Women line steps of Vancouver Art Gallery during May 6 demonstration in
which more than 1,000 farm workers and supporters marched to protest
regressive changes to Unemployment Insurance. Canadian Farmworkers
Union president Sarwan Boal pointed out that the raising of the UI waiting
period will force many of the Fraser Valley’s 12,000 farm workers onto welfare
since few jobs last more than 10 weeks.

New tax policy, rate
cuts answer to debt

The government of Canada would have
us believe the national debt is a serious crisis
that needs immediate and drastic action.
Should this not occur, other nations may
lose faith in Canada’s ability to manage its
financial affairs. Nothing could be further
from the truth.

To whom is Canada in debt? Fully 82 per
cent of the public debt is owed to Canadi-

~ ans. When Canadians buy government

bonds, (and 91 per cent of bonds are owned
by Canadians), they hold part of the
national debt. When government spends on
roads, schools, hospitals, sewers, the
amount does form part of the debt, but
Canadians are also left with valuable assets.

Business blames the debt on government
spending, but Ottawa’s spending has been
quite tight-fisted since 1985. In fact,
government will take in $12 billion more
than it spends on programs and administra-
tion (excluding interest payments) this year.

Michael Wilson doesn’t mention that,
nor does he note that the debt load is so
large because of the huge amount of interest
government pays on the debt — interest
rates that he largely sets.

The debt is therefore a mask for raising
taxes on working Canadians and cutting
social programs — part of the free trade
agenda.

Canada’s debt problem can be tackled
both by bringing down interest rates, and by
instituting a progressive taxation policy.

Government has sufficient revenue sour-
ces, it just has to tap them in a rational
manner.

Our current taxation system is neither
rational nor fair. There are thousands of
upper income Canadians who pay no tax at
all. On the other hand, middle and lower
income Canadians are paying between 20
and 40 percent of their income as tax. How
is that possible?

The tax rules are written for business, not

workers. A person who borrows money to
Start a business is able to write off the
interest on the loan as an expense. The
accumulated net worth of the business on
unrealized capital gains is not taxed. Thus a
business person can accumulate millions of
dollars in net worth and not pay a penny in
income tax. Workers on the other hand pay
tax on virtually every penny they earn.

This system obviously works for the
wealthy. In 1987, 287 Canadians with
incomes over $250,000 paid absolutely no
income tax.

The combination of lost revenue due to
little or no taxation of the rich and deferred
taxes for corporations plus government
handouts to corporations in forgivable or
interest free loans is what has contributed
to the lack of revenue, which in turn creates
the national debt.

The alternatives are reasonable: tax those
who can most afford to pay. Wiping out the
capital gains gift would raise about $900
million in revenue. Restoring the 34 per cent
tax rate for those earning over $60,000
would bring in an additional $600 million a
year.

And how about a wealth tax, such as is in
place in most European countries? This tax
is based on a person’s net worth and annual
income. In Canada the top 20 per cent of
Canadian income earners received 43 per
cent all personal income and own 69 per
cent of all net assets. Even a one per cent tax
on this base would yield between $10 and
$20 billion a year.

And why not a tax on corporations?
According to the Pro-Canada Network,
89,000 profitable companies with total prof-
its of $22 billion paid no corporate tax at all
in 1986, Even if the government were to
force corporations just to pay up their back
taxes, which total over $30 billion, the
deficit would almost be eliminated.

With files from Bob Abrahams

GREETINGS
from
C.P.U.
LOCAL 1123

Ottawa still holds to
cold war white paper

By FREDA KNOTT

VICTORIA — On April 27 I was
preparing to leave for Ottawa to join a
delegation of Canadian Peace Alliance
representatives from across the country
to lobby Defence Minister Bill McKnight
on the proposed purchase of nuclear-
powered submarines, when a news
report on the radio caught my attention.

It stated that the federal budget had
been leaked to the media. Among the
other budgetary items it reported that the
nuclear submarines had been cancelled
and that 14 military bases would be
closed or downgraded.

