THE RECORD
March 15, 2000

Fiat Lux

by Ed Deak

Well, the so called Business Summit came out with their eagerly awaited report on the BC economy and, as expected, their number one recommendation was the lowering of taxes. Number two, the cutting of red tape.

Right on track, our BCTV never fails to include a few lines on the disintegration of the health services and the brain drain to the USA on account of our high taxes .

When the 1988 federal elections were fought over the US-Canada Free Trade Agreement many of us have predicted that the FTA will be disastrous on Canada. One of the main points we raised was that not only shall we lose hundreds of thousands of manufacturing jobs, but the resulting stress and desperation will raise the demands on social services until they collapse. At the same time it will put multinationals in the ideal blackmail position to demand increasing tax cuts and special privileges.

We got them all in spades. The FTA, then the NAFTA and the WTO have wiped out whole industries, making hundreds of thousands unemployable, or forcing them into two or three part time jobs. Twenty years ago about half of Canada's tax revenues came from corporations, now it is twenty percent. Thousands of highly paid executives with yearly incomes into the millions pay no taxes. Our industries are being gobbled up by foreign corporations, our people fired and the resources exported. According to World Bank reports in the mid eighties 13 percent of Canada's exports consisted of resources, now it is 68 percent.

Meanwhile our Reform MPs and Liberal MLAs demand more reductions in regulations, so we become "more competitive" and export every tree and grain of mineral untouched by human hands. This is what they call: "Welcoming foreign investment to kickstart the economy."

While the corporate media eagerly propagandizes this nonsense, the figures by StatsCan paint a different picture. Over the past 20 years the investment in the BC forest and pulp industries averaged almost $1 billion per year. This almost $20 billion investment hasn't created a single job. It's sole purpose was automation to get rid of thousands of workers. Then the industry put all their eggs into the Asian bubble market and when it collapsed they blamed our Forest Practices Code and similar "red tape", which they negotiated and claimed that they could work with.

Now our local mills are making record yearly profits, amounting to $100,000 per worker, while firing more every year. The local Schoolboard has a serious budget shortage. They want to close some schools and make even kindergarten children walk up to 4km to school: in -20C temperatures on gravel roads in the forests with heavy logging truck traffic and no sidewalks. 4km per hour used to be the European standard for their infantrymen. In these conditions the children would be walking up to 3 hours per day. At the same time the corporations refuse to pay taxes and pay shyster politicians to propagandize for more tax cuts so they can fill the pockets of investors in other countries.

On the federal level, again by StatsCan, between 95 to 97 percent of the yearly $20 billion foreign investment goes into the acquisition of established businesses. The workers are fired and either replaced by automation, or the materials exported together with some key personnel. In spite of the propaganda, this foreign investment doesn't create any jobs, but eliminates them. The results are that our once proud social safety network is falling to pieces, the poverty gap is growing by the minute and the health services can not handle the stress related illness and accident numbers. Meanwhile, our politicians are proudly gloating over the great economic boom the NAFTA brought us and are negotiating to sell all that's left with the coming Free Trade Area of the Americas, the FTAA, and the Millennium round of the WTO.

We usually consider taxation as moneys taken from our pockets by various levels of governments. In other words, something we have to pay out more or less against our will The PR hacks of big business will do anything within their power to divert attention from the simple fact that there are many taxes hidden in the jungle of economic theories. When we pay taxes to a government we can expect and demand something in return. We can demand accounting of where the money goes and who gets it? Like schools, and police and fire departments and military and roads and so on.

What control do we have over taxes we are forced to pay into the bottomless pockets of private business? How can private business tax us? Very simple: Private taxation is called profits.

In real trade people exchange goods, or payments, of equal value. The profit is the satisfaction of the ownership of the traded goods. In commerce a certain amount of the payment is over and above the balanced trade value, inflating the price to benefit the seller. This artificially added on figure is the profit.

As a businessman I realize the importance of making a profit, but how much is the reasonable percentage over and above the real exchange values? According to capitalist theory the sky is the limit.

As a human being and a responsible citizen, I disagree ......More on this next time.

Copyright (c) 2000, West's International