From can.politics Sun Mar 14 16:38:26 1993 Path: utcsri!rpi!zaphod.mps.ohio-state.edu!caen!destroyer!cs.ubc.ca!unixg.ubc.ca!reg.triumf.ca!histlib From: histlib@reg.triumf.ca (MARY OLIN) Newsgroups: can.politics Subject: The NDP Plan:Research and Development, Workforce Training Date: 12 Mar 1993 19:55 PST Organization: TRIUMF: Tri-University Meson Facility Lines: 239 Distribution: world Message-ID: <12MAR199319550794@reg.triumf.ca> NNTP-Posting-Host: reg.triumf.ca News-Software: VAX/VMS VNEWS 1.41 INVESTMENT IN RESEARCH AND DEVELOPMENT Canada must do a much better job at research and development. Our plan includes doubling the federal government's direct investment in research and development, and working to improve R&D and the adoption of new ideas and innovations throughout the economy. Technological change is happening very quickly in the present world economy. The time between the discovery of a new idea and its conversion into products and services is shorter than ever before. Products have briefer "life cycles" and have to be continuously upgraded or replaced. In this environment, Canadian producers face tough competition from foreign producers who have made major commitments to research and development. Canada grossly under-invests in research and development and in innovation. In 1990 Canada invested 1.37 percent of its gross domestic product on R&D, up only 0.01 percent since 1971. In contrast, the United States invested 2.88 percent of its gross domestic product on research and development in 1990 (2.47 percent in 1971). Here are comparable figures for some of our other trading partners: Research and Development as a % of Gross Domestic Product 1971 1990 Germany 2.20 2.81 Japan 1.71 2.80 Sweden 1.49 2.76 France 1.88 2.42 Britain 2.10 2.28 Canada 1.36 1.37 We must come closer to these levels of investment if we want our workers to continue to produce products and services as attractive to consumers, at home and abroad, as competing foreign products. Doing a better job at research and development, and at widely diffusing the results in industry, is a pre-condition to building and sustaining a full-employment economy. An important first step to improving this performance: our plan will more than double funding for the National Research Council and the National Sciences and Engineering Council over the course of the next Parliament, increasing investment through these agencies from $929 million in 1992-1993 to some $1.9 billion by 1998-1999. Funding will be committed on the basis of stable five-year plans for these councils, enabling them to plan long-term research. The purpose of these investments is to encourage a broad, multi- disciplinary increase in basic and applied research in universities, centres of excellence and research institutes. It is hard to predict which research project will produce a product breakthrough. Our purpose is therefore to invest in a highly diversified manner, subjecting research proposals to the intense peer review used by the federal government's research granting coucils rather than trying to direct funding in excessive detail. To encourage the adoption and diffusion of new ideas generated by this increased investment, our plan assigns a much more strategic role for the Department of Industry, Science and Technology. Among the Department's mandates: The department will oversee a substantially upgraded Industrial Research Assistance Program. ("IRAP") This program helps Canadian firms cover the cost of in-house research and development workers, and encourages the adoption of new ideas that can be converted into product breakthroughs. We will shift the IRAP program out of the National Research Council and integrate it into the technology diffusion work of the Department of Industry, Science and Technology. IRAP is one of the federal government's most successful and widely-emulated of R&D programs. Focused on Canadian homebased firms and aggressively implemented, it can help make a real difference to Canadian R&D performance. Within our overall increase in R&D funding outlined above, we will increase funding for IRAP from its 1992 level of $86 million to $250 million by the end of the next Parliamentary term. The Department will encourage and assist more Canadian-owned firms to join together in "pre-market consortia", partnerships that spread risk and work together with universities, centres of excellence and research institutes to develop new ideas and to diffuse them. For example, the Department could bring together the major firms in Canada's pulp and paper industry, and work with them to launch and share a much-expanded research and development program aimed at developing higher value-added pulp and paper products, and at developing less polluting production processes. The Department will help firms identify best-use methods and technology. The Department will steer innovative enterprises towards investment capital includinng the new National Investment Fund. Much of this work will help create building blocks for deepening clusters of inter-dependent firms and help these clusters become internationally competitive. There is a limit to what direct government action can accomplish. Canada will not reach the levels of investment in research and development set by our trading partners unless these greater pulic sector commitments to R&D are matched by a MUCH greater private sector commitment. Canadian industry falls miserably short of the levels of research and development investment set by our trading partners. In 1990 American industrial investment in R&D accounted for 1.93 percent of the U.S. gross domestic product; German industry for 2.07 percent; and Japanese industry for 2.08 percent. Canadian industry invested only 0.73 percent of GDP in research and development. The absence of "incentives" is not the problem. Canadian R&D tax credits are already among the most generous in the world. Private-sector industrial research and development is low in Canada because private companies tend to concentrate R&D in the country where they are homebased, and more than 50 percent of Canadian industry is owned by foreign, mostly American, companies. In the long term, the best way to improve R&D performance in industry is to reduce the proportion of foreign ownership in our economy. A smart economy doesn't surrender sovereignty over its economy to other countries, either through trade deals, or through excessive foreign ownership. Under our plan, the federal government will co-ordinate the investment strategy of the National Investment Fund, higher public investment in R&D, and the work of the Department of Industry, Science and Technology through programs like IRAP to steadily increase the proportion of R&D incentive, Canadian-homebased industry in our economy. We will tighten the standards applied to foreign investments by Investment Canada. An important precondition to approval of substantial new foreign investments will be the willingness of the investor to commit to an R&D strategy in Canada. A REAL COMMITMENT TO WORKFORCE TRAINING [Some text omitted] ...Universities need to find ways to turn around steadily dwindling enrollments in science and technology. Statistics Canada recently reported that full-time enrollment in science and technology studies at Canadian universities declined from 24.4 percent of all enrollments in 1984 to 20.6 percent in 1989. In community colleges enrollment in those fields declined from 33.2 percent in 1984 to 26.7 percent in 1989. Government, industry and labour have to provide for continuous learning for employed and unemployed workers after they leave school. Canadian continuous learning and workforce training is well below the standards set by our trading partners. In March 1991 the Financial Post reported that each year the average Japanese worker receives 200 hours of training, The average Swedish worker 170. The average Canadian worker receives only seven