s leaders and repres-
entatives of various
popular organiza-
tions that constitute
the Pro-Canada
Network — labour
unions, farmers as-
sociations, women’s
groups, anti-poverty
organizations, aboriginal groups, environ-
mental associations, nationalist groups
peace networks, church groups, cultural
associations, senior citizens groups — we
have some basic concerns and challenges to
declare as the Mulroney government pre-
pares its first budget under the new free
trade regime.

For the past two and a half years, we have
waged a vigorous struggle against the U.S.-
Canada trade deal. Throughout, we argued
that the trade deal was the centrepiece of a
larger economic strategy that involves
major moves towards privatization and
deregulation. Indeed, this trade deal has
been the triggering mechanism for restruc-
turing Canada in terms of a continental and
market-oriented economy and society. The
wave of plant shut downs, corporate
mergers, and U.S. buy-outs immediately
following the ratification of the accord ear-
lier this year, was a sharp reminder of these
trends and implications.

The recent Throne Speech gives some
indication of how the Mulroney govern-
ment plans to reorganize Canada’s eco-
nomic and social policies under the new free
trade regime. The forthcoming federal
budget will reveal further plans. As the Mul-
roney government finalizes its first free
trade budget, we urge them to stop follow-
ing the corporate business agenda for Can-
ada’s future and to start responding to the
economic and social needs of the vast
majority of Canadians.

Campaign promises

During last fall’s federal election, the
Mulroney government steadfastly promised
all Canadians that the free trade deal would
not adversely affect Canada’s social pro-
grams. In the French language televised
leaders’ debate, the prime minister made
the following pledge:

“There is absolutely nothing that. will
stop the government of Canada from main-
taining all its social programs, all its
regional programs, but strictly nothing. We
are going to maintain all our social pro-
grams. There is nothing in the Free Trade
Agreement to the contrary, not only as con-
cerns our existing obligations but also with
respect to future possibilities.”

At the same time, other cabinet ministers
promised that the Free Trade Accord
would not impact negatively on our jobs,
our health care, our environment, our cul-
tural activities or our farm programs.
Indeed, those who continued to claim oth-
erwise during the campaign were branded
as “liars” and “scare mongers.”

The Mulroney government’s campaign
promises and assurances were firmly rein-
forced by Canada’s leading corporations. In
their four page newspaper ad blitz across
the country, they posed and answered a
series of questions about the free trade deal,
including the question: ““Won’t Canadian
business lobby to reduce spending on social
and other programs?” Their answer was an
emphatic “Not at all!”

Corporate assault

Once the election was over, however, the
country’s major corporations launched a
sophisticated campaign to persuade Cana-
dians to forget about these election prom-
ises. Within days, the Business Council on
National Issues had declared that the fed-
eral deficit was the No. 1 problem and pro-
ceeded to mount an aggressive lobbying
campaign. The Canadian Manufacturers
Association and the Chamber of Com-
merce followed with demands that Finance

Minister Michael Wilson begin major .

deficit reductions by cutting social pro-

ms.
The Canadian Manufacturers Associa-
tion made it quite clear that the free trade

12 e Pacific Tribune, May 1, 1989

Achallenge

for Canada

_ The full text of the
declaration issued by the
Pro-Canada Network

deal has made the need for deep cuts in
spending on social programs even more
urgent. In order to become more competi-
tive in the new free trade era, the CMA
argued, the federal deficit must be reduced
through cuts in government expenditures.
The major target, they insisted, is govern-
ment spending on social programs.

The Chamber of Commerce went a step
further in demanding specific program cuts.
Old age security and guaranteed income
supplements, they proposed, should be cut
by $2 billion this year. Another $3 billion
should be sliced out of the unemployment
insurance program. Other universal social
programs such as family allowance, they
argued, should be targeted for the needy,
thereby reducing further expenditures. In
addition, they argued that the proposed
national sales tax should be expanded to
cover everything, including food.

Four months after the federal election,
Canadians can now see who was really tell-
ing the truth during the campaign.

Deficit myths

The federal budget is a visible sign of the
government’s economic and social priori-
ties for our society. Reducing the federal
deficit however, must not become, the top

priority for the government. While the
’ deficit may be a problen, it is certainly not

the major problem facing Canada’s future.
The deficit is not a “mountain of debt” on
the backs of our children and grandchild-
ren. In the first place, the deficit is money we
owe to ourselves not to foreign creditors,
(e.g., 82 per cent of the public debt is owed
to Canadians). Secondly, the deficit repres-
ents real investment in public assets (e.g.,
schools, hospitals, roads, ports, power
plants, etc.). Thirdly, current federal deficit
is certainly not as high today as it has been
in times past, when it is viewed as a percen-
tage of our Gross National Product.

We firmly insist that federal deficit reduc-
tion should not be carried out at the expense
of our universal social programs. They did
not cause the deficit. On the contrary, the
deficit was largely caused by a combination

of high unemployment, multi-billion dollar -

hand-outs to large corporations and unjus-
tifiably high interest rates. Moreover,
government spending on social programs in
Canada is well below that of most other
industrial nations. In comparison to other
OECD countries, Canada ranks 13th out of
19 in the proportion of national income
spent on social programs.

