DITORIA

Liberals reduce deficit
on backs of the jobless

nly a week after he released the 1997-98 feder-
al fiscal budget, which had no plan to combat
the nation’s “official” unemployment rate of
9.7%, Liberal Finance Minister Paul Martin
went to the media with the idea of bringing
down Canada’s unemployment rate to as low
as 5%, during his government's next term in of-
fice, if elected.

As in his budget, Martin and the Chretien government of-
fered no plan at all. By saying they are concerned the Liberals
are trying to deflect the fact that Canadians are suffering
from the worst prolonged period of joblessness since the De-
pression.

“Official” unemployment has been over 9% for 78 consecu-
tive months. That kind of hardship has not been witnessed
since the 1930s. And rather than make life easier for the un-
employed, the Liberals are making it tougher.

“Official” unemployment statistics are a smoke screen for
much higher, unreported unemployment. When the Liberals
were elected in 1998, “officially” 59.6% of the country’s unem-
ployed could get UI benefits. Today less than 45% of jobless
Canadians are eligible to draw what is now called EI (Em-
ployment Insurance).

The Liberals have been beating up on the unemployed by
continuing to cut EI benefits and shorten benefit periods,
while making it harder to qualify in the first place. The results
of all the cutbacks by the Chretien government have resulted
in a huge surplus in the EI account.

In the current fiscal year along, the EI account has run up a
surplus of $6.6 billion which has gone into general revenue.
Rather than take that money and help the unemployed, Paul
Martin has applied it to reducing the general deficit.

The Canadian Labour Congress reacted swiftly to the news:
“We don’t have an unemployment insurance program. We
have a deficit reduction plan for Paul Martin. It’s obscene,”
said Nancy Riche, an executive vice president of the CLC.

So did the Canadian Chamber of Commerce. A senior vice
president said that the Liberals did not inform them about the
plan to use the EJ surplus and that Ottawa is turning unem-
ployment premiums, which are wholly paid for by employees

and emloyers, into a “deficit reduction tax.”

There is good evidence that Martin and his bureaucrats
kept their plan to reduce the deficit on the backs of the un-
employed hidden from both business and labour until the
budget came out.

However the Liberals did let senior officials of the Wash-
ington-based International Monetary Fund know of such a
plan in November of last year. A confidential report on the
Canadian economy, prepared for governors of the organiza-
tion before the budget was released, insists that the Liberals
guard the large EI surplus for large-scale deficit reduction
over the next two years.

The report plainly shows that the Chretien government was
willing to share with the IMF the plans that it was not willing
to share with its own people who pay for EI.

B.C. Federation of Labour president Ken Georgetti termed
the budget “cowardly.” He pointed out the fact that, as a re-
sult of high unemployment, Canada has more poverty-strick-
en children per capita that any other OECD nation and that
the Chretien government is doing nothing to remedy the situ-
ation to provide jobs.

In 1996 lack of employment in the country pushed 264,000
more Canadians to the low income poverty line, bringing the
national total to over 5.2 million people, of which 1.47 million
are children,

“Official” youth unemployment went from an astonishing
16.4% in December of last year to 17% in January of this year.
Meanwhile there has been an erosion of tens of thousands of
full-time jobs in the goods producing sector in favour of low
paying, part-time service sector jobs.

For years Martin, Liberal bureaucrats and conservative
economists have said that Canada’s “natural” unemployment
rate should be at about 8% and that any lower figures would
trigger unwanted inflation. And now Martin is cynically float-
ing his trial balloon talk of a 5% unemployment rate.

When the federal election is called this spring, workers
should be aware that any Liberal talk of curing unemploy-
ment is no more than hot air.

o LUITIBERWORKER

Official publication of 1.W.A. CANADA

DAVE HAGGARD . . President
NoRMAN Garcia NEIL MENARD... Ist Vice-President
Editor FRED MIRON .. 2nd Vice-President
DAVE TONES ... 3rd Vice-President
5th Floor, HARVEY ARCAND . 4th Vice-President
1285 W. Pender Street ‘TERRY SMITH. . Secretary-Treasurer

TA

(HORID RICE POR THE LUMPERWZRKER

Canadians sold phony bill of goods over protection
of culture under free trade agreements with the U.S.

When Canadians were sold
the Canada - U.S. Free Trade
Agreement and the North
American Free Trade Agree-
ment one guarantee that they
were given was our culture
would be protected. There
was no ifs, ands, or buts. Cul-
ture was off the table for dis-
cussion.

