Madam Speaker, before I direct a question to the hon. member from the Bloc I want to say that I was very shocked to hear about the promises my Reform colleagues made. They made promises to the Canadian people about what they would or would not do with the GST. How many times have they changed their minds just because of the political tide?
I suggest once and for all that they come out with a solid position, quit changing their minds and quit being hypocritical with the Canadian people.
Once again Bloc members are crying. They are holding their hands out to the Government of Canada, “please give us billions of dollars”.
The question they should answer for themselves is whether it is fair for Canadians to pay Quebeckers $2 billion, for that matter even one penny. There has been no loss established. In fact, there has been a gain. I think members should ask themselves is it fair. I think not. It is hypocrisy. The answer will be somewhat from a spoiled child. Is the answer fair? I say no, it is hypocritical.
Madam Speaker, I cannot help but sit here and chuckle over the word hypocrisy coming from the opposite; hypocrisy, the finest word the government has every used and abused to the Canadian taxpayer.
It was not that long ago, but it is kind of short in the memories of some of the Liberal members, who had to resign their seat over the misrepresentation of the GST.
The Liberal government, to the member from the Bloc, seems to forget that it campaigned to get rid of the GST. It sold that bill of goods to the people of Canada. I imagine it did the same in Quebec.
When we were debating the harmonization of the GST in the Atlantic provinces I can remember standing up in the House and giving a speech on the problems this would create in the Atlantic provinces. We all know that when governments start talking about harmonization, if you take the front part of the word it is harm. It harms the citizens of the country. It does not matter where this is tried. It found this out in the Atlantic provinces.
I would like the hon. member from the Bloc to answer a question. Who was in provincial power at the time harmonization took place in Quebec? Were they also led down the garden path by the government in power at the time?
Madam Speaker, I was offended by the remarks of the member opposite, who thinks Quebec is a welfare case that does not pull its own weight and that we should not be asking for what is owed us. As if we were asking for money that did not belong to us. This shows a lack of respect for Quebeckers. The money we are asking for, the $2 billion, is money we paid for. It is ours. We do not come here with our heads hanging. We paid this money.
You cannot speak that way, sir. It is an offence to Quebeckers. I would be ashamed to speak that way, to speak such words in this House.
Madam Speaker, I can understand the emotion and the indignation of my friend from Manicouagan. I can understand how a person can rise and jump about a bit. This is what happens when you hear all sorts of not very intelligent remarks in this House.
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 Hochelaga—Maisonneuve—tobacco act; the hon. member for Sarnia—Lambton—trade.
Madam Speaker, we are speaking about a part of the Bloc Quebecois motion, which says:
That this House condemn the government for blatant unfairness to Quebec in the matter of the GST—
First of all, let us talk about the position of the Bloc Quebecois. In its electoral platform, the Bloc said that Quebec, which chose a phased-in harmonization starting in 1991, has not received the same compensation as the three maritime provinces, since Ottawa offered them $961 million as of April 1, 1997.
As far as the GST is concerned, the Bloc Quebecois considered that the transfer of all federal fields of taxation would create some interesting prospects for Quebec. Also, the bloc proposed a series of tax measures in the context of a sovereign Quebec. For example “A sovereign Quebec will have the power to abolish the GST and replace it with a tax on commercial operations better adapted to free trade”. This quotation is from the householder published by Roger Pomerleau, the member for Anjou—Rivière-des-Prairies.
Since we are talking about GST, let us go back to the beginning of the GST. We will go back to the Quebec National Assembly on December 14, 1990. What I find strange in this vote is that Quebec decided to harmonize its tax. The Bloc Quebecois and the Parti Quebecois have always told us that this was a unanimous vote by PQ opposition members.
I will tell you this evening that there were several PQ members missing in the National Assembly. They were not there to vote against the GST. Several of them were missing. As a Quebecker, I thought it was a unanimous vote by the Parti Quebecois in the National Assembly.
In his speech, the Minister of Revenue, Raymond Savoie, told the National Assembly:
The GST strikes me as a fairer tax because it is based on the consumption of goods and services. And the more goods we consume and the more services we use, the more justified it is to opt for this method of taxation as opposed to the traditional one based strictly on revenue ratio.
But the funniest thing—because we are still talking about the GST, we will stick to that—is that when Ms. Marois, now a minister, but then the member for Taillon, spoke to this bill, she was completely opposed to the opposition party, to her party, and said that for her, the important thing was that businesses should be more competitive. For her—Ms. Marois—it was more important that our businesses should be on an equal footing with other sectors in the United States. In that sense, she was in favour of this harmonization, or the movement, and the minister was very happy to hear that.
There is another thing that should be pointed out about the GST, because we must go back to where it all began, in 1990. It is important that Quebeckers and the people of Abitibi understand what the GST was. Why is the motion today coming from the Bloc?
When you lost the election in 1985, the difference between the rate of taxation in Ontario and that in Quebec was 10.5%—this is still 1990—because today it is only 3.5% and on the decrease. It is steadily decreasing. It was not the intention of the government in power at that time, the Liberal government,to obtain compensation. They knew there was an agreement with Ottawa.
Throughout the speech by the Quebec Minister of Revenue, he is careful to stress the notion of fairness. We were guided by our wish to see that those with low incomes did not pay for this reform. We were not going to foot the bill for this reform. Measures were introduced.
These people are getting refunds. The opposition never says that low income Canadians receive GST refunds. It never says that the elderly and students receive GST refunds. We never hear anything about that, but it is good for these people. They tend to consume less that we do.
