British Columbia What effect will the proposed Goods and Services Tax have on the sale of homes? New information on this was made available by the B.C. Council of Carpenters (union) in its brief to the Senate committee on banking when it held hearings on the GST in Vancouver last month. A brochure issued by Finance Minister Michael Wilson entitled Information on Housing states that, “you pay no GST on resale housing”. This is inaccurate because it is only half the truth. While you pay no GST on the sale price of resale housing, you do have to pay the GST on all the services connected with that purchase such as the legal fee, sales commission, bank appraisal fee, and home inspection fee. The Real Estate Board of Greater Vancouver estimates that for the vendor this could mean (on a $256,000 home in Richmond, for example) an additional cost of $812 and for the purchaser an additional $91. The vendor would also be required to pay the seven-per-cent GST on moving expenses, relocation of cable, hydro and telephone services and on new furniture, appliances and gardening €quipment usually necessary upon the purchase of a home. How will the GST affect the purchase of a new home? Here’s where the: buyer is really gouged. The GST on the sale of a new house will be seven per cent with a 2.5 per cent rebate, according to government brochures, on houses priced up to $350,000. On the $256,000 house mentioned above the tax would be New tax will cost home buyers plenty $11,520. That would bring the price up to $267,520. However, what the government brochure conveniently fails to mention is that all the additional service charges as listed above on old houses would also apply to new houses. Add on another $812. But that still isn’t all. The cost of building a house will go up after Jan. 1, 1990, if the GST is implemented. The contractor will be required to pay the seven-per-cent GST on the lumber and other building supplies that go into the construction of this house. If the cost of these building materials is $50,000, for example, the seven-per-cent tax wouldadd_ another $3,500 to the cost of the house. Therefore, the GST would affect the costofanewhouseinthree ways — the seven-per-cent GST on the building supplies, the 4.5 per cent GST on the sale price, and the- - seven-per-cent GST on the services connected with the sale. What it all adds up to is that a new home that can be bought for $250,000 today would cost about $16,000 more after Jan. 1. All of which is another reason why the Senate should refuse to pass the GST. The whole purpose of the GST is to tax ordinary people more so corporations can be taxed less. It is opposed by 80 per cent of Canadians. The government has no mandate to pass this tax. It should be scrapped. For that matter, so should this unpopular government which today has the support of only about 20 per cent of Canadians. WALKING TOGETHER TOWARDS A NEW EL SALVADOR SALVAIDE NATIONAL WALKATHON SATURDAY, SEPTEMBER 29 STANLEY PARK SEAWALL “With your help we can rebuild our lives, plant our crops, open our own health clinics and send our children to school... with your help we can win the peace we all desire.” Registration 8:30am Co-Sponsored by: Bumaby Municipal Council; Bumaby-Kingsway Riding Association; : Comunitas; Unitarian Church of Vancouver. Proceeds to SalvAide Projects. For a pledge form please call 254-4468. 2 + Pacific Tribune, September 17, 1990 Meech Lake, GST related to free trade — Orchard _ Meech Lake, the Goods and Services Tax, high interest rates, Mexico’s cheap manufacturing zones: they’re all related to the Canada-U.S. Free Trade Agreement, and they all threaten, or have threatened, the future of Canada. So warmed anti-free-trade activist David Orchard at a packed meeting at the Maritime Labour Centre on Sept. 8. “What we have to do is to raise the issue in exactly the same way as as we did three years ago. We began in 1985 as a citizen’s organization, we studied the deal and then we pushed the opposition parties into fight- ing,” Orchard, leader of Citizens Concerned About Free Trade, told an audience of some 500 people. For close to two hours, Orchard, a Sas- © katchewan farmer, recalled the history of U.S. bids to take control of Canada, listed the effects of the free trade deal since it was _ Signed 11/2 years ago, and linked the pact to the GST and the defeated Meech Lake Ac- cord. And he slammed all federal parties, in- cluding the Liberals and the New Dem- ocrats, for giving up the fight against free trade after the 1988 national election. The