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Let's Talk About Taxes By Paul Pagnuelo Pigs Don't Fly and Neither will Higher Taxes Wc often hear complaints that our system of government is failing Canadians. Canadians. But let's consider another angle. Perhaps the system works too well! Think about it. Government uses a good slice of our tax dollars to fund special interest groups. They exist for the sole purpose of lobbying government government for more program spending. Their focus is always on newer and larger taxpayer funded programs and services. The bureaucrats, of course, love it because it means a new and bigger client base for their ministerial empires. The bottom line is a continually continually growing dependency on government. government. Recently, the federal government handed over $4.2 million of your tax dollars to special interest groups. Recently, the federal government handed over $4.2 million of your tax dollars to special interest groups. The purpose was to help them prepare their presentations to the Commons Committee examining the overhaul of Canada's social programs. 165 groups were eligible for this special funding, including the National Anti- Poverty Organizations, the Canadian Council on Disability and the Aboriginal Aboriginal National Council. We all know what these groups want. More spending-not spending cuts. Their message is totally out of sync with the wishes of ordinary Canadians. Canadians. The end result is always more and bigger government. More deficits, staggering debts and higher taxes. Few consider their loss of economic economic freedom which is eroded as a result of higher taxes and greater debt. Why does all this matter to the average average person? Who speaks for the silent majority who, until recent years, didn't have the benefit of an organized group to represent them? Where is the money for an all-out effort to let government know just how you really feel about the heavy tax load you're carrying? Who stands on guard for those of us who wallets have been ransacked and whose willingness to hand over more has reached the outer limits? Who responds for the average Canadian Canadian - those of us who arc tired of in-your-face government. Who voices voices your disapproval for those new and unwanted programs being rammed down our throats? Who says no to those who want to over-turn the values on which our country was built? These values and traditions for centuries have been the glue supporting the foundations of a civilized society. It's up to us as individuals to wake up and smell the coffee and to take action. It's up to us to let our politicians know how we, the silent majority, really feel. A little collective effort can go a long way to bring about positive change. Begin by calling your MP's constituency constituency office. Let the person who answers know you arc opposed to any tax increases, No long-winded discussions - just a short statement of fact about how you feel. Give your name and address, then thank them for considering your views. Another effective way of driving home the message is to fax your MP. One sentence that is to the point is all that's necessary. Those with a spirit of adventure might phone or fax the Ottawa office of the Prime Minister and the Minister Minister of Finance. A short message like "Don't tax me, don't tax my job," says it all. A new year's resolution each of us should make is a commitment to let our voices be heard. Multiplied by several million, wc can deliver a wake-up call to those sleepyheads in Ottawa with the force of a tidal wave. If wc do nothing, get ready for a real soaking. Higher taxes, fewer jobs and an economy headed once again for the dumpster. Now is the time to stop the special interest groups who want more government government spending and more from your wallet. Let Jean Chretien, Paul Martin and your MP know that PIGS don't fly and neither will higher taxes. taxes. "Let's Talk Taxes" is a feature service of the Ontario Taxpayers Federation. by Brian Costello HIGH YIELDS AVAILABLE NOW While this year's larger than expected interest rate increases create lots of pain for borrowers they can create a windfall of monstrous proportions for many. First, seniors, and those who like their money in very safe investments, can now earn a higher fate of return when their money comes due for renewal. Those with FtRIFs and RRSPs that are'due for renewal will be the big winners as they can lock away now for a long period of time at several percentage points higher than they were a year ago. For example, five year GICs presently pay more than 3% higher rates than they did a year ago. The real advantage though is that these interest rate increases are real. That is, when you subtract today's extremely low inflation levels from the rate you are earning, you come out with a high real rate of return. The most recent report on inflation showed it was running at a minus 0.1% rate. That means that whatever you earn you keep after paying the taxman. You should count on inflation rising in coming years though, so you always want to calculate what you earn after subtracting taxes and inflation. The problem though is that if you simply opt for term deposit and GIG type investments all you will do is lock in today's rates for the term you choose. Now, that's not a bad thing to do in that you know that you are earning a better rate of return and you have no fears as to the safety of your money. But, there's so much more you can do. For example, consider purchasing Government of Canada or Provincial government bonds. They pay a