MASSE IN THE HOUSE: Speech on the HST in Parliament

Speech on the HST
Hansard – December 8, 2009

Mr. Brian Masse (Windsor West, NDP): Madam Speaker, it is an honour to rise and talk about this issue.
I agree with my colleague that it is important to mention the tar sands. My community of Windsor, Ontario is going to be significantly affected by the tar sands because the refining of that gunk is going to be done across the border in Detroit. Windsor is down wind of the expanded refining facilities so we will feel the consequences. This is a real issue for the people in Windsor. Progressive Canadian and American environmental groups have been working together to prevent some of this from happening. It is a critical situation because it affects not only our economy but also people's health.
With respect to Bill C-62, it is important to talk a bit about the process that is going on here in the House of Commons and the “harpocrisy” of the Conservative government. It is really outstanding because the government is trying to ram this issue through the House, yet with other issues, such as the economy, it does not yet such an issue would be supported by all political parties in this place.
I would point to the process the government is going through with respect to its infrastructure funding. The Conservative government is not using the gas tax, for example, as a model to get some of those infrastructure projects out the door.
This is a political procedure the government is using to ram this legislation through this session of Parliament aided and abetted by both the Liberals and the Bloc. We are missing out on the important work that usually takes place here to make sure that legislation goes through properly. The government is behaving in a way similar to the American-style republican party of adding riders on to money bills that change legislation as opposed to actually doing the good work that usually happens at committees and doing the due diligence necessary to investigate the impact of legislation on various groups.
Specifically, we would have debate here in the House of Commons on a bill and that bill would be moved to committee. Witnesses from all corners of Canada would be called and they would provide testimony as to the impact of a certain piece of legislation.
The HST is certainly going to be significant for Ontario and British Columbia. It does involve other provinces as was noted before in the House. Conservative governments have a history of trying to ram legislation like this down the throats of residents being aided and abetted by some of their provincial support mechanisms. In this case it is the Liberal Party in both Ontario and British Columbia.
In speaking about history, I can think of the Grant Devine government of Saskatchewan. That corrupt government was eventually thrown out of power and the HST was repealed by the Roy Romanow NDP government. That NDP government brought in great legislation, balanced the books, cleaned up corruption, and set a significant mark for that province. Everybody remembers the corrupt Grant Devine Conservative government. That is important because it is tied to the HST.
The Darrell Dexter NDP government in Nova Scotia has provided a rebate on the home heating portion of the HST. That government is also starting to delist items from the HST.
I am going to read from the independent report from the economists at the Parliamentary Research. They said:
As noted earlier, the average annual interest rate on the federal government's market debt over the 1998 to 1999 to 2007 to 2008 period was 5.3%. Should the federal government borrow $5.9 billion in order to finance the proposed transfer to British Columbia and Ontario and should the government repay this amount in exactly 10 years and assuming an average interest rate of 5.3%, the total nominal cost to the federal government would be about $9.9 billion.
That is important. We do not know. That is assuming that we are actually going to be recovering and getting out of recession.
The minister mentioned a few minutes ago about the jobless rate going down but one of the reasons it is getting lower in a place like Windsor West is because people are running out of benefits.
There has been high employment for years. We have been warning this government and the previous government of a lack of sectoral strategy for the manufacturing sector. The member for Outremont was quite right talking about the dollar has raised the Canadian so high and so quickly, that we have been shedding tens of thousands of jobs in the manufacturing sector over the last number of years.
What we have in communities like Windsor is we now have people who are exiting the benefit system that was available to them.
It is important to recognize what are we going to borrow and what are we going to get for it in terms of a return on this. I have seen some of the documents and I have read through the argument of what it will do for the manufacturing sector. It will eliminate some taxation that is happening on multiple levels. There is no doubt about that and it is a fair argument.
However then we have to believe that those savings will get passed on to the consumer. I do not believe that is going to happen. Those savings would have to be passed on to the consumer and then the theory is that people can buy more and stimulate the economy.
