Winnipeg Free Press

Winnipeg Free Press (Newspaper) - December 11, 1981, Winnipeg, Manitoba Winnipeg free december 1981 7 by Joan Cohen Ottawa editor Ottawa on the eve of the second round of ministerial discussions on Federal Cash Transfer payments to the prov Canadas senior governments seem to be arguing As much about numbers As about in most provincial capitals the computers Are working As finance officials attempt to work out the Impact on their treasuries of Ottawa proposals for renewing its five year fiscal payments so Are the Long distance phone As provincial officials share the information they have produced on the effects of the Federal legislation is due to go before parliament in february establishing new procedures for calculating equalization payments to the provinces and renewing the Cash Transfer arrange ments for health services and pos secondary ministerial discussions resume monday in Toron but just one month after Federal finance minister Allan Maceachen Laid out Ottawa proposals in his Federal provincial officials Are worrying that the clock is running out with far too Little known about the effects of the Federal for the the most controversial Issue by far is Ottawa plan to drop its existing method of calculating equalization payments to Cana Das have not now number ing under the Ottawa would compensate All provinces whose per capita Revenue base for their and taxes Falls below that of the pay ments would go out to Quebec and the Atlantic to bring their per capita revenues up to the Ontario which has come up with calculations Indi Cating a possible loss of million in 19821983 As a result of the proposed change in equalization provides a classic example of the kind of confusion and uncertainty now much of the blame for this confusion must be Laid at the Federal governments in Ottawa this Federal finance officials declared themselves totally mystified by Manitoba these officials admit the new Mac Eachen proposals will result in a very slight Tilting of future pay ment increases away from Manitoba and toward the have not provinces of Atlantic but they insist that using new raw data just dispatched to the should be Able to determine to its satisfaction that its forecast losses about million in equalization payments in the coming five year period just Are not in the Federal estimates suggest that equalization payments to the prov which Rose at an average rate of million annually under the current five year will climb by Only million to a total of million in the first year of the new equalization after they Are forecast to Rise by million far More sharply than under the present a this growth line on its own appears to strongly contradict Manitoba but Ottawa from budget night to the has steadfastly refused to produce figures that will show whether the provinces would be ahead or behind under the new a Federal officials argue that there is simply no need to calculate what the existing formula would produce next year when they have absolutely no intention of using that formula after next april Ottawa maintains on this Over Cas provinces fear Ottawa policy will Cost them Money for the there seems to be no contradiction that the formula has outlived its in officials Here say the along with a commons committee studying the fiscal arrangements and the Aca Demic Community have All proposed an the present formula has been patched and pinned and patched again to keep it in some sort of working order through the past five Why officials fiddle around with those figures any longer the provinces cannot Budge them from that All they can get is a Federal calculation somewhat iffy in the present economic climate that equalization payments will grow at 4a per cent a growth rate pretty much in line with past growth oblivious most of us probably live out our lives blithely oblivious to the work Ings of Canadas equalization pro we know it is designed to bring revenues in the poorer provinces up to some National so that All prov inces can provide a Basic Standard of but few of us would have noticed Over the past Hal decade the Patching and pinning Ottawa put its decade sold formula through As re source moneys began accumulating in the coffers of the Western prov Ottawa had no intention of boosting its Grants to the have not provinces to match the funds above into Albertas trea this after did not Mirror any change in Revenue needs so Ottawa five years ago adjusted its so that Only a third of re source revenues were considered in calculating the equalization entitle ments of the have not then it put a the straight Dollar amount of resource revenues that would go into the equalization and made a series of other three years it discovered that despite these adjustments and with a visible Westward shift in economic activity generally Ontario reve nue position had slipped below the National All its other tax wealth did not compensate for its comparative dearth of resource neither proud Ontario nor Ottawa saw itself rapidly becom ing liable for equalization payouts of up to billion liked this and last Winter special legislation was approved by parliament exempting Canadas once richest province from have not All this begins to explain Why Ottawa officials started fishing around for a new