British Columbia

GST not supported by Canadians,
standing committee hearing told

Continued from page 1
income is spent on services, that drop would
result in heavy job losses in service-related
occupations, the majority of which are held
by women.

Jobs will also be lost in manufacturing,
particularly in areas such as footwear and
clothing which are not now covered by the
Manufacturers Sales Tax, where consumer
demand is expected to drop as a result of the
GSE.

@ An increased tax burden for low-
income families which are compelled to
spend a high percentage of income on clo-
thing and other necessities. The tax credits
will not begin to compensate them for that
increased burden and over time, the rebates
will be less and less effective because they
are only partially indexed to inflation.

e A big jump in retail prices as a result of
the replacement of the old manufacturers
tax by the GST. The old tax was imposed at
the manufacturers level — on about one-
third of goods — but the GST will be
imposed almost universally at the retail level
after markups have been added. Thus, a
piece of furniture might have a 13.5 per cent
manufacturers tax applied at the manufac-
turers price of $100 but the GST would
impose a nine per cent on the retail price of
$500 — a 233 per cent increase in taxes.

Cohen told the committee that there were
clear alternatives to the regressive GST.

“We could begin by fixing tax loopholes
which enable thousands of wealthy corpo-
rations to escape payment of taxes ... we
could re-introduce a more progressive
income tax system ... (and) we could intro-
duce a wealth tax,” she said. NAC has
called fora Royal Commission on Taxation
to recommend changes to the tax system.

The alternatives which would absolutely
not be acceptable, she emphasized, are
those being proposed by business and other
groups, to cut government spending on
social programs and to broaden the base of
the tax to include food.

“This is a tax which does not have the
support of the people of this country and
does not have the support of women,” she
said. “We urge this committee . . . to include
in your final report a recommendation that
the legislation for the tax be withdrawn.”

Both the B.C. Federation of Labour and
the Provincial Council of Carpenters
echoed NAC in calling for the withdrawal
of the GST proposal and an overhaul of the
tax system. :

“The Provincial Council of Carpenters
must add its voice to those of many
other Canadians who are demanding the
federal government introduce progressive
tax reform,” Carpenters Provincial Council
secretary Colin Snell told the committee. He
cited the need for a tax on luxuries, a
national wealth tax and changes to ensure
that “profitable companies pay their share
of taxes.”

The B.C. Fed also linked the GST prop-
osal to the Canada-U.S. trade deal, emphas-
izing that the Tories moved to reduce
corporate tax rates and to cut the inflation
protection on family allowances and per-
sonal income tax exemptions as part of the
process of “harmonizing” Canadian taxes
with those in the U.S.

Ironically, Tory members of the commit-
tee jumped on both Snell and B.C. Federa-
tion of Labour president Ken Georgetti for
suggesting in their briefs that the unjust
nature of the GST could lead to a “tax
revolt” — a term that has been bandied
about in the business community following
the announcement of the tax proposal.

North Vancouver Tory MP Chuck Cook
accused them.of advocating “breaking the
law” through civil disobedience, a charge
which the unionists rejected. But Snell
warned the committee that if the govern-
ment insisted on pushing its.tax through

2 « Pacific Tribune, October 9, 1989

As an alternative to the GST ‘we could begin by fixing
loopholes which enable thousands of wealthy corporations to

escape payment of taxes.’

despite the opposition of Canadians,
“there’s a limit to how much working peo-
ple will take and if we have to organize a tax
revolt, we will organize a tax revolt.”

Cook, who spent much of his time Tues-
day defending the government’s record,
again responded indignantly during hear-
ings Tuesday when Vancouver alderman
George Puil stated before the committee
that he considered it an “affront” that
committee chair Don Blenkarn was not
present for the session Tuesday when the
city of Vancouver presented its submission.
. In its brief, presented by Vancouver
mayor Gordon Campbell, the city declared
its “fundamental opposition” to the GST,
emphasizing that the tax would aggravate
the affordable housing crisis and would
have a negative impact on the service sector,
including tourism.

Several business groups also appeared
before the hearings Tuesday, advocating
that the government either withdraw the
GST or lower the rate — and make up the
lost revenue by cutting government pro-
grams. The Rental Housing Council of
B.C., representing apartment owners in the
province, was specific, calling for an across-
the-board five per cent reduction in
government employees.

At the same time, one major corporate
group, the Council of Forest Industries,
used the opportunity to press for even

— Marjorie Cohen, NAC

further tax breaks for the industry. Graham

Kennedy, chair of COFI’s taxation com-
mittee, complained that excise taxes on fuel
used by the industry imposed an unfair
burden on forest companies and should
either be removed if the GST were imposed
or companies should be given an “input
credit” against them.