hours. Statistics Canada reported that in 1987 only 5.3 percent of the working population received training of any kind... ...In some industries, businesss and labour are beginning to work together to address these issues. The Canadian Steel Trade and Employment Congress, the Sectoral Skills Council of the electrical and electronics manufacturing industry, and the Auto Parts Council are three examples of how labour and industry are building partnerships and stepping up to some of these training and development issues together. The federal government has belatedly begun to make funding available for these important bodies. At the national level the Canadian Labour Force Development Board is a labour-management body that now helps shape several billion dollars in federal UIC-account training funds. The Canadian Labour Market and Productivity Centre is another example of a national body where industry and labour work together on national economic issues. To achieve our objective of a full employment economy, we will build on and deepen these existing initiatives and resources; bring together the players involved in education, workforce training and continuous learning, and work to get Canadians to pull together to improve our country's performance in this area. Our plan includes a series of measures to address these issues: A refundable training levy, phased in over the course of the next Parliament. When fully implemented this levy will require employers with more than 10 employees to invest in a company-based training and development program, or to pay a sum equivalent to 2 percent of their payrolls to the federal government. This levy is a simple but effective means to lever more investment into training. Companies will be able to offset the levy by demonstrating that they have set up a labour-management committee to oversee a company training program, and by reporting the sum they have invested in workforce training and development annually. Each dollar spent on training will offset a dollar that would have otherwise be payable under the levy. The levy will be phased in over four years to allow firms to gear up training programs, increasing in increments of 0.5 percent of payroll per year. The refundable training levy will create a "minimum training obligation" in every medium and large Canadian firm. Funds raised by the government from the levy will be earmarked for publicly-financed training. Canada's networks of colleges, technical institutes and other educational institutions are important partners for labour and management undertaking new training initiatives triggered by the training levy. In 1989 employers managed payrolls totalling approximately $350 billion. A 2 percent training levy would have directed some $7 billion towards workforce training--still below the level of investment by many of our trading partners, but a sound base for helping to construct a "training culture". Fairly distributed, this level of new investment in training and development will provide every Canadian worker with five days of training a year. Although this measure is principally designed to bring about an important structural change in our economy, it is an effective jobs program, since it will trigger a demand for teachers and trainers in industry. This will create an ideal opportunity for older workers with priceless experience and skills, as well as for young teachers who currently face a tough job market in a time of declining school enrollments. Building on the examples of the Canadian Steel Trade and Employment Congress, the Sectoral Skills Council of the electrical and electronics manufacturing industry, and the Auto Parts Council, we will work with business and labour to establish joint labour-management sectoral training councils for each major Canadian industry. Co-ordinated by the Canadian Labour Force Development Board, these sectoral training councils will design guidelines and provide extension sevices for workplace training programs in individual companies. These boards will therefore have a direct role to play in improving the quality, common standards, and cross industry and interprovincial portability of training. They will also provide another forum for government, labour and management to broaden their partnership in the cause of building a full- employment, value-added and high-skill economy, and add another dimension to identifying and filling out industrial "clusters". Under our plan, the federal government will invest up to $20 million a year to cover the administration costs of these councils. [Our plan will create] a National Council on Continuous Learning. This council will invite provincial and territorial governments, educators, business and labour to come together to examine issues such as core curriculum in Canadian schools, literacy programs, education techniques, computerization, and other issues. Under our plan, the federal government will invest $10 million a year to fund this Council. For many young people, lack of experience poses a major obstacle to joining the work force. The federal government will work with provinces and territories to create a cost-shared program that gives young people useful job experience. Young people could be assigned to work in industry, community enterprises and social service agencies, and to take part in environmental programs such as tree planting, recycling, and energy audits. This youth service will provide opportunities for young people, and also for older adult mentors. We will release details of this community youth service in a separate document. Under our plan, the federal Department of Employment and Immigration will set up a long-overdue state-of-the-art national electronic jobs matching system. Job seekers and vacancies will be posted electronically at Canada Employment Centres, matching workers with potential employers across the country. This system will bring the federal government's employment centres into the 21st century, improving their ability to match jobseekers to jobs, helping to identify skills shortages, and reducing paperwork and waiting time at centres. Under our plan, we will restructure the Pathways to Success Program to recognise the principle of aboriginal self-government, the need for adequate resources, and the need to link training to economic development. We will increase funding for this program by $50 million per year. From can.politics Sun Mar 14 16:38:26 1993 Path: utcsri!rpi!zaphod.mps.ohio-state.edu!caen!destroyer!cs.ubc.ca!unixg.ubc.ca!reg.triumf.ca!histlib From: histlib@reg.triumf.ca (MARY OLIN) Newsgroups: can.politics Subject: The NDP Plan: A More Participatory Economy, A Green Economy Date: 12 Mar 1993 19:58 PST Organization: TRIUMF: Tri-University Meson Facility Lines: 205 Distribution: world Message-ID: <12MAR199319581796@reg.triumf.ca> NNTP-Posting-Host: reg.triumf.ca News-Software: VAX/VMS VNEWS 1.41 A MORE PARTICIPATORY ECONOMY To achieve a smarter economy, we have to make it easier for people to participate in decision-making affecting their workplaces; we have to give them more chances to try out their own ideas; and more tools to improve their chances of succeeding. Most Canadians work for companies in the private sector. In a smarter economy, the the energy, ideas and initiative of all working people must be tapped to achieve best possible results. Our plan includes measures that empower workers in their workplaces, enabling them to contribute all they can. An increasing number of Canadians are earning their living in the "third sector": working together in co-operatives and community development enterprises which exist for service instead of profit. Co-ops and community development enterprise are effective ways for individuals and communities to take a direct hand in their own development. We want to encourage these kinds of enterprises. Our plan includes working with labour and business to design new ground rules