MR. SPEAKER: Order, please. We will now commence with the daily sitting of the House.
PRESENTING AND READING PETITIONS
MR. SPEAKER: The honourable Leader of the New Democratic Party.
MR. ROBERT CHISHOLM: Mr. Speaker, I beg leave to table a petition which has 246 names and I will affix my name to the top copy. It is that familiar petition that the operative clause concludes with, "We hereby call upon the Liberal government to scrap the BST and live up to their commitment to bring in fair tax reform.".
MR. SPEAKER: The petition is tabled.
The honourable Leader of the New Democratic Party.
MR. ROBERT CHISHOLM: Mr. Speaker, I beg leave to table a petition which has 22 names affixed to it. The operative clause reads as follows, "We, the undersigned oppose the recent cuts to the Nova Scotia Children's Dental Program. The two-tier system is a personal affront, and changes within the program are not based on sound clinical experience. We the voters and tax payers of this province insist that the Government not make any more cuts to this extremely cost efficient program.".
MR. SPEAKER: The petition is tabled.
PRESENTING REPORTS OF COMMITTEES
TABLING REPORTS, REGULATIONS AND OTHER PAPERS
STATEMENTS BY MINISTERS
GOVERNMENT NOTICES OF MOTION
INTRODUCTION OF BILLS
NOTICES OF MOTION
MR. SPEAKER: The honourable Leader of the Opposition.
DR. JOHN HAMM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas some adults have shown this season that they have no concept of the true meaning of Christmas since the Tickle-Me-Elmo craze began; and
Whereas the obsession with the Sesame Street character doll has turned otherwise sensible individuals into Scrooges, concerned only with what they can get if they sell the toy; and
Whereas a five year old girl named Samantha Champagne has put to shame all of those individuals by giving up her Elmo doll to the paediatric unit of the Aberdeen Hospital in New Glasgow to, as she said to her parents, help the sick children;
Therefore be it resolved that the members of this House commend the selfless gesture of this young but wise little girl who has shown to us all that the true meaning of the season is about giving.
Mr. Speaker, I ask for waiver.
MR. SPEAKER: Is it agreed that notice be waived?
It is agreed.
Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried. (Applause)
The honourable member for Halifax Fairview.
MS. EILEEN O'CONNELL: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas the levels of hostility in this House have been somewhat excessive of late; and
Whereas threats, finger-pointing, challenges and invitations to step outside suggest a certain lack of respect for this historic place of assembly and for each other; and
Whereas fatigue is no excuse for unbecoming conduct;
Therefore be it resolved that all members of this House adopt as their motto, peace on earth and goodwill toward men and women, and have a truly peaceful holiday season.
Mr. Speaker I would request waiver of notice.
MR. SPEAKER: Is it agreed?
It is agreed.
Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
The honourable member for Leader of the New Democratic Party.
MR. ROBERT CHISHOLM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas this government is once again locked in negotiations with Nova Scotia doctors, many of whom feel overworked and underpaid; and
Whereas it has long been recognized that an expanded use of allied health care professionals like nurse practitioners, physiotherapists and midwives can both save money in the health care system and reduce physician burn-out; and
Whereas after more than three years in power, the Liberal Government has done nothing to live up to its campaign promise to make nurses, midwives and all other health care professionals an integral part of the health care team;
Therefore be it resolved that this House urge the Liberal Government to begin immediately to implement its promises regarding allied health care professionals.
MR. SPEAKER: The notice is tabled.
The honourable member for Pictou West.
MR. DONALD MCINNES: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas Dwight Mallory of Eagle-Thrush Studios in New Glasgow produced 2,500 copies of A Pictou County Christmas, a compact disc featuring various Maritime artists; and
Whereas proceeds from sales of the CD will go to the Pictou County Christmas Fund to benefit needy children in Pictou County; and
Whereas talented musical performers who donated their time and energy to the recording of the CD included: Art Fitt, Don Haggert, Marla James, Henry Lewis, Danny MacDonald, Greg MacDonald, John "Spider" MacDonald, Ron MacDonald, Claire Mason, Doris Mason, Jackie Rogue, and Jonathan Visser;
Therefore be it resolved that this House congratulate producer Dwight Mallory and the artists who contributed to a project that captures the true spirit of a Pictou County Christmas.
Mr. Speaker, I would ask for waiver.
MR. SPEAKER: Is it agreed?
It is agreed.
Would all those in favour of the motion please Say Aye. Contrary minded, Nay.
The motion is carried.
The honourable Leader of the Opposition.
DR. JOHN HAMM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas the former Salvation Army hall on Forbes Street in New Glasgow will become home to a youth centre in early January; and
Whereas the New Glasgow Crime Prevention Association initiated the youth centre project, forming a subcommittee of 10 people to operate the facility; and
Whereas the centre will be available for youths between the ages of 13 and 17;
Therefore be it resolved that all members of this Legislature extend our sincere and best wishes to the New Glasgow Crime Prevention Association; Community Relations Officer, Howie Dunbar; and Chair of the Subcommittee, New Glasgow Town Councillor Ken Langille, for their dedication and hard work on behalf of youth in the Town of New Glasgow.
Mr. Speaker, I ask for waiver of notice.
MR. SPEAKER: Is it agreed that notice be waived?
It is agreed.
Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
The honourable member for Sackville-Cobequid.
MR. JOHN HOLM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas two families in Glace Bay lost their homes earlier this year as a result of subsidence; and
Whereas the Minister of the Environment, on behalf of the Liberal Government, has turned down the families' requests for compensation; and
Whereas the Minister of the Environment has suggested responsibility lies with the municipality, an entity that is already facing a huge deficit as a result of downloading by this Liberal Government;
Therefore be it resolved that this House condemns the Liberal Government for the callous way in which it is trying to duck any responsibility for the subsidence problem in Glace Bay.
MR. SPEAKER: The notice is tabled.
The honourable member for Cape Breton West.
MR. ALFRED MACLEOD: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas earlier this year a Special Senate Committee reviewed the situation at the Cape Breton Development Corporation; and
Whereas the committee made several recommendations, including that the committee be reconstituted in the fall to examine and report on Devco progress reports; and
Whereas Cape Breton's unemployment rate is one of the highest in the country and every attempt must be made to prevent further job losses in Cape Breton;
Therefore be it resolved that the Premier write to the federal Minister of Natural Resources and request immediate action on the recommendations of the report, to give Devco every opportunity to remain an economical and viable employer in Cape Breton.
Mr. Speaker, I request waiver of notice.
MR. SPEAKER: Is it agreed that notice be waived?
I hear several Noes.
The notice is tabled.
The honourable Leader of the New Democratic Party.
MR. ROBERT CHISHOLM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas on November 29, 1996, this House approved Resolution No. 904, which called for a public inquiry into psychiatric services at the Cape Breton Regional Hospital; and
Whereas the Minister of Health has provided no reasonable argument for his failure to follow the wishes of this House and call a public inquiry into the suicide deaths of three individuals who had been treated at the Cape Breton Regional Hospital; and
Whereas the minister's failure to call a public inquiry not only affects the families of suicide victims but undermines the public's faith in the mental health system in Cape Breton;
Therefore be it resolved that this House call upon the Minister of Health to act upon Resolution No. 904 and call a public inquiry into psychiatric services in the Cape Breton region.
Mr. Speaker, I ask for waiver of notice.
MR. SPEAKER: Is it agreed that notice be waived?
I hear several Noes.
The notice is tabled.
The honourable member for Sackville-Cobequid.
MR. JOHN HOLM: Mr. Speaker, I hereby give notice that on a future day I shall move the adoption of the following resolution:
Whereas the Minister of Natural Resources has initiated a process of public consultation which will lead to legislation designating animals, insects and plants as endangered species; and
Whereas a similar process involving widespread public consultation resulted in the designation of 31 protected sites; and
Whereas the government has failed to take legislative action to ensure that those protected sites will, in fact, be protected;
Therefore be it resolved that the House urge the Minister of Natural Resources to carry through with the Endangered Species Act and avoid a replay of the problems caused by its failure to implement the protected sites plan.
MR. SPEAKER: The notice is tabled.
The honourable member for Halifax Fairview.
MS. EILEEN O'CONNELL: Mr. Speaker, I hereby give notice that on future day I shall move the adoption of the following resolution:
[8:15 a.m.]
Whereas it has been nearly 10 months since the tragic death of Warren Edward Sheppard in a Dartmouth small options home; and
Whereas the former Minister of Community Services promised prompt action both to investigate Eddie Sheppard's death and address the very serious defects in the regulation of small options homes; and
Whereas the investigation continues to drag on and regulation to this point consists of an inadequate set of minimum standards;
Therefore be it resolved that this House urge the Minister of Community Services to complete the Sheppard investigation without delay, report its findings to the Sheppard family and proceed with the implementation of appropriate regulations for small options homes.
MR. SPEAKER: The notice is tabled.
GOVERNMENT BUSINESS
MR. SPEAKER: The honourable Government House Leader.
HON. RICHARD MANN: Mr. Speaker, would you please call the order of business, Public Bills for Third Reading.
PUBLIC BILLS FOR THIRD READING
MR. SPEAKER: The honourable Government House Leader.
HON. RICHARD MANN: Mr. Speaker, would you please call Bill No. 48.
Bill No. 48 - Sales Tax Act.
MR. SPEAKER: The honourable Minister of Finance.
HON. WILLIAM GILLIS: Mr. Speaker, I rise in this House today to speak on third reading of Bill No. 48, a balanced and fair approach to tax reform in Nova Scotia. (Applause) In so doing, I move that this bill be now read a third time.
Mr. Speaker, this bill is about stimulating the Nova Scotia economy. This bill is about modernizing the provincial economy. This bill is about making our businesses more competitive. Add those up and you will see why this bill is about jobs. Why does harmonization add up that way? The answer is simple. Harmonization lowers the cost of doing business in Nova Scotia. The HST lowers the cost of doing business; that, simply, is what it does. On balance, there is no dispute. What happens when the cost of doing business is less? I want to go through this briefly.
First of all, business with a lower cost now has an advantage over those with higher costs. This gives our businesses a choice: they can either retain the increased profits in order to modernize or expand, or they can reward their owners and staff, or they can lower their price. Now many would say, why would a business lower its price? The answer is so they can sell more of their products and make even more profit. This is not a policy that depends on the benevolence of free enterprise, this is not a policy that depends on charitable fellows who say, hey, let's give the customer a break, this is a policy that says we have a free market place and we have businesses who know if they can sell for less they will sell more. Selling more for less means profits, and it is as simple as that. This is not economic theory; this is everyday economic practice.
The market for Nova Scotia business is not just Nova Scotia; it is not just the Maritimes or Atlantic Canada, for that matter. It is not just Canada either. The market for Nova Scotia products and services is the world. Mr. Speaker, many of our businesses are ready to broaden their horizons. They are prepared to take on the competition around the world. They are prepared to expand their businesses in order to sell more for less. This is the way they will grow and, as they grow, so will the jobs here in Nova Scotia. In fact, this is the only way we are going to be able to offer our children a secure future.
