OTTAWA (Staff) – Liberals under fire last week for their handling of the goods and services tax issue reminded critics of the billions of dollars that have been sent to prairie grain farmers.
On April 23, finance minister Paul Martin announced that Newfoundland, Nova Scotia and New Brunswick had agreed to meld their provincial sales taxes with the GST to form a 15 percent “harmonized” tax. In compensation for lower revenues, they will receive close to $1 billion over four years.
Martin called on other provinces to join the scheme.
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Critics howled about the broken promise to get rid of the tax and what they called a “bribe” to the Atlantic provinces.
Martin reminded them of the $1.6 billion being paid to prairie grain farmers for loss of the Crow Benefit, and the money sent to farmers during the trade war.
Assistance given to farmers
“It is a well-established practice in Canada, when a region undergoes a major restructuring or faces some hardship, as in the case of the payments to western farmers in the 1990s, for the federal government to provide assistance,” Martin told the Commons. “This is in fact what we have done here.”
Later, during debate, Martin’s parliamentary secretary raised the same point with Calgary Reform MP Jim Silye.
After listening to criticism of the compensation package from Silye, Toronto Liberal Barry Campbell wondered if he opposed all “adjustment assistance” aimed at helping a region deal with structural change.
“In particular, could he comment on the state of the wheat industry, wheat sector, wheat farmers and the compensation they are receiving as a result of budgetary structural change over the last few years?” asked Campbell.
Silye retorted the Liberal MP had missed the point. Grain, or the unemployed or the poor were not being subsidized with federal tax dollars. Instead, it was money to three provincial Liberal premiers “who will brag that they brought in tax cuts.”
The GST was the most explosive story on Parliament Hill last week as the Opposition saw a chance to undermine the government’s credibility with charges that Liberals lied during the election campaign.
At week’s end, as backbench Liberals squirmed at the news that anti-GST calls were pouring into their constituency offices, the Liberal government scorecard read:
- Apologies: Two, one from Martin for promising to “axe the tax” and then reneging, and one from deputy prime minister Sheila Copps who had vowed to resign if the tax was not abolished. It was not and she will not.
- Defections: Two, as Toronto Liberal John Nunziata was thrown out of the Liberal caucus for voting against the budget on the GST issue and Toronto Liberal Dennis Mills left the caucus in disgusted sympathy.
- Wavering: None, as prime minister Jean ChrŽtien refused to concede that people ever expected the Liberals to get rid of the tax. Instead, he read over and over from the Liberal 1993 campaign book, which promised only to reform and harmonize the tax.
