The debate over the HST is raging in the streets of Maple Ridge – Pitt Meadows and beyond. The same can be said of the House.
Michael rose in the House today to take his turn at the on-going debate against the HST.
Below is the draft Hansard of his speech and as always the official transcript will be posted as soon as it is available.
Second Reading of Bills
BILL 9 — CONSUMPTION TAX REBATE
AND TRANSITION ACT
(continued)
M. Sather: It is my distinct pleasure to rise to address Bill 9, the so-called Consumption Tax Rebate and Transition Act. You know, it’s hard to understand why the government wouldn’t come out and say in the title of this bill, this act, that it’s about the HST, because they continue to tell us all day long how wonderful the HST is.
Now is the time for applause, gentlemen, ladies. No applause. Well, maybe they’re having second thoughts. Maybe they are. It’s never too late to have second thoughts about a very, very bad move.
You can go through this bill and you will not see any reference to the HST — and in fact, that’s what this is all about. This discussion from the government side regarding the HST has become quite bizarre. We just heard it again from the member for Surrey-Panorama, and we previously heard it from the Finance Minister, who said: “I can’t wait to see the NDP stand up and vote against the repeal of the PST.”
Now, duh. Isn’t that a little bit weird to them? I mean, this…
Interjection.
M. Sather: It’s voluntary. It may be voluntary.
It makes no sense, because everybody knows that repealing the PST is about bringing in the HST, just like everybody knew and knows about the financing of health care — comes from general revenues. So what does this government try to do? They try to spin something about how all this money from the HST will go to health care. Flimflam, Madam Speaker. That’s what we’re seeing from this government around this bill — nothing but flimflam.
So since they don’t really want to name the bill for what it appears to be, I thought I would make a couple suggestions for them to help them out. For example, they might have called this act the “We’re pretty sure British Columbians are going to love this tax” act. Well, that’s what they seem to believe, so why not go for it? Why not put it right out there? I mean, they tell us how constantly this act will be good for British Columbians.
They tell us that, and yet I don’t know. Maybe they don’t get out and talk to British Columbians, because that’s not what British Columbians are telling us. I can’t imagine that’s what British Columbians, the vast majority of them, are telling them.
I mean, the member for Maple Ridge–Mission was at an anti-HST rally the other day. I’m sure he heard from the hundreds and hundreds of people who were there that they’re not impressed one little bit with the HST, and these are not all New Democrats by any stretch of the imagination. This government must know that, and these members opposite must know that, and yet they continue with this facade.
How about this one, Madam Speaker?
And these are not all New Democrats by any stretch of the imagination. This government must know that, and these members opposite must know that, and yet they continue with this facade.
How about this one: the “This tax wasn’t on my radar, but I was converted on the post-election road” act. It’s because it’s never too late. It’s never too late, and there have been conversions on the road before. You know, it could happen this time.
The members opposite might want to suggest to the Finance Minister, if he ever comes to his senses, which I doubt from what I’ve seen so far…. They might want to suggest to him some way that they can resurrect this bill. Some way that they can resurrect, I should say, their careers, as a matter of fact, their reputations, because their reputations have been badly, badly sullied by this classless and bad act.
I don’t just mean this bill as a bad act. I mean the bad act that this government has been engaged on since the election last spring. It’s been horrific. So one last shot for them at redemption. How about the “Lord, we ask for your forgiveness for bringing in this tax” act. You know, it’s never too late to ask for forgiveness. It’s never too late to repent. So this is the chance. It’s not too late. It’s not the end of April yet. You still have an opportunity. It’s for your own good. Trust us. It’s for your own good, and it certainly would be for the good of British Columbians.
I can imagine that the discussions behind closed doors with the government caucus, if they’re allowed to have those discussions, must be contentious. They must be contentious, because the government members are putting up a game face, if you will, in question period and at times during this debate. But they know. They know that they’re completely up against it with this act and that people in British Columbia are not going to swallow it.
I want to address some things that were said earlier today, particularly by the Finance Minister, when members on this side of the House brought up the fact that condo owners are going to be paying more as a result of the HST. Some incredible response, I thought. I thought it was a remarkable response from the Finance Minister to say, in effect, that government members were lying. He had to correct that, of course. It’s unparliamentary language. But, you know, I’m scratching my head and wondering where on earth the Finance Minister is at.