To take on the task, they must become more competitive. That means they must find ways to lower their costs. Harmonization helps them to do that. Harmonization gives Nova Scotia a competitive boost. Harmonization gives our businesses the opportunity to grow even faster, to add more jobs and to provide economic benefits for all.
Mr. Speaker, there is no magic to job creation. It will come as businesses feel confident they have a good future, a reason to invest and to grow. What this government has done is lay the foundation for that confidence. We have offered everyone the commitment that we
will not drown in a sea of debt. We have tried to correct the sins of the 15 years of the Buchanan-Cameron Governments. Our balanced budget legislation means we will have a future. Building on that foundation, we offer lower taxes and lower business costs. From this we will get a more competitive economy and an economy with a future.
I challenge the Opposition to state on the record their belief that taxes on businesses help create jobs. They should put it on the record now so that all may see. The Opposition seems to believe that higher taxes on business will encourage business to create jobs. The Opposition believes that even more taxes on business would be a good way to encourage modernization and expansion. I just don't understand.
AN HON. MEMBER: None of us said that.
MR. GILLIS: Yes, you have said that. It has been said across the floor, Mr. Speaker.
They are not in favour of decreasing taxes on business so it can be more competitive in the world and in the country. That is the fact, Mr. Speaker.
Now, Mr. Speaker, I want to turn to another part of the tax policy. They seem to be squeaking and squawking so you know they are hurting. (Interruptions)
I want to touch on another part of the tax policy and that is the challenge to make sure the benefits spread to all parts of our society. After all, we believe there must be a balance. Job growth must be coupled with tax fairness. This has been part of our negotiations since the beginning. Our government believes there is tax fairness. A capital tax on large corporations, balanced by input tax credits for businesses, that seems fair. A broader base of services taxed, balanced by a lower rate on goods. A broader base, also balanced by income tax cuts and direct assistance. A general income tax cut of 3.4 per cent, the first one in the history of Nova Scotia, Mr. Speaker, balanced by an even greater tax cut for low income Nova Scotians and the Direct Assistance Program to send help to those who do not benefit from tax cuts at all.
I want to say a few words about each of these measures in turn. Mr. Speaker, we estimate business savings through the input tax credits of approximately $170 million. This is what drives the job creation process I described earlier but this benefit is blunted for the big corporations because they face a new tax, a tax on their capital. As all honourable members would know from the budget, the annual yield on the capital tax will be approximately $45 million.
Mr. Speaker, the tax on the capital of large corporations puts to rest any notion that this is just a big break for business. The major financial benefits of harmonization will, in fact, flow to small and medium sized businesses. Those companies which have capital of less than $5 million will escape the capital tax entirely, the small businesses which are so important to the
Premier of Nova Scotia and the Government of Nova Scotia. (Applause) Those with capital between $5 million and $10 million will have the tax phased in. Those with capital in excess of $5 million will pay the full rate. All together, $45 million will be raised in taxes from our largest corporations. That is the total. Mr. Speaker, $170 million for all businesses, by lowering of taxes, less $45 million from our largest businesses. That is balanced, that is fair.
At this time I want to turn to the issue of a broader base, Mr. Speaker. Although we readily admit that the tax rate on some things will be going up - and that is a fact - we wish the Opposition was as quick to acknowledge that the tax rate on many items will be going down. In fact, between no change and going down, I think it is two-thirds or three-quarters of items that are not going up. Most important of all, we wish everyone would understand that there is nothing that will be taxed on April 1st that is not being taxed now, that is a fact, either through the PST or the GST. That's a fact. (Interruption) Every single item or service that is provided, maybe the Opposition and both segments of the House don't like to hear this, but every single item or service that is provided tax free now will be tax free after April 1, 1997.
Moreover, within the spending by an average consumer, there is a fairness and there is a balance. Mr. Speaker, because I do not have the time to review everything and I don't want to bore the House in doing it, I would just look at a couple of key areas.
First of all, let us look at utilities. Almost everyone in Nova Scotia has an electric bill and a telephone bill. A fair number, (Interruption) Mr. Speaker, the member for Sackville-Cobequid seems to want to get in on the act. I am not going to take up much of the time of the House, I wish he would just relax, he has had a pretty fair go at this in second reading and Committee of the Whole House on Bills, so why doesn't he just relax and hear the truth and stop squawking, just give me a chance. (Interruptions)
MR. SPEAKER: Order, please. The honourable minister has the floor.
MR. GILLIS: I will wait until the squawking stops. I think I am entitled to 10 minutes or so just to put a few facts on the record.
Moreover, Mr. Speaker, I was talking about utilities; people have, as everybody knows, almost everybody, a light bill, a power bill and a telephone bill and a fair number, as I was saying, have cable television. Now, there are some who do not have cable, obviously, a few who don't have a phone and a handful with no electricity, but we all know that most families have some combination of these and a lot of people regard them as basic. So let's look at that as an example. What happens to the tax next April, just to break it down into segments we can understand: power, telephone and cable.
Well, the family with an electric bill for their lights, washer, dryer, TV, stove and microwave, probably averages around $100 to $130 every two months depending on the time of year. Of course, as we all know, the power bill in the summer is less than in the winter, so we want to look at what it is on an annual basis. I am going to estimate $600 or $700 a year; a lot less if they are in a small apartment with no dryer and few lights. But let's just say, $700 for an example. What will be the increased tax of that household? (Interruption) Mr. Speaker, I am just trying to present a case, the other members will have their chance and they will have a chance in debate on third reading. I am putting this forward and I am sure they would want to respect a member's right to put that case forward.
I am going to ask, what will be the increased tax for that particular household that I outlined. Well, the $700 a year for electricity already includes, Mr. Speaker, the tax of 10.2 per cent, so remember the tax on electricity is not going from 7 per cent to 15 per cent, it is going, in fact, from 10.2 per cent to 15 per cent. So we have to take that out before we add in the new amount of the HST. What is the result? The result on the $700 electricity cost is an additional $30.42. Now, I acknowledge that does not include heat and I will touch on that later. I am, of course, assuming that we are not heating by electricity here, I gave the example earlier. But that is $32 approximately on the debt side of the ledger that will cost our family more.
I want to look at the other utilities. What about the phone bill and the cable bill? It is my understanding, Mr. Speaker, that the average tax saving on the phone bill will be $25. (Interruption) The saving will be $25 on the phone bill, a saving. The average family probably saves another $8.00 to $10 on the cable bill on an annual basis. That is a $35 saving compared to a $30 cost; not bad, no disaster there, and so it goes through each category when people take the time to analyze the different parts. (Interruptions)
[8:30 a.m.]
MR. SPEAKER: Order, please. It is extremely difficult to hear the honourable minister. I would ask that if there are members who wish to carry on discussions, to please leave the Chamber.
MR. GILLIS: Mr. Speaker, I want to assure all members of the House that I will try not to bore them and I am not going to go on very long, so I can move third reading and other members can have their chance. I would really appreciate it if they would just give me the opportunity for another five to eight minutes and I will take my place.
I want to move on and talk about the case of operating a motor vehicle. Over time, Mr. Speaker, we believe most people will be slightly ahead. The saving - and you have to look at the whole picture - on a car purchase or lease, combined with the savings on car repairs, over time will offset the increase in the cost of gasoline, which will go up 8 per cent. Using the figures of the Canadian Automobile Association, we have calculated a slight positive saving
for the average car driver. Individual cases, of course, may vary, depending on fuel economy, the type of vehicle one drives and how much driving the person does. But, on average, there will be a saving, if you count in the lower tax rate on the car - the purchase or the lease, whatever the case may be - spread out over the average life of the car. You talk, also, about the lower tax rate on repairs carried out at a garage.
Some people say, well, what about clothes? What about heating fuel? Mr. Speaker, there is a balance here, too. We believe that people will have savings in the daily operation of their homes. Although they may pay more for a plumber's visit to fix a pipe, for example, they will save when they go out to buy a weatherstripping kit to seal off some of the drafts in the house. Well, the members can laugh. If they are not for energy efficiency and savings, that is fine. That is their choice. They may be rich and famous and they don't need that, but the ordinary people think that is important. People will pay more for fuel oil and that is true. There is no doubt about that. There is an 8 per cent increase there, but somebody who happens to rent a water heater will pay less because the rate will go down almost 4 per cent.
A lot of people, especially in rural Nova Scotia, in fact, most people in Nova Scotia, have pride of home ownership. That is the thing they worked on, they invested in and it is something they are proud of. In case the members opposite do not know, there are costs that relate to maintaining a house. The cost of paint will be less, as well as the cost of a storm door or other insulation products - I mentioned one earlier - the cost of bedding plants for around your property, the cost of various items that you use in the house - detergents, toilet paper, shampoo, paper towels - and you can go on with the list. If you happen to have a pet, pet food, and even pop for those who indulge in soft drinks rather than hard liquor, those costs will go down as well.
Mr. Speaker, we are aware of people whose heat is included in their rent. We know that. There are people like that. These people may - and I stress may - not face an increase, or will face a small increase. I think this is important to note, harmonization does not come into effect until April 1997. Separate and apart from harmonization in the future, we all know that this year, earlier in 1996, the cost of home heating fuel has gone up about 20 per cent. Don't blame that on harmonization. It has nothing to do with it.
Again, Mr. Speaker, there are many variables, the amount of home heating oil that is used. Up until today, we have had a very mild fall. I am sure that the oil consumption in the average home or the average apartment certainly is down. In any case, it has not had an impact on rents because each landlord must look at their own situation and judge what they should do. Of course, we know that there are various impacts. Financing is coming due. The rates today are vastly different than 2, 3, 5 or 10 years ago. In any event, we know some landlords who say we will wait and see what happens. There may be pressures, I am not denying that there might not be pressures on some landlords but don't assume that there will be a massive impact because of this particular matter.
I want to touch on low cost clothing. I acknowledge that this is an issue but once again there is a balance here that is not acknowledged by members on the other side of the House, especially the two segments to my far right. For instance, much of the children's clothing we know is under $94 and hence will go up. However, as members would know, as young people grow older the winter coats of under $94 are not that easy to find so they, at the moment, attract the full tax, in fact, they would have a lower rate because they have the full tax rate now. There is household spending in both categories.
The member from Gabarus is not content to have his say as he has had it three or four times in the Committee of the Whole House on Bills and second reading, I just ask him, I plead with him just to give me a few more minutes to hear me out, he doesn't have to agree with me but I am entitled to my say too. Maybe he should just button up and give me a chance to finish my remarks. (Applause)
I think it is important to remember that there is spending on children in more areas than just clothing and not all the clothing that is purchased is essential. I realize that for low income families there are not many luxuries, not many low income families buy luxurious items but we all know there are pressures on children at all levels to have the designer type clothes that sometimes cost more than the $94 that exempts them from the tax and some of them right now are paying the full tax on them. In any event, I want to continue on.