that make it easier for working people in businesses under federal jurisdiction to participate in unions. We will work for closer and equal labour-management partnerships in all of our economic initiatives. And we will encourage provincial and territorial governments to introduce similar reforms in their jurisdictions. Many studies prove that the best labour-management partnerships and highest productivity are in unionized workplaces. In "Trade Unions in the Production Process" by Charles Brown and James Medoff, for example, the authors estimate that unionized firms in the United States have productivity rates almost 20 percent higher than unorganized companies in a well-managed firm, workers embrace and contribute to technological change and new work organization when they have a say in developing them, backed up by the fundamental security that comes with the right to to collective bargaining. Canada's higher rate of unionization offers us an important potential competitive advantage over the United States by opening the door to involved, participating workers. We should work to realize that advantage. Under our plan, we will implement a framework for national economic consultation with labour and the business community on federal fiscal and monetary policy. Our plan includes new legislation to facilitate employee ownership. We will introduce an Employee Share Purchase Plan. This plan will help employees to buy a controlling interest in their workplace through tax incentives, when they choose to do so and when the firm is a viable concern. It will also provide a structured and fair procedure for creating employee share purchase plans. Agreement by the parties involved--including employees, management, shareholders, and government--will be required for each employee buyout. Plans will have to show long-term employment prospects and the potential to improve the financial viability of the company. The federal government will offer a 50 percent tax deduction for an employee's contribution of up to $10,000 annually, or 10 percent of annual salary. Support will be offered for employee training related to share ownership, and for plan development. Federal tax revenue foregone through this plan will be roughly balanced by the savings to the government in income support and other adjustment costs that would have been incurred if viable firms were instead permitted to close. Canada's large and growing co-operative sector needs support. Under our plan the federal government will ensure co-operatives have access to the same tax benefits as corporations do, and will offer extension services to co-ops through an upgraded federal Co-operatives and Community Economic Development Secretariat, within the Department of Industry, Science and Technology. In 1990, according to the federal Co-operatives Secretariat "Resource File", there were 4,480 non-finanacial co-ops in Canada, with 3.4 million members, $15.9 billion in revenues, and $8.8 billion in assets. There were also 2,737 caisse populaires and credit unions with 9.3 million members, or one in three Canadians. They controlled assets wowrth $72.2 billion, including loans of $55.3 billion. Ten co-operative insurance and trust companies reported assets of over $40.4 billion. Co-operatives offer Canadians an important and proven alternative way to organize their work lives. Co-ops are a form of business incorporated for service rather than for profit. They are a flexible instrument that can meet many economic, social and cultural needs. They are owned by members and users and are controlled by them on the basis of one member one vote, typically working through an elected board and a professional staff. The National Investment Fund will be a new source of investment for Canadian co-ops. We will expand and enrich the services provided by the federal Co-operatives Secretariat to help improve management skills, marketing, promotion, education, and research within co-operatives. And we will eliminate federal tax, regulatory and purchasing policies that hold co-ops back. Under our plan, similar services will be provided to community economic development organizations. Community Development Corporations are a more recently developed instrument that permit citizens to take direct charge of rebuilding their own communities. Aboriginal Canadians have widely employed this form of development, resulting in highly successful ventures like the Kitsaki Development Corporation in La Ronge, Saskatchewan. New Dawn Enterprises in Cape Breton has helped launch a spreading network of firms and facilities, ranging from a housing development to homecare sevices for the elderly. In Cambridge, Ontario, the Community Opportunities Development Association provides employment support services and has helped many unemployed people launch successful micro-enterprises. The City of Montreal is providing core funding for a network of community development corporations targeting similar services at the city's economically-disadvantaged neighbourhoods. The National Investment Fund will look for partnerships with community development corporations. We will support community development with extension services delivered through an upgraded Co-operatives Secretariat. And we will ensure community development enterprise has a fair chance at government contracts and suffers no tax disincentive. The New Democratic Party continues to support the aboriginal peoples' inherent right to self-government, and we believe that one of the ways this can best be achieved is through aboriginal-controlled economic development. Under our plan, the Canadian Aboriginal Economic Development Strategy will be reorganized to become an aboriginal-controlled source of investment capital. EMPLOYMENT IN A GREEN ECONOMY Canada must act decisively to integrate environmental concerns into the way we do business. Our present approach to the economy is not sustainable. Environmentally friendly economic policies promote efficiency and innovation and generate jobs. Canadians have long understood the need for environmental reform. And Canadians know that our country and the rest of the world must move to a more sustainable approach to our environment. Good environmental policies make economic sense, save jobs and create jobs. Economies and firms who have moved towards sustainable environmental policies have improved both their economic performance and their levels of employment. The amount of energy and primary materials used per unit of gross domestic product are lowest in the world's most competitive economies. Between 1973 and 1987, Japan reduced the amount of energy required to produce its gross domestic product by 30 percent, and now boasts the world's most energy-efficient economy. In the process, a number of Japanese firms have developed cutting-edge green technologies and are well positioned to serve a growing world market. Firms like Sanyo have been investing heavily in solar energy, environmentally safe refrigeration and pollution-free energy fuel cells. Germany has some of the world's tightest regulations in stationary air pollution control. Not coincidentally, German companies hold a wide lead in patenting and exporting air pollution and other environmental technologies. The State of California has triggered a great deal of innovation in the automotive industry by phasing in unprecendentedly tough emissions standards, and by requiring vendors to meet sales targets for "zero-emission" vehicles like electrically-powered cars. In contrast, the former Soviet Union and Eastern Europe are among the most wasteful, polluting and energy-intensive economies in the world, and are correspondingly uncompetitive. Here in Canada, "green industries" represent important economic potential. It is estimated that environmentally-related enterprise is already worth $7 billion to $10 billion a year and employs 150,000 people. Sustainable environmental strategies affect