I wouldn’t have thought that a minister of his experience could not know his file. But I’ve seen his act before, and I’m not surprised, because when it came to the TILMA agreement, after months and months and months of debate and discussion about the bill, the Finance Minister did not know that the agricultural land reserve is not exempt from TILMA. He didn’t know it. In fact, he got up and stood. When I said it, he got up and said: “That’s wrong, wrong.” He was wrong. He’s wrong again. But he has the opportunity, and surely he’s going to clarify it at some time.
What condo owners and their association are saying: “Look, the fees themselves don’t go up.” We’re all agreed on that, but the things that the fees pay for do go up — things like landscaping, janitorial services, maintenance and renovations. Those are the things that condo owners pay for, and they’re going to be paying more for this.
The minister says no. He says it’s not the case. He needs to clarify that, then. Is it not true that they are going to be paying more for those services? It is true, and yet to hear the Finance Minister earlier today…. It was appalling.
You know, I think it must leave the government members privately with a sense of absolute hopelessness, because there’s no defence of this bill.
There’s no cogent defence of this bill that is being made by the government members, particularly the Finance Minister. So it’s a bad time to be a Liberal and there’s no cogent defence of this bill that’s being made by the government members and particularly the Finance Minister.
So, you know, it’s a bad time to be a Liberal. They’re heaping one catastrophe on the other. If it’s not the Solicitor General stepping down, if it’s not the brewing scandal over the casino, it’s the fiasco of the HST — the absolute fiasco.
I want to talk a little bit about the HST in other provinces because that’s been mentioned a few times, and there are some differences between this one and those in those provinces. For example, Nova Scotia and Newfoundland — they had reduced their HST, the combined tax, in the process of bringing in the HST. More importantly even than that, I think, is that the Maritimes consulted with industry and other business before bringing in the HST, and this government did not.
This government did not, and why did they not? They didn’t because they knew right from the get-go. I think they knew. They must have done some polling. I don’t know. They must have known.
Interjection.
M. Sather: No, they didn’t know? Lambs to the slaughter, I guess.
I would have thought that they would have known, but perhaps I’m mistaken on their acuity around these matters. The fact of the matter is that it’s a totally unpopular tax, and they’re suffering as a result. So they didn’t bother to discuss with any, not before the election, and then they dropped the bombshell on British Columbians.
You know, even if British Columbians accepted the tax, which they by and large do not, they would not accept something that is dropped on them like that, and the government knew it.
Why did they do it? Various theories are out there. They wanted some of that slush fund money from Ottawa, which incidentally they’ve kind of messed up for British Columbians too because they’re not taking it now. They’re reducing the amount of that transfer money that they could get. But when you put off taking the money, it’s not a freebie because then you’ve got to pick up the slack, and we know we’ve got another large deficit this year brought forward by this government.
Financing a deficit costs money. There’s a lot of interest that’s going to be paid — $70-some million is the estimate that I’ve seen. So, as I say, it’s a tough time right now. It’s a tough time, and I’m not so concerned about the tough time for the government, quite frankly. I’m concerned about the tough time for British Columbians and how this is quite frankly a very, very bad time to institute a new tax.
We’re trying to rise out of a recession, and now consumers are going to be hit with another tax that’s going to make them less likely to go out and spend their money, so it’s not good for British Columbia in many, many ways.
The Finance Minister says the HST will improve investment in the province, and the government in that respect is putting all their trust on the marginal tax rate on capital and that the HST will lower that measure.
Now, it’s not clear, in fact, if that will be the case. I mean, it’s arguable, I think, perhaps either way, but the Finance Minister has trotted out quite a few…. Well, not many studies, actually. There’s the Jack Mintz one, but anyway, he’s trotted out quite a few organizations that are supportive.
But a number of economists don’t agree on this factor, that the marginal effective tax rate on capital is a very good dependable measure. Some of those are Queen’s University’s David Chadwick, Smith chair; economics professor Robin Broadway, I believe it is; and an individual who, although I’m sure the members opposite are not fond of him, does his homework, and that’s Marc Lee from the Canadian Centre for Policy Alternatives.
Supposing, on that particular issue, in terms of investment being improved by the HST…. What would happen if that were the case? Well, if we look at the forest industry, for example, we see that a lot of their investment has been going south of the border. So is there any assurance that investment, if it were to improve…? I don’t think there’s a heck of a lot of great evidence that it will as a result of this tax, should it be passed. Mercifully, let’s hope it is not. We’re going to be doing everything we can, certainly, to do our best to see that it isn’t.
Ultimately, it always depends on the government as to whether or not…. They will have to make the decision whether to continue with this very unpopular tax.