We contend that the urgency of the fed-
eral deficit is being exaggerated to serve big

corporate interests. The corporate lobby
groups advocating deficit reduction repres-
ent the same corporations that are respon-
sible for much of the deficit through their
refusal to pay their fair share of taxes, in
some cases no taxes at all. Many of these
corporations have also been actively lobby-
ing for a major increase in military spend-
ing. Likewise, the advocates of making
deficit reduction a priority include the same
multinational corporations which annually
take billions of dollars out of Canada and
send them back to their American parent
companies as profits. Indeed, the hypocrisy
of this situation should not be lost on the
people of Canada.

Popular demands

As the Mulroney government prepares
its first budget under the new free trade
regime, we insist that it should reflect and
honour the campaign promises made last

fall by serving the basic economic and social

needs of the majority of people in this coun-
try.
Specifically, we demand:

Real jobs

That real jobs be the number one goal of
economic strategies in the federal budget.
This call s for an end to policies that pro-
mote the proliferation of low wage, part-
time work. What is required are policies
that promote full-time jobs with decent
wages. In order to curb the waves of worker
layoffs and plant shut downs caused by
corporate mergers and the trade deal itself,
new economic strategies are required. These
include: the reduction of current high inter-
est rates; new investment strategies designed
to redirect capital for certain key sectors of
the economy; the linkage of government
grants for corporations to specified job
creation standards; and the expansion of
public and community services (e.g., day
care and senior citizen facilities) as a positive
means for increasing job creation and pro-
ductive capacity.

Social programs

That our universal social programs be
strengthened and expanded, not weakened
by the provisions in this federal budget.
Universal access is what distinguishes Can-
ada’s social programs from those in the
United States. Any attempt to reduce social
spending by targeting the needy through
selective programs, undermines this princi-
ple of universal access. Selective programs
inevitably create social divisions between

those “who pay” and those ‘“‘who receive.”
Any targeting measures, that undermine the
universality of our social programs (€.g.,
family allowances, old age security pay-
ments), including direct tax back schemes,
would be a violation of campaign promises.
At the same time, we urge that renewed
energies be put into the development of a
quality, non-profit, universally accessible
day-care program in Canada.

Worker adjustment

That a comprehensive program for
adjustment assistance to unemployed work-
ers be included in this federal budget. The
government has repeatedly promised that
workers should -be provided the best —
adjustment assistance and retraining pro-
grams in the world. Any attempt, however,
to transfer funds from current income
maintenance expenditures for these put-
poses would be totally unacceptable. A
comprehensive, adequately funded, income
maintenance system provided by Unem-
ployment Insurance must be strengthened
along side any adjustment program.
Indeed, full UI benefits (insurance paid for
in part by workers themselves) along with
federally funded social programs are a
necessary. part of worker adjustment assist-
ance initiatives. Likewise, worker adjust-
ment schemes should not be a substitute for
industrial and agricultural policies designed
to create real, full-time stable jobs in all
regions of the country.

Regional development

That effective measures be taken in this
federal budget to make long term regional
economic development a reality in Canada.
In the near future, economically underdeve-
loped regions are likely to suffer from more
unemployment due to plant shut-downs,
corporate mergers, and more centralized
investment strategies taking place under the
new free trade regime. Make work pro-
grams, which provide only enough weeks of
employment to qualify for UI benefits, are
simply not sufficient. Similarly, the promo-
tion of arms production industries in
underdeveloped regions is not the answer.
Instead, alternative, community-based indus-
trial strategies are required to promote long
term economic renewal in these regions. It is
also essential that transfer payments for
education and health services to offset
regional disparities (including Native pro-
grams) be maintained and expanded. Any
cuts in federally funded regional extended
UL benefits or in federal transfer payments
to the provinces would be seen as a violation
of campaign promises.

Military spending

That government subsidies for arms pro-
duction be cut back in this federal budget.
this should include both the scrapping of the
$20 billion nuclear submarine program and
a freeze on direct subsidies to military pro-
duction industries. After all, it has been
clearly demonstrated that capital invested in
arms production generates fewer jobs than —
that invested in civilian forms of produc-
tion. Moreover, under the Free Trade
Agreement, the federal government will be
further pressed to provide subsidies for mil-
itary production industries. yet, any drain
on social program funding by increased
spending for either nuclear submarines or
arms production purposes would be seen as
a direction violation of campaign promises.

Social advocacy

That steps be taken in this federal budget
to ensure continued and enhanced govern-
ment support for social advocacy groups.
The federal government has traditionally
provided funds for specific organizations
(e.g., women, anti-poverty, native, cultural,
environmental groups) which make a sub-
stantial contribution to the development of
public policy in Canada. After all, Canada
has accept the United Nations guidelines for
government support of social advocacy
groups. Any attempt to cut back funding