We all know that across all income groups there is tremendous pressure to treat children well. We want, as a society, children to have more than the bare necessities. We buy them the clothes they need, we buy them the clothes they want, we also buy them pizza at one of my favourite places, Pizza Hut and hamburgers at Harvey's or McDonalds or A&W or what have you. We buy children shoes but we also rent them movies, we buy them treats, some chocolate bars, bottles of pop and yes, we buy them toys. (Interruptions) The members opposite can list their items later but they remind me of Tickle Me Elmo which some people seem to be after these days, that is what these people remind me of, the jokes.
When we look at a full basket of spending, we discover something that the opposition refuses to admit, a balance, a series of ups and downs, a fairness in this tax legislation that is enhanced by the issues covered in my next topic which will bring me close to my conclusion. The next topic is the income tax cuts and the direct assistance. I have covered this before but I want to repeat it before I take my place.
I think the people of Nova Scotia are badly served by the Opposition when they refuse to acknowledge our balanced series of income tax cuts and other assistance. Most Nova Scotia families will be getting at least $100 more in their pockets and purses because of this part of tax reform. For example, the single person living on $9,000 with a low income job, a seasonal worker with $9,000 of net income will get a one time cheque which will help with some of their bills of $90. The family comprised of two seniors, for example, living on maximum GIS will get $125 and don't tell me that that will not help in the spring or early
summer when people's bills are coming due whether they be taxes or late winter oil bills or whatever. The couple with two children and a net income of $26,000 will have $320 more because of the income tax changes. A single women, for example, making $35,000 in net income will have about $100 more, Mr. Speaker.
Almost everyone will get a tax break and the benefits are significant. I think all honourable members should keep that in mind.
We are living up to the challenges of government in the 1990's. We are offering Nova Scotians a future where the budget is balanced, the tax changes are balanced and the services offered to our citizens are balanced by affordability and need. This approach is a refreshing change from the early 1980's and 1990's when we saw the debt go from $0.5 billion to about $6 billion, and commitments made have forced it up even higher since. Then we have the Third Party with pie in the sky type promises that they will never be able to deliver on because nobody could ever afford them.
I just want to say that I think the approach we are taking is one that will serve us well into the next century. We are offering a balance in terms of taxes and services and trying to help those in need, especially those least able to help themselves. I think this will serve us well as we enter the new millennium. Thank you, Mr. Speaker.
MR. SPEAKER: The honourable member for Hants West.
MR. RONALD RUSSELL: I have listened to a lot of speeches in this House and I've listened to a lot of ministers give an introduction to their bill on third reading, but I have never heard such a lot of drivel in my life as we got from the Minister of Finance in introducing Bill No. 48 for third reading.
I do not know where the minister got his numbers from. In fact, I heard some numbers at the beginning - which I wish he would table some time later today - about input tax credits. These numbers, I do not know where they came from or how they were derived or anything else, but if they match some of the numbers he has brought forward - for instance, how well off senior citizens are going to be, how well off those who have children are going to be - then I do not have much faith in the earlier numbers.
The minister is talking about a family paying their telephone accounts, their hydro bills, their cable bills, et cetera, and he came out with a surprising result that people are going to be better off when they have paid for those three accounts. We had a visit to the Legislature, Mr. Speaker, earlier this week from the Sir Charles Tupper School and they delivered to the minister and to the members of the House a report on a shopping trip they had made.
AN HON. MEMBER: At the challenge of the Minister of Community Services.
MR. RUSSELL: At the challenge of the Minister of Community Services, right on. These young people went out into the real world, where the minister obviously has not been, and made some purchases. Then they compared the price of those purchases with what those same purchases would cost post-April 1, 1997. The items that they looked at were school supplies, clothing, electricity, heating oil, gasoline, haircuts; they looked at groceries, cable TV, telephone and a new car. The cost of school supplies - I think it is no great revelation - has increased to the tune of $11.08. The reason is, of course, that school supplies are no longer exempt.
Most children's clothing, in spite of what the Minister of Finance has to say, is less than $100, and they wear out a lot of clothes, kids' jeans and T-shirts. I know that the minister has had children, he must know how often children wear out their sneakers. Children's clothing will cost $176 more than it would in the past, with the advent of the BST. Electricity bills up by $48 per annum, which I think is rather low, however, that is what these children came forward with. Heating oil, up by $144 per annum; gasoline up by $76.80; haircuts increase in cost by $19.20, for an increased total cost on those particular items of $475.08.
[8:45 a.m.]
Now they did find some tax decreases. They found that within the grocery store those items that presently carry both GST and the provincial sales tax would add up to $7.80 per annum in savings. The cable TV billing would come down by $11.40 per annum; telephone bills would decrease by $25.08. What they did - smart kids, actually - they said that the average family would buy a new car every five years so they took one-fifth of that and they came up with a saving of $150 per annum on the price of a car. The decreased tax costs amounted to $195. You will remember that a moment ago, though, I said that the increased costs amounted to $475.08. So according to these young people, Mr. Speaker, in their particular families they estimate that the annual costs will increase by $280 per family.
Now, Mr. Speaker, as I say, I think these young people did a very good job. When I listened to the minister talking about the average family spending something in the order of $50 per month for hydro, I don't know if I live in an average house or not but I think I probably do, I don't know of ever getting a bill as low as $100 for two months. In fact, my average bill over the year, I would say, would come to something more like $100 per month. I think that is the average across the province, $1,200 a year. So the increased costs for electricity alone is going to amount to something in the order of $60 per year.
The cost of heating fuel, as you are probably well aware, heating fuel of its own volition has gone up considerably over the past approximately three or four months, by almost 9 cents a litre, I believe, from what it was last winter. Now I think heating oil is somewhere in the neighbourhood of 45 cents to 50 cents per litre. I would think that at the present time, to heat the average house, you are looking at something like, again, $1,200 per annum, at least. Now
heating fuel is going to go up by something in the order of 8 per cent, so you are looking at something like a $100 increase in your heating fuel each month.
Mr. Speaker, clothing, if you buy a suit you will probably pay over $100; if you buy an overcoat, you may well pay over $100 but the average person who is buying clothing on a fairly regular basis is buying shirts and socks and shoes and those kinds of things. Those costs are under $100. Heretofore they have been free of tax.
Mr. Speaker, I don't have much faith in the numbers that the Minister of Finance has brought forward this morning. I think the argument can readily be made that this tax is going to impact on those who are of middle income and low income. We are told by the minister's own figures that the cost of heating fuel for Nova Scotians is going to increase by $14.9 million, $15 million on electricity and $54 million in gasoline and that adds up to something in the order of about $75 million. We know that virtually every family earning less than $80,000 per year will pay more and that is including the reductions in income tax that the minister is so proud of.
The minister also talks about the low interest rates that we have at the present time. Well, low interest rates have absolutely nothing whatsoever to do with this blended sales tax.
SOME HON. MEMBERS: Or with this government.
MR. RUSSELL: Or with this government, yes. We all know interest rates come down, interest rates go up, they fluctuate over the years. At the present time we are very fortunate in that we have low interest rates. In fact, it is very fortunate for the government because that does indeed aid them in the cost of debt servicing and thus is a bonus to them at budget time. However, this tax will still be here if this government still remains in power four or five years from now when interest rates could be much higher than they are today.
You have to go back as to why the government is doing this. Why are they hell-bent to bring in a brand new tax? Is it because the people want to have a new tax? Is it because the people were clamouring for the government to bring the GST and the health services tax together? I notice the Minister for the Economic Renewal Agency is nodding his head. Obviously, he thinks people have been clamouring for this tax. If that minister thinks that people were clamouring for the tax, he must know then that the people right now are clamouring to the government to get off the harmonized tax gravy train and to leave us with the present status quo.
The government is reluctant to listen to the people, it is reluctant to take this proposal to the people and ask them whether or not they agree with the proposal to blend the tax. The minister would have the opportunity if, indeed, we were out on the road with this deal in public meetings, to make that splendid speech that he made this morning to audiences across this province and to have people have the opportunity to ask him questions with regard to the
numbers that he brought forward in that speech. But no, this government is not listening to the people and is not prepared to even listen to those who are basically in favour of the tax but want changes to some aspects of the tax. They are determined that the bill is going to go through the way it is. They are determined that indeed, the harmonized sales tax is going to be in effect on April 1, 1997.
I would suggest to you and through you to the government that they are going to rue the day that this tax comes into place. Just as people never forgave the government that instituted the goods and services tax, the GST, I would suggest the BST will become a word that will be on many people's lips when the next election rolls around and people are knocking on doors.
The municipalities, the retail sector, the tourism sector, the service sector are all against this tax, and rightfully so. We are told by the retail sector, Mr. Speaker, that rather than being a boon to business, this tax is going to be an impediment to business. It is going to impose upon those in the retail business a tremendous cost to implement and a tremendous cost to maintain. I know that the minister has told some retailers not to worry because once you are into this regime of a single tax that your expenses for that kind of changeover is all that is required. However, retailers that I have spoken to have said that there is an ongoing cost to the retail industry to maintain a system to accommodate the BST.
Mr. Speaker, the minister, in his opening remarks this morning, spoke about businesses using their money obtained from tax inputs to do one of three things: one, to retain the profits and increase salaries and benefits for their employees; two, to expand their businesses; or three, to pass through the savings to the consumers. Well, there was one other item that he missed, I think, and that would be for the businesses to retain the profits to indeed maintain their profitability because many businesses today are in the unfortunate circumstances of just being able to keep their heads above water. If there are any advantages to business to be gained from the implementation of the health services tax and indeed it does create additional profits for a company, in many cases, those profits will be retained by the companies simply, as I say, in order for them to remain as a viable, prosperous business.
Mr. Speaker, the minister also made the statement that the Opposition, in their cases that they brought forward in opposition to the blended sales tax, have said that in some way that we are - that is the Opposition - in favour of increased taxes on business or else not in favour of tax decreases. That is not so. What we are simply saying to the minister is, this is a massive tax grab and you cannot create jobs and you cannot create prosperity by taxing the devil out of people. The prime mover of small business is the ability to be able to operate in a market place that is as free and open and as free of regulations as possible where they can maximize their profits, maximize their turnover and, indeed, in such a way as to create a healthy and viable business climate. I don't think that anybody would agree that this government has done those things to make a viable business climate in this province.
Mr. Speaker, this government has been a failure in every reform it has carried out, whether it be education, whether it be in amalgamation of municipal governments or whether it be in education and now in taxation. Indeed, I suppose, when you examine this whole deal, one of the things that we have not spoken a great deal about but I think is one of the more important aspects of Bill No. 48, is that we give away to the federal government our right that we have in this province to maintain our own taxation system. That is important. That is a very important right that we, as a province have at the present time. We can either increase or decrease our taxes as we see fit.
[9:00 a.m.]
