Winnipeg Free Press

Winnipeg Free Press (Newspaper) - September 3, 1981, Winnipeg, Manitoba Winnipeg free september Jim my taxes Are Fertile Fields for fights Ottawa there is potential for Many conflicts in the getting and spending of Canadian tax the parliamentary task Force on fed Cra provincial fiscal arrangements this week turned the spotlight on sever at such in the task forces primary recommendation that Federal Contra buttons to shared Cost programs be but with tighter control Over provincially administered spending i provides the groundwork for much bitterness Between the two Levels of gov the task Force made it Clear that any such As the billion Over two years proposed by finance minis Ter Allan would Cut into the level of service offered under share Cost this is an Issue that has already drawn a Strong Nega Tulve reaction from the the task Force recommends that the Federal share of funding be Contin but with a threat of cutbacks if individual provinces do not meet Feder Al criteria for programs such As medi hospitalization and pos Sec Mondary whether the provinces will take kindly to Federal setting of standards is there is also potential for major Federal provincial disputes in tax col a the Federal govern ment collects taxes for nine provincial and is Able to do so because of a considerable degree of harmonization in taxes could turn can Ada into some kind of tax Jungle if they introduced taxes considerably different from those now and vastly Dif Ferent from those of other and there is room for disputes with the Federal government if provinces wish to provide certain incentive taxes that put them out of step with the Federal governments but it is in a related area that the task Force sees the greatest potential for Federal provincial confrontation the no taxing of Crown Section 125 of the ban act states that no lands or property belonging to Canada or any province shall be liable to provinces cannot tax Federal Crown corporations located within the provinces and the Federal government cannot tax provincial Crown it is obvious to the task and has Federal ministers for some that the advantageous tax treat ment available to some provincial Crown corporations could make them formidable the tax exemption for Crown corporations provides an incentive for both Levels of government to convert profit Able private Industry firms to Crown corporation provincial hydroelectric several Telephone utilities and firms such As the Potash corporation of Saskatchewan pay no income to offset the advantage enjoyed by Crown the Federal government in some instances has refunded 95 per cent of Federal tax paid by investor owned the theory is that the funds will be used to reduce Cost of the service to Alberta is the Only province that returns income tax re Bates to the private Utility other provinces retain the rebate in general obviously the Federal government cannot become too insistent about the disposition of the because the Federal government itself takes profits of its Crown corporations into general for profits of the National harbours Board went Back to Peter Thomson Ottawa editor shipping costs would although the potential to deny other governments Access to tax revenues has existed since All have been Able to live with the problem to As the task Force in today climate of uncertainty in Feder a provincial the Issue of Crown corporations takes on a different it notes that until recently the Federal government limited itself to the use of the Federal corporate income tax to derive Money from the National Energy program of 1980 placed an eight per cent tax on All Petroleum production revenues As Well As an excise tax on pipeline a Case now before the supreme court of Canada might indicate the degree of Protection offered the provinces under Section the task Force notes that should the supreme court ruling favor the prov the producing provinces could turn a Large portion of their Oil and Gas industries into Crown corporations to shelter them from Federal it might be worthwhile for provinces to nationalize other industries so As to preempt the Federal government from deriving tax revenues believes it is justified in a proliferation of Crown corporations could have an effect on the National equalization at present the profits of Crown corporations Are included in the equalization formula As part of the provinces share of reve Nues from business but if provincial Crown corporations chose to offer goods and services at equity among citizens would suf Fer because those in the corporations Home province would be getting the advantage of cheap the task Force notes that Quebec recently required Quebec Hydro a provincial Crown corporation to pay a Royalty on its this will affect the provinces equalization entitlement because Revenue that would ordinarily be counted As part of Quebec business income will be shifted to another Cate the new policy might reduce que becs equalization entitlements very slightly while producing a significant new source of the the task Force is that the determination of Crown corporation profits is very the extent to which the Federal govern ment can rebate income tax or take other Steps to place private firms on a More equal footing with Public firms is very an amendment to the Constitution permitting taxation of Crown corporations might be appropriate or the Feder Al and provincial governments could agree to reciprocal taxation of Crown no doubt both courses would be highly the task Force there of another solution that was once argued strongly by a Deputy minister of he suggested the corporation tax should be re the tax after regarded As a Cost of doing business which simply has the effect of increasing in the corporate income tax is usually regressive this official the revenues could be More appropriately replaced with a con or tax the problem with that solution is that it is politically Crown corporations such As Hydro and Saskatchewan Potash get tax Breaks that private firms do not and could become an area of Federal provincial conflict Malta can offer lesson to policymakers by Flora Lewis the new York times Malta Maltas feisty prime Dominic has his own fight now with Libya Muammar after years of mutually rewarding so he would like the United states to come to his but there is a it implies a warning about the Pitfalls for the United states in making arms handouts a key instrument of a foreign policy focused on global rivalry with the so who often uses temper tantrums As a tool of but can also use suave puts his Case Malta is having ousted nato from the naval base that was a historic British bastion in the Meriter situated in the Narrows be tween Sicily and it played a crucial role for the allies in the second world because of technological and the Island no longer offers great military but there is still a negative value in denying it As a base to a potential that would be All the More important if Libya goes through with its unlikely threat of giving the soviets base so Malta has asked the United states to guarantee its making Clear that it intends to put the same request to the Mintoff is deliberately sketchy about what he Means by a and seemed to consider it an impertinence when i pressed him to say just what he he argues that its in the interest of the United states for Malta to refuse military facilities to any coun try and to remain what he Calls Equi Distant from the so Washington should show Concrete he says he wants arms from East and refusing any specifics about what kind of threat he