BRITISH COLUMBIA

Taxes, cutbacks: budget highlights

B.C.’s Social Credit government has
set a budget for fiscal 1987-88 that con-
tinues the restraint program of the
former Social Credit government under
ex-premier Bill Bennett.

They do it in a smoother manner,
reminiscent of Ontario’s: Tories, with
some minor sops such as cuts to the
social service (sales) tax, the elimination
of the meal tax and a few other conces-
sions. But behind the facade of a “fresh
start,” the budget grants further tax
breaks to the wealthy and the corpora-
tions, while hammering the average tax-
payer and small business with tax hikes

and continuing the cutbacks in social

service spending.

And the budget is significant in what it
lacks, says the trade union movement
and other critics: meaningful job crea-
tion.

Highlights of the budget, for the fiscal
year 1987-88, include:

@ A cut in the projected deficit for
1987-88, to the tune of $321 million;

@ The elimination of the health care
maintenance surtax and the high income
tax (charged to the more affluent British
Columbians) coupled with an across-
the-board hike in personal incomes taxes
to become 51.5 per cent of the yearly
federal income tax;

@ An increase in the small business
income tax rate, to 11 per cent from eight
per cent; _

@ A new property purchase tax of one
per cent on transfers up to a value of
$200,000, with two per cent above that
level;

e A two-cents per litre fuel tax on
leaded gasoline; elimination of the meal
tax;

e A tax on insurance premiums for
corporations with head offices in B.C, a
move likely to precipitate an ICBC rate
hike;

e A corporation capital tax on all
banks and trust companies with paid-up
capital of more than $500 million, to be
offset by cuts in provincial corporate
income tax;

e Exemption of mining-related and
other materials from sales tax;

e A hike in minimum property taxes;

e A hike in minimum property taxes
from $1 to $100;

@ Five-per cent hikes in the support
portion of GAIN payments to families,
effective in June and again in December;
a six-per cent increase in the shelter por-
tion of GAIN Dec. 1;

e An increase of 3.4 per cent in the
health budget, to which Pharmacare ser-
vice has been added;

@ Introduction of a $5 fee for “sup-
plementary medical services” such as
chiropractors, and a dispensing fee for
,seniors using Pharmacare, to a maxi-
mum of $125 yearly; for below-poverty
seniors, a $125-hike in the GAIN rate to
offset this; a hike in the Pharmacare
deductible limit to $275 from $200;

e A 6.6-per cent hike for public edu-
cation, a 5.8-per cent hike for colleges
and universities, and a 42-per cent hike
for private schools;

@ Increases in JobTrac, the program
set up to employ mainly welfare recip-
ients; 5

@ A 28-per cent increase to silviculture
spending (Art Gruntman, regional vice-
president of the Canadian Paperworkers
Union, said the hike amounts to very
little and called the government’s lack of
commitment to reforestation “wrong
and short-sighted”.

Anti-free trade
fight gearing up
as Ottawa trying

new tack: Kashtan

The steadily increasing opposition to free
trade has forced the Conservative federal
government to try a new tack to sell the
concept to Canada, the leader of the Com-
munist Party of Canada said March 20.

“The government is trying other ways,”
including the establishment of a blue-
ribbon committee, Communist Party of
Canada general secretary Bill Kashtan told
an audience in the Vancouver East Cultural
Centre. :

The new committee — which includes
former Tory premier of Alberta, Peter
Lougheed, former Liberal finance minister
Donald MacDonald, and Thomas D’Aqui-
no, president of the Business Council on
National Issues — was struck by Prime
Minister Brian Mulroney recently to coun-
ter growing disinterest in the free trade con-
cept.

Kashtan, in B.C. on a speaking tour
entitled, “Canada is not for sale,” cited the
rise of coalitions in Quebec and Ontario and
recent polls showing less than 50 per cent of
Canadians support free trade.

He said the support for the idea on the
part of Canada’s largest corporations
“marks a change in corporate strategy —
the home market is no longer-big enough
for them.

“They're looking to sell to the U.S., even
though it means allowing the Canadian
economy to go hang and even though it
means unemployment for the working
people of Canada,” Kashtan charged.

The CP leader said that instead of free
trade with the United States, what Canada
needs is “multilateral trade with all coun-
tries.