We have now abdicated that right and transferred it not only to the federal government but also to our neighbouring provinces because, for instance, under the BST agreement, in this province, if we wish to raise our share of the blended sales tax, we must get the approval of our neighbouring province plus the approval of the federal government. If we wish to lower our share of the blended sales tax, we have to get the approval not only of the federal government but all of the other provinces that have signed the blended sales tax scheme. But the federal government has no such impediment. If the federal government wants to increase their share of the blended sales tax, they can do so. If they want to decrease their share of the blended sales tax, they can do so and they can do it unilaterally.
Mr. Speaker, I think that this is a bad tax. I think it is going to be one that people are going to suffer under for a short period of time, but I would suggest that some time in the future they will have the opportunity at the polls to tell this government exactly what they think of this tax and, hopefully, we will have a new regime which will do away with this blended sales tax. Thank you.
MR. SPEAKER: The honourable member for Sackville-Cobequid.
MR. JOHN HOLM: Mr. Speaker, I appreciate the opportunity - although I can't say that I welcome it - to stand and speak on third reading on the bill. I say that I appreciate the opportunity because I am glad that I have the opportunity and am grateful to be able to stand in my place in this House and to say what many Nova Scotians are thinking and feeling, but I can't say that I welcome it, because I wish that this government had done the honourable thing and had the courage to go to the people before imposing something for which it has no mandate and which, overall, I firmly believe is going to have a negative impact upon the lives of countless tens of thousands of people in this province and also on hundreds and hundreds of businesses in the province as well.
Also I can't help but think, Mr. Speaker, that the minister in his opening remarks was being a loyal Party member, a loyal government member. I really have some difficulty believing that this minister, himself, totally believes all of that which he is saying when he moved the bill, because it seems to be at such variance with the philosophy that he espoused
and espoused so eloquently when he was on the other side of the House. At that time, when the current Minister of Finance was the Finance Critic of the former government which had been talking about harmonizing the taxes, this minister said to the former Premier of the day, "As the Premier, of course, well knows, sales taxes are regressive. These taxes do not recognize a person's ability to pay.". At that time the current minister called upon the Premier of the day to have the intestinal fortitude to go out to the people before he would try to impose such a regime as is now being imposed by the red team of which he is part.
I have difficulty believing that the minister's philosophy and principles have changed so greatly that he has put behind him those beliefs that he had at that time, because, Mr. Speaker, when that former Finance Critic for the Liberal Party was speaking and talking about the plans of the former government, I found that quite honestly, philosophically and on principles, in terms of what he was saying, we were in agreement. I haven't changed my beliefs, I still believe that consumption taxes are regressive, that they do not take into consideration a person's ability to pay and I believe this government is lacking in the intestinal fortitude, as the current Minister of Finance was accusing the other government of doing by its failure to take this, what it describes, most significant tax change to the people before it imposes it upon them.
Mr. Speaker, another former Finance Critic for the Liberal Party, and actually the author of this deal, now the Minister of Health, when he was Finance Critic - it is amazing how the Savage Liberals have become Cameron Toryized since they crossed over. It is as if the presence of the Cameron Tories was left on the benches, left on the seats opposite, because ever since the Savage Liberal team assumed those seats, they have been following diligently the plans that were started by that former government.
The former Finance Critic, the one who followed the current Liberal Finance Minister in that critic portfolio, said back in 1992 that he urged the government to canvass public opinion before making any move to harmonize the provincial sales tax with the federal tax, Mr. Speaker. He criticized the government of the day for contradicting positions it had held just a year earlier. It is amazing how they have fallen into exactly the same mould and are doing exactly as the Tories had done before or proposed. One would almost think that Mr. Cameron has returned from Boston and is occupying the Premier's seat and is directing the activities of the Liberal Government today.
Mr. Speaker, the government, the Premier have spoken in this House and they have told us, they have told Nova Scotians, that all of their concerns are fringe issues. They have told them, and if anybody dares to question or criticize the wisdom and the flip-flop of this government, it accuses them all of being naysayers, people without any vision, people who are afraid to grab the opportunity. He accuses all who question what this government is doing of being political, and they belittle, they put down the concerns that are raised. They demean them.
Mr. Speaker, I want to talk about a few things. I am not going to have enough time today to get into everything, but I want to pick on a number of points. First of all, the current Minister of Finance is trying to sell and put the best face on the bad deal that was negotiated by his predecessor, the current Minister of Health, who negotiated this deal behind closed doors, not in open public consultation process but in secret. He has to try to put on the best face because Cabinet solidarity is required. The current minister says that this is going to stimulate the economy here in Nova Scotia. He said it is going to modernize our taxation system and make it more progressive.
It reminds me of an old advertising tactic that has been used. It has been in practice for many years. What you do is you go out and you look and you conduct public surveys and you find out why people do not like particular products. Then what you do is you build your advertising campaign around the exact opposite, the flip side. So if there is a particular reason why somebody does not like a product, you say more people buy or shop at a particular place because of that product.
AN HON. MEMBER: It is called bandwagoning.
MR. HOLM: It is called bandwagoning. I am just told the technical term for it, Mr. Speaker, but it is an old practice. That is what this government is doing. They have obviously looked at what is going on; they have obviously tried to get the pulse of what the people are saying, although they don't want to let on that they have, and they found out what people are objecting to so they are trying to do the flip side. They are trying to tell people what they know isn't so.
We are being told that this is going to reduce the cost of doing business in this province, and for some that is true; for some businesses, yes, indeed, that is true. I freely acknowledge that. Also the government says that that is going to result in lower prices and that those price savings are going to be flowing through at the rate of 50 per cent to the consumers, creating massive new employment in this province. For some that is true, I don't deny that, that is a fact. Some may actually be more than that but I would suggest that the vast majority will be less.
There are a number of things that the government has not talked about. We have all heard a great deal about the pricing-in structure and how the price-in factor is going to lead to tremendous costs, not only in the short-term startup costs of changing over your computer programs or buying new software or having new software designed, buying new hardware that is able to do that. Estimates from those who made presentations before us at the Law Amendments Committee and in other presentations, those initial startup costs just for those items alone can range, depending upon the size of the business, from the tens of thousands of dollars into the hundreds of thousands of dollars.
Then there are countless other businesses where the products that come in are already pre-priced, so each and every one of those items are going to have to be re-stickered in the local businesses, ongoing costs that are going to very directly eat away from this so-called input saving that they are going to receive. So there is not going to be that to be flowing through.
I can just picture the ads that appear on radio and television, these national ads in future, you know how you turn on the television and you see advertisements for times that programs are going to appear. They will say watch such-and-such a program at nine o'clock, Eastern Standard Time, except in Newfoundland, where it is going to be a half an hour later. You can just see these national ads being put out advertising, buy this product for so much, except in Atlantic Canada.
We are, and we cannot expect, given that we are only 10 per cent of the market, that these national magazines, national catalogues that are being provided across the country and which provide products for sale in so many of our retail outlets are going to have those all switched.
Let's take a look at another aspect, let's take a look at inventory. Businesses large and small have to carry often millions of dollars worth of inventory, so that they will have the product to service their customers or to sell when it is needed. Businesses all across our region, all across Nova Scotia, have warehouses filled with inventory. Right now, Mr. Speaker, they charge provincial sales tax when that product is sold but they are not paying provincial sales tax upfront for that product, as it is sitting in the warehouse.
What they are going to have to do now, and we had examples of this brought to us in Law Amendments Committee, these companies, these businesses, when they obtain those products, they are going to have to pay the blended sales tax and then supposedly be getting the input tax credit back when they sell it. As it was pointed out to us, many businesses have some inventory, stock that they have to enable them to service, whether it be heavy equipment, whether it be to service computers, you name it, have to carry in their inventory hundreds of thousands, in fact millions of dollars.
[9:15 a.m.]
Before I got up to speak I did a very quick calculation. If a business is carrying $1 million of inventory and they have to carry the financing charges on that $1 million worth of inventory and as I pointed out, many carry a lot more than this, at 9 per cent and they are going to have to be paying the 15 per cent on that in terms of the BST, just figure it out how much more that is adding. Even if they get the input tax credit back, it is going to cost businesses in this province tens of thousands of dollars more in carrying costs even before they can start to get any input tax credits back. That is going to be another volume that is
going to be removed even if they want to, their inability to pass on to the consumers this so-called cost-savings.
We heard about those involved in the investment community. This government is setting it up in such a way that those businesses involved in security funds, if you are headquartered, centred in Nova Scotia, those funds that accept monies, for example, mutual funds, whether that be an insurance company, if it is located here in Nova Scotia or credit unions with their headquarters here in Nova Scotia, they are going to be placed at a disadvantage to the national banks that have their headquarters located somewhere else. Quite simply what it means is if the money is being invested here in Nova Scotia, those businesses, if their headquarters is in Nova Scotia have to charge 15 per cent of the administrative fee. If their headquarters is located outside of Nova Scotia or outside of this BST zone, they don't have to charge you. If you go and take your dollars and you want to invest in a mutual fund and you go down to your local bank after April 1st and that local bank's headquarters is in Toronto, that bank has a competitive advantage over a credit union in this province if their headquarters is in this province, that is what we are doing.
In his comments earlier today, the minister suggested, in fact, told us that all of these businesses are going to be passing these savings on and it is going to be placing us with a competitive advantage in the international world. Do you know, government doesn't have to do what it is doing in order to do that. Right now we have control over our tax system in this province, we have that control, it is our legislation.
If the Government of Nova Scotia wants, it can increase provincial sales tax or it can decrease provincial sales tax. It has already shown that it knows that it has that power because one of the first things that it did was increase the provincial sales tax by 1 per cent, going from 10 per cent to 11 per cent. They also know that you can have different rates on different items. They know that because, for example, when they imposed for the first time provincial sales tax on electricity that Nova Scotians used, they imposed not the full 11 per cent but they imposed a 3 per cent rate, a different rate.
The Government of Nova Scotia right now, the former Minister of Finance and now Minister of Health who is the author of this deal but he is not the sole signature, he is the one who wrote the document along with his federal colleagues but all of the other 39 members are all signatories and they sign it each and every time there is a recorded vote in here that says that they support it. That is why it is important that we have recorded votes because then you know exactly where people stand so that every time the member for Cape Breton Centre stands up and votes in favour of this bill he is saying that he is also a joint author of this legislation. They all know that if they wanted to make changes to our provincial tax system to give particular tax advantage to those businesses that are specifically involved or even if they are not totally involved with but where they are aiming at certain products being exported, they could change the tax system to zero rate for them, to make it a 50 per cent raise in terms of the provincial sales tax. They can do all that now, but they would not have
to give up, as we are doing by this legislation - excuse me, I want to change my phraseology there a little bit - I do not want to say what we are doing, because I do not consider that I am part of what is being done in here. I want to point out that in each of those recorded votes I am proud to say that I have voted against what this government is doing. So, I am going to say it is what they on the other side, on the red benches, are doing, not what we over here in the New Democratic caucus are doing.