thinks Malta by careful he suggests without actually saying that hell turn to the East alone if the West Doest come for reasons that Are not Obi has already signed a vague guar Antee agreement with Malta which pro Vides for a quite precise Grant of million plus million in soft Loans Over five years ending in mint offs Point is that the United states should do something similar since Italy might not be a fully reliable he has also asked Tunisia and Algeria for guarantees and claims to receive military advice from you it is As he that Malta is now but when he is asked what kind of arms he he mumbles about preventing a if is foolish enough to make the reference is evidently to khad whom mint offs supporters accuse of helping the opposition Christian democratic Leader Eddie Fenech Fenech Adami did get Thadda i to Call off a Boycott of maltese exports which threatened jobs earlier this but that is Only another example of the Tricky response any body who presumes to Deal with khad Dali can the which included goods produced i Libya owned factories in was part of the punishment a Qaddafi imposed after his Row with Mintoff last Libya also stopped other financial benefits and which it had been Selling to Malta at its internal distribution a Concession which amounted to a subsidy in return for mint offs effusive support for a Qaddafi and his attacks on the United states in International the two broke Over Maltas attempt to Drill for offshore Oil while Libya claims exclusive rights to the seabed 200 Miles from its though Malta itself is Only 150 Miles but there seems to have been a More personal quarrel which both still keep observers think it was essentially that each Man thought he could outwit the other and got angry at finding himself being in any Mintoff is fishing for new preferably before elections due by next and he Points out that he has definitely improved relations with the United that All to the it would be even better if Mintoff acknowledged some similarity in his problem with Libya offshore seabed claim and the problem with Libya offshore air space but he shrugging off the response to attack by shooting Down two libyan planes As none of his we Are not party to your dispute with he and its just As Well that mint offs own experience offers another Clear demonstration of what lies in store for third world leaders who think they can play with a Qaddafi without getting but mint offs attempt now to play off Washington and Moscow is also ill he has made an agreement to let the russians use the former nato hunkering but he wont Tell the Price he the lesson of All this is that the United states is Only offering itself for Ransom when it says confronting the soviets is so important it will Overlook local policies and ambitions in Distri buting its and it is Only feeding the problem when it establishes the provision of arms As the Token of the state department int fooled by which is now that Wisdom should be applied in far More sensitive crisis areas around the tories put ministers on display a Morden the sky was the Sun was Bright and the band music rang through the main some children began to coax parents for an adventure on one of the Many rides or lined up for Foo Long a growing number of people sauntered from one display to comparing prices of such items As leather paintings and while some of the older Folk clustered around reproductions of Early farming equip remembering How it used to be in Days gone there was a mixture of nostalgia and a proper mood for the opening of the 15th annual Morden Corn and Apple while it was occur ring in Manitoba in there was a i timelessness to the it would have made a perfect setting for a 1940sera Hollywood therefore it was also a perfect setting for obviously the organizers of the latest Cabinet foray were aware of the psychological Bene fits of such an event and decided that the like other should be appropriately on display at the proper time and the proper the opening of a Rural festival was an Ideal time because people who attend an event Are usually in the positive mood associated with the be ginning of most and Morden was the Ideal it is a prospering under the dome Arlene Billinkoff town in the prosperous constituency of a Riding which has been represented by conservatives for Many therefore it made sense to slow Down the Busy tour of the South Central pan of the province for an hour or two and give the politicians an Opportunity to mingle with very important people the actually this was Only a min Cabinet since some ministers were attending to other duties or taking the Day but judging by the Public the absentees were missing a Good emotional shot in the lets face there is something of the Ham in most politicians and they do like Public although their faces May not be As familiar As some their names usually ring a Bell after several years in for during the opening ceremonies of the Brian Ransom and Warner Jorgenson were seated quietly in the virtually but when the formal introductions were Given and each stood the murmurs they had been recognized and would continue to be recognized for the rest of the More the oohs and has seemed to have a positive the sounds May not have been quite As positive when the ministers met privately with local councils and other those people usually express concerns and ask for never while other areas May be cry ing the this part of the province is relatively with a healthy combination of agricultural and Indus trial including a plastics clothing Tupperware and Morden Fine in the food company office is a sign which the lord liveth and the government Tabeth that Mes Sage made Sterling Lyon Proba Bly because in this his govern ment had been the Morden Fine foods had been owned by the province and lost Money when the tories decided to sell that financial Burden for a Mere the nip hollered about an economic sellout which would Hurt the the new owners changed the policy of the company and expect to end this fiscal year in the Black for the first equally this Progress was being made with fewer the owner pointed out As he led the ministers through a group of unoccupied offices which would be turned into a daycare that move underlined the efficiency of private he despite the preference for private Over Public there was still need for government therefore the Premier announced Sev eral times a Grant for the upgrading of a senior citizens Resi As it was but it was not As mayor Friesen of Morden while his area had experienced steady grow eth for several dec things remained to be his Council had presented the ministers with a number of such As improvement of the towns sewage sys tem and the establishment of a Provin Cial and hoped for a positive therefore he welcomed the Cabinet with a series of compliments and hinted about his desire for future discussions with the ministers of finance and eco nomic he was proud to recognize these elected and when you Honor them the requests the Way we we will recognize you that was a but there was some the government was aware that it must give in order to receive and if Lyons approach was any the Pembina held by highways minister Don would receive its just i Hope this Orchard continues to be he and while it May have been a bad it was if the Pembina voters elected someone other than a the present government would be in serious that did not seem Likely in despite some it was Home territory and while the government May face problems in other parts of the in this area the tory band was Likely to play doonesbury ail i coup i ;