May 16, 1978

?

Some hon. Members:

Hear, hear!

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
LIB

Joseph Jacques Jean Chrétien (Minister of Finance)

Liberal

Mr. Chrftien:

On top of all that, with the way Quebec has cut its taxes, and when talking about the rich, if a rich man goes into a store in Quebec today and buys his wife a fur coat at $10,000, he will have a tax reduction of $800. If another rich person goes in a store in Montreal to buy furniture coming from France, like the Roche-Bobois type, and pays $10,000 for it, he will get an $800 break. The best way for all the people would have been for the government to do the sensible thing that the other provinces did and cut the sales tax across the board for everybody.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
PC

Charles Joseph Clark (Leader of the Official Opposition)

Progressive Conservative

Mr. Clark:

Mr. Speaker, the Minister of Finance should stop worrying about buying fur coats and address himself to the question of why his government is proposing a measure that clearly penalizes the poor in two ways: first, by ignoring some 2.2 million Quebeckers who would have been able to take advantage of sales tax cuts as proposed by the government of Quebec and, second, by introducing a sliding-scale arrangement.

Our estimates show that there are some 150,000 Quebeckers who in the 1977 tax year paid less than $85 in income tax. Consequently, they will be receiving less than $85 through this arrangement-less than the rich in terms of the benefits of this proposal. Why did the Minister of Finance not introduce some measure, if he intended going to this extreme, that was more equitable than giving more to the rich and less to the poor, as he is proposing in this measure?

[Translation\

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
LIB

Joseph Jacques Jean Chrétien (Minister of Finance)

Liberal

Mr. Chretien:

Mr. Speaker, I shall have to explain again to the hon. member what we are in fact doing in our budget. What we did is that we have reduced the income tax in all provinces in a fair way, which means we have reduced the income tax by $100 in Ontario, in Manitoba, in Saskatchewan, in British Columbia or in the Maritimes; on the other hand, the provincial governments have raised their income tax, and as we levy taxes for both levels of government, we have offered Quebec $85 in the same manner. If Mr. Parizeau wants to increase his income tax or other taxes, he can do so, except that we do not levy taxes for the provincial government; this is why we passed the reduction directly on to the individuals. We did it in such a way that we have vacated a field which the government of Quebec can take over if they wish but they cannot get benefits from both sides, which means they cannot increase their taxes and receive a benefit which the other provinces did not receive. As a matter of fact, the other provinces had to raise their income tax, and Mr. Parizeau can do the same thing. We have simply left one tax field.

May 16, 1978

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
PC

Charles Joseph Clark (Leader of the Official Opposition)

Progressive Conservative

Mr. Clark:

May I ask one further simple question of the Minister of Finance? Since we have now been assured by the Prime Minister that there was never any intention to call an election and that there was never any urgency, consequently, to bring in a budget, why did the Minister of Finance not avoid all of this problem? Why did he not secure the absolute agreement of all the provinces before he proceeded with an act that involved an intrusion into provincial jurisdiction?

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
LIB

Joseph Jacques Jean Chrétien (Minister of Finance)

Liberal

Mr. Chretien:

Mr. Speaker, for the first time I, the Minister of Finance of the land, took the time to visit the provincial ministers of finance and discuss this proposition.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
?

An hon. Member:

And you messed it all up.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
LIB

Joseph Jacques Jean Chrétien (Minister of Finance)

Liberal

Mr. Chretien:

It is beyond me to listen to the Leader of the Opposition who for weeks and months was asking me when we would have a budget, and today he gets up and says we were too early with the budget.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
PC

Charles Joseph Clark (Leader of the Official Opposition)

Progressive Conservative

Mr. Clark:

I said you are incompetent.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
LIB

Joseph Jacques Jean Chrétien (Minister of Finance)

Liberal

Mr. Chretien:

In a nutshell, I want to say that what we have done for Quebec in reducing federal income tax is the same thing that we have done for the other provinces.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   SALES TAX PROPOSAL RELATING TO QUEBEC
Permalink