and ended up with a plan that simply measures the reve nue base of each province against that of any province with less tax raising potential gets an equalization Allan Maceachen budget papers last month gave an elaborate description of what this new formula is de signed to but it did not take the provinces Long to discover an important fact Maceachen had not because Ontario has virtually no Energy Energy revenues will no longer have any effect on equalization Ottawa officials do have a reason Able explanation for using the Ontario their calculations show that it should result in equalization pay ments rising at about their historic they that Ontario has always been viewed As having a healthy Economy and High Standard of and thus its income Levels Are a Good target to aim turns Back clock the Ottawa proposal brings Munici pal property taxes into the Revenue it also turns Back the clock and counts All provincial re source the change does not help the have not but it virtually guarantees that Saskatchewan will remain with the and sometime in the future Newfoundland and Nova Scotia will shoot quickly up to have status As once their offshore resources Start going on the Ottawa calculates this will come sometime after officials Here Are Adamant that Ottawa could not tolerate a set of equalization arrangements that either pushed Ontario Down to have not status of that artificially denied it Access to equalization the present special after has meant Ontario Money raising capacity right now is the lowest per capita in the All the have not provinces Are through equalization to a Standard per Ontario alone Falls slightly below that at least some of the have not provinces Are expressing doubts about a formula that ties their Revenue prospects to the destiny of a single Ontario has taken a hard look at the proposal and decided it is a fair except for one Brock Ontario assistant Deputy minister responsible for intergovernmental i wistfully recalls a Long ago on Tario proposal for a tier of Revenue sharing that would redistribute a portion of the wests Energy wealth to the no resource the Smith was a non starter at the like the other mean Ontario is carefully checking out Maceachen calculations regard ing future Transfer it has its own questions to raise about Maceachen budget project ions for growth in the Canadian econ As is widely the minister has failed to recognize the depth of the current economic the miscalculations will be Felt in tax Revenue if on Tario is particularly badly hit by the Maceachen projected equalization payments will not materialize for the other these and other Revenue each with critical linkages to Mac each ens fiscal payments Are today weighing heavily on the prov they May yet press the Federal minister to have time set aside at the Royal York next week for a hard discussion about the nations economic soviets fortify far East by Clare Hollingworth Telegraph Hong Kong Moscow is currently transforming the sea of okhotsk into a soviet Lake comparable to the Strate Gic military bastions already established in Europe on the Kola Peninsular and the White the new strategic fortress at the Eastern end of the russian land mass and to the North of Japan is designed primarily for submarines armed with Long Range nuclear missiles which can be launched at targets anywhere in the United states from a relatively Invulnerable the Entrance to the sea from the Pacific is by narrow passages through the soviet occupied Kurile new military airfields Are being constructed on the Kamchatka Peninou intelligence experts claim that it is already virtually impossible for the United states to install submarine de testing devices on the okhotsk seabed because the surrounding lands and islands Are covered by Strong defence systems made up of radar guided mis guns and interceptor this development is part of the significant transformation of the strategic scene in the Western Pacific Ocean As soviet Power mounts to reach its Peak during the coming decade while the United states finds itself increasingly in an inferior despite japans dependence on Middle East Oil and imported min american military strength is insufficient to assure the stability of both the Indian and Western Pacific five months of the year the okhotsk sea is covered with thick which would add to the difficulty of Antisubmarine Many japanese and chinese Mili tary experts claim that while Moscow is making promises not to increase its offensive military might at the Western european end of the land they Are now concentrating on a massive buildup in the although the japanese Are realists and their recent chiefs of staff have All recommended a meaningful buildup in their military system with an important increase in size of All three ser prime minister Zenko Suzuki still feels the need to go slow until he obtains the necessary consensus in the there an urgent re in Japan for the enactment of espionage without which it is difficult to preserve essential military Japan is weak Japan could not defend itself even from an attack on the Northern Island of hokkaido by the soviet paratroops and marines now based on the Southern Kurile which the soviet Union occupied in As Sun the famous chinese strategist of the 6th the Cleverest generals