Measures were introduced. These people are getting refunds and these changes will cost nothing to families with an income of around 30 000 $, for instance. They will lose nothing.
One thing should be said regarding the GST in Quebec, we are making changes, reducing it from 9% to 8% and to 7% in 1992. The overall impact should be beneficial, good for democracy and I believe empowering, or at the very least advantageous for Quebec society as a whole.
One thing is very important, and that is that the minister took note of the change and really sought to be fair. He noticed that the government was committed to the notion of economically advantageous mechanisms across North America and this is what this bill is all about. This is why Mrs. Marois supported free trade.
One thing in this debate in the national assembly was very important, the vote. When it took place, quite a few PQ members were absent.
But one thing should be said, according to my notes—
Madam Speaker, if the hon. member wants to know who was there, I can send the list to his office. I can tell you that I have the list of those in favour and those against. Not bad for a member in Ottawa.
Let us talk about the memorandum of understanding between the two levels of government. On August 30, 1990, the Government of Quebec and the Government of Canada announced the signing of an agreement whereby the federal government fully transferred administration of the GST to the Government of Quebec which, in return, would harmonize the tax base of the provincial sales tax with the federal tax until January 1, 1992.
It had become necessary to replace the federal sales tax. Before the GST, the federal government had a manufacturers sales tax, a tax which had become obsolete in many ways, but was never mentioned by the hon. members opposite. That old tax had 26,000 exemptions. There were so many gaping holes in that legislation that the government of the time had to do something, hence the GST. With the replacement of the manufacturers sales tax with a more modern sales tax and the decision to harmonize the two taxes, Quebec was putting its economy in a better position to compete with the other provinces.
Madam Speaker, I could answer that some of his colleagues have been members of a communist party and, today, we do not know whether they are speaking for the Bloc Quebecois or for some communist party.
In agreeing to harmonize the two tax systems, Quebec was putting its economy in a better position to face competition from other provinces and other countries. Indeed, in reducing the cost of inputs and capital, it was making industries in the province more competitive.
There is also one thing we must talk about: the administration of the two taxes should be more efficient and less costly, both for business and for governments. As a result of the agreement, retailers were finally going to enjoy more uniform tax rules and introduce a single accounting system and a centralized administration.
Madam Speaker, you are telling me that my time is almost up. I thought I had 20 minutes for my speech.
Do I have confirmation that I have 11 minutes left? Thank you. You see, this side also has learned to count.
The harmonization of Quebec's provincial tax with the GST was done in two stages. Thus, on January 1, 1991, the provincial tax base and the GST base were harmonized for personal goods, that is, personal property. As of January 1, I repeat, the base was extended. It now includes services and personal property.
What happened on January 1, 1992? Quebec, our Quebec, the Quebec of Quebeckers, the Quebec of the Abitibi people, the Quebec of Canada— because my Canada also includes Quebec—started administering the GST collected on its territory. In 1992, the federal government helped Quebec take on new administrative functions—the opposition is quiet about that—by handing over the infrastructure, i.e. facilities and equipment, and providing $20 million over three years toward start up.
We know that several million dollars worth of facilities and equipment were involved. In addition, federal employees were offered comparable positions within the provincial public service. We know that people in the Quebec provincial public service are very well paid. They are in a very good position to do good work.
Both governments share on an equal basis the cost of administering the sales tax. What happened to revenue generated by the consumption tax in Quebec over five years? It increased by nearly $2 billion. Members opposite often throw figures like $1 billion, $1,000 million, $2 billion, but now we are going to have the real figures.
We are still on the same topic. We were talking about the GST all along. Within five years, the revenue generated by the consumption tax in Quebec increased by nearly $2 billion, or a 50% increase. Statistics show that, while Quebec collected $4 billion in sales tax in 1987-88, in 1991-92 the new sales tax grossed $6.158 billion.
When discussing sales tax revenue, it is important to known the real figures. They are all there. In terms of growth over 1989-90, with the GST—not the old outdated sales tax, but the GST—in 1990-91, Quebec's revenue increased by 2.7%, or $240 million. In 1991-92, it grew by $1 billion, or 20% more. And, in 1992-93, $888 million.
The figures provided by Quebec officials tell us that, since 1990-91, the province received $3.463 billion, for an average increase of 11.3%.
Quebec is once again using the obsolete federal estimate of $4.8 billion regarding the revenues generated by a harmonized sales tax, instead of the revised amount of $4.575 million. So, what do we make of the inaccurate statements found primarily in Quebec's public accounts, particularly on page 218? It is important to know these facts.
The provincial government says one merely has to look at Quebec's public accounts or budget documents to see the extent of the costs generated by harmonizing Quebec's sales tax with the GST. However, these documents clearly show that revenues from the provincial sales tax increased by $3.463 billion following harmonization in 1991.
The Quebec government uses the argument that the $961 million compensation to the maritime provinces is equivalent to $423 per capita, while the compensation claimed by Quebec amounts to $273 per capita.
This comparison does not make any sense, since compensation is not at all calculated on a per capita basis. This is where the Bloc Quebecois is mistaken, when it refers to $961 million. These arguments are only based on the total provincial losses of sales tax revenues following harmonization.
Do you know where the Bloc Quebecois' mistake come from as regards the $961 million? It comes from the fact that, in Quebec, government expenditures increased much more rapidly than federal transfers.