Winnipeg Free Press

Winnipeg Free Press (Newspaper) - June 29, 1987, Winnipeg, Manitoba Winnipeg free press june 1987 Page 7 of five Canadian business wants faster action on the sales tax proposed in Michael Wilsons tax business voices concern Toronto to put it Canadian business is not too impressed with Michael Wilsons Effort at tax it Howe see his plans As an improvement Over the existing tax regime and is strongly urging him to move quickly to get his proposed Broa based sales tax the tax on consumption in the second phase of his program up and the business Community appears United in hailing the sales tax reforms As vital if Canada is to grow and compete in the manufacturing or make any significant Progress in getting its deficit under running into political roadblocks in Wilson deferred implementation until after the next pessimistic observers fear the delay Means the tax is already doomed and that with the goodies in the form of reduced personal taxes All handed out in phase Wilson has nothing left to make the added tax dose these were the views expressed at a Daylong study conference on the tax proposals sponsored by the no one on Bay it now views Wilson As the great re former he was once made out to there was general disappointment that his first stage reforms devoted much attention to handing out goo Dies that were too Small to be genuinely and there was some concern that he had backed even in the phase two propos from making consumption taxes carry a considerable proportion of the tax speakers also lamented Wilsons failure to obtain the spending reductions he had once promised As a major element of his fight to bring Down the deficit in his failure during the tax review process to produce the full scale Joan Cohen Ottawa editor Reform of Canadas social pro Grams he was promising a year this for one have meant abandonment of universality in some programs and the targeting of social assistance toward people in As for the immediate needs of corporate Canada there was the but in places highly warning that the Wilson reforms would seriously Cut into Cash flow and endanger Cana Das productive in speakers repeatedly warned that the capital Cost al Lowance slowing Down capital investment write offs from per cent to a 25 per cent declining balance would discourage in vestment and induce companies to put their plants in the the big Issue Robert Vic chairman of the investment firm of Price waterhouse told the is the big Issue in base broadening and the government has made major in the United states the capital Cost allowance would work out to a 29 per cent declining meaning that for the first time since the second world War depreciation rates on manufacturing goods would be less generous in Canada than in the United Brown also was concerned about a proposed new Putin use Rule which allows firms to begin claim ing a capital Cost allowance Only when the equipment or facility is actually this Rule operates in the United it would Only affect companies developing Meg projects or major where they would have no tax benefits for the five or seven years it took to Complete the this is hardly an incentive for major like several other Brown said it would take time to compare the weight of the new Canadian tax rules with those newly in place in the United he said he would make the needed even though the finance department had insisted that the Canadian tax was no heavier than the he pointed out that while the effective rate of corporate tax in the United states is around 38 or 39 per companies in Ontario face a 44 or 45 per cent by reductions for manufacturers and processors will kick in to bring these but not Down to the 38 to 39 per cent another important critique of the capital Cost allowance proposals came from Browns fellow panel list William chairman and chief executive officer of Cana Dian general electric company Blundell put Forward an argument that and canadians should find particularly he was deeply concerned about Wilsons since the spending disincentive May Well arrive at the very time that Canada and the United states conclude a free Trade agreement that will open up major Market opportunities for Canadian Manu such a treaty would drive Cana Dian manufacturers toward in creased specialization and Large scale manufacturing meaning much if the change in capital just As the new com Mercial and Trade patterns Are being would give the advantage to the affecting our Economy for a Long time to in Wilson has every reason to want to reconsider his proposals on this score if the critique is look for other sources of probable delay Blundell was the last of a Long procession of speakers to express concern about the Likely delay in the introduction of the phase two Broa based sales suggesting that in fact there were no Guaran tees that Canada would Ever get the phase two yet manufacturers Are reeling under the Long condemned manufacturers sales tax it is supposed to one speaker calculated that manufacturers would save billion in the portion of the tax now levied on their the Federal government needs the new funding base to genuinely attack the Defi every month of delay in this brings the significant risk that precipitous action will be needed to Deal with an out control Situa Ionin the Canadian Blundell he however that Canada May be at an economic with the potential for a Strong up Side flowing from a Trade treaty coupled with a More aggressive implementation of the phase two proposal that would launch it in the arguments Are it would do interesting to see the business Community out and sell ing both it and the sales tax concept to the Canadian British politicians look to the future by Macrae special to the free press Margaret Thatcher has duly be come the first British prime minis Ter to win a third successive election since lord Liverpool during the Napoleonic she would not be Wise to push through Early the six reforms that Are much needed in Britain but could be these Are a tax Reform on the same Model As presi Dent Ronald reagans the introduction of Competition into both state education and the National health service the replacement of the spending ethic by incentives for the entrepreneurial in the inner cities Reform of local government finance and the granting of Protection to Trade unionists who do not go on strike even when their unions order them i suspect that she will botch some of these reforms in her first and that by late 1988 when the second session of the new Parlia ment begins she will be losing fre quent thirdterm governments usually do lose such by elections but thatchers 101ma Jority Means that she can stay in office until 1992 if she wants this makes it All the odder that the harshest reaction after the election has come within the social demo Cra Liberal Alliance of David steels liberals who have Only 17 Down two from the last Parlia ment and David Owens social democrats now with Only five Down steel has in effect