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Council votes opposition to sales tax

On the initiative of the Committee of
Progressive Electors, Vancouver city coun-
cil in a near-unanimous vote Aug. 29 con-
demned the federal government’s contro-
versial Goods and Services Tax.

In doing so, they rejected a mild report
from senior city officials that called for
some modifications to the tax, and instead
adopted a motion from COPE Ald. Harry
Rankin that “this council go on record as
opposing the proposed federal sales tax.”

Aldermen and the mayor also ordered
the city’s finance department to prepare a
brief, at a cost of $25,000, on the effects of
the tax on city finances to be presented to
the federal government’s standing commit-
tee on finance chaired by Tory MP Don
Blenkarn.

And council agreed to an additional
motion from Rankin that the committee,
which will hold hearings on the tax in Van-
couver on Oct. 2 or Oct. 3, be urged to allow
everyone who wishes to appear before it to
speak. A government ad which appeared in
local newspapers mid-August invited par-

ticipation, setting a deadline of Sept. 15, but
did not guarantee that everyone who sub-
mitted a brief by that date would be allowed
to address the committee.

Instead, the advertisement stated: “After
reviewing the briefs received, the committee
will select those individuals and organiza-
tions it wishes to hear.”

Council members attacked that provi-
sion on the grounds that it violated demo-
cratic principles.

Former COPE alderman Bruce Yorke,
who heads the newly formed Vancouver
Consumers Committee Opposed to the
Nine Per Cent Tax, told council he wrote
Blenkarn on Aug. 16 calling on the commit-
tee chair to open the hearings to all inter-
veners.

“So far I’ve received no reply — not
even an acknowledgement,” Yorke said.

Yorke told council that the proposed
GST represents the latest in a massive shift
of taxation away from the corporate sector
and onto consumers. He noted recent arti-
cles calling the tax “an $80 million

How we'll be gouged
by government's GST

Here are some quick facts about the pro-
posed federal Goods and Service Tax
(GST):

@ The federal government plans to
impose this new tax on the Canadian public
on Jan. 1, 1991.

@ The starting rate will be nine per cent.

@ It will be applied to almost all the
goods and services we buy.

© But groceries will still go up in price
because the cost of packaging them and
transporting them to retail stores will be
taxed.

® The new tax will cost consumers $27
billion a year ($4 billion for every one per
cent of the tax). This makes it the biggest
single tax grab in Canadian history.

® The additional taxes will mean the
equivalent of more than $1,000 a year for
every man, woman and child in Canada!

® If your family is earning $30,000 a year

and half of it is spent on goods and services
not exempt, you will pay an additional
$1,350 for just this one tax.

@ It will take $3 billion out of the B.C.
economy each year, half of that from resi-
dents of the Greater Vancouver region.

® Federal Finance Minister Michael
Wilson told the House of Commons when
he delivered his budget speech last April
that the GST will not be a hidden tax, that it
will be added on at the cash register for all to
see. Since then he has stated that it will be a
hidden tax after all, that there will only be a
sign in the place of business stating that an
additional nine per cent tax must be paid.

This means that firms supplying the
goods and services could be adding 10, 20 or
30 per cent to the price and consumers have
no way of checking up. The GST isa license
for unlimited profiteering.

® The GST will replace the Manufactur-
ers Sales Tax of 13.5 per cent which today is
levied on goods manufactured in Canada.
Manufacturers add it on to the price. The
consumer pays the tax. It brings $15 billion
a year into the federal treasury. When this
Manufacturers Sales Tax is abolished, the

2 e Pacific Tribune, September 4, 1989

price of Canadian manufactured goods
should come down by 13.5 per cent.

Even government officials admit that this
will never happen. The manufacturers will
keep the price where it is and pocket the
13.5-per-cent reduction in their costs as an
extra profit. The refusal of the government
to do anything about this means that it is in
fact forcing consumers to subsidize manu-
facturers to the tune of $15 billion a year.

© Finance Minister Wilson said the tax
will be revenue neutral, that is, it will just
replace the Manufacturers Sales Tax and
not raise any more money. Now he admits it
will raise almost double that amount and
will be used to lower the deficit.

© Government finance officials admit it
will raise the rate of inflation by two to three
per cent.

© The new tax is a booby trap. It can be

raised at any time and it can be extended at
any time to include groceries and the other
things now exempt.

Mel Couvelier, B.C. minister of finance,
was right on when he said that the GST is a
means of “taking the tax burden out of the
corporate sector and placing it on the con-
sumer.”

The deficit wasn’t caused by government
loans to cover the cost of social services such
as health care, pensions, or family allowan-
ces. It was caused by loans made to cover
the loss of federal revenues due to the huge
cuts in taxes to big corporations made in
every Tory budget since 1984.

The way to reduce the deficit is not by
placing more taxes on working people. It
can be accomplished quickly and efficiently
by:

S Compelling the big corporations to
pay their fair share of income taxes. Start by

-forcing them to cough up the $34 billion

they owe in deferred taxes.

© Bringing down interest rates. Every
one per cent drop in interest rates would
mean a saving of billions in interest pay-
ments on the $32 billion debt we now have.

bonanza” for business and reporting that it
will cost Vancouver home buyers an addi-
tional $5,100 — not the $1,650 claimed by
federal Finance Minister Michael Wilson.

He criticized a report from city manager
Fritz Bowers and finance director Don
Forss for regurgitating the federal govern-
ment’s position on the sales tax and for not
dealing with the impact of the tax on the
living standards of Vancouver residents.

