March 12, 1993

PC

Andrée Champagne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Madam Deputy Speaker:

The question as enumerated by the parliamentary secretary has been answered.

Topic:   BILL C-275 REQUEST FOR WITHDRAWAL
Subtopic:   QUESTIONS ON THE ORDER PAPER
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PC

Murray Cardiff (Parliamentary Secretary to the Minister of Agriculture)

Progressive Conservative

Mr. Cardiff:

I ask, Madam Speaker, that the remaining questions be allowed to stand.

March 12, 1993

Topic:   BILL C-275 REQUEST FOR WITHDRAWAL
Subtopic:   QUESTIONS ON THE ORDER PAPER
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PC

Andrée Champagne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Madam Deputy Speaker:

Shall the remaining questions stand?

Topic:   BILL C-275 REQUEST FOR WITHDRAWAL
Subtopic:   QUESTIONS ON THE ORDER PAPER
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?

Some hon. members:

Agreed.

Topic:   BILL C-275 REQUEST FOR WITHDRAWAL
Subtopic:   QUESTIONS ON THE ORDER PAPER
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GOVERNMENT ORDERS


[English}


EXCISE TAX ACT


The House resumed consideration of the motion of Mr. Mazankowski that Bill C-112, an act to amend the Excise Tax Act, the Access to Information Act, the Canada Pension Plan, the Customs Act, the Federal Court Act, the Income Tax Act, the Tax Court of Canada Act. the Tax Rebate Discounting Act, the Unemployment Insurance Act and a related act, be read the second time and referred to a legislative committee in the Economics envelope.


LIB

Roger Simmons

Liberal

Hon. Roger C. Simmons (Burin -St. George's):

Madam Speaker, I have a few words to say on Bill C-112.

Maybe by way of background we could recall the events of 1990. The government told Canadians and Parliament that it was going to have some tax reform. It went on to say that it would not just be tax reform, it would be tax reform in the best tradition. The government undertook to ensure that the reform would result in fair and simplified taxation.

It spared no effort, as will be remembered, in ensuring that its tax reform package got through the system. It used every rule in the book and invented a tew rules. It broadly interpreted some other rules to ram the tax changes through this House.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

John R. (Jack) Whittaker

New Democratic Party

Mr. Whittaker:

To say nothing of the eight GST senators.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Roger Simmons

Liberal

Mr. Simmons:

My friend from Similkameen feels a speech coming on. I did not hear what he was saying. I was coming to that but he reads my notes well from back there with those glasses.

My friend from Okanagan-Similkameen-Merritt just reminded me of something I want to mention to the House. The government used every rule in the book and every perversion of most of the rules to get the GST, and that is what I am talking about in case some of my friends on the other side of the House have forgotten so soon, the goods and services tax. It is called many other names

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by those 85 per cent of Canadians who vehemently and strongly oppose that tax measure.

I see my honourable friend, the Minister of Transport, has entered the House. I hope he will make a speech on the subject later on, to indicate to Canadians whether he still supports these measures.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Jean Corbeil (Minister of Transport)

Progressive Conservative

Mr. Corbeil:

Like the Grit sneaky tax.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Roger Simmons

Liberal

Mr. Simmons:

I would love to hear the Minister of Transport tell us. He seems to be seized with the-

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Thomas Edward Siddon (Minister of Indian Affairs and Northern Development)

Progressive Conservative

Mr. Siddon:

Can I not get an honourable mention here?

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Roger Simmons

Liberal

Mr. Simmons:

They are all excited over there this morning. It must be the leadership. They all see themselves as the Prime Minister of this country. God knows we need a Prime Minister for this country. Need we look further? Why the Minister of Transport and the Minister of Indian Affairs are not out there running, I do not know.

We were talking about the GST, so understand the diversionary tactic. They are not particularly excited about having anybody talk these days about the GST, but I want to do it for a few minutes for old times' sake. I want to one more time before this administration disappears because we are told that as of June 15 it is a whole new millennium, a complete change. All the bad deeds of this administration are going to be swept under the rug, all will be new, there will be a new day dawning around June 15, and all the bad, terrible policies of the Conservative administration will be forgotten by Canadians.