the bottom lines of firms-- positively. The Sheraton Centre Hotel in Toronto saved $1.2 million per year between 1984 and 1989 through energy efficiencies. Low-flow showerheads alone save $58,800 per year. Quaker Oats Co. of Canada in Peterborough, Ontario cut its waste generation byb 75 percent, saving $976,000 a year. Northern Telecom invested $1 million to develop a more efficient CFC-free method of cleaning circuit boards, resulting in savings of $50 million by the year 2000. Under our plan, the federal government will introduce a comprehensive environmental policy. Here are three examples: Under our plan, the National Investment Fund will invest in innovative, commercially-viable Canadian firms engaged in developing and marketing green technologies. The federal government will invest in environmental research and development through our increased commitments to the National Research Council and the National Sciences and Engineering Council. Canada still has a chance to become a world leader in developing new technologies that promote better environmental management and clean-up. Some examples include the manufacture of goods from recycled materials, air and water pollution control and monitoring equipment, energy conservation technologies, and site clean-up technologies. Also under our plan the National Infrastructure Program will put a high priority on investment in improved sewage treatment facilities. One third of Canadian communities dump raw sewage into lakes, rivers and oceans. In other communities existing treatment facilities are breaking down. Investment in sewage systems will reduce water pollution. Energy, Mines and Resources Canada will expand and improve its Efficiency and Alternative Energy Program to better promote energy efficiency and the use of alternatives. Energy efficiency and conservation reduces energy costs, increases competitiveness, generates jobs and reduces harmful emissions. More and more utilities are recognising that it is more cost-effective and more environmentally friendly to encourage consumers to be more efficient than to build new generating facilities: "negawatts" instead of "megawatts". Ontario Hydro and B.C. Hydro have committed substantial resources to energy conservation measures. Under our plan, we will provide project grants for energy audits of businesses and homes, firms adopting co-generation, development and marketing of efficient equipment like heat recovery ventilators, and energy efficient windows, light bulbs and reflectors; set minimum energy efficiency standards; extend the R-2000 program for new homes to retrofit housing. Under our plan the federal government will commit $250 million a year to this upgraded Efficiency and Alternative Energy Program. Environmental concerns about air pollution and global warming are creating new economic opportunities in the research and development of energy alternatives. The National Research Council and the National Sciences and Engineering Council will channel R&D investment to developing energy alternatives such as hydrogen fuel cells, biomass fuels, and solar wind energy. From can.politics Sun Mar 14 16:38:26 1993 Path: utcsri!rpi!zaphod.mps.ohio-state.edu!caen!destroyer!cs.ubc.ca!unixg.ubc.ca!reg.triumf.ca!histlib From: histlib@reg.triumf.ca (MARY OLIN) Newsgroups: can.politics Subject: The NDP Plan: Resources Date: 12 Mar 1993 19:59 PST Organization: TRIUMF: Tri-University Meson Facility Lines: 150 Distribution: world Message-ID: <12MAR199319595081@reg.triumf.ca> NNTP-Posting-Host: reg.triumf.ca News-Software: VAX/VMS VNEWS 1.41 A FUTURE FOR CANADA'S RESOURCE COMMUNITIES As part of our overall economic strategy, our plan targets Canada's resource commmunities for reconstruction and renewal. The future of many regions of our country depends on it. An important part of our strategy will be to increase value-added activities--that is, to increase the amount of resource processing, whether the resource is agricultural produce, fish, forest products, or minerals. This will help diversify local economies and sustain communities over the long term. -->Agriculture Family farms are the core of many rural communities. But farm income has been dropping--by 20 percent in 1991, on top of a 12 percent decline in 1990 --and many families have been forced off their land. Farm families deserve a fair return for their products. Our plan includes a number of measures to help family farms: A national farm income stabilization program will provide a guaranteed price to farmers for part of their crop (for example, the first eight thousand bushels of wheat), with payments calculated according to production costs. This program will protect farmers during periods of falling or low agricultural prices, and target assistance to those who need it most. This program will replace existing, less well-structured federal farm support programs at about the same spending level. Farm forclosures will be suspended until an adequate farm debt review process is in place. The Farm Credit Corporation will be directed to develop a farm debt relief plan with a low fixed interest rate. This measure will cost the federal government an average of approximately $500 million a year. We will work with provincial governments to implement locally-controlled community trusts to manage agricultural land that comes into the possession of the crown. Rather than selling off productive land to the highest bidder, these trusts will open up new land tenure options for farmers, including leasing land. Reasearch and development funding will be targeted at developing more sustainable agricultural methods. If Canadian agriculture is going to have a future, we have to do a better job of protecting soil and water. We will introduce improvements to the pesticide registration process. We will support the creation of "organic" grades for produce. And we will design tax incentives for farmers to purchase conservation technologies. We will continue to support the principles of orderly marketing through marketing boards and the Canadian Wheat Board. -->The Fishery Federal government mis-management and foreign overfishing have combined to decimate Atlantic fish stocks, threatening the fabric of hundreds of communities in Atlantic Canada. The resulting moratorium on harvesting cod has destroyed thousands of fisheries-related jobs. On the west coast, jobs are threatened by a Free Trade Agreement ruling that mandates exports of unprocessed salmon and herring, our most valuable west coast fish stocks. Problems in the inland fishery are devastating many aboriginal and northern communities. The Canadian fishery must adopt more ecologically sound management practices, and we have to protect fishing communities and fishing people. The indiscriminate harvesting levels of the past will not serve the interests of the future. They must be replaced by management practices that will rebuild resources so that they can produce their optimal sustainable yield. Under our plan we will institutionalize a system of community co-management of the fisheries. Fishers must be involved in determining policy. We will open the doors, creating new institutions that bring fishing communities into the decision-making process, including the setting of quotas and allocations, and future restructuring. We will restore adequate funding for the Department of Fisheries and Oceans, in order to permit the department to properly do its job of enforcement and the study and co-management of fish stocks. We will restructure the Fresh Water Fish Marketing Corporation to maintain pooled pricing and coordinated marketing, while facilitating local processing. The National Investment Fund will look for commercially viable partnerships with fishing people and fishing communities to invest in modern, sustainable harvesting equipment. The fund will also lood for viable partnerships with firms, co-ops and community development enterprise engaged