This government is giving up control again, at a time when provinces are talking about greater control over their own economies, having increased power. Of course, the federal government is offloading a lot of responsibilities to the province without the money. Here the province is willingly giving back to the federal government and to our neighbouring provinces control over our tax system. They are saying that the Provinces of Newfoundland and New Brunswick, for example, if they want to increase the provincial sales tax, Nova Scotia has no choice but to go along. We are giving up that authority. If the tax rate is to go, because the other provinces decide we want more money from regressive consumption taxes, they can increase it to 16 per cent, to 17 per cent, to 18 per cent, you name it, and Nova Scotia has to go along. At the same time, if we want to reduce it, we have to get the unanimous consent of all signatories. We are giving up control. That is something that this government is prepared to lock not only themselves into but future governments.
If this government does not feel they are competent enough to be able to be in charge of the tax system in this province, step aside. Resign and let somebody else do the job. Others are quite prepared to honour their responsibilities and live up to the responsibilities that are being assigned by the people to this Legislature. If you do not feel competent enough to do that, if you do not have enough faith in yourselves, step aside. Somebody else will be happy to do that job. It would be pretty hard to do it in a less competent fashion, I might add.
The minister, in his comments, talked about how this is going to be a benefit to all. He gave certain examples. He stood up and he used a phone bill. I do not know whose phone bill he was talking about. I do not know whose electric bill he was talking about, but he was saying how the savings are going to be there for the average consumers. We had before us, appearing at the Law Amendments Committee, dozens and dozens of people who dispute the minister's math; people who, to the best of my knowledge, for example in the Homeowners Association of the metro municipality, are not affixed or associated directly with any one Party. The majority of people who were there, some may have belonged to one or the other political Party, including the Liberals, or I would guess the majority are not affiliated with any. They also have done their calculations and it is amazing how their calculations differ from those of the Minister of Finance as presented here today.
They pointed out that what is actually happening and using their own real life examples, after looking at their own bills, they have pointed out that in reality, Mr. Speaker, the cost to them and their families is going to increase dramatically, dramatically; pyramid taxing, gasoline, 8 per cent. Just look at it this way, too, we know that every cent increase in gasoline
price means $11 million more out of the pockets of the taxpayers in this province, $11 million more. Here, the government is going to impose 8 per cent more on top of the taxes they are already collecting. So if the average cost of a litre of gasoline is about 60 cents, or about $2.40 a gallon, 8 per cent more would be another 4.8 cents, which would mean, Mr. Speaker, an increase of about $52 million. If the price of gasoline goes up because this government is unprepared to do anything to stop the gouging that is done by many of the larger oil companies in this province, if the price of gasoline goes up by another one cent, because the oil companies are successful in driving the independents out of business, as they are trying to do, so that their monopoly situation has increased, if it goes up by one cent, that is another $11 million more in cost and that, for the province, would mean another $880,000 in provincial sales tax.
There will be absolutely no motivation, in fact, the incentive will be there for the government to encourage the oil companies to increase their gasoline prices, because it means every cent close to $1 million more in the Treasury of the province and $1 million less in the pockets of consumers.
The Minister of Finance talks about how people are going to be saving and he spent a great deal of time talking about how children's clothing really is going to cost less because, you know, you cannot, obviously, buy clothing for children under $100 nowadays. Well, I invite the minister and I will take the minister, if he wants to come with me, I will be quite happy to take the minister around to the kinds of stores in which the majority of Nova Scotians shop.
AN HON. MEMBER: Frenchy's.
MR. HOLM: We can even go to the second-hand clothing stores. But we can go to the mainstream shop and I want to assure the minister that I can find him all kinds of designer clothing, sneakers, footwear, boots, et cetera, that come in well under the price of $100 per item which are now going to be, for the first time, subject to provincial sales tax. I don't know when the last time was that the minister went looking for clothing for children, but I assure him that it is readily available, not only for children, but also for adults.
The minister talked about Twinkies and Mars Bars and pop as going down in price. Well, Mr. Speaker, some of those items, yes, will drop in price, but the essentials that families have to buy are going to go up; they will definitely increase. We know even that certain medical costs, home care costs, those that are being provided to family members by other family members where they have gone out and had to procure the services of private home care providers because the level of service, which is being cut by the government, is not adequate, for the first time, they are now going to have to pay provincial sales tax on those kinds of services. Shameful.
Municipalities, school boards, hospital boards are going to now be paying provincial sales tax for the first time. That is going to mean that property taxes will go up, will increase and those costs will be passed on to all Nova Scotians. Rents can now go up yet again, courtesy of this Liberal Government. There is no rent control, Mr. Speaker, so tenants don't even have the right to challenge those landlords to ensure that those rents are justified. Hospital boards, school boards, already reeling from cuts by this government, are now going to have to pay provincial sales tax. What does that mean, other than again reduced services that they can provide?
[9:30 a.m.]
Mr. Speaker, the government says this will create jobs. We have had example after example of presenters before the Law Amendments Committee who told us how jobs will actually be lost in their particular businesses, some even brought with them several employees whom they pointed out will end up having to be laid off because of this action.
We heard from those in the Home Builders Association who showed us and explained how, in fact, there could very easily be more people losing their jobs in the construction and renovation business than the government is predicting will be employed or new jobs created as a result of this whole deal. In that one sector alone they are talking about the potential loss of more jobs than will be created, according to the government's fanciful projections.
Mr. Speaker, it boggles my mind how this government has done such a major flip-flop. One can only conclude that they are in the strong grasps of some very strong particular interest who have a great deal to benefit from this and that they are prepared to go to any length to try to cover the backside of the Prime Minister, in pretending that the GST that the Liberals promised to get rid of has, in fact, changed. By calling it the BST or the HST or whatever, is not getting rid of the GST. What we are really talking about in this whole debate is expanding the Mulroney GST to a whole host of new products and services that have not had the provincial sales tax applied to them before. So now the provincial sales tax and the federal sales tax are now a much broader-based GST. That is what we have here in Nova Scotia, courtesy of the Liberal Government, the clones of the Mulroney Tories.
The government said, when they were in Opposition, consumption taxes are regressive. They were right. The paultry measures, despite the spin that the government members and their spin doctors try to put on them, that they have announced, in terms of income tax reductions and other assistance, will not come close to offsetting the increased costs that families will face.
There is certainly no doubt about it, those who are in the most upper economic incomes, those in the highest income tax brackets, yes, indeed, they will benefit the most. They will find that their income taxes will drop more than sufficient to pay for the increased costs of the essentials that are going to go up as a result of the BST.
For the average family in this province, the middle income earners and certainly the lower income earners, the cost-benefits being promised to the people, in terms of those very modest income tax breaks, if they get it at all, they will not cover the increased costs. So once more this government is telling those middle income earners, middle income taxpayers, to once more subsidize the very wealthy and the most powerful. The Tory trends of the past are, yet again, being continued by the Liberal branch of the Tory Party in power today. It is clear and it is evident, and that will not be lost on the people of this province.
Mr. Speaker, as I draw my comments to a close, the Premier said to have faith in the province. I say to the Premier, have faith in the people. I say to the Premier and I say to the Liberals on the front benches and backbenches, if you truly believe in what you are doing, if you have confidence that what you are doing can stand the test of close analysis, then take it on the road - whether that be in the form of an election, to get a mandate to do it, or have at least a committee, public hearings, or a fair tax commission to look at the tax structure - before you impose the Mulroney style expanded goods and services tax upon all of the businesses here in Nova Scotia and all of the consumers here in Nova Scotia.
I didn't know that the Liberals, when they ran for office, were saying, we are running as clones of Brian Mulroney; we support his policies and we want to expand them here in Nova Scotia. I thought the Liberals were opposed to those; I thought they had principles. So did Nova Scotians who were opposed to those that were being imposed by the former Tories. Yet, obviously, I was mistaken, as were the vast majority of people, because you want to continue to be their clones and to impose that style of government upon the people here.
I say to the Premier, have faith in the people. If your deal is saleable, they will adopt it. If you don't have any confidence in it, as is being shown by your actions railroading this through, then instead of putting your faith in the people, I suggest that the people will demonstrate their faith in you by giving it to you on the chin and give you what you deserve in the next election, whenever you have the courage to call that.
MR. SPEAKER: The honourable member for Pictou West.
MR. DONALD MCINNES: I want to speak again on Bill No. 48, particularly in third reading. Why is this bill being done? I have asked myself that question on many occasions and I have asked you, Mr. Speaker, why are we doing this bill. The way I see it, the Prime Minister called all the Ministers of Finance to Ottawa and suggested to them that they try harmonization. If the harmonization was being done on a national level, I think we could live with it and if it wasn't on the backs of the average consumer of this province, I think we could all live with that.
Three of the Atlantic Provinces, in their wisdom, decided to go with this tax and Prince Edward Island decided not to go. Why did Prince Edward Island decide not go? They went to the people by having a committee go around and the people spoke. As a matter of fact, I
have done some checking with P.E.I. and they are certainly not going to join in the harmonization. I have been hearing that rumour and I made a couple of calls last night; there is no intention of them doing it.
The former Conservative Government in Ottawa put in the GST and the people of Canada told them what they thought of that. They came back with two seats. I say to you, Mr. Speaker, and to my colleagues across the way and to my right, that you have to listen to the people. If you do not listen to the people, you will not be over there.
Last night or the night before last, I guess - I get confused on the nights - the Premier spoke on the bill in Committee of the Whole House and the Minister of Finance also spoke on the bill. They talked about the jobs that were going to be created.
AN HON. MEMBER: In dreamland, eh? Isn't that crazy?
MR. MCINNES: Well, if it will create jobs, that is fine. That is wonderful. I think every one of us in the House would be pleased if, because of this harmonization of taxes, it is going to create jobs. I would be very disappointed if everybody was not happy about that, but I have yet to see where those jobs are and nobody has explained to me where they are. The honourable Minister of Finance said the other night, show me one economist who will not say that this is good and will create jobs. Of course, the next day in the paper we had one economist who said it is all a crock, that it will not create jobs.
The Minister of Community Services challenged Sir Charles Tupper School to go and do a survey and they reported back to us yesterday. I will not read it, because you all saw it; it has been on everybody's desk. It certainly showed that the overall tax increase, on their piece of paper, was $280 on an average family of four. The Minister of Finance this morning talked about an average increase in the power rates. He used a figure, and I do not have a copy of his figures, but I think it was in the vicinity of $650, or whatever. I just want to say to you, Mr. Speaker, my condo which I have in Halifax, a one-bedroom condo, costs me over $650 a year and I am not there a lot of the time. In the summertime there is no heat or anything. I think the figure should be higher, to the Minister of Finance, that the average cost would probably be more than $1,200.
I know there are a lot of members who want to speak on this bill this morning and I do not want to delay it, but the Law Amendments Committee did have over 85 presenters. Again, I am not going to go through all that. We had the Union of Nova Scotia Municipalities. We had a number of municipal units. We had the two large municipal units, Halifax and Cape Breton, that were there and were very upset and wanted the bill changed or amended so that they would be exempt from this tax. We had all kinds of pensioners' groups. We had all kinds of individuals who were very much against this tax grab. We also had Clearwater and Jacques Whitford and the other fish plants saying that it would be helpful
to them. That is fine. It's an ill wind that doesn't blow somebody some good. Maybe it will be helpful.
