“4 Castlegar News 1989 Review, April 16, 1989 Ottawa must red Editor's note: Canada’s national debt — which this year will reach about $320 billion and the country’s deficit in excess of $27 billion, are the biggest threats to Canada's prosperity and long-term economic Outlook, says Thomas d’Aquino, president and chief executive officer of the Business Council on National Issues. In a recent address to the Kiwanis Clubs of Ottawa, @ Aquino, a native of Trail who has served as BCNI President since 1981, takes a hard look at the seriousness of ihe threat and offers some stern advice on how to get Canada’s debt and deficitunder control, Here are some excerpts from d' Aquino’s address: We must understand’that the problem (of the national debt and the deficit) is a massive one — it cannot be dealt with in a year-or two, It will take five to 10 years of un shakable commitment The federal government must take the lead, and this it must do without apology and without equivocation. The battle against deficits and debt is a battle for jobs, for growth, for security. To evade the challenge, which I readily acknowledge is a formidable one, is to betray the millions of Canadians who seek, and have been led to ex pect, order and discipliné in our public finances Tackling the deficit and the national debt will require co-operation: yours and mine, that of provincial and municipal authorities, and of the seemingly endless number of interest groups who demand more and better things of the public purse. Only those who cannot afford to make sacrifices — especially low-income Canadians — should be exempted from the battle to regain our fiscal integrity With-these fundamentals understood, let's consider the essential elements of an anti-deficit strategy SEFTING THE TARGETS The attack on the deficit must be credible. In other words, the deficit must fall significantly and consistently in accordance with a carefully laid out plan. Every deviation from the plan, every postponement of the promised reduc ‘Only those who cannot afford to make sacrifices... should be exempted from the battle to regain our fiscal integrity.” tions, seriously undermines the overall exercise and the public’s commitment to it In facing our fiscal dilemma, we should set for our- selves a national goal of more than halving the deficit by 1992. To achieve this, the deficit-would have to fall ona yearly average of $5-7 billion, the sum being made up primarily ‘of expenditure reductions supplemented by revenue increases. MEETING THE EXPENDITURE CHALLENGE On the expenditure side, the largest single item is the interest on the public debt, a sum of some $32 billion which we can do little about in the short term. Also difficult to make inroads on in the short term are statutory program expenditures which amount to about $50 billion. This leaves for special scrutiny some $40 billion in non-statutory expenditures which include economic development, national defence and official development assistance. The Photograph taken from the top of the chip silo. THOMAS D’AQUINO ...'getback to basics’ non-statutory category of expenditures must yield the lion’s share of savings in the early days of the expenditure reduction exercise Business, a significant beneficiary of federal program spending, must bear its share of the burden. One area for consideration is industrial subsidies and grants. Those should be subjected to tough scrutiny, and be pared down Canada’s elaborate system. of income support programs cannot be exempted from a comprehensive deficit reduction strategy. In total, social spending accoun: ts for close to 60 per cent of all federal program spending In this vast area of expenditure, there is room for change, and itis time for change. The guiding prineiple-of progressive social policy, when public monies are scarce, must be Lo assist those in need not those who are manifestly well-off, or even decently well-off; and.not those who, in the presence of op: portunity and in the absence of any impediment, choose not to be productive members of society, The government must make changes in programs which give benefits to people whether they need them or not, and we must support those changes, The government must resist pressure to create new entitlements, new programs, which in better times would be very nice to have, but which today simply cannot be afforded We cannot afford to give everyone the same public pension or the same baby bonus whether they need it or not We cannot afford mismanagement or abuse of the very costly unemployment insurance program — a program that is so vital to the all top many Canadians who cannot find work. distribution and the segregated chip storage piles: Celgar pulp is made from combinations of Western Hemlock, Alpine Fir (locally known as Balsam), Spruce, Pine, Larch and Douglas Fir. Western Cedar, Western The government provides a myriad of other types of programs and benefits, We cannot afford today to satisfy each interest group, each constituency, each region, or region within a region, by giving them something. Wemust wean ourselves from these expectations and from these habits