My first reaction to this announce-
ment was, “Hurray, I don’t have to go to
Ottawa.” But just a minute, I told myself.
That’s just one item on a whole list for
discussion. So I finished packing and left
for Ottawa.

Fifteen people, from Victoria to
Halifax, met with McKnight on Friday
morning, April 28, for one hour. Among
the lobbyists were representatives from
the Canadian Labour Congress, the
Voice of Women, Operation Dismantle,
the Canadian Peace Congress, Green-
peace and various regional peace groups,
including myself representing peace
organizations in B.C.

We began by presenting our concerns.
We told the minister we appreciated the
cancellation of the submarines and
hoped that this was a prelude to scrap-
ping the defence white paper — particu-
larly its premise that the Soviet Union is
the enemy.

We asked that cruise missile testing be
stopped and that nuclear powered and
armed warships be banned from Cana-
dian ports. We insisted that low-level
flights over Nitassinan must be halted
immediately as these pose threats to the
health of, and cultural and moral
assaults on, the population.

We expressed our dismay at the pros-
pect of a permanent NATO base on
Canadian soil at Goose Bay, Labrador.
We pressed for an end to chemical and
biological warfare research and a full-
scale inquiry into it.

The closure and downgrading of mil-
itary bases we hailed as a good move, but
we felt that bringing home the forces
from European soil would have been
wiser. And we noted our concern about
the unemployment this move would
cause. We asked: would funds be availa-
ble for conversion of the bases to peace-
time use? Finally we called upon the
government to work towards a Compre-
hensive Test Ban Treaty.

McKnight’s response to these con-
cerns was less than satisfactory.

He claimed that the submarine pur-
chase was cancelled due to lack of funds

only; that the pressure of the peace
movement had no effect on the decision
and that if funds were available the sub-
marines would be built tomorrow. The
defence minister stated that the govern-
ment’s goals have not changed: the white

_Paper is intact and is being updated

annually.

The cruise missile, McKnight said, is
not an offensive weapon. In fact it can be
used to calm fears, he claimed. The low-
level flights he called an international
obligation to which Canada must con-
tribute.

Regarding the Innu protests, he stated
that he had tried to talk with them
unsuccessfully. They have rejected any
discussion, McKnight contended, but
said that the government is starting to
look into the worries of the Innu.

The minister claimed that Canada is
not involved in chemical weapons devel-
opment and there is no need for a public
inquiry.

There are no dollars available for the
conversion of closed bases, McKnight
said. However, there will be some
retraining and relocation of the person-
nel. He assured us that although there
would be a loss of jobs, the hardware
would not be touched. The government
will continue to maintain a presence in
Europe in line with Canada’s NATO
commitment.

McKnight was pleased that the War-
saw Pact is talking of reductions, but said
he wants to see these carried out before
Canada responds.

McKnight concluded by saying that
public opinion is a fleeting thing (in
response to our pointing out that polls
have shown Canadians do not want
submarines and the other military items).
The electoral process, he stated, is the
way for Canadians to express their views.
He did not acknowledge that the major-
ity of Canadians did not vote Conserva-
tive last November.

Later in the day we met with the New
Democratic and Liberal caucuses. We
were disappointed at the poor turnout
for both, but realized that since it was
Friday afternoon, many MPs had left for
their constituencies. We had frank dis-
cussions with the MPs that attended and
came out feeling more optimistic than we
had about the McKnight meeting.

The experience of lobbying in Ottawa’
was a new one to me and quite an eye-
opener. I believe it serves a purpose in
that we confront politicians with our
concerns.

However, it is necessary to carry on
with activities in our communities, to
make the public aware of the dangers of
continuing the arms race.

Freda Knott is a Victoria peace activist.

GREETINGS
from the
Canadian Yugoslav
Community Association

... joining other Canadians
in opposing the federal budget.

Sec

Pacific Tribune, May 15, 1989 « 3

Se ee Ee ae ne ee ge ee