Are those that never shoot an Arrow from their with China encircled by virtue of the vietnamese occupation of there is Little Tokyo sem official ally in peking could do with their Small and outdated Navy to help in Case of a soviet it is doubtful whether any chinese plane could Pene trate soviet air More focus on Page 8 you can make the Rich but Only once Thorp 11 a of there Are Many variations of the slogan that is regularly paraded by the marxist Leninist make the Rich pay one of these variations is the so often voiced in of changes in taxes that seem to concen trate on the poor and leave the Rich better off than the simple fact is that the taxation department would like nothing better than to be Able to get More from the but the demands of government get in the politicians would dearly embrace any scheme that would show them As being responsible for taxing the Rich at a rate acceptable to the but there just Are not enough Rich to make the whole exercise what we have left is a system of rough Justice that is in the process of constant As soon As one loophole is another is and accountants drive their trucks through it at High plugging the loopholes that affect the Rich is often and costs More Money than it to discover How silly it is to spend too much Money to pursue the the Case of the super Rich tax avoider need Only be there Are about 750 we Are who have incomes of a year and yet who pay no Federal taxes because their affairs Are quite to avoid these supposing a government were to Fred Cleverley enact a Law that taxed away All income above a such a Law would catch the High income canadians who now pay no applied to the it would add million to govern ment this is a considerable amount of slightly according to the auditor than the Federal government now spends on but it is an amount that is peanuts when deducted from total government estimated by finance minister Allan Maceachen at billion in the coming if expenditures can be held Down to Mac each ens then the Federal government will spend million a every Day during the coming that is million an hour and a the Money gained by taxing away All but from Rich who have the Cleverest tax accountants would run the country for seven 51 minutes and the rest of the taxpayers would still have to pick up the Cost for 364 16 eight minutes and seconds of the next How about the Noutsos Perrich let us tax the remaining canadians who had incomes of and who did pay if we supposed they paid no and by using the new their incomes to each the government would that is enough to run the government for 12 Days and six approximate if we tackle the canadians who make or and who pay no and we tax them Back to the Federal government would get an additional or enough to run the country for ten hours and 11 if we take everyone who makes Over and assume they now pay about 20 per cent a generous and tax them Back to the Federal government would get an additional or enough to run the country for nine Days and 19 give or take a few by now we have reduced every tax paying Canadian to the Point where he can keep no More than by doing so we have gained enough Money to run the country for about three that leaves the rest of us to pick up the balance of the Cost of running the country for 49 weeks out of can anyone reasonably argue that increasing the taxes on the Rich would reduce the remaining taxes enough to be seen on a twice monthly pay Check of course it is not fair for anyone to have an income of a year and pay no but the Cost of getting at these few incomes would vastly out weigh the it must be remembered that a confiscatory tax is a on shot method of dealing with the once it is in the tax department knows full Well that efforts to show income below the confiscatory level will Given the apparent Success of accountants so will be making the Rich pay is the stuff of which elections Are so far in there Are just not enough of doonesbury them to pay enough to Benefit the rest of a la u 1 have always liked the Story about the individual who was having trouble paying his Bills and selected three a month from those he paid them and ignored the when he received a particularly bitter letter from a creditor who had not been he answered by warning the creditor to be or he would not be in the draw at apparently is what Canada Post has done to thousands of Winni Eggers who because they have american express to receive a travel questionnaire this past a joint project by american express and up the questionnaire offered prizes of travel to the Orient and american express travellers Che ques to spend to those who answered besides the big there were Earl Bird prizes that included an pm press class trip for two to and in spending to entries had to be in by november the letters were according to the in Toronto on november they were delivered this week in Canada Post had made sure that like the complaining cred were not Ever in Early Birday much a51 hats to Amft howards bi66est pm8 in is Owr kit that Era threat 10 my Luik adj Mhz Kaoi Tohal Eua put Iknou Hayou them on the the w mom maps used to say she them Toffi in was a sea Pasour now she says j that5a observe the problem then How do feminis15 reach such a woman any other l suppose svg6es love c was coupons i Nult i ;