of thinking. In a sense, we must get back to basics, get rid of the frills. FACING THE BITTER PILL OF TAXATION Having amassed a huge debt burden through protrac ted deficit spending, Canadians now must face the music and begin to pay down what has been’ in effect a form of deferred taxation. Getting the deficit under control will not be achieved only through strong economic growth and ex penditure restraint, however. More will be needed. In the words of Allan Taylor, chairman and chief executive of ficer of The Royal Bank of Canada, ** ... let us not indulge in fiscal fiction. Tax increases are inevitable.”” But before bowing to this inevitability, let's remind ourselves of a few sobering facts. In recent years, Canadians have been subjected to a steady onslaught of rising taxes. We now pay more for gasoline. Our federal sales taxes are higher. Our personal income tax exemption and person income tax brackets have been partially de indexed. Corporations and individuals are paying surtaxes And all of this on top of a direct tax load already high by in. ternational standards Let’s also keep in mind that tax increases tend to en courage politicians to spend more rather than less. What better example than the recent federal general election when, despite the country’s serious fiscal problems, spen ding promises reached mind-boggling proportions? And let’s not forget that higher taxes often lead to slower economic growth, and as the economy declines so do government tax revenues. Higher taxes also stand in the way of entrepreneurship, investment and innovation — all of which Canada needsnow more than ever It would seem to me that the only acceptable approach to the so-called inevitability of tax increases is that they act only as a supplement to very significant reductions in ex penditures, and that the increases carry with them a three- fold commitment: first, that the extra revenues gleaned in this way be earmarked especially for deficit reduction pur- poses; secondly, that the increases be temporary only; and ‘We cannot afford today to satisfy eachinterest group, each constituency each region, or region within a region, bygiving them something.” showing the otd chip thirdly, that the competitiveness of Canadian enterprises not be disadvantaged in any way. Tax increases that are used to fuel further spending that we cannot afford must be opposed with all the strength we can muster SUSTAINING ECONOMIC GROWTH We forget, sometimes, what a powerful counter- deficit tool vigorous economic growth offers us. Canada’s strong economic performance during the past several years produced benefits that exceeded expectations. Were it otherwise; our deficits would have been higher than an: ticipated This strong record of overall economic performance is uce deficit due in large measure to the revival Of business activity after thi rious recession of the early 1980s, It would not have been as successful, however, without some encouragement ‘on the part of Witness imp: wn federal-provincial relations; the relaxation of foreign in- vestment regulations; the energy accords; some deficit reduction measures; concrete steps in the area of privatization; and the Canada-United States Free Trade Agreement. An even more vigorous application of this growth-oriented philosophy on the part of the federal government and the governments of the provinces is essen- tial to sustaining high levels of economic activity. REASSESSING THE ROLE OF THE PUBLIC SECTOR If continued economic growth, cutbacks to business, and the construction of more progressive social policies will help in the battle against deficits, so will fresh attitudes towards the public sector, Tighter management in the public service is a must. Incentives to spend must be replaced with incentives to save — and this applied to (government) ministers as much as to their officials. ‘Tax increases that are used to fuel further spending that we cannot afford must be opposed with all the strength we can muster.” Public sector activities which can be carried out with equal or improved effectiveness in the private sector should be privatized — a step which can yield significant savings to the public purse. Most important of all, the power of government to tax and to spend — the root of many of our problems — must be subject to much more effective rules of accountability both-inside and outside of government Achieving these reforms should be a key priority of an ef- fectiveanti-deficit strategy INVOLVING THE PROVINCES AND MUNICIPALITIES Are all these initiatives enough? Not if they apply only to the federal government. The same approach must be un- dertaken-by-each-of the provinces. The combined debt of the provinces adds more than $85 billion to the federal debt of $320 billion. Municipalities, too, are groaning under the effects of increased spending and have an important role to. play Both provinces and municipalities can do something about this. Achieving greater efficiencies and better value for money are critical, in particular in relation to the ex- ploding costs associated with education, health services and other social services. ACHIEVING