One particularly ominous suggestion
came from Fraser Institute director Michael
Walker who called on the government to
eliminate the $3.1 billion in proposed
rebates to low-income families under the
GST.

Although the unpopularity of the GST
was unmistakable even from the limited
number of groups appearing before the
committee, the contrived nature of the hear-
ings has tended to mute the widespread
opposition that there is to the tax proposal.
The committee is remote from the cam-
paigns and petitions against the GST cur-
rently circulating across the country.

Wilson has also stated that the govern-
ment intends to proceed with its agenda
regardless of the outcome of the hearings.

But that is unacceptable, the B.C. Feder-
ation of Labour stated in its brief.

“Tt is Mr. Wilson and his government
who have the obligation to listen to the
widespread opposition this tax is engender-
ing, to consider, consult and go back to the
drawing board.”

Blenkarn’s
comments
draw fire

Comments by Don Blenkarn, chair
of the standing committee studying
the Goods and Services Tax, that
Canadians “are stupid’ and the
government will have to spend $100
million in advertising to educate them
drew fire in committee hearings Tues-
day.

Committee member NDP MP
Lorne Nystrom suggested Blenkarn
was “hallucinating” with his spending
proposal.

Even in the massive advertising
barrage aimed at winning acceptance
if the Canada-U.S. trade deal, the
Tories and business groups fell short
of that mark, spending some $55-56
million, he said.

“So $100 million is something we
haven’t seen in the history of this
country,” he said, adding that $100
million could “help a lot of poor peo-
ple in Toronto and Vancouver.”

Ald. Harry Rankin, appearing with
the delegation from the city of Van-
couver, told acting committee chair
Tory MP Murray Dorin that the
committee “wasn’t even listening to
Canadians,” since the witnesses had
been selected beforehand. He urged
the committee to break up into small
groups and “go around and listen to
the hundreds of Canadians who want
to say something about this tax.

“You might learn something,” he
said, “and you won’t have to spend
$100 million to do it’?

Tax unacceptable ‘in any disguise’

Just about everybody has come out
against federal Finance Minister Michael
Wilson’s Goods and Services Tax. The
only exception seems to the be the Busi-
ness Council on National Issues, the most
powerful business organization in Can-
ada. It is made up of the chief executive

officers of the largest 150 Canadian and |

foreign corporations operating in our
country. It claims assets of $7 billion. Its

members control not only industry and
financial institutions but also the media.
Faced with such widespread opposition
to the Goods and Service Tax as it stands
today, its supporters are now trying to get
it adopted in some other form. Three of

the new strategies being advanced are: (a) -

lower the rate of the tax but apply it to
everything including groceries; (b) merge
the federal nine-per-cent tax with existing
provincial sales taxes; (c) as a last resort,
drop the rate by two or three per cent for
the time being. 9 at

' Lowering the rate of the tax but apply-

ing it to everything ‘including ‘groceries

would not reduce the amount we have to
pay to Ottawa. In fact it may take even
more money out of our pockets. Does
Wilson really think he can fool Canadians
by this transparently fraudulent sleight-of-
hand trick?

Merging provincial sales taxes with the

nine-per-cent federal Goods and Services —

Tax would mean, in the case of B.C. where
we have pay six per cent in sales taxes, that

we would have to pay a total tax of 15 per
cent. It might make it easier for business to
collect such a tax, but for the consumer it
would mean that more money than ever
would be taken out of their pockets
because the provincial tax would then
apply to many goods and services that are
today exempt.

Bringing the rate down to six per cent or
seven per cent wouldn’t save us anything
in the long run. It would only mean that
next year the rate would be raised that
much more. In every country where such a »
tax has been introduced it started off at a
small rate. In every case it has gone up

dramatically, into two-digit figures. In
some countries the rate is now already 20
per cent. That is what we would soon be
up against.

A Globe and Mail editorial (Sept. 25)
was misleading when it said of the public
hearings being held on the tax by the
House of Commons finance committee:

“In an almost unanimous voice, group
after group appearing before the commit-
tee has said it accepts the tax in principle
but categorically rejects the approach
proposed by the federal government.”

What it didn’t mention was that this
House of Commons committee is select-
ing the organizations it will hear and natu-
rally — since the Tories dominate it —
select those groups that will help sell the
idea of a GST to the public. It also ignored
the fact that scores of organizations,
representing literally millions of consu-
mers, have categorically rejected this type
of tax in principle and want no part of it in
any form.

This tax is bad in principle because it is
so unfair.

It hits low and middle income groups
the hardest because they have to spend
almost all their money on taxable items to
live.

The whole intent of this exercise is to
place the entire tax burden of running the
country on the backs of consumers, most
of whom are working people, and absolve
corporations of all taxes.

This is why the Goods ‘and Services Tax

must be rejected’not only in its present

form ‘but in any other disguise it may be |

dressed up in. =e