I mentioned in earlier exchanges in the House that it was the argument put forth when we had no conditions put on the reduction of the GST on gasoline prices. What we saw was the GST reduced on gasoline, so the coffers of the nation lost that revenue coming in, but we have not seen that passed on to the consumers.
I have yet to see a study that shows that those savings have been passed on to the consumers. I would suspect many Canadians justly so question gasoline prices, especially because the government killed the only program that was capable of monitoring that, a monitoring agency, a watchdog program that would have been fairly and independently out there. We have the industry self-policing itself which is ludicrous.
One of the reasons I talk about the process that is so important when the legislation passes is because we figure out ways to ameliorate problems when we have legislation in front of us. Earlier this past week we had the Minister of State (Small Business and Tourism) in front us at committee who admitted that there has been no study on the effects of tourism on this particular HST grab.
That is critical because there was a study done by the Tourism Industry Association of Ontario and also from British Columbia the Butch Gardens study as well which show that tourism was going to be affected significantly by this HST grab. Hotels, restaurants, theme attractions, travel, all those things are getting a big whack tax put on top right now.
The tourism industry is the fourth largest sector in the Canadian economy. They have been facing a perfect storm as well. Not only the introduction of the U.S. passport requirement which is a real challenge because only 35% of Americans carry passports but we have had the petrodollars affecting the tourism industry all the way from the Niagara region, across Ontario and even in my region where the high dollar has resulted in a shift with the rapid acceleration. It used to be an advantage for Americans to come over and take advantage of that.
Then the government whacked the tourism industry again when it cut out the GST rebate. This is the party of our good friend Brian Mulroney who brought in the GST and there were severe economic repercussions on the tourism industry because of that.
In fact when he introduced the GST in 1991, the food service industry in Canada suffered a 10.6% decline in real sales, 7.3% of which was attributed to the GST. Once again our Conservative friends introduced that tax on Canadians.
We have now a situation where we had a couple of hearings and we had some witnesses yesterday at the tourism committee, because we happened to actually be studying another sector of the economy, so we were able to get some testimony from them on the HST. They see this as a significant challenge. We had some good testimony, and that is important because they are calling for some rebates and a series of things to be delisted, but we cannot really get to that full evidence and analysis because there is no actual study at committee on this bill.
That is a shame on the Conservatives, and the Liberals in particular, for not even allowing that public debate to take place, not even allowing that evidence from witnesses who are important in our sectoral economies, to come forward and to show what challenges would take place. There is complete ignorance on that. They prevented some really good evidence on how this will affect the tourism industry.
People have to be wondering about their representation, when they are in southern Ontario and they look at the Niagara region and elsewhere where we have to compete so hard for dollars. What is interesting is that our tourism deficit has ballooned under this government, and I will get into that later. We have seen U.S. visitations to Canada, which are three-quarters of the visitations that we receive in the overall tourism industry, decline significantly. On top of that, we have actually seen that deficit expand quite significantly with job losses that we have been suffering in those industries.
A number of different independent studies were done by the Tourism Industry Association of Ontario. They looked at a number of different scenarios as examples of what the HST is going to increase and what they are going to face. Keep in mind that Canada is already one of the most expensive places in the world to visit. I believe we rank fourth in the world in terms of the overall expense, so now on top of that, we are going to have another level of taxation that is going to further add to that component. That is a real problem, especially given the fact, as I mentioned earlier, that the dollar is high, U.S. visitation is down and we have a struggling economy.
Borrowing from our own taxpayers and from these businesses to throw another tax on top of them is going to affect a number of different scenarios.
One area is the weekend getaway, with a base cost of $1,603. Currently we have an 8.3% tax, but when we add the HST, future tax and incremental taxation, it is going to actually increase our taxes 43.6%. There will be an increase when we look at the incremental taxation related to the activity on that type of a vacation, when we take all the different components of that vacation in the visitation, so it is going up significantly.
