Winnipeg Free Press

Winnipeg Free Press (Newspaper) - November 13, 1981, Winnipeg, Manitoba 12 Winnipeg free november 1981 0 budget 81 homeowners offered Little help in budget 1 u flaws spotted in proposals Federal budget Aid to hard pressed homeowners will mean More jobs for Ottawa but wont do much for Manitoban forced to the Wall by High mortgage interest says Norm its no help at All to people pressed to the said the mortgage action committee he said the pro Grams guidelines will probably pose an administrative other Manitoban contacted said a recent dip in the Bank rate would be More help to most homeowners than the mortgage assistance scheme revealed in finance minister Allan Mac each ens budget last disappointed and most of the politicians and businessmen interviewed expressed disappointment with at least some aspects of sweeping budget changes hatched in Ottawa v provincial nip Leader Howard Pawley said he was disappointed with and sorry about the contents of the drawing the provincial election into his Pawley said the Federal budget was following in the footsteps of four years of conservative government in the budget does not Deal with the question of he and like the the Federal government is not adopting a positive role toward the Federal government schemes to As Sist Small businesses and homeowners facing High interest rates Are said Premier Sterling while campaigning in said the Federal program to assist Farmers and stimulation of apartment construction dont at first Blush appear to be finance minister Brian Ransom re fused to comment on the budget last saying he and his staff were in the process of examining it in Lyon and Ransom scheduled a press conference for today to comment in detail on the Federal financial pack provincial Liberal Leader Doug Lauchlan also said he would comment in detail today about the but expressed concern about the Bud gets implications for Lauchlan said he is disappointed that economic development expenditures in Western Canada will be Only Mil Down from billion announced in the last As Lauchlan said he is disappointed in Federal promises of Energy Price increases which will have an inequitable Impact across the coun with consumer provinces ing the it is vital that the provincial government that is elected tuesday Call the Manitoba legislature into immedi ate session to Hammer out its position on established programs financing which will be renegotiated under the new he Federal payments to mostly used for pos secondary Educa Tion and Are to be Cut by billion during the next five the government says part of the loss will be made up through increased income tax receipts for provinces under taxation agreements with Ottawa Worth progressive party Leader Sidney Green said the government brought this budget in because they were forced the province will feel the squeeze and some provincial parties will be Quick to loudly criticize the Federal he Green described the Federal Mort Gage assistance program As quite Jack president of the Winnipeg chamber of com said reaction to the budget has been very business people could have Swal Lowed paying More tax had the government made evident its commit ment to control Federal he they talk restraint and theres Al most no sign of government he pointing to the projected in crease in Federal spending from billion to billion during the next fiscal some of the measures outlined by the government will restrict investment and rather than the econ he a bitter Sharon spokesman for a Winnipeg group called Home owners against rising said the budget has done absolutely nothing to fight i think it is a 4 by Paul Pihi Chyn Winnipeg free press last nights Federal budget provides Relief Only to those homeowners who find themselves in the direst of dire finance minister Allan Maceachen set aside million to fund a series of measures aimed at helping Home owners hardest hit by High interest but at the same time made it Clear he was counting on the Banks and financial under Maceachen Home Allan Maceachen budget which taxes employee fringe makes provisions to encourage construction of rental housing and increases defence spending has drawn mixed proposed arrangements billion five year period 198283 to 198687 new Brunswick billion Nova Scotia billion Prince Edward Island billion Newfoundland billion British Columbia billion Alberta billion Saskatchewan billion Manitoba billion source current arrangements table j proposed arrangements tables 5 and Tat cat Ontario Standard for needy Ottawa up if Ontario can afford so can the rest of the coun at is the philosophy governing a proposed new Way of calculating equalization payments to the country six poorest prov under the proposed scheme unveiled in yesterdays prov inces with a Small or impoverished tax base lacking the per capita capacity to raise the same reve Nues As does would receive the difference through equalization equalization payments would then enable All provinces to provide services comparable to those which Public authorities in Ontario would be Able to finance with average rates of boasts a news release accompanying the Prince Edward is Nova new Quebec and Manitoba will receive almost billion during the next five years under the it was decided to change the for Mula used to calculate equalization payments when the traditional fat cat of suddenly found itself among the have not provinces and was technically eligible for handouts despite its relatively Selloff Ontario landed on skid Road be cause the existing formula uses revenues from Oil and Gas to help distinguish Rich from the importance of these revenues in the formulas put Ontario below the for Mulas poverty will the six poor provinces receive More or less Money under the proposed formula finance depart ment officials were asked that ques Tion last some said they did not know the answer and some said the provinces would receive but didst know How much by using a have not As the new average the Federal government in lowering the National Stan Dard in the but by increasing the importance of natural resource revenues and municipal the pendulum swings the other raising the National provincial government economists undoubtedly will spend hours at their calculators trying to deter mine if the pendulum has really swung their bringing More help from or will result in a net loss of owners who face a combined interest and municipal tax payment which exceeds 30 per cent of the Gross household income Are eligible for fed eral government homeowners with what Maceachen called a reasonable amount of equity in their Homes can obtain Relief by arranging with their mortgage Holder to defer part of the higher the government will guarantee the interest to a limit of when those mortgage payments Are More than 30 per cent of Gross in in the Case of households with Little or no equity in the and where interest deferral alone will not provide sufficient the government will write off up to 100 per cent