in value-added processing and local manufacture of boats and fishing gear. As a major fishing nation, Canada should be processing its own product and manufacturing and exporting world-quality fishing equipment. Instead we import 85 percent of our gear and export too much unprocessed resource. We will establish, unilaterally if necessary, Canadian management jurisdiction over the entire continental shelf off Atlantic Canada including the "nose" and "tail" of the Grand Banks. -->Forestry The forest industry accounts for more than 300,000 direct and 1.1 million indirect jobs in Canada, and produces some $43 billion worth of goods annually. The bulk of the industry is regulated by provincial and territorial governments in Canada. Only 10 percent of Canadian forests are under direct federal jurisdiction. Nevertheless, the need for a coherent strategy towards the industry is clear. The fate of our Atlantic fishery awaits our forestry industry with catastrophic consequences for employment in Canada if we don't act. Under our plan: The federal government will work with provinces and territories on joint federal-provincial agreements regulating clear-cutting, providing incentives for reforestation, and protecting old-growth forests. The National Investment Fund will look for commercially-viable partnerships with people and communities to invest in firms that add value to forestry products. The Department of Industry, Science and Technology will support firms engaged in adding value to forest products by helping to organize pre-market consortia, through the Industrial Research Assistance Program, and through its other services. -->Mining More than a million Canadians live in our country's 130 mining communities across Canada, and 100,000 people work directly in the mining industry. Canadian mining is a $17 billion business. In 1991, for the first time in Canadian history, more mines closed (33) than opened (18). Exploration was a third of what it was in 1987. What is happening, put simply, is that Canadian mining profits are being reinvested in the developing world. For example, Canadian mining companies like Placer Dome, Falconbridge, Rio-Algoma, and Cominco invested almost $2 billion in mining projects in Chile between 1987 and 1992. This despite generous federal, provincial and territorial grants to encourage resource companies to develop the mining industry in Canada. Some mining and resource companies have demonstrated a good measure of responsibility towards communities affected by adjustment. Alcan Aluminum, for example, set up a venture capital fund in partnership with municipalities and governments to launch new businesses in the Saguenay region of Quebec, when it restructured its extensive facilities in that region to the detriment of employment there. Under our plan, future federal financial participation in the industry will be in the form of equity stakes with a corresponding say in management and investment decisions, rather than through tax and cash grants. A more businesslike relationship between the federal government and the mining industry in investing in new projects will help reduce the redirection of resources offshore, and will make it easier for the government to direct attention to locally-based processing, environmental protection, local sourcing of equipment, and reinvestment in the community. The National Investment Fund will look for commercially-viable partnerships with small and medium-sized mining firms engaged in exploration. We will extend present federal flow-through share provisions to junior mineral resource companies. The federal government will work with resource companies and resource communities to create venture capital partnerships and community development initiatives designed to diversify local economies. -->Infrastructure and Services in Rural and Remote Communities Rural and remote communities must have fair access to national postal services, transportation, telecommunications, government services, and financial services. Federal crown corporations and federally-regulated utilities will be mandated to work closely with rural and remote communities to ensure they receive the services they need. From can.politics Sun Mar 14 16:38:26 1993 Path: utcsri!rpi!zaphod.mps.ohio-state.edu!caen!destroyer!cs.ubc.ca!unixg.ubc.ca!reg.triumf.ca!histlib From: histlib@reg.triumf.ca (MARY OLIN) Newsgroups: can.politics Subject: The NDP Plan: Trade Policy, Fiscal and Monetary Policy Date: 12 Mar 1993 20:01 PST Organization: TRIUMF: Tri-University Meson Facility Lines: 288 Distribution: world Message-ID: <12MAR199320014458@reg.triumf.ca> NNTP-Posting-Host: reg.triumf.ca News-Software: VAX/VMS VNEWS 1.41 TRADE POLICY THAT CONTRIBUTES TO FULL EMPLOYMENT Conservative trade agreements have placed Canada's governments in a straight-jacket. Many measures necessary to encourage high-wage, high value-added development in Canada are illegal under the Free Trade Agreement. Under our plan, Canada will abrogate the Free Trade Agreement and will not proceed with NAFTA. The Free Trade Agreement and NAFTA are international treaties in which a Conservative Canadian government has signed a contract with a (since-defeated) conservative American government, committing Canada to follow conservative economic policies ruinous to our country, in return for nothing of substance in the way of improved market access. The Free Trade Agreement and NAFTA fail Canada for many other reasons: Both agreements limit the ability of Canadian federal and provincial governments to control foreign investment and the exploitation of Canada's natural resources. Neither agreement seriously addresses the need for basic standards in a trading relationship. They therefore open the prospect of pitting Canadian workers against exploited sweat-shop work forces in the southern United States and in Mexico with few labour rights and few enforceable health, safety and environmental standards. Both agreements have the effect of constructing an American-dominated trading bloc, contrary to our interests. Our transportation, telecommunications, water and energy resources are opened wide to continental integration. Europe and Asia are provided with strong incentives to respond by reinforcing their own regional trading blocs. These trade deals produced neither Brian Mulroney's 250,000 promised new jobs, nor did they bring the promised end to the U.S. trade harassment, nor were they cushioned by the promised "most generous adjustment programs... anywhere". Instead, they helped create our deepest and first Made-In-Canada recession. Canadian manufacturing jobs have disappeared at four times the rate of U.S. manufacturing losses since 1989. We have experienced our worst balance of payments with the United States in ten years. U.S. trade harassment of Canadian exports has become more, not less intense under the Free Trade Agreement. It is our policy to abrogate the Free Trade Agreement. And it is our policy to not proceed with NAFTA. Under our plan, Canada will regulate our trade relationship with the United States through the GATT framework, to which both Canada and the U.S. have belonged since 1948. We will propose to continue the orderly reduction of tariffs between Canada and the United States, governing the balance of our trading relationship within GATT rules and through sectoral trading agreements such as the Auto Pact. Setting aside the Conservative government's trade deals is the first step towards rebuilding Canadian trade policy so that it contributes to full employment. Under our plan a new trade strategy will include the following elements: -->Common Standards Countries around the world have become increasingly concerned about the effects of trade on their economies and the quality of life of their citizens. A consideralble body of international agreements are forming to ensure that trade meets human needs, and does not trigger a "race to the bottom". Among