Budget

Tories reject option of interest cut

Continued from page 1
that unemployment would be a factor in
keeping wages down.

As in past budgets, Wilson presented the
Spectre of a huge deficit haunting the eco-
Nomic wellbeing of future generations. But
he rejected the solution of reduced interest
Fates — dismissing that approach as a

quick-fix” — and opted instead for major
expenditure cuts which will rip away at the
National fabric of the country, already badly
torn by the Meech Lake Accord.

The spending cuts to the transfer pay-
ments to the provinces fall into two main
areas:

© The Established Programs Funding,
Which covers the federal share of costs of
universal medicare and post-secondary
education. Although it has called the mea-
sures a two-year spending freeze, the
8overnment will actually reduce the federal
contribution by $870 million in 1990-91,
another $1,540 million in 1991-92 and will
Impose further cuts in future years for a
total reduction of $7.4 billion over five
years. The EPF has already been eroded as
4 result of previous budgets.

® The Canada Assistance Plan, which
Provides funding for provincial social
assistance programs as well as day care and
other programs. The budget measure is
aimed at the three richest provinces, B.C.,
Alberta and Ontario and will see program
Spending capped at a five per cent increase
Per year, resulting in an actual cut in the
federal government contribution of $155
million over two years. That cut will come
at a time when the government is already
Planning to force many more people on to
Welfare because of cuts to federal unem-
ployment insurance.

Caps have also been put on spending on
the Canadian Broadcasting Corporation,
Marine Atlantic — the East coast ferry
System —'and on’ Canada Mortgage and
Housing Corporation, which provides
funds for housing for seniors, low-income
groups and others.

The budget will cut by $51 million over
two years, the amount previously promised
by the government for social housing — $16
pen in 1990-91 and $35 million in 1991-

And in another contentious measure,
the government will jack up the room and
board rates for war veterans living in hospi-
tals and other institutions from $8 a day to
$14, taking $17.3 million from the elderly.
Another veterans’ program will be cut by
$18 million.

The cuts to the federal transfer programs
are in keeping with the government’s own
re-structuring under the Free Trade
Agreement and its plans for passing
National programs over to the provinces
under the Meech Lake Accord.. The federal
transfers have been a vital part of Canadian
development, providing for, among other
Programs, a universal medicare system
across the country.

With the federal share cut back, and
transfers for social assistance restricted in
three provinces, the decision as to whether
Programs will be maintained and at what
level will be left up to provincial govern-
Ments who will be forced to raise their own
Inancing. Many government will be unable
9r unwilling to do so and the national
Standards of programs will be steadily
€roded.

The Pro-Canada Network warned: “It is
Not an overstatement to say that the addi-
tional cuts announced in this budget are
Placing in jeopardy the very future of medi-
oe and publicly-funded education in Can-

ate

Organizations in the health care and edu-
cation field echoed the Pro-Canada Net-
Work in condemning the federal budget.

Pam Frache, chair of the Pacific region
for the Canadian Federation of Students,
Noted that the cuts to post-secondary fund-

ing could be as high as $30 million, or three
per cent of the advanced education budget
for B.C.

“Such federal cutbacks will certainly
translate into higher user fees for our post-
secondary system and erode whatever
accessibility currently exists,” she said.

Frache challenged Prime Minister Brian
Mulroney on his pledge last year that the
federal government would “carry its fair
share of the burden to ensure that all young
Canadians receive a first class education as
they confront a world class challenge.”

Since that time, she said, Ottawa has
imposed the Goods and Services Tax
(which will affect textbooks), imposed a
three per cent administrative tax on student
loans, cut federal youth employment pro-
grams, cut federal financial assistance and,
with the latest budget, cut federal transfer
funding.

“It’s clear that this government has failed
to follow through on its commitment to
advanced education,” she charged. “The
government is not shouldering its fair
share — itis simply passing the deficit buck
on to those least able to carry ites

The 28,000-member Hospital Employees
Union warned this week that the $100 mil-
lion cut in the health care transfer payment
to B.C. would deepen the crisis in an
already-underfunded health care system.

The union estimated that the cuts to
transfer payments imposed by both Liberal
and Tory governments since 1982 have
resulted in a loss to B.C. of some $600
million in the 1990-91 budget.

And this budget “is more bad news for
the thousands of B.C. residents unable to
get access to a health care system stretched
beyond capacity because of financial res-
traints,” HEU secretary-business manager
Carmela Allevato said in a statement.

She called on British Columbians to

‘reject’ the health care cuts imposed in the

Wilson budget.