In 1993 this government promised jobs, jobs, and promised no increase in taxes. What did it do? It came in and cut the health care. It forced amalgamation on Cape Breton County. It forced amalgamation on Halifax. Has that been shown to save us money? No. What did they do with the school boards? Down to seven. Is that saving money? I do not think so, Mr. Speaker. Did they listen to the people? No. We suggested that the Public Accounts Committee go out across this province and meet the people and hear what they wanted to say about this tax. We suggested that the Law Amendments Committee go out across the province. Would they agree to that? No.
The other reason they are doing this now is because they have to have an election prior to May 1998, it has to happen, that is the law of the land and we all know that, now whether it will be next fall or the spring, who knows. I am telling you right now, you didn't listen to the people and if you don't listen to the people you have got to mend your ways quite a bit and you don't have much time to do it.
[9:45 a.m.]
This bill will pass and it will be law sometime this afternoon or whenever it is proclaimed and it is going to hurt the average taxpayer of this province. It affects their gas, their lights, their fuel, their children's clothing and the people in the $30,000 income bracket cannot afford it. I say to you if it was a national program, if it wasn't on some of those consumer goods that hurt the average person, it might be all right but it is not that way and I will be voting against it. (Applause)
MR. SPEAKER: The honourable member for Kings West.
MR. GEORGE MOODY: Mr. Speaker, listening to my colleague for Pictou West and I think he said this about each time he has spoken on the bill, why are we doing this bill. I have been listening and trying to figure out if there was an answer to why and he honestly wants to know why we are doing this. I haven't heard an answer yet that would tell me why we are doing this. I would think we would be trying to do something for the people of the province.
Maybe the reason we are doing this, my colleague for Pictou West, is because Chretien and the federal Liberals promised to do away with the GST, I think this is why we are doing it. They tried to make a deal and this Premier was sucked in to protect the feds. It is strange, he was sucked in but it is going to have an effect on the outcome of the next general election. I can't figure out why this government could be sucked into a tax deal that raised home heating fuel. How could it be sucked in on a deal that raised electricity? How could it be sucked in on a deal that raises gasoline? How could it be sucked in that there are many
essentials that people have to have that now are going to cost the taxpayer more money? How could a government, led by John Savage, be sucked into something that has a negative effect?
No matter what industry you talk to and I know that we finally had someone, the Minister of Health get up and say yes, there were pluses and minuses, yes, we are at risk as a government in making this kind of deal.The Premier hasn't said that they were at risk, he hasn't said that yes, there are all of these things to consider. The one who struck the deal said yes, there is a lot of risk and we knew that as a government. The risk is what are the people's reaction going to be when they find out that this kind of tax really hits those on fixed incomes, really hits those that are on low income.
The government has tried to say well look, this is going to create jobs and the economy is going to boom and so that will make up for any increased taxes those people will have to pay. We have already had an economist come out and say there is nothing in this that will create jobs, nothing in this that looks like this province is going to move ahead in job creation because of a blended sales tax. I have spoken to individuals in my constituency, one individual is going to lay off people because of the blended sales tax. I have talked to other people who say that it is not a job creator, as a matter of fact, it could have a very negative effect.
There are issues that come before the Legislature that are sort of like what you call a 24-hour wonder. You get up and you speak and people get all worked up and then the government feel - and time is a great healer, Mr. Speaker - that the people will forget and they will move on to other issues. The one thing about taxation issues is that people do not forget, because every day they pay their electric bill, every day they pay their fuel bill, every day they buy gasoline and every day they pay this tax, they are going to remember. They are going to say, who did that to us? They will remember the government that put this sales tax in.
It does not matter, even when they pay their municipal taxes, because I am sure municipal governments around the province, who have said that this will cost them millions of dollars, who said that the tax rate on property tax will go up because of the BST, are going to remind people that you are paying more because of the provincial government. Driving schools, safety supplies, fitness clubs, all of those will now have a 15 per cent tax after April 1st.
This government says, we want people to be fit, we want people not to be a drain on the health care system and part of that, Mr. Speaker, is living a healthy lifestyle and part of that is being fit. Now we are going to tax those people more money to be fit. If you want to join the YMCA, you are not going to pay 7 per cent after April 1st, you are going to pay 15 per cent after April 1st. Imagine, to join the YMCA you are going to have to, to be fit, pay more taxes. It is bad because not only is it hitting those who want to try to live a healthier life style, it is, on the other end, hitting those who end up being sick that have to hire private home care. They are going to pay more after April 1st.
What the government did, was take a tax base and broaden the tax base. They brag about coming down from 18 per cent to 15 per cent. (Interruption) Yes, they brag about that, but what they do not tell, in all honesty, is that that is spread wider so that there are more tax dollars than we would be led to believe on the issues that it is going to hit. Before this government had the opportunity, as a government, they had the opportunity to decide what the provincial tax, the PST covered, and, wisely, they did not cover fitness clubs, if you wanted to join the YMCA. Wisely, they did not cover private home care and, wisely, they did not cover school supplies. There were a lot of areas that the government, in its wisdom, said - they didn't put the PST on toothpaste - that kind of a tax would be unfair and they had control over that. Now they have lost that autonomy. They have gone in with the feds and the other provinces help control the agenda. So no longer can this Cabinet, in their wisdom, decide what it is we want to drop out/put on this list.
They also lost the opportunity to have the autonomy to make sure that the rate does not go up. If two other provinces want it to go up and the majority in the agreement want it to go up, it automatically goes up and Nova Scotians pay more and they cannot even get back at the people who raised it because it is the politicians in other provinces who have made it happen. When people find out that they have lost that autonomy, I know they will be very upset. As we go down the road in the new year, because, you know, we will have the Christmas season and people are busy and people get to think about this and, yes, they may, between now and April 1st, some of this will not be in the forefront, after April 1st, obviously, people will start to remember what it is this government has done to them.
As a retailer, they are still trying to figure out how this is going to work and trying to figure out how the paperwork is going to flow. So what this government has done by broadening the base, they know that this will bring more money out of the consumers' pockets, $84 million, the Minister of Health said about $80 million, so he is not arguing that it is not more money out of the consumers' pockets. When they say that just maybe the businesses will pass on some of that savings - they acknowledge, they started out at 50 per cent, they are down to 25 per cent and it may not even be 5 per cent. As a matter of fact, with the price included, there may not be any saving, Mr. Speaker, there may be an increase in the cost to the consumer. So not only is the consumer paying $80 million or $84 million more in direct taxes, they could be paying more for the goods and services that they have to buy.
You would have thought that a government that cared about its people would have allowed some input by the people of this province, they would have done the kinds of economic studies to see, in actual fact, how this is going to affect, instead of guessing if there is going to be 50 per cent of the saving passed on to consumers. They should have done a study. Did they do a study on the price-included? No. When they asked the people, do you want prince-included, the people said well sure, it is more convenient. They didn't tell them that the price-included will mean higher prices for the consumer when he goes to buy that product.
No matter where you are, whether you are in a taxi or using whatever kind of services. The one issue that really bothered me was with seniors. I know this happens and maybe it is because Kings County is unique but I doubt that it is unique, a lot of seniors in our province don't drive long distances any more. A lot of seniors in Kings County find it very difficult to come to metro to do their shopping or to come here to events. So they arrange and hire, through their seniors' organizations, and I want to make sure that I give a lot of credit to the seniors and the organizations of seniors groups around the province, they do a great service for themselves and others. So by organizing the seniors, they take a bus into Halifax or to wherever, for a trip, a few times a year. Now the government is going to make they pay more because the tax is going to be 15 per cent. There was no PST on that trip. I wonder, Mr. Speaker, why we should say to seniors, look, you can only get one or two trips into Halifax a year, why should we ram them with an extra tax to those seniors on fixed incomes?
Does this government have the opportunity now to say listen, we are not going to tax those seniors? No, they don't. Apparently they are tied-in with Ottawa and the other provinces, so they don't have the power to say to our seniors in Nova Scotia anymore that we really care enough about you not to charge you that tax on that bus trip that you get only once or twice a year, into Halifax or some other area. So transportation is going to be hurt. Those who are driving their cars but those who have to go by other means, and a lot of seniors that I know, as I say, don't want to drive long distances, some of them cannot even afford a vehicle, are now going to be hit by a higher tax.
Another area is children's clothing. We may all take it for granted that clothing under $94 maybe is not what we see as being the majority of clothing that is bought. If you ever go into Byway or those kinds of stores where clothing is under $94, Mr. Speaker, you will find that a lot of people go there to buy their clothing. Part of the reason is that they don't have the money to buy the more expensive clothing but part of the reason is they know there was no PST under $94. The government recognized, prior to this, that it was very important for fixed income and low income and for children's clothing that there not be a large tax on that.
[10:00 a.m.]
What does this government do? After April 1st, they slam them with a 15 per cent tax and that is going to hurt many of those people who, in the past, had to go that route, shopping under $94. So it means that they will have less and it also means more for shoe repairs. A lot of people have to get as many days, weeks and months out of a pair of shoes as they can because they can't just afford to run off and buy a new pair. What they could do before was go and have them repaired and there was no PST, but after April 1st there is now a 15 per cent tax on those people having to have their shoes repaired.
I hear this government talk about the tourist industry, about how this is going to have a great, positive impact on the tourist industry. Whether it is the Unique Country Inns or other groups that I have talked to, they say by price-included - and I understand they can put
two prices in their book now, price-included and price without tax where other areas like P.E.I. don't have to put in price-included - those people in the industry, not government politicians, say this will have a negative effect. When people look at these books to promote your province for travel destination, they will not see that there is a price-included and when they see the larger price they think, lost in the fine print, that potential business to our province may choose another destination due to the higher comparative cost in Nova Scotia. In other words, when we are doing our advertising, it looks very much like when people from out of province read that, they obviously may not come here.
One of the other areas are our children's school supplies that are exempt, the PST now and will be charged the 15 per cent. It is bad enough to hit our adults, but this is going to have an effect on young people, whether it is their private dance or music lessons, whether it is minor hockey because the rinks now charge minor hockey 7 per cent GST on ice rentals and we are now into the 15 per cent on ice rentals. So it is going to affect figure skating, minor hockey, and it is going to affect those who want to take ballet, those who take music lessons and these are all things that are essential for our young people.
I know people who can barely find the money, they have a young daughter or son who wants to take piano lessons or join in another activity and they have to work very hard to scrape up the money so that their son or daughter can take those lessons. Now they are going to have scrape up even more and maybe some of those people will not be able to take those lessons. I think it is so important that when young people have talents that they be given the opportunity, whether it is through dance, music or sporting activities, that they be allowed those opportunities and have equal opportunities. We all know the richer one is, the more opportunity that young people have. Now what this government is saying to those who are struggling as a family unit, we are going to make it more difficult for you to struggle as a family unit and we are going to make it more difficult to send your son or daughter for those things that are precious, especially later on in life.