them: The European Charter of Social Rights of Workers Negotiated in 1989, the European Community social charter twins freer trade between EC member nations with provisions for fair remuneration, social security, the right to bargain collectively, and for a rise in the level of working conditions in less developed regions of Europe. The International Labour Organization Canada has already signed 29 ILO conventions, including those which establisha minimum employment age and a framework for minimum occupational health and safety standards (number 138 and 155), those which ban forced labour and discrimination (numbers 29, 105 and 111), and those which provide for the right to organize and bargain collectively, and to receive equal pay for equal work (numbers 98 and 100). The United Nations Commission on the Environment and Development (UNCED) The UNCED summit in Rio de Janeiro in 1992 produced few concrete gains. It did, however, demonstrate that countries can sit down at the same table and agree on basic environmental standards, a process that can be built on. The draft subsidies code within GATT It is in Canada's interest that subsidies be governed by a common set of rules, so that trade sucess isn't determined by who gets the biggest subsidy. In cases like these, smaller economies tend to lose. At the same time, we need common rules that recognize the need to promote equitabile development between regions and to upgrade skills, technology and industry. The subsidies code in the early 1992 "Dunkel draft" of the Uruguay Round of GATT includes much of this. Canada should work with like-minded countries to broaden and deepen the approach to international trade that runs through these agreements, building a broadly-based, multi-lateral trading environment in which trading partners with lower standards will be helped to raise them. Specifically, under our plan we will work with other nations to include social, labour and environmental provisions within the terms of GATT. -->Market Access and Development through GATT In the decades to come the Pacific Rim will represent our largest potential market. An increasingly integrated and prosperous Europe also represents important trade potential. And Latin America and other developing regions represent further important potential markets. Canada is too dependent on trade with the United States. Our southern neighbour accounts for over 75 percent of our trade, including most of our value-added exports. Under our plan, Canada will therefore work for a broad, multi-lateral, steady and planned reduction of tariff and trade barriers through GATT. We will also assist Canadian companies to develop opportunities in these opening markets. GATT, with all its imperfections, is the best existing trade regime for our country. It encompasses most of the world, and therefore does not lock us into a regional trading bloc. Canada has traded with the United States and most other nations in the world under GATT since 1948. -->Agriculture under GATT Canada's agriculture supply management system is threatened by certain proposals contained in the draft "Uruguay round" proposals currently being negotiated. These proposals call for supply management (in which Canadian producers of certain agricultural products are assigned quotas which guarantee a reasonable return) to be replaced by high tariff walls, which will then be gradually reduced. Supply management has served Canada well, protecting farmers from market failure while avoiding the outrageous costs and waste produced by European Community-style agricultural subsidies. The NDP is strongly committed to agricultural supply management and will work unrelentingly to protect it within GATT. -->A Better Future by Building on the United Nations GATT is a serviceable platform to replace the Free Trade Agreement and NAFTA. In the long term, we believe more than GATT is needed to ensure world trade serves the real needs of people in all trading nations, north and south, industrialized and developing. We are committed to the United Nations as the forum where all of the world's peoples can come together to work on common challenges. We will work for the day when the UN brings the same focused attention to trade and development that it currently does through the Security Council to military conflict. -->Sectoral Trade Agreements The 1965 Auto Pact is a good example of a sectoral trading agreement that can supplement GATT by managing a trading relationship in a mature industry. The Auto Pact establishes a requirement for Canadian content in North American-built vehicles sold in Canada. The agreement produced a substantial expansion in our automotive industry, a cornerstone of our economy. The Canadian content rules in the Auto Pact are a useful model that could be applied in a number of other sectors, steel being a critical example. Under our plan, where Canada has a strategic interest in doing so we will seek to negotiate sectoral agreements with trading partners, on the model of the auto pact. We will start by proposing a steel pact to the United States. -->Unfair Trading Practices International agreements such as those discussed above are our best instrument to govern our trade with other countries. Canada must nevertheless be equipped to respond to firms who export goods into our country in a manner that violates our trading standards. When access to the Canadian market is granted to the products of exporters from other countries who do not respect basic standards on pollution, labour and human rights as set out in international agreements, we are forcing Canadian firms to compete in our own market against products whose prices reflect this exploitation. Our plan includes a Canadian Trade and Investment Act, which will permit Canadian companies, workers and consumers to take legal action against foreign companies who gain unfair advantage in our domestic market through practices contrary to agreed international standards as outlined above. -->A Focused and Coherent Export Strategy Diversification is our best means of lessening our dependence on trade with the United States. Our plan includes the development of a focused and coherent export strategy. The federal government, provincial governments, and Canadian enterprise must work in close partnership to expand and diversify Canadian trade. Our plan includes: Reallocating resources to export development within Canada's External Affairs and International Trade Department, with particular attention to the Asia-Pacific region, and substantial attention to Latin America and Europe; Working closely with Canadian business to ensure that multilingual, competent and culturally-sensitive personnel work on trade development, and that export development information is widely shared and promptly acted on by Canadian-homebased exporters; Reviewing Canada's system of export credits to ensure best possible value is received; Coordinating closely wiith provincial trade offices. FISCAL AND MONETARY POLICY THAT CREATES JOBS In the past twenty years, Liberal and Conservative governments have single-mindedly attacked inflation, without regard to the consequences of their policies on jobs and the economy. Canada's reward has been a steady, long-term, and permanent increase in unemployment. Under our plan, federal fiscal and monetary policy will complement the government's first priority: achieving full employment. -->Interest Rates In its December 1992 "Economic Outlook", the Organization for Economic Co-operation and Development (OECD) comments that "the maintenance of higher-than-expected interest rates could alter the course of the [Canadian] economy for the worse." We agree with the OECD analysts that higher interest rates will damage the Canadian economy. Current interest rates may look low in nominal terms, but in real terms--after inflation--they are very high. At almost 5 percent, our real interest rates are about double