Now eight years after the
FTA and three years after the
NAFTA it looks like cultural
protection is going down the
tubes. In mid-January the
United States won the right to
print and distribute “split-run”
magazine editions in Canada
by beaming in American cul-
tural content, adding a few
pages of Canadian content,
and skimming advertising rev-
enue away from Canadian
magazine producers.

In April of 1993 Sports Illus-
trated, owned by the giant
Time-Warner Inc., launched a
“split-run edition” of the mag-
azine, by beaming in page
content to a Toronto area
printing operation. Then it
threw in an article or two on
Canadian sports and grabbed
advertising revenue on this
side of the border. Soon its
“split-run’” circulation grew to
130,000.

By the following year a task
force study, sponsored by the
Canadian government, said
that there were another 100
U.S. magazines about to fol-
low the Sports Illustrated
lead. In December of 1995 the
federal government effective-
ly ended the split-run edition
by imposing an 80% excise
tax on the publication. It sim-
ply didn’t fit Canadian con-
tent rules.

The U.S. went around the
NAFTA and directly to the
World Trade Organization to
successfully seek unfettered
access to this cultural sector.
Apparently NAFTA wouldn’t
have helped Canada out ei-
ther.

In reaction to the WTO rul-
ing federal Trade Minister Art
Eggleton said: “We didn’t
have any cultural protection

under NAFTA. That’s a myth.
We never did.”

So now what?

Ottawa trade consultant Pe-
ter Cook, often quoted in the
financial press, says that
“Canada has traded away its
cultural sovereignty when it
signed on to the WTO.”

And you can be sure that
USS. interests, already domi-
nant in publishing, telecom-
munications, and in cultural
programming, have been em-
boldened by the WTO deci-
sion. American cultural indus-
tries are the second largest
exporters from the U.S., sec-
ond only to the aerospace in-
dustry. Culture in Canada rep-
resents a market of $29 billion
annually, or about 5% of our
country’s gross domestic
product.

Gordon Ritchie, a trade
consultant who helped the
Conservative government of
Brian Mulroney negotiate the
Canada-U.S. FTA, has predict-
ed that 1997 will be a rough
one for Canadian cultural in-
dustries. “There will be as-
saults,” he says. “This is the
thin edge of the wedge.”

At risk will be thousands of
Canadian jobs in the cultural
industries.

In a letter to the Vancouver
Sun following the WTO rul-
ing, Elizabeth Rains, Presi-
dent of the B.C. Association
of Magazine Publishers, wrote
that the U.S. agreed to cultur-
al exemptions in the NAFTA
which Canada pushed for.

The essence of the argu-
ment for Canadian cultural
protection was written by Ms.
Rains: “What does exist is a
need to learn about ourselves.
The U.S. has 10 times our
population, giving magazines
that speak to Americans enor-
mous economies of scale. To
fight the free trade battle,
Canadian magazines would
have to appeal to the larger
readership by featuring U.S.
culture and not our own.
What we would learn about
us is how to become good
Americans.”

And becoming good Ameri-
can we are, if the Liberals
have their way. The Chretien
government is hacking away
at the publicly funded Canadi-
an Broadcasting Corporation,
cutting away over one third of
its budget, and about 4,000
workers during the next three
years.

When they ran for power in
1993 the Liberal red book of
election promises slammed
the then Mulroney govern-
ment for cutting back funding
for the CBC. It blamed the To-
ries for “failure to appreciate
the importance of cultural
and industrial development.”

The Liberals said that in the
new globalized economy and
rapidly expanding technologi-
cal revolution, the Conserva-
tives were undermining Cana-
dian institutions.

In December of last year
Liberal Heritage Minister
Sheila Copps, questioned on
the CBC cuts, had no idea
how many jobs would be lost
in the first year. She said 19.
In fact 996 CBC employees
were given their pink slips be-
fore Christmas, 615 agreed to
leave “voluntarily” and 88 po-
sitions were not filled.

A month later, after the
WTO decision on split-run
magazines was rendered, Min-
ister Copps circled the Cana-
dian cultural wagon and
called a “summit” meeting of
the 25 executives in the indus-
try. No workers were invited.

Said Copps: “If the Ameri-
cans insist on pursuing their
domination of the world cul-
tural community by using all
the instruments at their dis-
posal..,We are prepared to use
all the tools in our arsenal to
fight the decision that re-
stricts our capacity to build
our own culture.”

Soon after that, the Liberals
gave $10 million back in fund-
ing for CBC Radio. Ian Morri-
son, of the Friends of Canadi-
an Broadcasting, called the
move a “little more than a
cynical election ploy.”

LUMBERWORKER/APRIL 1997/5