av

DONIAYIG 74

The following is the full text of the budget analysis prepared by the Pro-Canada

Network.

The first free trade budget is a definite move to harmonize the structure of our
economy, our society, and our culture with the requirements of the Free Trade
Agreement. During the federal election campaign, the Mulroney government and its
ministers told us repeatedly that Canada’s unemployment insurance, regional
development, farm, and social programs were safe under the FTA. Canadians can
see how deeply and broadly the Tories deceived Canadians. It’s a real act of political

deception.

Attacks on advocacy
groups ;

Cuts to women’s groups may be linked to
retaliation against groups who opposed free
trade, particularly women’s and Native
groups. The Tories have cut funding to
women, Native people, multicultural pro-
grams, and official languages, against the
advice of experts in those areas. Secretary of
State funding is being cut by $10 million in
1989-90 and $16 million in 1990-91. Hardest
hit will be women’s groups ($2 million),
Native organizations ($3 million), and vis-
ible minorities ($2 million from multicultu-
ralism). The cut to Native programs adds
insult to injury at a time when the rights of
Native post-secondary students are being
attacked.

“Sacred” social
programs?

The Tories have brazenly gone back on
their promises in regard to unemployment
insurance, social programs and regional
development. The government has aban-

Agricultural provisions cuts in regional development, UI changes mirror demands made by U.S. in new free trade economic
climate.

6 » Pacific Tribune, May 8, 1989

doned its previous commitment of approx-
imately $3 billion per year to unemployment
insurance. From 1990 onwards, employers
and employees will bear the full cost of
funding the program. Employee premiums
will therefore increase from $1.95 to $2.25
per $100 of insurable earnings. The employ-
ers share will continue at 1.4 times the
employee contributions, but given the influ-
ence of business groups with the govern-
ment, it is probably only a matter of time
before business pressures the government to
change this ratio in its favour. Because the
government is a major employer and
because UI premiums are tax deductible,
the cuts will amount to $425 million in 1989-
90 and $1.9 billion in 1990-91 (this change
should be viewed in light of last week’s
announcement by Barbara McDougall of
$1.3 billion in program cuts).

In the area of social programs, the Tories
have mounted a major direct attack on uni-
versality. This budget introduces a new
arrangement to “claw back” payments
made to individuals with incomes over
$50,000 under both the Family Allowance
and Old Age Pensions program. This is a
back door method of “targeting” social
benefits by using taxable income to deter-
mine who will, or will not, receive them.
While 14 per cent of Family Allowance
recipients and 4 4 per cent of OAP recip-
ients will be affected initially, the measure
could quickly be expanded to include a very
large proportion of the population, either
by amending the $50,000 limit or allowing
inflation to bring more and more people
into the “clawback” category.

EPF cut further

Another clear betrayal of the Tories’ elec-
tion promises is the further reduction in
Established Programs Funding (EPF)
payments included in the budget. This
government, which claims the deficit is a
burden on our children, has moved to
further reduce expenditure on health and

- education by cutting one per cent annually

from EPF payments. This represents a loss
of $200 million 1990-91 and rapidly increas-
ing reductions in future years.

Regional development cut

One of the results of last fall’s campaign
against the FTA was to force the Tories to
pledge that Canada’s regions not pay for a
trade agreement whose major benefits
would be felt in central Canada.

The budget shows this to be one more
hollow promise and serious deception by
cutting funding on regional development
through programs such as the Atlantic
Canada Opportunities Agency and the
Western Diversification Fund. These pro-