federal Conservative government has introduced the vastly unpopular Goods and Services Tax to help pay for financial shortfalls and competitive disadvantages for Canadian industry in the wake of the deal, Orchard said. “First, the government is losing $2 mil- lion of tariff revenues that they have to col- lect from somewhere, and instead of taking it from the companies they are going to take it out of your pocket and mine. “Second, there is a Manufacturers Sales Tax which has existed since 1924 that creates a minor disadvantage for Canadian companies. They are going to remove that tax and slap a massive new tax on, that will be collected off the backs of shoppers,” Or- chard said. Orchard said free trade has been dis- astrous for Canadians in terms of job losses, investment, social programs, agriculture, trade and sovereignty. ¢ Jobs: “Mulroney said that the free trade agreement would produce new jobs and wealth for Canada — 250,000 new jobs. Instead what we’ve seen in the last year is 165,000 manufacturing jobs lost.” ¢ Adjustment programs: Orchard noted Prime Minister Brian Mulroney had pro- mised “the finest” in job retraining to mitigate job losses through free trade. “That promise went straight into the gar- bage can along with his promise to build a world-class icebreaker in Vancouver, his promise not to touch unemployment insur- ance and his promise that medicare would not be affected.” ¢ Social programs: Since the agreement, the Tory government has chopped $3.3 bil- lion from unemployment insurance and has announced the federal government will get out of contributing to the program al- together. “The federal government will no longer have any incentive to keep un- employment down. What they are doing is bringing unemployment insurance more in line with the U.S.” Meanwhile, Bill C-76 has been intro- duced into the Commions, which if passed will hand over medicare to the maanees: Orchard noted. ¢ Cheaper goods and services: The gov- emment produced a brochure before free trade was ratified promising cheaper ser- vices. “Instead, prices rose more in 1989 than at any time over the previous four years. Deal should be DAVID ORCHARD ... scrapped. And now the government is going to slap a seven per cent Goods and Services Tax (GST) on virtually every transaction that takes place in the country.” ¢ Increased trade: “When the free trade talks started, Canada had a trade surplus of $20 billion .... Since then our surplus has dropped almost to zero and our trade surplus with the U.S. dropped by a massive 62 per cent.” ¢ Agriculture: More than 40 per cent of Canada’s vegetable producers face bank- ruptcy, Orchard said. Meanwhile, “over 90 per cent of the fresh vegetables sold in Can- ada now comes from the U.S.” ¢ Investment: U.S. branch plants are pulling out of Canada since the free trade deal was signed. In an effort to keep some investment in Canada, Ottawa has raised interest rates. But, “those same high interest rates are creating havoc with our industrial capacity and our farms — anyone who has to borrow money to do business.” Meanwhile, the free-trade zones along the Mexico-U.S. border — called maqui- ladoras — are operating union-free with wages as low as 63 cents per hour. Said Orchard: “The creation ofa North American free trade zone is designed to lock Canada into the U.S. grid and make it harder to abrogate the deal. The idea is to use Can- adian resources and Mexican labour, all con- trolled by U.S. capital.” On the failed Meech Lake Accord, Or- chard charged the federal government and the mass media with pushing propaganda that painted opponents as being anti- Quebec. The rise of bigotry through organ- izations suchas the Alliance for Preservation of English in Canada furthered this effort, he said. Quebec does have legitimate grievances in seeking to protect language rights. But English-speaking premiers who claimed to back that right were doing so to promote their own interests, Orchard said. “Those legitimate concerns could have been dealt with by a federal government sincere about keeping this country together. Instead, Mr. Mulroney gave all the other premiers the powers that would balkanize this country, cut the east-west ties and of course leave us ripe for picking by the United States.” : Orchard criticized political leaders such as the Liberals’ Jean Chretien for proposing to renegotiate the free trade pact to remove all “the bad parts.” “The only thing that can be done with this deal is, it’s got to be abrogated and thrown out,” he declared to applause.