I do not know if the Conservatives are going to invent a new pill, a kind of amnesia pill. Is that what they have in mind? Maybe they are going to administer to all Canadians some kind of a prescription for a pill that will make them forget the bankruptcies of the last eight years. I am not talking only of the bankruptcy of ideas, there has been that as well, but about the pain that has been inflicted on individuals, families and corporations out there, on people trying to do business, trying to run their homes, and trying to maintain and manage their family budgets. I am talking about that kind of bankruptcy, that kind of pain.

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What kind of amnesia pill are they going to need-in a quantity of 27 million, and some of us might need a double dose so they had better make a few extra-to get Canadians, including the 12 per cent who still support the government, to forget the pain that has been inflicted by this administration over the past eight or nine years?

Before that millennium arrives and before we get into that brave new world let us talk about another brave new world, the one of late 1988, 1989 and 1990 when this government came before this House and before Canadians and said: We have a great idea. It is called tax reform, it is called the goods and services tax, and we promise it will be fair.

Now that it has been implemented for just over two years, since January 1991, go out there and ask almost any Canadian how fair the GST has been for him or for her. Ask the person who is in university and who must buy some books how fair the goods and services tax is. Then remember that the goods and services tax was going to lower prices.

The Minister for Indian Affairs needs another honourable mention. We need to tell Canadians that he is here signing documents in the House, placing his x on every sheet he has in front of him.

The goods and services tax was supposed to lower prices. It was supposed to be simple. We all remember the very thick document that was put through this House over our objections, over my objections. That was only two years ago. Remember what this tax instrument was going to be. It was going to do away with the manufacturing tax, and yes it did that. It was going to collect some money, and it has sure done that; ask almost any Canadian. It costs a lot to do it. The government will not tell us how much it is costing but it is costing an awful lot of money to collect this goods and services tax. It is costing so much that the government has elected to hide the totals on that particular issue.

It was going to be a simple tax. That is what the former Minister of Finance said the government wanted. He said that it wanted to simplify the tax system. If we want to understand how it has simplified this particular tax then we have to understand the double-talk of this government on many matters. When it says it is going to do something then that is code for saying that it is really

going to do the opposite but for the record it has said it will do something else.

On this issue it has been no different. It said it was going to have a simple tax, it was going to have a GST and, boy, girl, is it going to be simple.

After two years Canadians love the simplicity so much that the government has come up with a bit more simplicity, another 350 pages of simplicity. How is that for keeping its promise? The most convoluted, diabolical, and unpopular tax in Canadian history now becomes the most complex tax in Canadian history.

Now, two years and two months into the new tax regime it needs another 350 pages of rules to explain it and make sure it is milking every last cent from those who have to buy books to go to university and from those who are trying to operate small businesses.

I suppose this bill is not a bad opportunity to also remind Canadians about this government. I am not just talking about the gentleman from Baie-Comeau. Sure, he is the leader of that government and leader of his party but he is not the only one responsible for the government's policies, unless the Conservatives have been having a one man show over there. I understood it was a great democratic institution in which everybody had his say. I suppose they mainly say: "Me too", but they have their say.

I am sure the Minister of Indian Affairs has his say. He is known to have not only a considerable mind but a fairly independent mind so I am sure he has his say. Nobody would suggest that he would be a sheep in any administration or any caucus, so we know there is one voice over there speaking out. I know the member for St. John's West, the minister of fisheries, is a man who would not sit quietly by if he saw something of which he did not approve. I could go down the line and mention other people on that side of the House who have established their reputations in their constituencies and across this country as people of integrity and independent mind. I believe that, but which is it? Are they, generally speaking, people of independent mind and integrity, as I believe, or are they a bunch of sheep?