Also last week, delegates to the Van-
couverand District Labour Council echoed
unionists across the country in declaring
their opposition to the budget. Meeting on
the night of the budget speech, the council
voted to go on record “condemning
Michael Wilson’s Feb. 20 budget, including
the sale of Petro-Canada, as contrary to the
interests of working people in Canada.”

Canadian Union of Public Employees
delegate Stephen Howard, who proposed
the motion, urged unionists to “resolve to
go out of here tonight to start immediately
on the fight against the GST and to demand
a fair taxation system.”

Across the country, union leaders were
particularly critical of the government for its
refusal to tackle the problem of high interest
rates which are slowing economic growth

and saddling the country with enormous ,

payments on the debt.
The Pro-Canada Network also singled
out the interest rate policy in Its analysis,

CARMELA ALLEVATO ... HEU calls on
British Columbians to reject health care

cuts.

noting that the government “listened to
those groups calling for expenditure cuts
and ignored the very real option of interest
rate reductions.” ;

The PCN noted that easing interest rates
would boost housing starts across the coun-
try, stimulate consumer spending and
investment and help to produce more
goods, thus reducing the pressure of infla-
tion. Sap

In response to arguments that lower rates
would result in’a falling dollar, the Network

emphasized that a lower dollar would be
“positive for employment” since it would
increase exports. Foreign holders of Cana-
dian debt would be the losers, it said.

“It is important to recognize,” the PCN
analysis emphasized, “that when the
government talks about the spending
deficit, what it is really talking about is the
increase in the cost of borrowing money to”
pay the interest charges on the public debt.
Reduce interest rates and the deficit soon
disappears.”

‘ Ct iNADIAN

SHIPBULDKG

RECOGNITION )

B.C. shipyard workers reacted swiftly
and angrily last week as news of the
federal budget revealed that the govern-
ment planned to keep defence spending
largely intact while eliminating com-
pletely the one project that for five years
has been seen as the symbol of Canadian
sovereignty in the Arctic — the Polar 8
icebreaker.

The $689-million project, on the
books since 1985 when it was first prom-
ised by External Affairs Joe Clark fol-
lowing the unauthorized entry into
Canadian waters by the U.S. vessel Polar
Sea, was scrapped by Finance Minister
Michael Wilson in his Feb. 20 budget. In
defending the cut, the government
offered only the pathetic assurance that
the U.S. had promised in an agreement
to seek prior consent if it planned to enter
Canadian Arctic waters.

The vessel was to have been built in
Versatile Pacific’s North Vancouver ship-
yard where construction was expected to
generate 1,000 jobs as well as important
new developments in technology and
design. But that will now be lost, along
with the $15 million already spent on the
project.

“It’s a black day for shipyard
workers,’ said Ron Ferguson, a represen-
tative for the shipwrights local of the
Carpenters Union and a spokesperson
for the Shipyard General Workers Fed-
eration.

John Fitzpatrick, president of the
Marine Workers and _ Boilermakers
Industrial Union, which represents the
majority of workers at the Versatile yard,
told delegates to the Vancouver and Dis-
trict Labour Council Feb. 20 that the
scrapping of the project could well result
in the end of new ship construction at the
North Vancouver yard.

Recently sold to Toronto-based Shield-

Shipyard workers call for decision on Polar 8 construction in November, 1986.

Shipyard unions slam
scrapping of Polar 8.

te

ings Inc., Versatile-Pacific has long been
in financial trouble as a result of the
decline of shipbuilding on the west coast
and the site has been eyed by real estate
developers for condominium construc-
tion.

Delegates to the council unanimously
endorsed Fitzpatrick’s resolution calling
on the VDLC to work with the B.C.
Federation of Labour and the Canadian
Labour Congress to protest the govern-
ment’s action by:

@ Organizing letters to Prime Minister
Mulroney urging reinstatement of the
project;

®@ Soliciting the assistance of local
municipal councils to support the posi-
tion of the union;

@ Calling on the provincial govern-
ment to do likewise.

It pledged the labour council to sup-
port the Marine Workers Union in any
action it decided to take to protest the
scrapping of the project.

Fitzpatrick said the union would be
pressing that demand with the two local
Conservative MPs, North Vancouver’s
Chuck Cook and West Vancouver MP
Mary Collins who is also the associate
defence minister.

Ironically, both members had earlier
claimed credit when the project was
finally announced two years ago, after
repeated delays. For months before that,
shipyard workers had organized demon-
strations and lobbies to Ottawa and
worked closely with municipal councils.

“Now Collins is saying that people will
understand the need to scrap the project
because of the government’s deficit,”
Fitzpatrick said.

“But she'll have a hell of a job selling
that cock and bull story to people in
North Vancouver,” he said. “And we
intend to go after her.”

Pacific Tribune, February 26, 1990 « 3