If you look at some of the forest companies out there…. TimberWest says they’re officially realtors now. So what is the confidence that we can have that…? The government, of course, is greasing the skids there monumentally to turn forest companies into realtors in various parts of the province.
We don’t have a lot of confidence that the supposed benefits that the Finance Minister says will happen will in fact happen. He also says that the HST will increase B.C.’s tax competitiveness. However, Manitoba, which looked at and rejected an HST for their province, said that an HST would only increase the tax competitiveness of their manufacturing sector by all of 1/10 of 1 percent. So hardly worth their while was what Manitoba decided. But a government has great faith, I guess, in its vaunted capabilities, which seem to be markedly diminished, to me, as a result of this ill-considered and ham-fisted attempt to bring in an unpopular tax.
Also, the minister says that the HST is going to help exports. You’ll remember that in his speech in second reading he talked about sending all those 2-by-4s over to China. More properly, he should probably have been saying “those raw logs over to China,” because that’s….
Hon. C. Hansen: That’s not true.
M. Sather: That’s what in fact is not true.
Hon. C. Hansen: Very few raw logs.
M. Sather: Here he goes again. “Very few raw logs go over.”
There’s been an unprecedented export of raw logs from this province over the past few years. And they believe that. Better believe it. They know what the truth is. There again, the Finance Minister never fails to make these incredible and unbelievable statements. There you go.
Interjections.
Deputy Speaker: Members. There is a member who has the floor. Please continue.
M. Sather: A report for the International Monetary Fund by writers Alan A. Tait and Krugman and Feldstein said:
“Many VATs” — value-added taxes, and the HST is one of those — “exempt and zero-rate important sectors of the economy, especially food, housing and many personal services.”
There are some exemptions for food and housing under this bill.
“Therefore, this type of VAT raises the price of tradeables relative to non-tradeables and encourages the substitution of food, housing and services for tradeable goods. This implies that both imports and exports would be reduced. The most likely effect of the introduction of a VAT would thus be a decline in exports.”
The same author writes in the publication for the International Monetary Fund:
“Overall, the VAT is not thought to have contributed significantly to improved export performance in the European Community. The VAT makes the customs union possible but is not the agent that creates international trade.”
So you see, it’s by no means a uniform belief that trade…. Certainly, the Finance Minister wants us to focus on 2-by-4 rather that creates international trade.” So you see, Madam Speaker, it’s by no means a uniform belief that trade in…. Certainly, the Finance Minister wants us to focus on 2-by-4s rather than those raw logs, but whatever it may be, exports thereof.
The sad part about the HST, despite what the government says — which can only make me believe they don’t get out much — is that people on the ground, small businesses, are upset about this tax. You go into any restaurant, almost. They will tell you that they’re very, very upset about the effect that this tax will have on them.
The government talks about input tax credits all the time. Wow, businesses get input tax credits. But the biggest drivers, the biggest cost factors for restaurants are labour and food, and they don’t get any input tax credits on those. They are going to hurt and hurt big, and they know that. I don’t think the government even knows that. I just don’t think they’re getting out at all. They should get out, because I think if they had gotten out and took the time to talk to some of those individuals in the first place, this never would have happened.
Hairdressers. Government likes to talk, reel off the business organizations that support the HST. However, a lot of businesses are not supportive. Go in and talk to hairdressers. They’re appalled. They’re furious. And they’re ready and willing and able to sign the initiative petition that’s going around to try to prevent this ill-considered tax from happening.
It’s tax time right now, and a lot of folks, myself and my wife included, have their taxes done by accountants. It’s interesting that the government lists several, or two or three, accounting organizations that purportedly support the HST, but when I talked to my accountant about it, he’s freaked out. He’s concerned that he is going to have to charge the HST if this government passes this bill, and he’ll have to do that next year. He’s wondering and asking me: “What can I do about it?”
It’s the people on this ground that this government needs to talk to, not just the people in the corporate boardrooms. Quite frankly, from a purely political point of view, you must need to remember that the people who do most of the voting are the average British Columbians. The people in those restaurants, the people in those hairdressing shops — the people that are small, that don’t have the access to power — have great concerns about how they’re going to be affected by this bill.
I mentioned the initiative petition that Bill Vander Zalm is driving. Bill’s driving the bus that’s going around to most towns in British Columbia. What is the government going to do if that initiative were to pass? Initially everybody, I think most people in British Columbia, thought: “Nah, it doesn’t have a chance.” Now a lot of people are saying that it may very well have a chance.