of the interest deferred under its guarantee rental housing boosted the measures apply to All mortgages renewed Between and Maceachen said further details of the plan will be released by housing minister Paul Cosgrove when he introduces enabling amendments to the National housing in order to encourage the construction of rental the government will provide interest free Loans of up to for each to provide new rental units allocated to tight markets across the it was not immediately known How Many of these interest free units would be allocated to the units will be in addition to the units already scheduled to be built across the country in 1982 by the Central mortgage and housing Cor Federal officials will be meeting with provincial housing authorities to deter mine exact allocation of the new Maceachen his Maceachen said he wants financial especially to do i particularly want them to ensure that ample fund will be available to smaller borrowers at the lowest Possi ble margin of Cost Over the rates which they pay to their in a detailed paper on the budget which Maceachen tabled in the Parlia ment As part of his the minis Ter said about canadians face mortgage renewals before the Middle while renewal at substantially higher interest rates will almost in variably require some adjustment to household the increase in mortgage payments on renewal will in the vast majority of result in situations where actual ownership of properties is of those facing mortgage re Maceachen 65 per cent will be renewing five year Mort income growth Over those five years for the vast majority of these More than make up for the increases in mortgage payments upon Maceachen said that in few of these the renewal will result in pay ments of More than 30 per cent of the household he said Home owners will also find themselves in a better Cash flow position As a result of the general tax reductions offered to most canadians in the the budget paper concedes that very High interest rates have placed severe burdens on All but argues that savers were Able to obtain a return on their Money which More than compensated for the erosion of its real value by it says the government recognizes that the interest rate level is having a serious effect on some parts of the agricultural especially hard hit have been Farmers with Large who Are now having difficulty in meet ing their debt charges because of the combined effect of depressed Market prices for their products and rising input special loan rate to assist the budget offers a special loan rate of 1134 per five percentage Points below the Normal farm credit corporation rate of 16 per a total of million has been set aside to enable the farm credit corporation to make these special under the Loans would be written at the but a five percentage Point rebate will be paid Back to the Farmer for up to two there would be a loan maximum to any individual any Farmer demonstrating financial distress would be eligible for the in a bid to help Small Maceachen is offering preferred tax treatment to firms in financial difficulty the preferred treatment will apply to portions of interest rates at More than six per cent and is available to both incorporated and unincorporated Small Perks found going by Chris Smith Federal finance minister Allan Mac Eachen stuck both hands in taxpayers pockets last local businessmen and tax experts with one he put Money into taxpayers pockets through reduced tax rates with the other he took it Back with new taxes on employee Perks and they the budget received mixed reviews Here last night As business spokesmen and tax experts tried to sort out the mass of but they All agreed that it adds a number of items to the taxable offsetting benefits from a reduction in marginal tax plans Toad Farmers and Small businesses facing devastation because of High interest rates were hailed by local business but at the same time they were concerned the plans would not help enough saying the budget referred generally to those in financial distress without any savings and investment May be cur tailed by budget measures which eliminate or reduce the tax deductions Al Lowed for interest paid on Loans used for registered retirement savings plan resp contributions or invest they Rees chairman of the Manitoba Branch of the investment dealers said it was a very Short sighted budget in Many the incentives of yesterday Are the loopholes of Jones said of Mea sures such As the elimination of the resp loan interest had to borrow Many spokesmen said the majority of people borrowing Money for resp contributions did so not for the interest deduction on their but because they had to borrow the Money just to make the he said investment will be adversely affected by a similar move which limits the amount of loan interest an investor can deduct to the amount of Money he makes on the Jones said a reduction in capital Cost allowance provisions in the first year will make companies think twice about the budget reduced by half the current allowable deductions for capital he for a company until now could have deducted 30 per cent of the Cost of new machinery in the year it was but that has been reduced to 15 per the Only Good thing about the budget is the reduction in tax paid by those in the top bracket to 52 per cent from 66 per a number of tax experts but at same time employment benefits such As interest free company cars and More general Bene fits such As dental and extended healthcare plans will be taxable they Are just trying to tax every Benefit you get from employment said Ken Buckingham of the Institute of chartered he said extending the ceiling for the Low corporate tax on Small business to from is certainly a but those same Small Busin esses will now have to pay cent tax on dividends paid to their owners a new tax with this the Manitoba Chambers of com Merce have been advocating an in crease in that tax said spokes Man Alex but Maceachen really amounts to a catchup for inflation rather than a real he predicted the average taxpayer will see an increase in his pay Cheque because of the budget but he could not predict How causes hardships Al Brackman of the certified Gener Al accountants association said the budget causes hardships for those peo ple with capital gains because tax deferrals for income averaging annuities have been it Means some one with an unusually High capital gain in one year will no longer be Able to spread out the tax he called the taxing of employee including air travel As a Radical change and said it will change the Way some higher income earners will want to be they will take the Cash now rather than benefits which will be taxed As income in any everyone was pleased Maceachen retained indexing of personal income tax after reports that he wanted to end in Toronto the Canadian chamber of Commerce said that by overhauling the corporate tax system to plug Ottawa will restrict business investment at a time when it should be encouraging ;