Yorke said a recommendation in the
report calling on Ottawa to reduce the fed-
eral deficit could amount to “another slash
in essential services, already under severe
attack.”

However, Yorke said, the report is accu-
rate in pointing out that the GST may not
remain at the currently planned nine per
cent.

: The report observed that “given. ..the
significant revenue that can be generated
with small increases in the federal sales
tax — estimated at $2.5 billion per percen-
tage point — the possibility of sales tax
increases cannot be dismissed. . ..”

Yorke said real alternatives to the ta%
include cutting defence spending which, he |
noted, has not decreased as many think but |
in fact is budgeted to increase by two pe
cent per year. And the government coul
begin calling in some $30 billion in deferred
corporate taxes, at the rate of $3 billion pe!
year, Yorke suggested. :

During the 1%-hour debate, council
members, including several from the right-
wing Non Partisan Association, slamm
the proposed sales tax. :

Ald. Philip Owen denounced the tax i1@
lengthy speech, while Ald. George Pull
— the most conservative of the A
members — called the proposed tax “out
rageous.” aay |

Puil also leveled fire at fellow NPA Ald.
Gordon Price, who claims membership
the New Democrats. Price refused to vol
for the motion against the tax, claiming he
was not convinced of its regressive natult-

Puil said if the session had been covere
by television, “I would have walked out i?
disgust” over Price’s remarks. a

Continued from page 1
the company paid the provincial govern-
ment in 1988.

This is a lease price, and includes an
anticipated $22 per square foot in com-
bined federal and provincial subsidies,
leaving the city to raise the additional $6
to $8. At the termination of a 40-60 year
lease, the city will have the option to buy
the land outright.

According to a Globe and Mail
report, the city hopes to receive special
grants from the senior governments for
the project, but federal Minister of State
for Housing Alan Redway said the

_ chance of that “‘is pretty well zip” due to
spending restraints.

The deal underscores the scandalous
nature of the sale of the Expo lands by
the B.C. Enterprises Corporation, a
Crown company, to developer Li Ka-
Shing for a fraction of what the land is
actually worth. The government claimed
the sale price was $320 million, but critics
have said it is actually more in the range
of $125 million to $145 million, in 1988
dollars.

(The controversy increased when it
was discovered early this spring that
much of the land is contaminated by
industrial toxins, and that the province
had agreed to pay the clean-up tab,
which could amount to between $100
million and $300 million for the entire
80-hectare site.)

COPE aldermen had proposed earlier
on that the city make a bid for the Expo
site. But this was rejected by the Non-
Partisan Association which dominates
city council. Since then, the NPA major-
ity has also voted down COPE motions
to open the question of development of
the site to public input, opting instead for
working hand in glove with Concord
Pacific on a development scheme that
includes high density projects exceeding
normal city zoning bylaws. :

The B.C. Assessment Authority has
estimated the value of the Expo lands at
$500 million to $600 million once the city
approves the zoning.

COPE and various housing and anti-
poverty groups had pushed council to
press Concord Pacific to release at least
one-third of the site for social and non-
market housing. That was voted down,
with the NPA majority limiting the con-
dition to only 20 per cent of the site, in
return for zoning considerations.

Rankin also slammed the scheme of
handing over city owned land to a pri-

Housing ‘a disaster’

"will not answer the needs of Vancouver's

——

vate company, VLC Properties Ltd.,
introduced by Mayor Gordon Campbell
earlier this year.

Council on Aug. 29 voted, over the |
opposition of COPE aldermen Rankin, |
Libby Davies and Bruce Eriksen, along
with NPA Ald. Jonathan Baker, to lease
14 city-owned properties without tender
to VLC and invest $2 million in the com-
pany. Company president Jack Poole
has until Sept. 30 to raise $18 million |
from private sources.

Rankin, charged. thatthe. scheme, ||...
struck by the mayor and private devel-
opers in secret sessions this spring, means
the public is subsidizing the developers.
And he said the 1,800 units to be built

lower-income residents.

“We have the greatest building boom |
in the history of this city, but it’s all
offices and high-priced condos. Mean-
while, we have a smaller vacancy rate
than at any other time in the city.”

“Its a scam, because it will only
supply a small portion of housing for
those at the lower end of the market. It
won’t provide social housing. We're giv-
ing away millions of dollars for a pig ina
poke,” Rankin charged.

Rankin told council during a 3 hour
debate that 50 per cent of the staff at city
hall would not be able to afford the rents.
One-bedroom units are expected to rent
at $600 per month, with two-bedroom
and three-bedroom units costing $800-
$1,200.

He said that council must impose a
moratorium on the demolition of affor-
dable housing, and that city-owned land
should be used to provide social housing
built by the city.

Last May several organizations, inclu-
ding the Tenants Rights Action Centre,
Vancouver Status of Women and the
Vancouver Food Bank released a joint
statement with recommendations on
solving Vancouver’s housing crisis.

The statement noted the increased
demolition of affordable housing, land
speculation that has led to property flip-
ping and skyrocketing land prices, and
the wiping out of tenant protection by
the provincial government in 1984.

Among its recommendations were a
rent review system, a provincial Rental
Housing Protection Act, government
funds to upgrade existing accommoda-
tion and to build 20,000 new social hous-
ing units in the city, and a speculation tax
on profits from land sales.

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