Are they a bunch of sheep saying: The devil made us do it, the only reason we went along with all these policies over the last eight years was that we had a fellow

March 12, 1993

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from Baie-Comeau who was leading the charge. That is what we are going to hear over the next few months. They are going to say: All those tax measures are all the legacy of one man, but he is gone now and it will be a brave new world. Which is it?

Were they the team of men and women pooling ideas to put before the House to help run the country, the team they pretended to be and said they were for the last eight years, or were they a bunch of people in bondage? Were they 150 or so people in bondage, being slave-driven by one man from Baie-Comeau who foisted his unpopular ideas and theories of government on everybody? Which is it? It cannot be both.

If this tax measure today and the one that it addresses, the GST, is the brain-child of this government then by extension it must be the brain-child of the minister of employment, who would like to be Prime Minister. It must be the brain-child of the Minister for International Trade, who would like to be Prime Minister. It must be the brain-child of the Minister of National Defence, who would like to be Prime Minister. It must be the brainchild of the Minister of Communications, who would like to be Prime Minister.

I put that on the record because we are going to see the reintroduction of the Tory two-step during the next three months leading up to the leadership convention. The old Tory two-step, in philosophic terms, tends to have it both ways. It tends to move in both directions at once depending on what theory is being supported at the moment.

I have seen a bit of it already, and I am looking forward to that exercise, that fast dance which allows the Minister of Employment and Immigration, Minister of Communications or Minister of National Defence to say in the same mouthful: "Yes, I fully support the gentleman from Baie-Comeau but if he did not have me in complete bondage I would have done it differently".

What we are dealing with here today on March 12 is no different than what we will be dealing with on June 20 or 21, 1993, after the Tory leadership has been resolved. That is the record of an administration of 35 or 38 people, one of whom will likely be the new Prime Minister at least on an interim basis. That is what we are dealing with.

That record is the record of that government, that administration, and not the record of one man. It has to be, particularly when it comes to matters of taxation and tax reform, one of the most arrogant records in Canadian history. Why? I say that because this is the administration that imposed the GST, the most hated tax in Canadian history, not only without proper consultation with Canadians but over the almost unanimous objection of Canadians. Fully 85 per cent had voiced their opposition to this particular tax.

This is the administration that imposed the GST on small businesses, despite their strenuous objections. This is the administration that imposed the GST on provincial governments, despite their objections.

It is true that these changes do not portend any brave new world. They are a bunch of technical changes that will facilitate certain matters and perhaps make the tax grab a little bigger here and there and that kind of thing. The deed was done two or three years ago when the GST was rammed through this House. This is just sharpening the guillotine blade. That is all it does. This is not the policy instrument, it just sharpens the guillotine blade to make sure the head is completely severed rather than doing a clumsy job as in the past couple of years.

Let us be clear, whether they cut my head off cleanly or clumsily they have decapitated me. Whether or not we have another 350 pages of amendments and technical changes is not the real issue here today. I am sure that as we get to clause by clause it will become the issue because the rules require that.

Surely at this point in time the issue is very much the principle of the kind of legislation and the kind of tax reform and taxation measure which this bill is based on. That is why I have used my time to remind us of what this tax was supposed to do. It was supposed to be simple, but I think we can lay that promise to rest. It has gone the way of a lot of those other promises. When the government says simplicity it does not necessarily mean simplicity. When it says fair it does not necessarily mean fair. Do not take my word for it. Ask almost any Canadian who has been paying the GST over the last couple of years.

March 12, 1993

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This is the administration that has increased taxes on Canadians 38 times since 1984. Do not forget that the GST is just one of them. Is it any wonder that the public has no real confidence in the fairness of our tax system? One of the effects of the machinations of the Tories on these issues, on tax reform, other than destroying confidence, has been a larger underground economy than ever before. If there is one area in which this government can take some backhanded credit for improving the economy it is the underground economy, which is the people who have found it convenient to engage in peddling services and goods in such a way that there is no record of the sale and therefore no particular need to collect the tax.

These machinations by the government have undermined consumer confidence. This undermining of consumer confidence is one of the reasons that the recession we are gripped by continues and has deepened.