PAYMENT OF INCOME TAX REBATES

PC

Flora Isabel MacDonald

Progressive Conservative

Miss Flora MacDonald (Kingston and the Islands):

Mr. Speaker, my question is also to the Minister of Finance. I want to refer him to a statement made by the Prime Minister at the December, 1969, constitutional conference regarding the rationale for direct payments through income tax rebates by the federal government to individuals. The Prime Minister said:

Within each province where the scheme applies, there is going to be a redistribution of benefits and certainly we are going to tax all rich Canadians, no matter where they are, a little more to help the less rich Canadians-

I would like to ask the Minister of Finance how he is going to explain to those 2.2 million poor people in the province of Quebec who are at the lower end of the income scale how the federal government can justify paying a rebate to those in the higher income levels, reversing what the Prime Minister said would be the rationale for this type of payment back in 1969?

Topic:   ORAL QUESTION PERIOD
Subtopic:   PAYMENT OF INCOME TAX REBATES
Permalink
LIB

Joseph Jacques Jean Chrétien (Minister of Finance)

Liberal

Hon. Jean Chretien (Minister of Finance):

Mr. Speaker, 1 am doing exactly the same thing for Quebec as I have done for the other provinces. I have reduced the income tax of the federal taxpayers. That is exactly what I am doing in Quebec with the balance of the money that the Quebec government did not want to use to cut sales tax. I think it is very clear what we are doing. There is no difference in treatment between Quebec and the other provinces. We have cut income tax in the federal budget for the citizens of all provinces and the provinces raised their own income tax by the equivalent amount of money.

Oral Questions

Topic:   ORAL QUESTION PERIOD
Subtopic:   PAYMENT OF INCOME TAX REBATES
Permalink
PC

Flora Isabel MacDonald

Progressive Conservative

Miss MacDonald:

Mr. Speaker, once again referring to the 1969 statements of the Prime Minister which seem to have been so reversed now, when referring to the spending power and payments to persons and institutions at that time the Prime Minister said:

It is not possible to enter into a discussion of this particular proposition without considering the whole of the structure of Canadian federalism-

Now that the Minister of Finance has taken the country into an era of balkanized federalism and established a very dangerous precedent in what is going on, why has the government decided to endanger the very basis of our federal system by choosing a method of payment which bypasses the provincial governments and which the government at one time considered should only be proceeded with in a review of the whole structure of federalism?

Topic:   ORAL QUESTION PERIOD
Subtopic:   PAYMENT OF INCOME TAX REBATES
Permalink
LIB

Joseph Jacques Jean Chrétien (Minister of Finance)

Liberal

Mr. Chretien:

Mr. Speaker, 1 made exactly the same offer to the Quebec government as I made to the other provinces at the time of the budget. It is not me; it is the Quebec government which decided to balkanize the country in proceeding the way they have.

Topic:   ORAL QUESTION PERIOD
Subtopic:   PAYMENT OF INCOME TAX REBATES
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   ORAL QUESTION PERIOD
Subtopic:   PAYMENT OF INCOME TAX REBATES
Permalink
LIB

Joseph Jacques Jean Chrétien (Minister of Finance)

Liberal

Mr. Chretien:

After I made the offer there was no way I could go back to the other provinces and offer the same deal, because I wanted to be fair to everybody. For example, the citizens of Ontario would like to see the automobile tax cut; however, that would not have been agreeable to British Columbia because they are more interested in building materials. The ones who are trying to divide this country are the Parti Quebecois in their manoeuvring. I am surprised that a national party wants to save the neck of the Parti Quebecois.

Topic:   ORAL QUESTION PERIOD
Subtopic:   PAYMENT OF INCOME TAX REBATES
Permalink
?

Some hon. Members:

Hear, hear!

Topic:   ORAL QUESTION PERIOD
Subtopic:   PAYMENT OF INCOME TAX REBATES
Permalink

May 16, 1978