Mr. Speaker, there is not one thing that I can think of that would change my mind, to even come close to supporting the unfair tax that this government is levying on this province. This tax is unfair. It is unfair for so many people, whether you are young people, children, whether you are on low income, whether you are a senior, it is very unfair. I admit, if you are wealthy and you buy the luxuries of life like fur coats, it is cheaper. But for most Nova Scotians, this tax will hurt and that is why I have to vote against this bill in third reading and urge all other members to say no to a tax that is going to hurt this province and hurt the people that live in it.
MR. SPEAKER: The honourable member for Cape Breton West.
MR. ALFRED MACLEOD: Mr. Speaker, it is my pleasure now to get up and try one more time to convince this government that Bill No. 48 is certainly a bad tax for this province and it is a bad bill for this province. There are a few things that happened this morning that
the Minister of Finance mentioned in his speech. I found them quite interesting and I thought that maybe I would remark on a few of the items and the things that he brought up in his speech.
The minister mentioned that the average power bill would be between $600 and $700 a year for a home. The minister said, to be reasonable, he would go along and say that it would be about $700 a year, and I thank him for being respectful in that matter. That works out to about $50 a month, or if we take the $700 figure, it is about $58.34 a month. If we go a little further, that is $117 every two months, roughly. I found it so interesting, Mr. Speaker, that I called Nova Scotia Power and asked them a few questions. They told me that if I spent and used absolutely no power, none, my bill for a two month period, a billing period between 58 and 64 days, would be somewhere between $23 and $24. That is not using any power, that is just having the privilege of having it hooked up to my home. So that means that the minister is telling us that the average home in Nova Scotia, without electric heat and he was very specific, it was without electric heat, he says that they are burning about $90 worth of power in a two month period, in a period somewhere between 58 and 64 days, because that is what the billing period is.
Well, I stay in an apartment, Mr. Speaker, here, when I am in Halifax. The power bill for that apartment is higher than that. I just wonder what a normal home, with four people in it, two adults and two children, and they are using TV and they are using computers and their microwaves and all the items that the minister mentioned when he was making his speech, people are using all those items in their house, and he still expects the average power bill will only be about $90. In my home, I have three children, we do have electric heat and I will be the first one to admit that, but our bill, in the winter, runs somewhere between $600 and $700 every two months. In the summer, when there is no electric heat being used, we still use somewhere between $150 and $250 worth of power every two months. I think that we are a pretty average family. I think that somebody who researched the information for the minister made a mistake because there will be a bigger increase in the cost for people than what the minister said.
We move on and he mentioned phone bills and we will talk about phone bills. The member for Cape Breton Nova had an ad here from Maritime Tel & Tel telling us the other day about the $25 savings that would be there for long distance calls. When the seniors were in and made their presentations to the Law Amendments Committee, they brought it to everybody's attention that, indeed, local service was going up by $2.00 a month, so there would be an increase of $24 a year. That almost wipes out that so-called saving.
The minister also mentioned about cable. Well, I can't really speak on cable because where I live - and the minister referred to me as the member from Gabarus - well, in Gabarus we don't have cable so I can't really make an honest statement about what it does. Then we went on and the minister said in his statement that it would be very hard to find a winter coat for an older child under $94. That is what is in his speech, that much of children's clothing
is, indeed, under $94. However, when they get a bit older, winter coats under $94 are not easy to find.
Mr. Speaker, I am a pretty ordinary shopper. Page 12, in the Kmart flyer - I will table it; that is not a problem - shows winter clothing for young men. It shows that the regular price for this clothing - and this is the more expensive of the two jackets that are shown, by the way - is $69.93 to $79.93 but they are on sale for $59. That is a long way from $94; that is a long way from where tax now kicks in. But with our new blended sales tax, this same coat, if my math is correct, would be about $8.85 more in taxes. So the $59 coat on sale now costs me $67.85. This flyer is jammed full of children's clothing. I glanced through it quickly - and I will say that it was quickly - but I couldn't find an article of children's clothing that was over $94.
I used this flyer as an example because that is where most Nova Scotians shop, at the chains and the big stores and those kinds of stores. Yet the minister and this government will try to tell us that this is saving money.
If that wasn't enough to sort of make you wonder what is going on with this tax, let's think about what happened when we had a group of school children come in and talk to us. They presented a report at the challenge of the Minister of Community Services. Now even children, Mr. Speaker, young people who are attending school, can see that this tax is flawed and not good for the people of the Province of Nova Scotia, yet this government refuses to say and, indeed, identify the fact that this is going to hurt consumers. They won't live up to that.
These young people, Mr. Speaker, came in and said, in a little report that they delivered and that each member of this House received, that it will cause commonly used items to increase in cost and less commonly used items to decrease in cost; with tax-included pricing, it will make items look more expensive; items that are increasing will more than double in tax while items that are decreasing will go down by only 3.8 per cent; the tax may discourage people from moving to Nova Scotia; the tax may encourage people and businesses to move out of Nova Scotia; and increased tax on services such as home care could make life very difficult for groups such as the elderly.
These are young people, they are our future and these are the problems they see with this tax. They are the ones who are identifying these problems. They did it at the request of one of the government ministers.
We had the elderly, the seniors' group come in and make representations to the Law Amendments Committee. They told us the problems it was going to cause for them. We have heard this government say time and time again that we are going to have 3,000 jobs created. I would love to see 3,000 jobs created, and I would love to see this government show the proof that that was going to happen.
[10:15 a.m.]
This very morning we had an opportunity to pass a resolution to encourage the federal government to implement a plan on the Cape Breton Development Corporation that was delivered by the Senate and the Premier said no to that resolution. He said we have already written that letter. I can tell you, Mr. Speaker, that the people of Cape Breton would be not a bit insulted if another letter was written and certainly would have appreciated this House sending that kind of a message this close to the Christmas season. We know that unemployment on Cape Breton Island, the unofficial rate, is somewhere between 40 per cent and 50 per cent. The Premier is shaking his head no. I only quote numbers that his own Minister of Community Services, the member for Cape Breton East, has gone around and publicly stated in his own constituency, but the Premier is over there shaking his head no. That is what his minister is saying and if he does not agree with it, he should be talking to his minister, not shaking his head and letting it rattle over there.
This is not a good bill for the ordinary consumer in the Province of Nova Scotia. We still have an opportunity, however, to go out and hear from more people. We do not have to pass this bill today. We can take the opportunity to stand the bill and go out and have public hearings and hear from Nova Scotians and get their opinions. The bill is not going to be implemented until April 1st. That still gives us time, three months. I do not understand, Mr. Speaker, why we do not want to hear from people in this province.
This bill is going to have an effect, a long-lasting effect. This bill has more ramifications than any bill that I have had the privilege to deal with since I have come to this House. This bill's implications will long be here. Long after any one of us who is sitting here will be here, this bill will still be here. People in this province will know the negative effects. If there are positive effects, they will see them, but the ordinary consumer does not believe that there are. There have been thousands upon thousands of people who have set forward their concerns, signed petitions, phoned people, written people. They are scared. They are worried. All that seems to be on the minds of the government benches is push this through. It does not seem to matter what any member of the Opposition has to say. It does not seem to matter that we are representing Nova Scotians and not just our own opinions. There is an agenda here and that agenda apparently does not have anything to do with the concerns of the people of Nova Scotia.
The Premier has said that the agenda is jobs, and I hope he is right. I would hope that if he is that convinced that that is what it is, he would produce the papers, he would produce the studies that show this is going to create 3,000 jobs. We had person after person come to the Law Amendments Committee and say they did not think it was a good thing. We had some, admittedly, who thought it was a good tax. Those who thought it was a bad tax far outweighed those who thought it was a good tax. We even had some who showed up with people they were going to have to lay off because of this tax. The Premier says it is going to
create jobs. There is nobody in this House who hopes it will create jobs more than I. I would really like to see the proof.
The Minister of Finance also mentioned about the $90 rebate to families under certain incomes and that will be welcomed by those families. The one thing that was not mentioned was the fact that somebody who is receiving benefits from Community Services will not qualify for those. Those people's expenses will be going up. Their costs will be going up. Will that be allowed for in the Community Services budget? How are those people going to be addressed and how are we going to help them? Mr. Speaker, the list goes on and on, why this bill is not good for the consumers of Nova Scotia.
We will be voting on this bill sometime today, probably, if the government does not take the initiative to stand it and let us go around the province and talk to people. Maybe, Mr. Speaker, what we should have is a secret ballot so that people can vote with their heart and not with their Party lines, so the people can actually vote the way their constituents want them to vote, but whether we have a secret ballot or a recorded vote, I can guarantee you that I, for one, will be voting against this bill.
Mr. Speaker, I hope and I pray that each of the other members of this House, regardless of their political affiliations, will vote the way their constituents want them to and not the way their House Leader wants them to. Thank you.
MR. SPEAKER: The honourable Leader of the Official Opposition.
DR. JOHN HAMM: Mr. Speaker, it is a pleasure to join in the debate on third reading on Bill No. 48. We have had a lot of opportunity over the last few days to analyze the blended sales tax and the intention of the government, despite a mounting body of information that indicates that this is a very harmful piece of legislation for Nova Scotians, the government has given every indication that it is going to plod on and do what it has been told it should do by the federal government in Ottawa.
Now, it has been, I think, for many who have sat through the long hours of the House a somewhat tiresome time. One could, perhaps, make the comment that what the speeches lacked in depth, they made up for in length, and never has that been any more true than in the debate in recent days.
I was looking forward, really, to the Minister of Finance, his introductory speech to third reading today. I felt it was an opportunity for the government, finally, to come forward with the kind of information that we had been asking for, for days, to provide the kind of information that would give a little confidence to those of us in Opposition and confidence to those in the province that, in fact, this tax reform is really what the province needs.
I am reminded of a saying - and this is not original with me, but I think it is, perhaps, appropriate - a politician is one who shakes your hand before an election and your confidence after it. (Laughter) Well, Mr. Speaker, I think the confidence of Nova Scotians is truly shaken with the introduction of this bill. There are so few Nova Scotians who will benefit and so many who will be injured by this particular piece of legislation.
Abraham Lincoln said, "You do not help the poor by destroying the rich." Abraham Lincoln was silent on the issue of destroying the poor and that is what this piece of legislation does; it is going to destroy the poor, the low-income Nova Scotians.
I was not in the least bit impressed or persuaded by the arguments that were brought forward by the Minister of Finance this morning who was trying to indicate that, on balance, this is a good piece of legislation. In fact, it is the balance that makes it all wrong. The balance is simply not there. The whole bill is out of kilter.
We do need tax reform, but we need a sensible tax reform and we do not need a tax increase disguised as tax reform because, for the majority of Nova Scotians, this is a tax increase and the magnitude of that increase is greater than the projections that are being given to us by this government.
