Taxes, public spending cuts make people pay for deficit The federal Conservative government handed Canadi- ans a budget Feb. 26 that continues the Tory practice of social spending cutbacks, reducing job creation programs, hiking military expenditures and privatizing publicly- owned corporations. While it lacked the ham-fistedness of B.C. Socred budgets — prompting daily press pundits and big busi- ness spokesmen to term it a “something for everyone” budget — the reality is that it reflects the government’s right-wing philosophy by which working people and the poor pay for capitalism’s crises. Key features of Finance Minister Michael Wilson’s reduce-the-deficit budget are a lowering of the tax rate for corporations that will cost Canada $1.6 billion by 1990 and a 2.75 per cent increase in military spending as the government prepares to involve Canada further in the U.S. government’s first-strike war schemes. Additionally, Canada’s working class and lower middle class got hit with tax hikes, both at returns time and at the cash register. : Corporate taxes, which will undergo a rate restructur- revenue in 1986-87, while working Canadians will shoulder 43.2 per cent of the tax income tax burden. A series of tax breaks for business introduced in last year’s federal budget, as well as the $500,000 lifetime exemption on capital gains, remain to ensure that no hard times are in store for the nation’s monied elite. Such advantages will more than compensate the upper classes for the government’s across-the-board hikes to income tax of 1.5 per cent in the upcoming fiscal year, and three per cent next year. That comes from an income tax surtax that kicks in July 1. In contrast, a five- to 10-per cent surtax imposed on upper-class taxpayers in Wilson’s 1985 budget expires this Dec. 31. The finance minister reduced the surtax charged corpo- rations in last year’s budget. That five-per cent surtax will expire at the end of 1986, to be replaced by the three-per cent surtax in 1987 and succeeding years. Federal sales taxes of between seven and 14 per cent will be raised one per cent April 1. The “sin” taxes — alcohol and tobacco sales taxes — rose by four per cent and six per cent respectively, effective Feb. 27. Lower-income earners get it in the neck even for conven- iences such as air travel. For domestic flights, tickets under $556 are hit with a maximum $50 tax, with less tax on fares above that level. Token credits for the poor — defined as those families with a $15,000 or less per-year income — include a $50 tax rebate for adults and $25 per child at tax returns time, and a $300 cheque for per-child tax credit paid before the return is filed. The attack on Canada’s estimated four million poor is intensified with the government’s continued social spend- ing cuts, including a $100-million chop to the job creation budget in 1987-88. That comes on top of a $200-million cut in 1986-87, announced in last year’s budget. Wilson said there will be further divestment of Crown corporations, in line with the recent sale of deHavilland aircraft to the private sector. He also gave Canada Post less than two years to eliminate its deficit. The new budget reflects the reduction in fiscal transfers to the provinces for health, housing and education. The government also plans to eliminate some 5,000 federal civil Business spokesmen have generally praised the budget which has been condemned by labor, women’s and com- munity groups, and the opposition parties. 6 e PACIFIC TRIBUNE, MARCH 5, 1986 ing, will account-for 13.4 per-cent. of total government=—-.-. = -s- = ~ = = corsa MAS More) wm a ipeat i visas Hstsooiisg at monid-t dd vilnses Unity can defeat } Tory budget attack’ “Federal Finance Minister Michael Wilson’s budget spells increased hardship for working people and a bonanza for corporations,” the Communist Party’s central executive committee said in a statement issued Feb. 27. “He obediently carried through the wishes of the trans- nationals and Canadian big business.” The statement continues: Canada got Chapter 2 of the Tory, neo-conservative agenda. Tory times are hard times for working people and good times for corporations. Chapter 3 will be even worse with attacks on Unemploy- ment Insurance and other social programs in the offing. The budget does nothing to relieve the huge unemploy- ment problem except, as Mr. Wilson put it, “Leave job creation to the private sector.” It does nothing of conse- quence for youth or for women, the two most affected sec- tors when it comes to unemployment. The budget held out little for the mass of working farmers at the brink of ruin. Mr. Wilson, his ears ringing with the demands of the bankers of Zurich, London and New York, and the money changers of Chicago and the big corporations, makes a great deal about the size of the deficit. He then goes on to use it as the justification for every anti-people measure in his budget. The deficit should have been reduced in a manner that favors working people by: @ Putting Canada back to work and thus automatically reducing the outflow in Unemployment Insurance and welfare and boosting revenue from the rapid growth in the home market; @ Slashing the arms budget; @ Halting the outflow of billions in foreign profits each year; @ Taxing back the super profits of the banks which derive from outlandish interest rates; © Calling in the billions owned in deferred corporate taxes. But no! All deficit reductions derive from taxing work- ing people further —$1.5 billion immediately, with $7.5 billion over the next five years, by hacking government spending to the tune of $.67 billion, most of it from sq useful programs and by putting the lid on social spend Many of the budget provisions are directed to m Canada even more attractive to the U.S., especially regard to military matters and free trade. The increase arms spending will strengthen the trend to military in tion with the U.S through Star Wars via NORAD. The trimmed social programs, the drive to dereg and privatization are all designed to make Canada attractive on the free trade auction block. Important adian institutions such as Via Rail and Canada Posty forced to raise the price of service — at the expen working people and to the advantage of the pra privately-owned competitors. What is needed is a people’s budget that will: @ Put Canada back to work through policies employment, higher wages and salaries to raise the ples’ purchasing power; reduction of hours of work same rate of pay; earlier voluntary retirement with bet pensions; a massive program of public spending to pn erly house Canada and to build related facilties; a la program of renewal of the urban infra-structure; @ End the shame of poverty in a rich land; ® Show that Canada stands for peace and d ment; @ End regional disparity. Instead, Canada got a corporation budget. Mr. again proved that the interests of the corporations working people are completely divergent. This budget must be defeated. Mass actions aspects of the previous budget, such as the move | index pensions. this budget can be defeated. What is needed is a united fightback of the tra movement and the democratic movements of women, youth and students, Native people, seniors poor, the NDP and the Communist Party. ‘ Such a people’s movement could win a people’s bt Build a people’s majority outside parliament to the Wilson budget! :