the real interest rates of 1 to 3 percent in the United States. Canada's real interest rates should continue to decline. Lower real interest rates will contribute to faster economic growth and will reduce government debt service charges, helping to pay for both private and public- sector investments necessary to move towards a full-employment economy. -->The Exchange Rate In the same report cited above, the OECD comments on the late-1992 decline in the value of the Canadian dollar, from 84 cents against the U.S. dollar to 80 cents: "...exchange-rate depreciation should allow Canadian exporters to gain market share while restoring profit margins." We agree here as well. A less punitive interest rate policy will continue to allow our dollar to find its real value against the American dollar and other currencies. This will provide a much-needed boost to our export industries. Some studies suggest that permitting interest rates to fall by 2 percentage points and permitting the dollar to find its real value against other currencies would stimulate enough new investment to create 100,000 jobs. -->Foreign Transfers Under our plan, tax-subsidized savings (RRSPs and RRPs) will be confined to investments in Canada. The Canadian taxpayer will no longer subsidize transfers of capital that create jobs in other countries. -->The Public Debt The OECD estimates that Canada's net public debt owed by all levels of government in 1992 is equivalent to 53.9 percent of our gross domestic product. That is considerably higher than most of our major trading partners. Other ways of calculating the level of our debt set it even higher. Over 32 cents of every federal dollar goes to interest on the public debt-- about $40 billion a year. Some $8 billion goes out of the country to foreign holders of our federal debt. According to the OECD the U.S. net public debt is 37.9 of the GDP; the United Kingdom 35.6 percent; France 28.8 percent; Germany 22.7 percent; Japan 6.1 percent. The OECD calculates that Sweden's net public debt as a percentage of gross domestic product is only 3.4 percent. Since our major trading partners don't devote as much as we do to paying interest on their accumulated public debt (aggregating all levels of government), they have comparatively more available to invest in physical and social infrastructure; in industry; in research and development; and in adopting more sustainable and efficient environmental policies. If Canada's comparative disadvantage in this respect is sustained over a long period, the quality of life of Canadians will decline relative to those of our trading partners, and our products and services will, broadly speaking, likely be less competitive in both our domestiic and foreign markets. A continued high-unemployment, trickle-down economic policy that strangles economic growth, and piles up ever more public debt to provide income support for jobless Canadians who could be contributing to growth, will guarantee this result. The federal government will collect roughly $370 million a year in federal income taxes from every 100,000 unemployed workers we can get back to work. Getting those same 100,000 workers back on the job will save the federal government about $900 million a year in income support they'll no longer need. And the increased economic activity those workers will generate will indirectly create hundreds of millions of dollars more in revenues for the federal purse. In short, reducing unemployment is a highly efficient way to cut the annual federal deficit. We have to rebuild our real economy, or there is no solution to Canada's fiscal problems. We therefore believe that most major new government investments should be directed to programs such as infrastructure, venture capital, training, child care, and research and development, which will create real jobs, or otherwise earn a return by producing a more competitive workforce or more economic growth. In the long term, Canada must get its net public debt more closely in line with its major trading partners. To do so, our plan will help turn unemployment around without increasing the deficit over a Parliamentary term, by balancing new spending with new revenue, reallocations of existing funds, and by helping to trigger growth. We will work hard to eliminate inefficiencies in government spending. For example, we will cut subsidies and tax breaks to produce a fair return to the Canadian taxpayer. Canada's Auditor-General identifies areas of waste and inefficiency in every annual report: the Auditor-General will get a ready response rather than a cold shoulder under our plan. And we will seek to reallocate funds from lower priority programs to higher priority programs, before adding to the debt to fund initiatives. For example, our commitment to real global security will mean lower priority on defense spending. From can.politics Sun Mar 14 16:38:26 1993 Path: utcsri!rpi!zaphod.mps.ohio-state.edu!caen!destroyer!cs.ubc.ca!unixg.ubc.ca!reg.triumf.ca!histlib From: histlib@reg.triumf.ca (MARY OLIN) Newsgroups: can.politics Subject: The NDP Plan: Taxes Date: 12 Mar 1993 20:03 PST Organization: TRIUMF: Tri-University Meson Facility Lines: 158 Distribution: world Message-ID: <12MAR199320031048@reg.triumf.ca> NNTP-Posting-Host: reg.triumf.ca News-Software: VAX/VMS VNEWS 1.41 A TAX SYSTEM THAT CREATES JOBS AND SUPPORTS PUBLIC INVESTMENT For the past decade, federal tax policies have been guided by the "trickle-down" theory of economics. The capital gains exemption, the GST, lower tax rates on the rich, and cuts in corporate taxes are all guided by the belief that if the rich and the big corporations get breaks, they'll create jobs for the rest of us. Obviously, this policy has failed. The average Canadian family is now paying $3,600 more in tax than they were eight years ago in real dollars, but is receiving fewer services and benefits than before. The standard of living of many Canadian families has dropped since 1980, mainly because of higher taxes. Meanwhile the wealthy have gained new tax breaks with no demonstrable benefit to the economy. The Goods and Services Tax is an unfair tax burden which has hurt working Canadians and businesses. It has also contributed to an unprecedented drop in retail sales and killed thousands of jobs. It helped push us into this long recession and is holding back the recovery. Canadians deserve a fair tax system which will: Raise revenue for necessary government investments and services without overtaxing Canadians; Help establish a fairer distribution of income and wealth; Provide proper incentives to stimulate the economy. Unlike the Conservatives and the Liberals, we don't think that the last two objectives are incompatible. A fairer tax system will improve our economic growth. Our plan will build a fairer tax system through the following measures: -->We will scrap the GST The GST is a regressive and economically harmful tax. New Democrats are commmitted to eliminating it. Here is how we will do it. In the first year we will eliminate the GST on a basket of products targeted to produce new jobs quickly. These products will include new homes, books, children's clothing, and furniture. This measure will reduce federal receipts from the GST by over $2 billion over a full year. This measure alone will generate 40,000 new jobs by lowering prices and putting more spending money in the hands of Canadians. New home construction will get an important added boost. In the second year, we will reduce the GST rate to 5 percent, which will put another $4 billion in the hands of Canadian consumers. In the third year, we will reduce the rate to 4 percent. In the fourth year we will reduce the rate to 3 percent. And in the fifth year, we will eliminate the tax altogether. Eliminating the GST will help create some 200,000 new jobs, and will give the average family a tax break of almost $2,000. Business will be relieved of millions of hours of