They cannot even leave camping alone. This is one of the things that is ironic about this in Ontario. This is another Dalton McGuinty tax day on Canada Day. He cannot help himself, apparently. Maybe we need to have a motion in the House of Commons here to have Dalton leave our Canada Day alone. He brought in his health care tax a number of years ago after not telling the public about that, and then once again went through an election here and did not tell the public about that. They are now introducing a new tax on camping.
My son is a Beaver and their Beaver group is one of the examples of the new taxation. We have to do fundraising for them as it is. We live in the inner city where some of the kids cannot afford some of these events. In fact his troop, because there are kids in it that cannot afford the different events, was just recently subsidized by the other troops for a fun day that we had in Windsor, and I thank all the volunteers for that at the Cleary International Centre for the Arts. It was a terrific family event day.
Now when they go camping they are going to get taxed. When they go camping, they have an estimate of $2,173. The current taxation is $188 or 7.9%. That is going to go up and there is going to be future taxation for the other things that are added on. They are estimating around a 33.2% increase overall when they add all the activities from the camping trip together.
We could not even exempt camping in Canada. We could not even have a discussion or a debate about that. We just have to accept that this is going to happen.
We also looked at a shopping weekend in Toronto where good friends of the Conservatives, the Liberals are right now in the Toronto area. A shopping weekend of $4,856 is the average shopping weekend in Toronto according to the study and there is going to be a 14.2% increase on that when we add in the hotels and all the different things that people would have. So that is going to make it more challenging for Toronto as a destination.
We have already had a number of challenges such as SARS for example. In my riding people from the Detroit area refused to come into Windsor or Toronto explicitly because of the SARS issue and we had to debunk all that. It has taken years to recover from that issue.
There have been challenges and tourism destinations are very important for the country, not just for Toronto. Tourism is our fourth largest industry and once again we have not been able to study this issue or to have any meaningful input on it other than these outside measures others have been doing. They are from credible companies. HLT is the advisory group for this one.
A family ski holiday of $4,363 ends up with the incremental taxation resulting in a 25.3% increase is the estimation because things like lift tickets and a whole series of other things that did not have any tax now are subjected to this new tax grab.
What is important in terms of the impact on the overall economy it was good to have the Canadian Tourism Commission at our committee. It does a very good job. Madame Mackenzie runs it. It has many challenges. It has a small budget, small department. Interestingly enough the Liberals moved it toward the Olympics and that is a big event and destination that hopefully does take place. We hope that will turn some things around. This is a quote from documents:
Canadian outbound travel spending continued to rise in light of a strong Canadian dollar to reach a record level of $26.9 billion in 2008, an increase of 15.5% over 2007. As a result Canada's international travel deficit, the difference between what Canadian residents spend abroad and what international travellers spend in Canada, rose to a record of $12.6 billion in 2008.
That is devastating. When there is a significant deficit like that in one of our largest industries, it is critical to turn that around. We are not just talking about Americans or other destination marketers coming in that are going to have to pay the HST. When the government scrapped the GST rebate they were very upset about that and many people said that is one of the reasons they will not come back.
With the HST imposed in Ontario and British Columbia there could be more incentives for more Canadians to spend their tourism dollars outside of Canada. Part of the CTC's mandate is to have Canadians spend money in their own communities or to travel around Canada. But now we are adding another level of cost when we are competing for tourism dollars at a time when we have the significant challenges of a crumbling economy. This is just absolute utter nonsense that we would not get into a responsible evaluation about the impacts of this, whether we agree or disagree with the ideology of the bill, but we should be concerned about getting some empirical data to analyze and propose some solutions that would look at this and to show some leadership. To simply say we are washing our hands of it is unacceptable.
It is important that Canadians realize this is the agenda. When the Conservatives brought in the GST supported by the Liberals I remember the big scrap that was supposed to happen, it never took place and there have been successive attempts to bring in provinces. This is exactly what the Minister of Finance said on May 2 in budget 2006:
The government invites all provinces that have not yet done so to engage in discussions on the harmonization of their provincial retail sales tax with the federal GST.
That is what the minister said. That is the reality. Nothing happens without this. We need to have a proper study before we tear this at Canadians.