A BETTER POLICY BALANCE Our concern about deficits and debt leads inevitably to a debate about the role of monetary policy, and in par- ticular the role of the Bank of Canada. There can be little doubt that the failure to reduce budgetary deficits more vigorously in recent years has contributed to higher rates of inflation in Canada than among our major industrial par- tners. The Bank of Canada in turn has responded in- creasingly firmly to dampen inflationary pressures by raising short-term interest rates. The costs to C ‘anadians of these policy imbalances are there for all to see. A successful assault on the deficit requires that monetary policy. be sup- ported by responsible fiscal policies Canada’s Best Team of Custom Blend Pulp Specialists Over 380 CO-OPERATORS Ensuring TOP QUALITY and ‘UNIFORMITY As shown in the photograph above, our chip stock piles are separated by species to produce our various pulp grades. The result, top quality and uniformity, from the first bale to the last. Celgar Pulp Company MOVING PROFESSIONALS ... as skilled gradu: Movi all SINCE 1929 es of moving. jes of the United Van Lines training centre, illiams Movin has the experience If you need to make a move - whether long-distance or local ~ the people to ‘call are Williams Moving and Storage (B.C.) Ltd. at 2237-6th Ave. in Castlegar Manager Art Coburn points out that “the Williams professionals are skilled graduates of the United Van Lines training centre — exper- ts trained in all phases of moving.” In addition, the company has added the “U-load/We haul” con cept of moving in containers Although the mainstay. of the moving industry has traditionally been the moving van, today the ex- ceptions are Williams Moving and United Van Lines, who are able to offer the best of both worlds with »conventional.vans and domestic household containers anywhere in ‘Canada and the Yukon. Established in 1929, Williams has headquarters in Coquitlam and branches in Victoria, Vancouver, Penticton, Kelowna, Castlegar, Cranbrook, Sparwood, Golden, Kamloops, Prince George, Prince Rupert, Terrace, Massett, Edmon: ton, Calgary-and Cold Lake, Alberta, as well as in Lethbridge. Now, after 59 years of servicé, what makes Williams Moving stand out from the other van lines is the domestic container service, which provides container service, fast delivery or preferred delivery, economical storage in transit, ex- clusive use and Willsave and/or Transave Service You can depend on the Williams professionals — a van line with a difference a % Moving Over 59 Years of Quality Ser Getting your commodities to their destination and transporting them efficiently and safely,isa responsibility we take very seriously. When you need reliable moving service, callus! 365-3328 af WILLIAMS Moving & Storage 2237-6h Ave., Castlegar, B.C. 43 Years of Service 5 YEARS, NEW OWNER, ERNIE BERGER 71 31 3th St., Castlegar CASTLEGAR BICYCLE SHOP (1984) 365-5044 Bicycle Sales & Repairs Skate Sharpening by Dupli Skate System 5 OWNER: ERNIE BERGER 19 Years of Service ; GERONAZZO HOLDINGS Serving Castlegar, Robson, Blueberry Creek, China Creek, Fairview and Genelle with Garbage Disposal Service RICHIE AND DOREEN GERONAZZO Box 3279, Castlegar V1N 3L8 365-5816 16 Years of Service RESTAURANT Chinese & Western Food For Take-Out Phone 365-6741 Friday 11:30a.m. to3a.m. Saturday 12:30 noon to 3a.m. Sunday 12:30noon to 10p.m Monday Closed Tuesday, Wednesday, Thursday 11:30 a.m. to Midnight Jim and Amy Mah 198 Columbia Ave., V1N 1A9 8 Years of Service Roadside Place “The Best Little Lure House " inthe Kootenays” Chevron Gas Groceries Largest Selection of Fishing Tackle in the Kootenays Lotto Centre * Live Bait Over 200 fishing rods, over 1,000 lures, and just about everything in tackle. Ron and Sandra Franks Phone 365-5225 2253 Columbia Ave., V1N 2X2 Open 7a.m.to.10p.m. 5 Days a Week Saturday & Sunday 9a.m. to 10p.m 5 Years of Service WYLLIE & OKROS BARRISTERS & SOLICITORS Kenneth Mayland Wyllie David Dezso Okros Offices in Castiegar & Nelson Suite 100 1444 Columbia Avenue, Castlegar ViN3K3 Phone 365-8451 27 Years of Service F.J.McLEOD CONSTRUCTION LTD. GENERAL CONTRACTING INDUSTRIAL & COMMERCIAL BUILDING CRAWLER LOADER& BACKHOE BOBCATSERVICES Phone 3653566 DICK McLEOD 500-201st Ave. Castlegar, B.C. V1N3P7 19 Years of Service TO CASTLEGAR & DISTRICT FRANK’S SHARPENING SERVICE Comptete saw sharpening— service including band saws and carbide tips. Mower blades, scissors etc. 1216-1st Street Castlegar, B.C. Call 365-7395 15 Years of Service EMCO ENGINEERING LTD. 186 Columbia Ave. Castlegar, B.C.V1N1A9 365-8455 RON ROSS — DAVE MacINTOSH GERARD van der MEULEN — JOHN DAVIS: PRATT — DON PARROTT ELAINE ROSS — JOHN HILDEBRANDT Syringa Park Marina SALES & SERVICE Authorized Dealer for Campion and Bayliner Boats, Springbok Aluminum boats and Highiliner Boat Trailers Located on the Arrow Lake 9 km. North of Hugh Keenleyside Dam_ SID & AMBER SMITH CALL 365-5472 WOODLAND PARK SHELL Shell Gas and Oil Open 24 Hours a Day 365 Days a Year Convenience Store GarWash Video Rentals Diesel and Marked Gas KIM AND BRUNO TASSONE 365-6218 1780 Columbia Ave., V1N2W5