Now I look at the remarks of the minister this morning and I made considerable comment the other day in speaking to the bill when I was questioning the fact that the minister had taken the lost revenue projection of last May of $120 million and he has now downsized it to $100 million. In other words, somewhere along the line, $20 million has appeared despite the fact that after the $120 million projection, he added $13 million in offsets which should have actually increased the lost revenue to the province. In other words, the province has provided an additional $13 million to offset some of the negatives that were being created by the legislation. Despite that $120 million, instead of going up to $133 million with $13 million in offsets, it is somehow suddenly reduced to $100 million.
Well, the argument I put forward on that day, if that figure is wrong, then why should we have any confidence in the other projections that are given in the same document? To this point I have not received a satisfactory answer from the Minister of Finance. But you know it is interesting because another new figure appeared in debate today. I did get a copy of the minister's speech this morning. I want to make a short quotation from that speech, "I want to say a few words about each of these measures in turn. Mr. Speaker, we estimate business savings through the input tax credits of approximately $170 million. This is what drives the job creation process I described earlier . . .". We have debated this for days and why is it, on the last day of debate, a figure that was presented last May of $240 million of input tax credits is suddenly given to us this morning by the Minister of Finance at $170 million?
I would hope that the minister would clarify that because, again, he reaches into his hat and he pulls out a new number to throw before the members and before Nova Scotians, a new number at this stage of the game. Is it any wonder we have no confidence in what the government is telling us about the effects of this bill and what it will do to Nova Scotians and what it will do for our business climate and what it will do for the average consumer. The numbers keep changing. We ask for them to provide some substantiation for the numbers and it simply does not come forward.
Mr. Speaker, again, a politician is one who shakes your hand before an election and your confidence after it. My confidence is shaken and the confidence of Nova Scotians is shaken in this government because of the way they have introduced this bill, the way they keep juggling the numbers, the way they don't listen to anyone.
Mr. Speaker, this is a serious matter. This place isn't always a serious place and there are many who will attest to that, but there are times - and this is one of those times - when we are dealing with the future of Nova Scotia in a very major, in a very important way. If we make a mistake, if this government makes a mistake with this legislation, then we will suffer for perhaps no less than a decade in getting it straightened out. Well, why is it with something so important that we have had so little opportunity for input, so little input from anyone other than those in government and that close circle of people who give them their advice? Do they not think that there are good ideas beyond their close circle of advisors? Are there not those in Nova Scotia who understand this perhaps equally as well or perhaps even better than they and better than their advisors? Because this is another example of a government that excludes the majority of Nova Scotians from the decision-making process.
[10:30 a.m.]
I believe that it is the government's prerogative to make decisions for that is why they were elected and that is why in 1993 the people of Nova Scotia made the decision that they wanted this government to handle the affairs of the province. That mandate did not include a commitment by Nova Scotians that the government would no longer seek advice of Nova Scotians on issues, particularly issues that were not part of a mandate. Not only was tax reform not part of a mandate delivered to this government; as a matter of fact, prior to May 1993, the Premier said there would be no new taxes, said there would be no tax reform. Clearly, on province-wide television, this was a commitment made by the then campaigning Leader of the Opposition seeking the office of Premier, seeking the opportunity to lead this province perhaps even into the next millennium. It well may be that this particular piece of legislation and other mistakes that the government has made may preclude his opportunity to lead us into the next millennium.
I made reference to the fact that all of a sudden we have the minister getting up today and saying that the input tax credits will benefit business to the tune of $170 million, a number that appeared in debate here for the first time on the last day when there is no opportunity
now for us to determine exactly what it is that that new figure represents. Why was $240 million which was used every day since last May as the input tax credit available to business, suddenly changed today, the last day, almost like what happened in the spring sitting when finally the information came out, on the last day, what was believed to be the correct information on the tax reform document? Not much wonder that no one has any confidence in what this government is doing and why they are so suspicious of what this all means.
I had every expectation that the Minister of Finance, probably in order to come to us this morning in debate and to crystallize for members of the House and for all Nova Scotians the essence of what this bill is all about and to give us all a confidence that he and his Cabinet colleagues and his close circle of advisors would provide the information that would perhaps gel what it is the government is trying to do - well, did the minister stay up all night preparing his speech, working and coming to grips with the essence of the arguments that have been presented against the bill for days? I suggest that the Minister of Finance must have retired rather early last night because after he had finished speaking I was more convinced than ever that they do not have a solid grip on what this all means.
The minister started to talk about utilities. It was funny and I will make my point a little bit later, but it suddenly just struck me that great speeches are often referred to by a specific item in the speech or where it was given and so on, like the Gettysburg Address. Of course, we refer to that because it was given there and it has nothing to do with the content. I think that in times to come the minister's speech today will be referred to as the weather-stripping speech. I will go on and explain what I mean by that in a few minutes. He started to go through a rationalization that, in fact, the consumer was not going to be hurt by the legislation. As he went through his arguments he would almost lead you to believe that the $84 million of increased consumer taxes really don't exist. He tried to rationalize all those areas in which the consumer will be hard hit. He started to talk about heating oil. Heating oil or furnace oil is a major purchase for most Nova Scotians because the majority of Nova Scotians, in fact, heat their homes with furnace oil.
As an MLA, one of the difficulties that faces me almost invariably on a Friday afternoon, late in the afternoon, particularly in the winter months, is when a constituent comes in and says, I have no money to buy oil, we are out of oil. It is late in the day and, as you know, Community Services does not have the discretionary funding that it once had to jump in and solve the problem. Invariably they come, it is late on a Friday afternoon and they need a tankful of oil; there are children in the home and it is very difficult.
We are all aware that after April 1st, $100 worth of heating oil will be $108. But the minister says that is really not going to be a hardship, because you are going to save if you buy paint for your house because it will be 3.7 per cent cheaper, or if you buy a new storm door or bedding plants or paper towels. Then he said you are going to save money on weatherstripping. Now I don't know how often you buy weatherstripping, Mr. Speaker, but through the winter months I have to purchase furnace oil every two weeks. I think it has
probably been four or five years since I had to put weatherstripping around the doors of my home. My recollection is that I did a number of doors and windows and I think the total cost of weatherstripping was something like $7.00 You buy it in big rolls and it is very inexpensive.
As a matter of fact, the comment by the minister was so humorous that I was beginning to think that if I bought enough weather stripping to offset the increased cost of my heating oil, I would have to add a new room onto the house to store the weather stripping, but it well may work.
Then we went onto gasoline. Many Nova Scotians, of course, end up going once or twice a week to the gas pump. Certainly in the political life you end up going about twice a week if you do a lot of driving. The increased cost to the consumer in Nova Scotia per year with the blended sales tax, with another 8 per cent on our gasoline and diesel fuel, will be $54 million. So Nova Scotians will reach in every year at the gas pump and will pull out $54 million to buy the same amount of motor fuel that they are buying today.
So the minister said well, that is not going to be a problem because your car purchase and your repairs will offset that. Well, I don't know, many Nova Scotians never had the opportunity to buy a new car so they are not going to get that maximum saving and many Nova Scotians, in reality, repair their own cars. That is a very common pursuit for many Nova Scotians today, they will fix their own cars, but they still have to buy the gas so they are going to pay the 8 per cent, they are going to pay that $54 million. I, for one, don't feel that balances out at all, it just simply doesn't wash.
Perhaps the single biggest hit on the consumer, of course, is the hit at the gas pump, that $54 million. I don't think even the wealthiest of Nova Scotians who purchase very expensive cars will, if they do any amount of driving at all, unless they buy the car and park it, save enough on that purchase to offset the increase in the cost of gasoline. There is no balance to that argument whatsoever.
The minister went on and he talked about utilities. He said you are going to save $8.00 to $10 a year on your cable bill. You are going to save $25 a year on your telephone bill because those two utility costs will go down. They will go down 3.7 per cent. But then, he started and he said that would be offset because the $25 on the telephone and the $10 on the cable are going to save $35. He said you are only going to pay $30.42 more for your electricity, but he did say that your electricity cost would be $130 every two months which is $65 a month. Well, I have an opportunity on occasion - I look at my own electrical bill, it is considerably more than that every two months, more than $130. I find that even those with a very small, modest apartment will have an electrical bill in that range. The minister really is not providing a balance in his argument because the majority of Nova Scotians have an electrical bill in excess of $130 every two months.
If I can quickly find it, the minister's clinching argument after he decided that we would say enough on buying weatherstripping to purchase our heating oil, he said that in reality it has been a warm fall. He said people are not buying a lot of heating oil. I would suggest very strongly to the minister that unless our climate approaches that perhaps something very similar to the climate in either South Carolina or Florida, we are not going to save enough on weatherstripping to look after the increased cost of our furnace oil here in Nova Scotia. He did make a small concession. He said there may be a pressure for rents to go up. There certainly will be a pressure for rents to go up because it has been well established and, I think, even accepted by the minister that the increased costs of services to the landlord will, in fact, be passed along to the tenant. There is no question in my mind. This was very well documented and many speakers indicated to the members of the House the calculation of just what that meant in dollars for renters. It is not only going to cost more in apartments. It is going to cost more in condominiums.
It is going to cost more living in an older home because your renovations will be increased in cost. Of course we are all aware that despite the offset in building costs for new homes, the costs of a new home will be increased some 4 per cent to 4.5 per cent. So on and on it goes. The logic in the argument that is brought forward simply does not hold water.
Then we got on to clothing. The minister - and I believe his words, I did not write it down, but I will paraphrase what he said - said that clothing is a problem because low-priced clothing, clothing $94 and below, will now bear an additional 8 per cent tax that is not there today. That is in contrast to the fact that more expensive clothing, in fact, has a lowering of its tax. The tax on it will go from 18.77 per cent down to 15 per cent. Many speakers made reference to the fact that a very expensive leather coat or a fur coat actually goes down in price at the same time a child's jacket or a child's sneakers will, in fact, go up in price.
What did the minister try to say about that? He said, you know, many young people like expensive clothing and they like designer jeans and so on. It well might be that a lot of their clothing items will be over $94. That may be true in a small percentage of Nova Scotia homes, but very small.
[10:45 a.m.]
I was pleased to hear my colleague, the member for Cape Breton West, get up and make reference to that when he said, in his area, the young people, largely, do not wear designer clothing. They are, like the majority of young Nova Scotians, wearing low-cost clothing, clothing that costs under $94, and that clothing is up in price. Balance and fairness, well, where is the balance and fairness when expensive clothing comes down in price and inexpensive clothing goes up in price? Where is the balance? Where is the fairness? That was a term that was used by the minister, himself.
The government likes to refer to the APEC study. Well, it is interesting. What will happen to clothing expenditures under the new blended sales tax? Well, according to APEC, there will be a decrease in spending for clothing of $8.3 million. In other words, Nova Scotians have no more money to spend on clothing, the tax is going up, and they are going to buy less clothing. That is wha