There will be an election some time in the fall or some time between now and the fall. I suspect it will be in the fall. It is very likely there will be a change of party in power. That is certainly one of the possibilities. I will not be partisan on that point because I see my time is up. However there will be a change and somebody will have to deal with this.

In conclusion let me say how we in this party propose to deal with the issue. We have said we would wipe out the GST. We intend to do that. We are not going to be like our friends in the NDP who think it can just be cancelled and $15 billion will come out the sky from somewhere. Nobody in this party has said if we became the administration we would have what we used to call in high school the big rock candy mountain where everything was free.

There will be taxation. That will come as no surprise to any Canadian. There will be taxation. What we have said and continue to say is that it will be fair taxation. To do that we have said that during the first year of our mandate we will consult Canadians, which is more than this administration has done.

I see my time is up. I wish I had a little extra time to explain to the minister because he is a doubter. He may

not vote for us anyway, but I want to tell Canadians who were not consulted last time that this time they will be consulted.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

John R. (Jack) Whittaker

New Democratic Party

Mr. Jack Whittaker (Okanagan - Similkameen - Merritt):

Madam Speaker, I have listened with rapt attention to my hon. friend from Burin-St. George's. I have a couple of comments and questions for him.

I noted during his speech that he talked about how the GST had led to massive numbers of bankruptcies throughout Canada. As I travelled across Canada on the GST hearings I noted this was one of the things we ran into. People were predicting the problems the GST would cause them as small business people and people who had to deal with the tax on an ongoing basis.

Another thing became clear to me, particularly in the province of Newfoundland, the Northwest Territories and Yukon, that the cost of living in these three areas of Canada was substantially higher than many areas in central Canada and in my western province of British Columbia.

I wondered from his perspective whether it has been shown that the cost of goods and services is often higher. In some cases in the Northwest Territories, for instance, it was quoted as high as 58 per cent above what it was in centres such as Edmonton and Toronto. In St. John's, Newfoundland the predictions were that the cost of living was some 21 per cent higher. It seemed to me this was an unfair tax.

I have looked at Bill C-112 and I have not been able to find any amendments to make the tax fairer for people in these regions who are already paying more than their full share of taxation, who are already in some cases the most impoverished people in Canada with the highest unemployment rates. Yet this government through its GST legislation appears to be hitting them harder than those in the rest of Canada with a consumption tax.

I would like the member's comment on that. I would also like his comment on whether there is anything within the particular bill that would lead us to believe they will use any of their amendments to help with the education of Canadians through removing taxes on books and publications for educational purposes, or even for casual reading.

March 12, 1993

Is there any amendment to help people in the educational area and to help the people in Newfoundland, Labrador, Yukon and the Northwest Territories?

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Roger Simmons

Liberal

Mr. Simmons:

Madam Speaker, I thank my friend from Okanagan-Similkameen-Merritt. He rightly zeroes in on two important issues that flow from this debate.

The cost of living differs from place to place in this country, as he has so kindly drawn to the attention of the House. It is different in Newfoundland, in the Northwest Territories and in certain more geographically remote and less populated parts of the country. In normal times that places an extra financial burden on people who make their lives and their homes in those places, such as in my province of Newfoundland and Labrador.

That problem, as my friend from Okanagan-Similkameen-Merritt has rightly implied, was aggravated with the introduction of the goods and services tax. The way it is manifested now, to respond to his question, is that I find people are saying to me quite candidly that they want to buy an item but with the extra 7 per cent GST they cannot afford it. They are delaying purchases or they are avoiding purchases.

I will give one example arising from a conversation I had in the last few days. Many people in rural parts of the country rely on all-terrain vehicles and/or snowmobiles or ski-doos as we call them, which is one of the trade names, to get their firewood, in some cases to get their water supplies and for transportation itself. I was talking to a person a few days ago who wanted to buy a ski-doo for about $4,500. Some cost more than that, as we know. He wanted to buy the ski-doo but the extra 315 bucks federal tax on it made the difference between his being able to afford that item and not being able to. For him it is not a luxury or recreation vehicle; it is a work vehicle. That is the way he hauls his wood. That is the way he gets his water. That is the way he goes to work in some cases. That is the way he travels. That is his transportation. That is his wheels, as we say.

