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Home Newspaper of Halton Hills Established A Division of Canadian Newspapers Company Limited Guelph Street Georgetown Ontario DAVID A BEATTIE Publisher and General Manager Deficit will be up despite cuts BRIAN acLEOD Editor Phone 8772201 DAN TAYLOR Advertising Manager laii RrRlilrrKl g Page THE HERALD Wednesda Ma 1989 Watch those shoes We got a good look at how not to handle a bad situation in Ottawa last week The days following the budget leak to television reporters and the ensuing political rhetoric that flew about the nations capital showed that the Conservative govern ment likes to fall back on the its not my fault approach when its back is against the wall It would have been refreshing to see Finance Minister Michael Wilson take HaltonPeel MP Garth Turners advice that he be strong and admit his responsibility for the budget leak By claiming that he wont be responsible for an act of sabotage Mr Wilson has cleared the way for future finance ministers to plead the same case in any further budget leaks It would have been refreshing to hear Mr Wilson stand up in Parliament and say yes its my responsibility but Im going to take the heat and stick it out because I think the people of Canada will be able to judge my decision in three years Even the budget itself is hardly refreshing Figuring out a way to run up a 5 billion deficit while cutting expen sive submarine programs and promised day care spaces and increasing personal income taxes can hardly be described as imaginative Conservative supporters say the budget is Michael Wilsons crucial first step to bringing the deficit under con trol Its more like he tripped over his new budget shoes The group that grew Editors Notebook holding an annual meeting next Saturday Anyone interested in the program can drop in at a May 13 at St George Anglican Church Brian MacLeod Herald Editor Members of the Citizens group POWER Protect Our Water and Environmental Resources were able to relax for an evening in Ac ton Saturday and reflect on two years work I remember sitting in the small kitchen in Ltmehouse two years ago with eight people discussing ideas on how they could go about organizing a campaign against the landfill site Back then it seemed to me that this would simply be an effort of a few people who live right next to the quarry But when the enormity of the land fill proposal became apparent to them they word bet ter than any ratepayers group Ive ever seen It s amazing how some people who probably had never even heard of such monstrosities as the Environmental Assessment Act have become engrossed by the whole issue Perhaps the most disconcerting thing about last weeks federal budget is that the muchdiscussed deficit will be up this year despite hefty tax increases and spending cuts Despite being mugged for about billion in higher taxes this year and next and seeing billion in spending cuts over the same period taxpayers will just be treading the deficit waters until 1992 Finance Minister Michael Wilson told us last Wednesday night in his hastily released documents that last year deficit was billion This years will be billion and next years will fall to 28 billion The fiscal plan one of the stack of budget papers says interest payments on the national debt this year will be billion more than predicted in the February 1988 budget So what went wrong The key is higher interest rates The documents are forthright in blaming higher rates for the cur rent budgetary Short term rates are now expected to be on average more than four percentage points higher in than the Finance Department s foresaw a year ago There are a number of ironies in all this In some ways Canada is a victim its own success Economic growth in the last year far exceeded expectations par ticularly after the stock market crash of October That finance officials say led to in creased inflation RATES RAISED Then John Crow the Bank of Canada governor who has been preoccupied for years with ting a revival of inflation which Ottawa wracked the economy in the late 70s and early 80s moved to raise interest rates Since the government borrows heavily to finance its spending every time the rates went up the federal deficit grew But the higher rates apparently did little to halt inflation and in some ways fed on the rising interest charges Ottawas own costs are estimated to rise billion for each onepercentagepoint sustain ed rise in rates Here we have another irony In terest rates are raised not only to cool inflation but to attract foreign investors to Canadian assets thus supporting the value of our dollar But large deficits scare off foreign investors They lose con in Canada And the higher interest rates designed to attract foreigners are also the driving force behind the larger deficit Its a conflict of mammoth and poten tially tragic proportions Little wonder that the Canadian dollar plunged on foreign markets on news of the unexpectedly large deficit Guess who will foot the bill for this failure by the Finance Depart ment s pokers to predict the future And not only through higher interest charges on tgages and consumer loans There s probably not a soul in the country who didnt expect to pay higher taxes To give Michael Wilson credit he has managed to spread the burden while making an effort to exempt the from the war on the deficit TAX HIKES Among the tax increases over the next two years are 2 billion more in personal income tax billion in federal sales tax on many manufactured goods booze and construction materials billion in excise taxes on tobacco and gasoline and billion through a minimum tax on large corpora We should also toss in here the billion more to be collected from bosses and workers for unemployment insurance That s effectively a tax Then there are spending cuts totalling 6 billion over the first two years Among them are more than million in clawed back family allowance and oldage pensions from well heeled parents and seniors Therell be 200 million less paid to the provinces next year for social and other programs million less in foreign aid reductions of 2 74 billion in plann ed military costs a drop of million in child care spending million less over two years in crop insurance million less in the Via Rail subsidy and a plethora of smaller cuts Despite all this the deficit will be only marginally less two years from now By the way the Finance Depart is now predicting things will start getting better by 1991 In fact by 1994 Wilson says the deficit will be a mere shadow of its former self at billion Do wanna Although POWER is the Acton Citizen of the Year the efforts of the Halton Hills Volunteer Am Service in Acton be forgotten Acton residents responded superbly to the call for more volunteers this year in order to keep the new service on Churchill and Queen Street alive In Your Opinion Question budget tough enough in lilting llu it Itii think I- Minister I Wilson should hi fortul to of Ihi From the oneliner of the week department Christine McLachlan representing Halton Peel MP Garth Turner at the Acton Citizen of the Year banquet Satur day night had this gem Im representing Garth Turner who couldnt come because he had some faulty plumbing in Ottawa AVDIM1RET municipal bylaw enforce ment officer I think that some of the things he is slashing are the wrong ones and I think it is going to make us more like the United States But Im glad to see those subs go I think he should resign Here in Georgetown the Open Door Teen DropIn Centre and Young Parents program ace MIKE banker Yes I think there was pressure on the minister to get tough or else the deficit would con tlnue to grow Absolutely not he shouldnt resign They parliament have more important things to worry about KIM DALE student Yes because it will help people to stop drinking and smoking No he shouldn t resign I don think the teak was his fault SAl NOGUERA manager No I think they should cut more of their expenditures There is a lot of waste in the federal government If they don t make the cuts they 11 have to increase taxes By tradition yes he should resign But I think in this case It was sabotage Mil I retired I think it was too tough in certain areas I think people in lower income groups were hit too hard He shouldnt be forced to resign but there should be an extensive carried out You cant afford to have lax security