“Particularly (Canada needs trade) with
the socialist countries, which can create not
only the basis for jobs, but also for the
diversification of industry Canada needs.”

Kashtan compared the “locking in” of
Canada to the U.S. with a free trade deal to
its integration into the arms race through
membership in NATO and NORAD, and
weapons testing agreements such as that
allowing cruise missile tests in Canada.

2 e PACIFIC TRIBUNE, MARCH 25, 1987

Despite the resurgence in efforts by
Tories and big business to revive free trade,
broad-based groups such as the Council of
Canadians are gearing up for a large media
campaign, while the Canadian Labor Con-
gress has recently met and outlined plans for
a campaign this summer, Kashtan noted.

“So coincident with the formation of this
big business coalition directed to try and
stampede the Canadian people into support
for free trade, there is a growing movement
of opposition,” he said.

“We've reached a crucial stage in this
struggle. If Mulroney wins, if the corpora-
tions win, it will seriously undermine the
sovereignty and independence of Canada,”

~ he warned.

“The stakes are high, and much depends
on the working class, and the fact is, that the
main force throughout the country at the
present time opposing free trade is the trade
union movement,” he asserted.

Noting that both U.S. President Ronald
Reagan and Prime Minister Brian Mulro-
ney are “going down the drain” in public
opinion, Kashtan remarked that “people
are getting fed up” with big business politi-
cians and capitalist attempts at solutions.

“They’re not yet as angry as they should
be, but they’re becoming more critical,” he
said.

The Liberal opposition is “at sixes and
sevens” over free trade and under leader
John Turner is hiding its policies until just
before the next election, Kashtan observed.

Meanwhile, national polls show the New
Democratic Party has the support of 33 per
cent of Canadians, which “shows that Can-
adians are looking at change,” he said.

“(Communists) are in a good situation.
We have a program, we have policies that fit
the situation and we are going to grow as
the policies we advocate and fight for are
supported by the growing body of Canadi-
ans,” Kashtan declared.

The Communist Party leader said that,
“We have a situation where athe NDP, the
trade union movement, the Communist
Party and the women’s movement all have

Communist Party leader Bill Kashtan says Canadian capitalists want expanded

market, irrespective of threat to economy.

similar positions (on free trade) and the
basis is there for a people’s coalition.”

Communist Party provincial leader
Maurice Rush said the recent tax imposed
under U.S. pressure on Canadian softwood
exports shows how Canada would fare
under any free trade arrangement.

He said the $300 million in expected
revenue from the tax “‘could have been paid
by the forest companies for years without
bankrupting them.” But that source of
revenue is likely to decline, with Canada’s
share of the U.S. softwood market falling to
about 27 per cent from the current 33 per
cent next year, Rush said.

“The American objective is to force the
amount of lumber that comes into the Uni-
ted States down even further. If (exports
don’t decline) they'll impose additional
duties, because the whole name of the game
is to lower competition from B.C. lumber.”

Rush in his speech accused Social Credit
premier Bill Vander Zalm of aping his
predecessor Bill Bennett by failing to make
clear his policies prior to the provincial elec-
tion.

“He did not say he was planning the
ae sellout of British Columbia,” Rush
said.

Noting reports that more than 100 busi-
nessmen have bids in for liquor store pur
chases, Rush said Vander Zalm has placed
services such as ICBC, the ferry system,
public transit, hospitals and Crown forest
lands on the selling block. Additionally, the
provincial government has allowed the sale
of companies, such as the Bank of British
Columbia and West Kootenay Power an
Light, to foreign concerns, he pointed out.

“And the ultimate sellout is that British
Columbia is foremost among the provinces
in pressing the federal government for a free
trade deal,” Rush charged.

Rush said the task for working people is )

“not to sell out British Columbia, the prob-
lem we face is to develop British Colum
bia.”

He called for a program of “massive”
silviculture and reforestation, munici
infrastructure renewal, shipbuilding and
using the province’s hydro-electric 1
sources to power new manufacturing indus
tries.

“We need in this province a massiv®
people’s fightback against this program of
selling out Canada and selling out
Columbia,” Rush declared.

TRIBUNE PHOTO — DAN KEETON

British