demanded that the two parties should merge which would mean with the liberals preponderance of both maps and grassroots the Alliance would be led by steel himself or some Liberal clone rather than whether or not the liberals and social democrats the party is Likely to win by election seats in but the economist summed up the alliances election Campaign by calling steel David politics he gives the impression of promising anything to get a vote and calling Owen David policy he gives the impression of being seriously interested in thinking out what would be the policy initiatives for a government to 1 think that by the general election of 1991 or 1992 a combined party under steel would descend into get Ting hardly any votes because steel just does not look like a serious contender for if the much More imposing Owen is pushed out of the Alliance i believe that Thatcher will say to him in about 1989 Geoffrey Howe wants to leave the foreign office to be come lord Chancellor the new lord Chancellor is a 64yearold would David like to become tory foreign Secretary my guess is that Owen would accept that and probably go on to be thatchers successor As Leader of the conservative natural both Thatcher and Owen have to say at present that any such scenario is Neil Kinlock has emerged from the election with 229 labor versus 208 in the old compared with six out of every 100 voters switched toward him in five out of every 100 in and three out of every 100 in Northern nobody else switched to him at All and in London including inner London there was actually a swing to to gain Power Kinlock needed a seven per cent swing compared with 1983 right across the and he got that nowhere at not even in about 60 of the 229 labor maps Are very hard left including Many of the new and another 80 Are Well to the left of Kin Nock it is noteworthy that most of the left wingers unfortunately including three of the four new Black labor maps won their seats with Sharp swings against them compared with neighbouring Kinlock will now try to change labors so that it is not so easy for tiny constituency parties sometimes 20 zealots in a smoke fill room to foist very left Wing maps on but expect squabbles As he does Macrae is Deputy editor of the Thatcher should be cautious about new defence White paper was classic manipulation Canadas White paper on defence contained no surprises because it was never intended it was carefully leaked through the department of National defences office of while it was being the department was Busy backing and calming Down Public opinion at Home and in the Selling of the White paper is really a much More interesting Story than can be found in the paper there was the bad news Story about the one and Only exercise conducted in the 20 years that Canada had promised help to Norway in the Case of the details pointed to the fact that the help could not be delivered at this particular part of the White papers change in policy had the foundation Well in place before there was the hint that realizing the difficulty in keeping its Promise to had decided to withdraw the Promise the bad news had the desired since the department had made Public its massive failure Over the nato partners were left with Little on which to hang Canada actually changed nato strategy unilaterally by its decision to switch redeployment of emergency troops to West Ger Many rather than to nato made the Best of the new strategy and issued statements to the effect that a stronger Canadian contingent in West Germany would help the the real significance of the change can be found in the answer Given by Canadas chief of defence general Paul when he was asked when Canada would practise its new Promise of the general those kind Fred Cleverley of exercises Are Norway Cost us More than next on the leak list was the decision to acquire nuclear powered submarines rather than cheaper diesel electric replacements for Canadas three submarine there was no mention of submarines at it was suggested that Canada might protect its claims to Arctic sovereignty by laying mines in Arctic the suggestion came right from the with several Cabinet members apparently on it produced the expected outcry of protest and revulsion from the after Are terribly hard to control and Likely to cause no end of International mines Are also prohibitively now that the paper is the futility of the plan to mine Arctic Waters is painfully there was never any intention to put mines it was a Clever Way to divert Public opinion from the real which was to buy nuclear anyone who thinks Back Long enough will recognize something called news manage ment in the leaking of the second major thrust of the paper getting into nuclear submarines in a big there for the judicious references to the picture of three nuclear two belonging to the United states and the third to that had surfaced at the North there were the dark hints that these submarines just have travelled through Waters claimed by the answer was Canada needed its own nuclear submarines to watch and follow other nuclear submarines in its the idea was dropped with ample emphasis on the fact that Canadian Summa while they would be nuclear would carry no nuclear what was left up in the air was the reason Why the United states and Britain would encourage the publication of the which had Tobe official did these two allies not realize that such a picture would offend Canadas ideas of its sovereignty Only after the White paper announced the intention to buy the submarines did the minister of National Perrin admit that Canada had full knowledge of the intention of these submarines to do what they we must assume that Canada gave its approval if it did and if there were Why did when he was informed of the intention to move the submarines to the North not complain in All the time the office of information was dropping hints at what the White paper would it was equally Busy gathering reaction from across Canada and around the this reaction was quite helpful to the minister and senior officers who were required to answer questions when the paper itself was then the emphasis was on the billion total expenditure predicted for the next 15 few people asked How the department intended to buy new redeploy forces and triple the size of the reserves on that was the the difference Between the billion and the billion that would be spent just by adding two per cent a year to the current no one asked How the miracles of equip ment acquisition would be accomplished without massive additional lumps of no one asked Many questions about most of the comment on the submarines had already been it was news management at its Terry who had the responsibility for Selling the leaves the information Section soon to pursue his Ca his next Job will be structuring the reorganization recommended in the paper he has just doonesbury by Garry Trudeau a me steady tar wolof Rev options House Elyott Sifa Rrona t i ;