The short answer to my friend from Okanagan-Similkameen-Merritt is that the GST for those people already clobbered by a high cost of living clobbers them to the point where they are foregoing purchases really necessary to their lifestyle, to their way of living.

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The second point he raises relates to books. I have always thought that surely even a government so ruthless as this government must have some limits. I thought that books would have been the limit. When that furore arose at the time debate on the bill was in progress, I thought the government would have at least had enough political moxie-if no conscience at least enough political smartness-to smarten up on this one.

The government said in one mouthful: "We want to help Canadians become functionally literate". In the next mouthful it said: "But we are going to tax your effort to become literate. We are going to tax books for leisure reading, casual reading, in the main flow of education at universities and so on. We are going to tax books". That has to be knee-capping of the worst order. A government that perhaps has no sensitivity should at least have had some sensitivity to its own survival, some basic political smarts.

I thank my friend from Okanagan-Similkameen- Merritt for his question. I am as appalled as he is that on the matter of books the government did not see fit to act differently. I can confirm to him that after the fact, two years into the GST measure, this tax on books is an inconvenience. It is dissuading people from pursuing as aggressively as they would like matters related to education and literacy.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

John R. (Jack) Whittaker

New Democratic Party

Mr. Jack Whittaker (Okanagan -Similkameen-Merritt):

Madam Speaker, I rise today to put my comments with respect to Bill C-112 on the record. Sometimes I can say it is a pleasure to rise to speak on bills. However, with respect to Bill C-112, rather than it being a pleasure it is a somewhat painful experience.

After going through some of the amendments in this massive bill I recalled the arguments of the government as it was bringing in the GST. Under the manufacturers' sales tax and the federal sales tax regime there were so many interpretations of the former taxation rules and laws the government wanted to change them for a number of reasons, one being simplification.

We have already had some simplification as a result of its amendments. Now we see in 348 pages of amendments a further simplification of the goods and services tax, further exemptions and further deletions.

March 12, 1993

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Previous speakers have spoken on some of the things not included in this bill that have been requested by thousands of Canadians. I refer very specifically to the deletion of taxation on reading materials. We have just come through literacy day, literacy week and literacy month. The government pays lip service to doing what it can to increase the literacy of all Canadians. The statistics are clear. Those who are functionally illiterate are often the ones who have to take the lower paying jobs and have a harder time surviving in the job market in Canada.

Essentially the government has placed a taxation on education on the one hand with the GST. The majority of Canadians would shake their heads to realize that on the other hand it is putting money into trying to increase literacy in Canada, paying it lip service.

Do not get me wrong, Madam Speaker. More money has to be put into trying to educate Canadians and to ensure that we are the tops in the world with respect to literacy, job availability and income. We can do that through ensuring that the majority of our population, wherever they live in Canada, has equal opportunity to education, to learn to read at least functionally, and to survive in today's modern and technical world.

When we look at Bill C-112 we expect to see a small amendment to encourage people to read rather than the addition of a 7 per cent penalty on learning. We look through the bill to see whether it is one of the amendments and we see the changes mentioned earlier. We can now get a six-pack of yoghurt tax-free and the tax on bull semen is rebatable although not tax-free. However we still have a 7 per cent penalty on education through the taxation on reading materials.

Even though I speak of that specifically I do not suggest for a minute that the goods and services tax is a tax that should have been passed in Canada. Almost 85 per cent of the people of Canada did not originally want the GST. Now that they have seen it, they would like to see the GST scrapped. That is something that we should be discussing, not 348 pages of amendments. We should be discussing legislation that does away with the goods

and services tax, that repeals this regressive taxation of Canadians.