If in fact that initiative is successful, what is this government’s response going to be? Are they going to bring in a bill that allows for a referendum? Well, they should, but I think they know very, very well where that would go, a resounding defeat. Or are they going to bring in legislation that would effectively end this HST debacle? Some people have suggested that, well, they could bring it in but then not call it for debate. I dare the government to do that. I dare them to bring in a bill to this House and then let it die on the order paper.
I wonder what this government is going to do. I’m they’re shaking in their boots, hoping at least one constituency somewhere in this province is not going to sign up the required number of people, that that initiative will pass.
You know, Madam Speaker, a lot about politics is about branding, and this government’s brand is suffering big time. It’s coming, I think, to a tipping point for this government. You can only endure so much damage to your brand before it becomes unredeemable, before you’re stuck with what you’ve got.
I don’t think the Liberal Party of British Columbia wants to go there. I don’t think they want to ruin themselves for the future. Why not, then, take the hit now that you made a big mistake and cancel this bad experiment right now?
Why not say to British Columbians: “You know, we are fallible human beings. I know we didn’t tell you what we were going to do, but we’re saying now that we hear what you say. We’ve talked to you, we’ve listened to you, we know that you are not happy with this tax, and we are going to cancel it, get rid of it right now”?
That’s what this government should do. That would be, in my opinion, in their best interest to do that, because this is not going to go away. I guess that’s what the government is hoping. They’re hoping, of course — hoping against hope, praying — that the initiative campaign will not succeed. And even if it does, I guess, they’re hoping that somehow the huge anger that British Columbians have towards this government as a result of this deception that brought in this tax and as a result of the tax itself….
Notwithstanding what the Finance Minister says, they know that this tax is not good for them, and they’re going to punish this government. They’re going to punish this government unless they come to their senses. But that’s up to them, Madam Speaker, and I can only hope for the people of British Columbia that they will come to their senses.
Look at tourism. They’re going to be suffering. Tourism services are going to go up another 7 percent. Now, these folks are really worried. I mean, they depend largely, to a considerable degree, on tourists coming over from the U.S. to Canada — to British Columbia specifically. The Canadian dollar is right around parity at this point with the American dollar. That is not good for tourism. To have this on top of it, it’s going to be a very hard blow. It’s going to be a tough time for tourism as a result of this.
And the government, you know, just goes on talking about all the benefits to business. Where are they when they’re looking at the tourism industry? Where are they when they’re looking at the restaurant industry? Where are they when it comes to all the little people?
You know, I talked to somebody the other day, and he’s a winemaker. They’re uncertain about how or if this is going to affect them — it shows there’s not enough information out there. The juice that they pay for to make their wine…. The member opposite is a vintner. Although it’s not his business particularly, he knows all about wines. They’re worried about whether or not it was considered an agricultural product. They understand, some of them at least, that it no longer will be and that it’s going to be subject to a tax.
I talked to another person. I went into a floral shop, and she started talking about a friend of hers who is a wedding planner. My wife and I used a wedding planner. It was great — absolutely wonderful service. They’re going to be subject. These are little people. They’re going to be hurt, and I guess this government doesn’t talk to those folks, because they would know that those kinds of people are going to be hurt.
I talked to another individual who has a courier service. She picks up pets in Vancouver from the airport and takes them to their owners — stuff like that. She’s going to be hit by this. They’re trying to get their businesses going, they’re trying to make a living, and they can’t afford this kind of hit.
It’s totally ironic for a government that brags all the time about the tax reductions that they’ve made for businesses, by and large, and yet they’re so ready to adopt the tax, to embrace a tax that puts the burden on the average British Columbian, and that’s not right. It’s simply not right at all.
So we see this for what it is. It’s a tax shift. It’s a tax shift from business to the average British Columbian, and they’re concerned about that. The government needs to get a lot more concerned about it. Their level of concern, certainly as indicated by the remarks of the Finance Minister, is…. The disparaging remarks by the Finance Minister are worrying, quite frankly, because I think it shows a complete disconnect with the reality that’s out there, and this government is proceeding at their own peril.
I don’t think I’ve got too much time left, so I just want to add a few more words.
You know, you can’t even go green now. Remember how proud the government was at going green? Now your tax rebate on your hybrid that you could get before to help you go green is gone with the repeal of the PST. The ability is lost. The flexibility is gone.
This is one of the things that — remember? — Rick Thorpe and Carole Taylor, when they were part of this government, said was so bad, because you lose capacity to adjust and to have ownership over your own taxes in British Columbia. They said it was bad. Now it’s curious. They’re not in government anymore.