better rate of return, they offer comparative safety and when interest rates fall they will shoot up in value allowing you the ability to sell, at a profit, if you want, and re-invest your money elsewhere. While the bond markets change almost by the minute, consider some recent examples. Two year term deposits and GICs at the major financial institutions were yielding 7.75%. Government of Canada bonds were yielding almost three quarters of a percent more with the potential of a capital gain. Four year GIG type investments were yielding 8.25% while Government of Canada bonds were offering 8.9%. Five year GICs offered 8.5% while Canada Bonds for a similar period of time were paying almost 9%. The bond markets will fluctuate daily as interest rates change. If they go up bond values will fall making their yields even more attractive. If rates rise in the next few weeks or months get ready to load up at the higher rates and make an even greater windfall when rates fall. In fact, if you want to go for a very long guarantee you can buy Canadian Government bonds yielding more than 9% that won't mature until the year 2023. In the bond markets there's a pecking order. The highest quality bonds are issued by the Federal Government. Provincial Governments based on their credit ratings follow, with corporations next and junk bonds at the low end of the ratings scale. The lower the quality of. the guarantee the higher the rate of return the borrower has to pay. Effectively, that means those who want a higher yield can opt for provincial'or corporate bonds provided they don't mind giving up some security. But, Is there any fear of security with provincial bonds when they are effectively guaranteed by the Federal Government anyway. And, how risky is Ford, Bell Canada, Canadian Utilities, TransCanada Pipelines, the banks and the top utility companies in the country? Ten year Alberta Government bonds pay almost 9 1/4%, seven year BC bonds pay about 9 1/3%, Hydro Quebec bonds maturing in twenty five years yield more than 10%. Provincial bonds will almost always yield more than Federal bonds because they aren't as tradable. Corporate bonds historically pay a higher yield than governments, but not always. Governments at all levels have spent like crazy. The world Is wary of their bonds. However, many corporations have their acts under control. Buying Bell Canada bonds for example produces a yield of about 9 1/4% for five years. Do you think Bell Canada will make it? If rates fall you make a windfall, if they don't you earn 9 1/4% a year for five years and get your money back at that time. It might bo an automatic reaction to lock away at today's higher GIG and term deposit rates, They are three percent or higher than a year ago, However, a financial planner or stock broker can usually get you a higher yield by shopping the smaller Institutions or by looking at the bond markets. There are also high yielding dividend paying Investments like mutual funds and bond funds. The payoff .will be higher in the long run. ■ ■ 1 The Canadian Statesman, Bowmanvillc, Wednesday, January 4,1995 11 to Make 1995 a Safer Year Resolve Accidents and injuries in the home can be prevented by following a few home and fire safety tips says First Alert, the country's leading supplier supplier of home and fire safely equipment. equipment. For that reason, the company has developed a checklist you can follow to help make your home a safer safer place. "The New Year is a good time to resolve to make your home as safe as it can be," says Jim Hind, general manager, BRK Brands Canada, makers makers of First Alert home and fire safety products. "By following the checklist, checklist, you can help prevent fires, break-ins and other house-hold accidents accidents from occurring". First Alert's home checklist was developed to help lower the alarming number of residential accidents, injuries, injuries, break-ins and fires that occur each year. According to Statistic Canada, there were 245,000 reported residential break-ins in Canada in 1992; 30,000 house fires in 1991, representing a loss of more than $6 million; and more than 4,000 deaths and injuries due to house fires in 1991. Each year, more than 2,000 accidental accidental deaths occur in the home. First Alert's Home Checklist • Check your smoke alarms. Smoke alarms should be installed on every level, and in every bedroom, of your home. Change the batteries at least once each year and don't use rechargeable rechargeable batteries because they might not trigger the low-battery warning alarm. Test according to manufacturer's instructions. • Check your fire extinguishers. Follow the manufacturer's instructions instructions to make sure the pressure is still adequate and that the extinguishers arc properly located. The kitchen and workshop arc ideal placed to install fire extinguishers. • Create an escape plan and practise a fire drill. Ensure that there are two exits in your plan and make sure everyone knows what they arc supposed to do in the event of fire. If your house has a second story, consider purchasing a fire escape ladder. ladder. • Check your home heating system. system. Faulty furnaces and cracked heat exchangers arc leading sources of carbon monoxide in the home. Look for signs of deterioration and make sure the warm-air and cold-air outlets aren't blocked, and that nothing nothing impedes the system's air supply. Call in a certified heating contractor for an annual inspection. Installation of a carbon monoxide detector will provide your family with an early. • Check your fireplace and Resale home prices