What has the GST done for Canada? Why was it put into effect? I do not deny the fact that it was time to get rid of the manufacturers' sales tax.

The argument was that we had to be more competitive on international markets by getting rid of the manufacturers' sales tax. We had to bring in fair taxation. The government chose its version of a value added tax in order to help its wealthy friends, those who were pushing it, who saw it as a benefit to themselves.

When the GST was brought in there was supposed to be a drop in certain retail prices. I recall in one of the hearings a manufacturer of auto parts, a person who very truthfully sat before the finance committee and when asked if Canadian consumers would see a drop in the price from the plant gate as a result of the saving on the

13.5 per cent manufacturers' sales tax answered no. He said it would not be passed on because of the administrative costs of the goods and service tax for business and for other sundry events that would occur. He told us that if anything was left over it would be built into profit.

I think over the period of time we have had to look at it and particularly when you talk to auto parts dealers, that is exactly what happened. They got new price lists that simply were the old price lists with increases of 7 per cent for the GST.

This tax has not only hurt the small business community but in some cases in many border towns it has destroyed many businesses.

Walking up Bank Street in Ottawa you see every few blocks a number of stores that have closed down, with signs in their windows saying "Bankruptcy Sale, Going Out of Business" or "Bankruptcy Sale, Pre-Closing Sales". Some of these businesses have been established for a long time.

When you talk to these business people, a number of factors have pushed them to the conclusion that they must go out of business or that they are now to the edge and must declare bankruptcy or the receivers will move

March 12, 1993

in because they cannot pay the loans they have incurred in order to stay in business.

When you talk to them it is the cost of the administration of the GST that is always mentioned. People no longer come in and buy some of the articles because the 7 per cent GST has put the articles out of the range of some low income earners.

For those with higher incomes, 7 per cent on an article they may want to purchase will not make that much difference as to whether they buy it or not. If they want it and they have the money they will purchase it.

People on fixed incomes have to watch money carefully to ensure they have food and clothing for their children and a roof over the heads of their families. That 7 per cent is a major chunk out of their income.

The government will argue that they get a rebate, that each quarter they get some money back. What you find in talking to some of these low income people is that the rebates often go in the fall, for instance, to purchase something for the children so that they have something new to wear to go back to school.

As winter comes along the children need winter boots and overcoats. Often they are forced to purchase these things not at the regular price but at second hand stores and taking hand-me-downs. The 7 per cent on top of that makes a lot of difference to them.

What can we get out of this bill? Who does it help? I suggest it has helped those who have pushed it, such as large business corporations. Those with a lot of money are getting more as a result of this. The middle income class once again is getting the shaft.

I recall a prediction that the manufacturers' sales tax was supposed to bring in $18.5 billion in net revenues to the government coffers in 1991. In the public accounts I see that the GST has brought in gross revenues of slightly over $28 billion but of that $28 billion over $13 billion is paid out in administration and tax rebates. There is slightly over $15 billion in revenues as a result of this, a $3 billion shortfall over what was originally anticipated with the manufacturers' sales tax. Why is that?

It seems that what has happened is that the cost of administering this was much higher than we had been led to believe. The monetary and fiscal policies of this government have driven us into the deepest recession probably in Canadian history and people are not purchasing. Part of the reason they are not purchasing is the

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high interest rates we had until recently, high dollar, import goods and the GST.

I live in the border town of Osoyoos, British Columbia, and I watched the effect of the goods and services tax on the business communities in our area. As the dollar rose, more and more people flooded across the border, purchasing a lot of goods and many services where they did not have to pay tax. A survey was done of those crossing the border over a two-week period and well over 80 per cent of those surveyed said they were shopping in the United States because they were fed up with taxation in Canada and specifically the goods and services tax was the straw that broke the camel's back. They were not going to pay it and they did not care what the effect was on Canada. They did not want this tax. They could see that large corporations were benefiting and that they as low and middle income earners were hurting.

Almost 30 per cent of the population of the Okanagan Valley is over 65 years of age. Those on fixed incomes said they could not afford the extra 7 per cent they had to pay out for their goods and in some cases their services. They went across the border to get the goods they felt were cheaper.

