members present this evening will vote no on this motion.

Mrs. Wayne: Mr. Speaker, the members of the PC Party will be voting no.

[Translation]

Mr. Bernier (Beauce): No, Mr. Speaker.

(The House divided on the motion, which was agreed to on the following division:)

(Division No. 220)

YEAS

Members

NAYS

Members

PAIRED MEMBERS

(1855)

The Deputy Speaker: I declare the motion carried.

_____________________________________________