Canada budget: little for poor, little from corporations FWD

Tom Boland (
Wed, 17 Feb 1999 20:27:57 -0800 (PST)

FWD  Toronto Star [News Story] - February 17, 1999


 IF YOU ARE a middle-class Canadian with young children, you'll love Paul
Martin's boost of spending for hospital care, his modest personal income
tax cuts and increases to the child tax benefit.>

 If you happen to be a university-educated professional, you'll applaud the
additional funding for research and innovation and the removal of the 3 per
cent surtax.

 If you are a market analyst, a business executive or a Reform party
member, you'll note approvingly that the finance minister allocated $3
billion toward paying down the national debt and left corporate taxes

 If, on the other hand, you happen to be homeless, out of a job or scraping
by on welfare, you'll find nothing to cheer in the 1999 federal budget.

 Martin argues every Canadian will benefit from shorter hospital waiting
lines. He has exempted more low-income Canadians from having to pay
personal income taxes and boosted the child tax benefit for poor working

 ``Working'' is the significant word here. Five successive Liberal budgets
have widened the gap between two types of poor: the working poor who still
file income tax forms and so can benefit from the new Liberal tax credits;
and the poor sleeping in the streets or lining up at food banks.

 There's little in yesterday's budget for the worst-off Canadians. No
restoration of benefits for the unemployed. No new infusion of money for
social assistance.

 When Jean Chretien's Liberals hacked social spending in 1994, unemployment
insurance was trimmed by $5 billion a year. There's no sign the feds ever
intend to restore eligibility to the hundreds of thousands of jobless cut
off by strict new rules.

 Similarly, the old Canada Assistance Plan was rolled in with health-care
funding going to the provinces. Health care now gobbles up the lion's share
of what is called the Canada Health and Social Transfer. Martin has poured
billions back into the CHST in this budget, on the proviso the new money be
used exclusively for health care.

 Federal social assistance now amounts to a tax credit, introduced two
budgets ago, which is called the Child Tax Benefit. It's a federal cheque
that goes directly to working-poor families with children, and when fully
implemented will cost the government $2 billion - a third of what was once
spent on the old CAP. Today, there's nothing for the misfit sleeping on a
grate, or the other forgotten poor.

 They have no political clout, of course. When the homeless demonstrated on
Parliament Hill last week, Liberals and Reformers dismissed them as
``professional agitators.'' Conservative Leader Joe Clark went out to talk,
and was roughed up, but at least he demonstrated concern.

 Chretien and Martin have other political priorities. Announcing $7.9
billion over three years for health care should defuse the nasty tensions
that had been building with the provinces (except Quebec, of course). The
premiers, who had threatened to become Chrétien's unofficial, and
only real, opposition, have mostly been pacified and the Liberals'
reputation as good national managers restored.

 In Parliament, the only heat comes from Preston Manning's Reformers, whose
loud demand for tax cuts has managed to create the impression that
Canadians can pay a lot less but still get better health care. Martin
wisely declined to go back into deficit to deliver major tax relief,
although he promised cuts closer to an election. He delivered just enough
to counter Reform's tax-busting crusade.

 What may go unnoticed amid the headlines on billions for health care is
that Martin spent nearly as much of last year's surplus on reducing the
federal debt as he did on health care. $3 billion went to the debt, and
$3.5 billion up front for health care. Think what some of that $3 billion
debt repayment might have done for the jobless.

 But that would have meant taking on the business elite, the Reform party
and all the right-wing think tanks and market investors who have declared
the debt a priority.

 Martin is very careful to not alienate the allies who gave him such strong
backing during his first three years of deficit-fighting. He hasn't begun
to tackle glaring inequities in the tax system. Federal revenue from
personal income taxes and the goods and service tax (the tax that was
supposed to be scrapped) continues to grow, hitting ordinary Canadians in
their pocketbooks.

 Meanwhile, corporate taxes account for the lowest proportion of federal
revenue in decades, and falling.


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