It had a devastating effect on the small business community of Osoyoos but we watched it tremor up through the Okanagan Valley so that when you went up to Kelowna, some 80 miles to the north the merchants there said that even they were feeling the effect of the goods and services tax and cross-border shopping.

What is the solution? The Liberal member for Burin- St. George's says that the Liberals would wipe out the tax. I would suggest that that is the Liberal position today, but as we have seen the Liberals have changed their position several times. When the GST was introduced by this government the Liberals were split. They could not decide whether they liked it or whether they did not like it. They could not decide whether to bring in alternatives or not. What they finally said was: "We just do not like it. We have no alternatives but we are going to watch this tax".

Later on, after it was brought in, they said: "Well the people of Canada do not like it, perhaps we should get rid of it and maybe we should bring in this little sneaky tax, a tax that will be hidden". They looked at that aspect and how to change it but they knew that would not be popular because it would tax everything, including food, it would be a hidden tax and people would not truck with that. Therefore they said that they would not go along with that.

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All of a sudden they said: "Maybe we would make some amendments to the tax". Today they are saying: "We will wipe out the GST".

However I was pleased to see the member finally come around to the position of the New Democratic Party when he said that it would be phased out. I just hope that the Liberal Party will recognize that the phase-out period must be specified and the alternatives that they have to the tax must be specified before an election is called.

I am also pleased to see that the Liberals are finally talking about fair taxation, something that they did not understand when they were in government prior to 1984 and certainly something that the Conservative government has had no inkling about over the last nine years of their short stay in power.

What has happened over the period of time with this tax and who are these amendments in Bill C-112 going to help? I would suggest the same thing once again; that it is not going to help anybody but the large business community. It is not going to help education. It is not going to help the people in Newfoundland and Labrador, the Northwest Territories or Yukon in equalizing taxation and equalizing the cost of living for them.

One other point I would like to make is not on the GST but another amendment concerning the Unemployment Insurance Act. While a minor amendment, it reminds me of the inequities in the Unemployment Insurance Act which was before this Parliament last week and which increases the power of unscrupulous employers.

It seems to me that we should be seeing some changes in the Unemployment Insurance Act ensuring that employees are treated fairly and that unscrupulous employers are not able to use glitches within the system to blackmail their employees into staying and working for them in circumstances under which nobody would want to work.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Thomas Edward Siddon (Minister of Indian Affairs and Northern Development)

Progressive Conservative

Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):

Mr. Speaker, I know that the hon. member for Okanagan-Similkameen-Merritt has a large seniors' population in his constituency. I also know he is a man who would want them to be fully and correctly informed about the facts.

In reading the local newspapers in the member's riding and listening to his intervention today, I have been troubled by the fact that he is not telling the whole story. I think it is important that the record of the House show that is the fact.

In fact, under this government since 1985, but in particular during the last three years, we have seen the net disposable income of our senior citizens increase after correction for inflation and taxes. I think he would want his constituents to know that.

In fact, the policies of this government which have brought inflation down to its lowest level in more than 25 years represent a net saving to Canada's senior citizens, the persons most in need of assistance from the government. Those inflation controls have reduced the escalation of all the costs that senior citizens and the disadvantaged in society have to bear because of the policies of this government.

The GST tax credit, which the member did not speak of, puts dollars right into the pockets of senior citizens. He has not recognized that it offsets any negative impact for the vast majority of Canada's senior citizens. In fact, most of them come out dollars ahead because of the GST tax credit.

I should also point out that the exemption of food, pharmaceutical products and rent from tax also helps senior citizens and the disadvantaged in society.

The bottom line is that the tax on manufacturers was penalizing and crippling Canadian manufacturers and killing jobs in Canada. By removing that tax we have created a situation where there is much more competition in the marketplace.