rose faster than inflation in 23 of the 27 major Canadian urban centres between 1971 and 1994, according to figures released December 19th by Canada Mortgage and Housing Corporation (CMHC). The analysis of the average price paid for resale homes over the past 23 years, in the first CMHC study of its kind, can be found in the latest issue issue of CMHC's Canadian Housing Markets. "In Vancouver, for example, average average house prices rose more than inflation inflation by a spectacular 175 per cent over the last 23 years," said Bruno Duhamel, Market Analyst for Local Markets in CMHC's Market Analysis Centre. "But, prices in four markets increased increased below the rate of inflation over the same period, down by one chimney. A clogged chimney is another another leading source of carbon monoxide monoxide in the home. Look up the chimney chimney with mirror and flashlight for any obstructions. Make sure your fireplace has its own source of outside outside air. • Check your fuses. Make sure the proper fuses arc used, and never replace fuses with pennies, washers or metal foil. Call in an electrician to check wiring, especially in older homes. • Check electrical cords and circuits. circuits. The number one cause of residential residential fires is mechanical and electrical electrical failure or malfunction. Don't plug too many appliances into the same outlet, and replace cords that arc frayed or cracked. If the appliance appliance has a heating clement, always replace cords made specifically for per cent in Trois-Rivières, in Sherbrooke Sherbrooke by 11 per cent, St. John's (-10 per cent) and Québec (-21 per cent)," he added. In another article, in Canadian Housing Markets, CMHC forecasts show Vancouver house prices will remain remain the highest in 1995 with an average average resale price of $390,000. But, for the first time in four years, house prices will increase more in some southern Ontario markets than Vancouver's Vancouver's 2.6 per cent. Prices in Hamilton, for example, will increase 4.1 per cent, with 3.4 per cent in Windsor and 2.8 per cent in Kitchener. The 1995 resale forecast of major urban markets also shows that most centres will continue to recover from the downturn experienced in the early 1990s. "The housing recovery is slow but that appliance. Do not run extension cords under carpets or staple them to baseboards. • Check to ensure that flammable flammable materials are stored properly and out of the reach of children. Careless smoking and children playing playing with matches arc the leading causes of fire deaths. Remove all unnecessary unnecessary combustibles and flammable flammable liquids from your house. • Check to ensure your valu-' ables are hidden. Consider buying a fire resistant safe for your home for keeping jewelry, important papers and other valuables out of reach of fire or theft. • Survey your house from the outside to make sure that locks work, basement windows aren't left open and there is adequate lighting around outside entrances. Inflation Rate persistent," said Duhamel, "with sales of existing homes expected tej bo about the same next year as in 1994 after recovering by 2.4 per cent this year." "Resales will increase in 18 of the 27 major centres. With employment growth of more than two per cent in many of its major urban centres! southern Ontario will lead Canada'! housing market," he added. "And this increasing demand resulting from employment growth will offset thç effect of rising interest rates." Forecasts also show housing starts will rise sharply in some centres, alâ though starts in all major urban markets markets combined arc forecast to remain stable. This differs from CMHC's National Housing Outlook (NHO)j which forecasts a one per cent upturn in starts nationally, due to faster growth in smaller cities and towns. Resale Prices Rise Above Over 30 Years Quality Real Estate Service 234 King Street East, Bowmanville Telephone 623-3393 Toronto Line 686-1035 CLOSE TO HOSPITAL + SHOPPING Gorgeous renovated kitchen with walkout to deck. Brick bungalow, 2 bedrooms up and in-law apartment down. Fireplace. 1 1/2 space detached garage. Fenced yard. Just listed. $133,500. Ann Van Dyk* 623-3393 OPEN HOUSE SUNDAY, JAN. 8/95 2 - 4 p.m. Tastefully decorated 3 bedroom home features skylight in bathroom. Door to garage from large eat-in kitchen, walkout. walkout. Great location. Only $133,900. Take Simpson Ave. to 3 Soper Court. Call Ann Van Dyk* (905) 623-3393 or (905) 623-4638. Terry Witherspoon* FIRST AD 623-3393 Charlie Reid* 623-3393 Large 4 level backsplit in mature neighbourhood neighbourhood of Bowmanville. 3 + 1 bedrooms, 4 pc. and 3 pc. bathrooms. Good - size principal rooms. Asking $128,900. Vacant. Call Terry Witherspoon* (905) 623-3393 or (905) 983-8296. 10 ACRES-ORONO JUST LISTED - BACKSPLIT Custom built ranch bungalow. Hardwood floors, 3 bedrooms, hardwood floors, finished finished rec room plus 7 stall horse barn, 3 basement, Spotless 53 x 150' lot, paddocks. Great location. $259,900. Bowmanville. $138,900. Call Charlie Reid* (905) 623-3393 or (905) 983-5914. © SOME FRIENDLY FOLKS WILL SOON MAKE YOU A SPECIAL OFFER ON YOUR COMMUNITY NEWSPAPER THAT OFFERS YOU A GREAT DEAL MORE! The Canadian Statesman has commissioned sales representatives to undertake a subscription drive. They will present a special offer, and will soon be calling on you to offer year-round reading of The Canadian Statesman at substantial savings, The Canadian Statesman Clarington's Community Newspaper Since 1854 62 King Street West 623-3303 Bowmanville This offer not available at Statesman office.