Prices are lower and there is more variety. I defy the hon. member to go to the Canadian Tire stores, the grocery stores, the shopping centres in his constituency. He will find more variety, more sales and better choices for consumers of higher quality products than ever before. This is because we removed the tax on Canadian manufacturers. He would be irresponsible in suggesting that we do not have to make that tax up in another way, which most Canadians now have come to understand and accept as necessary to avoid creating a mortgage for our grandchildren to pay.

March 12, 1993

The question is simply this: Why does the hon. member not tell the senior citizens and the disadvantaged in his constituency that the disposable income of Canadians is $1,500 greater per capita today than it was three years ago?

During the life of this government the disposable income of Canadians, the additional money they have to spend, has increased. That applies more to senior citizens than to the average middle-income Canadian. It is time he told his constituents the truth and the whole truth and not embellish the truth the way he has done.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

John R. (Jack) Whittaker

New Democratic Party

Mr. Whittaker:

Mr. Speaker, it is a real pleasure to speak to one of my part-time constituents, the Minister of Indian Affairs and Northern Development. He has a residence in Kaleden which is in my area. I hope he will be able to vote for me in the upcoming election. I know he realizes that I have been telling the truth about this government and that I have done a good job in this area. He even hears that from members of his own party in Penticton which I am always heartened by.

Let me just point out to the minister as well as to the people in my riding and the rest of Canada that what the minister has not told us is that since this government came into power Canadians are paying approximately $1,858 more every year in federal taxes than they were in 1984.

Look in the estimates to see what this government has done with respect to seniors. It has chopped the Seniors Independence Program and cut the New Horizons Program by 40 per cent, a program that has been well used by seniors in Okanagan-Similkameen-Merritt as well as the rest of Canada.

He talks of inflation control. Just last Friday in my riding office I was speaking to a senior woman who brought in her old age pension cheque. She explained to me that she had received an increase in that particular cheque of $2.17 over the previous period. I tried to do what the government would do. I explained to her that the inflation rate had dropped and that the Old Age Security was tied to the inflation rate.

She mentioned to me something I already knew and which I would like to pass on to the minister and the government. That rate is based on the food basket and other things. In her area the cost of her housing has gone

Government Orders

up something like 15 or 16 per cent over the last year, yet she received an increase of 1.2 per cent. Her heating and utility bills have gone up substantially. The cost of food and related things has gone up. Therefore, her cost of living has gone up 12 to 15 per cent over the past year. However, she was receiving based on the cost of living index across Canada an increase of something like 1.3 per cent on her Old Age Security cheque.

That is the reality of what is happening to the seniors community in my riding and I would suggest the seniors community across Canada.

I dealt with the tax rebates and I know exactly what happens. If the minister were to look at the statistics he would see that often the tax rebates in some cases and in some income levels, yes, are up and above what would normally be paid out in taxes. I do not deny that. My point is that as predicted what is happening is that as these quarterly payments come in people are so up against the wall they are using them to purchase necessities of life.

Recently because one woman had to call in a plumber she did not have sufficient money by the end of the month to buy food for her three children. The GST rebate is being used for things such as that.

The minister mentioned that passing on the taxation was a mortgage for our grandchildren. Let me point out to Canadians and to this minister that under this government our national debt has more than doubled. We are now $460 billion behind the eight ball. Look at the budgets over the last two years. We see predictions of a year and a half ago that our deficit this year would be $22 billion. In October last year, a scant eight months after the last budget, we saw that the prediction was $34 billion.

Now we are hearing sounds from the Minister of Finance that our yearly deficit will be over $34 billion because of this government's monetary and fiscal policies even though the interest rates have dropped, saving this government a couple of billion dollars in interest. This government can still not face up to the fact that it has made a mess of its tenure in office. It has made a mess of the finances of this country. This government is leaving a negative legacy for our grandchildren.

March 12, 1993

Government Orders

I have this to say to the government: Shame on you, good-bye after the next election.

Topic:   GOVERNMENT ORDERS
Subtopic:   EXCISE TAX ACT
Sub-subtopic:   MEASURE TO AMEND
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March 12, 1993