unpaid administrative work for the government by being liberated from the GST. When the GST was introduced, the prices of fuel, tobacco, and alcohol were unchanged on average because excise taxes were adjusted. As the GST is eliminated, we will increase excise taxes on these products so that their prices to the consumer remain the same. -->We will introduce progressive tax reform and reallocate government spending to replace the GST and help pay for our new programs. We will do this by: Eliminating inequitable and wasteful tax breaks. The cost of wasteful and inequitable tax breaks has spiralled under the Conservatives. The present tax system allows businesses to deduct the cost of meals, entertainment, and even escort services. These deductions alone cost the federal government $1 billion a year in lost revenue. We will eliminate these deductions. Over half the $1 billion in revenue lost each year through the $100,000 capital gains exemption goes to the one percent of Canadians with incomes over $100,000 a year. We will retain this deduction for primary residences, small business and farmers, but otherwise eliminate it. The tax system also allows only 75 percent of capital gains to be included in taxable income. This is supposed to compensate for the effects of inflation, but instead it distorts investment by encouraging short-term speculative investments and unfairly penalizing longer-term investments. We will eliminate this reduced rate and instead allow investors a deduction to compensate for the effects of inflation. Tax laws still allow corporations to deduct the cost of borrowing money to finance mergers and acquisitiions. Tax-payers are therefore subsidizing the export of jobs and investment, often finanaced from our own savings through Canadian chartered banks. That doesn't make sense. We will restrict this deduction and eliminate it as it applies to foreign investments by Canadian firms. A minimum corporate tax. Over 90,000 companies with profits of over $27 billion avoid paying taxes each year. Two thirds of these profits are legitimately untaxed because of prior-year losses, the non-taxation of intercorporate dividends, and due to taxation of dividends at the sibsidiary level. That leaves about $9 billion in corporate profits that avoid tax because of tax preferences. A corporate minimum tax at 14 percent--half the statutory rate--would raise about $1 billion each year. Under our plan, we will publish a detailed proposal regarding this tax in the first year and implement it in the second year of the next Parliament. Full potential revenue will therefore not be realized until the third year. More progressive income taxes. The wealthiest taxpayers in our country are not paying their fair share. We will bring in two more income tax brackets to make sure they do. Currently there are three tax brackets. Canadians pay 17 percent on net personal taxable earnings up to $29,590. They pay 26 percent on additional net personal taxable earnings between $29,590 and $59,180 (double the lower bracket). And they pay 29 percent on additional net personal taxable earnings in excess of $59,180. Under our plan, extending the same formula to upper incomes, we will add a 35 percent tax bracket to net personal taxable earnings in excess of $88,770 ($29,590 more than the previous bracket), and a 40 percent tax bracket to net personal taxable earnings in excess of $118,360 ($29,590 more than the previous bracket). This new 35 percent tax bracket will affect taxpayers earning average gross annual incomes of approximately $100,000. The new 40 percent tax bracket will affect taxpayers earning average gross incomes of approximately $135,000. The Conservatives' income surtax reduction from 5 percent to 3 percent disproportionately benefited high income taxpayers. We will reverse this measure. A wealth tax. Canada is one of the few countries in the world without some form of wealth tax: among OECD countries, only Canada and Australia don't have some form of wealth tax. For the first time in many decades, the disparity in wealth between the richest and poorest Canadians has increased during the 1980s, after many years of increasing equity. A wealth tax is an important part of a tax system based on ability to pay. An annual wealth tax would affect the top 10 percent of Canada's income earners. With exemptions for owner-occupied homes, farms and small businesses a wealth tax will raise some $1.5 billion. Taxing private trusts. New tax legislation now before the House of Commons would give the wealthy owners of private family trusts another tax break worth hundreds of millions each year. We will eliminate this loophole and then integrate the taxation of private trusts with an annual net wealth tax. Our plan also includes reallocating funds from lower priority programs to higher priority ones, including: Reallocating to general revenues 3 percent of the current military budget in real terms each year. This meets the United Nations guideline for reducing spending on defence, and reflects the fact that our future security is much more closely tied to the strength of our economy than to the size of our military. Reducing the military budget will cause some dislocation and job loss in the Department of National Defence and in defence industries. Defence spending is the government's least efficient instrument to promote employment and regional development. Conversion makes better economic sense. The same dollars reinvested in communities affected by defence cuts through the National Investment Fund, the National Infrastructure Program, the National Child Care Programand the other measures outlined in our plan, will better develop regional economies, and more than replace employment lost to defence cuts. Reallocating to general revenues the funds now dispensed under the Defence Industries Productivity Program. This $200 million annual expense no longer meets our needs. Eliminating the GST tax credit when we have finished scrapping the tax. The federal government disburses some $2 billion a year through this tax credit, which will not be required when we have completed the elimination of the GST. From can.politics Sun Mar 14 16:40:02 1993 Path: utcsri!rpi!zaphod.mps.ohio-state.edu!caen!destroyer!cs.ubc.ca!unixg.ubc.ca!erich.triumf.ca!histlib From: histlib@erich.triumf.ca (MARY OLIN) Newsgroups: can.politics Subject: The NDP Plan:Economic and Fiscal Impacts Date: 14 Mar 1993 10:31 PST Organization: TRIUMF: Tri-University Meson Facility Lines: 184 Distribution: world Message-ID: <14MAR199310312282@erich.triumf.ca> NNTP-Posting-Host: erich.triumf.ca News-Software: VAX/VMS VNEWS 1.41 ECONOMIC AND FISCAL IMPACTS OF THE NDP FULL EMPLOYMENT STRATEGY To assess the impact of our jobs plan on employment, economic growth, inflation and the federal debt, we asked Informetrica Ltd. to conduct an independent analysis of our program using their detailed econometric model of the Canadian economy. Informetrica uses a large disaggregated econometric model, with over 2,400 estimated equations providing forecasts and impact analysis for almost 10,000 variables. Informetrica took our plan and performed an impact analysis against their latest base case forecast. Based on their analysis, we believe our plan will generate over 500,000 more jobs than are currently projected for the next five years, increase economic growth and reduce inflation, without adding to the federal deficit aggregated over five years. 1. Reducing Unemployment Our plan will reduce unemployment dramatically. Most economists are projecting a jobless recovery if conservative policies under a Liberal or Conservative government remain in place. Informetrica projects that new job growth under conservative policies will be absorbed by new labour market entrants, leaving about 1.5 million people out of work indefinitely. The NDP plan would substantially reduce unemployment. Our estimates on the impact of our plan: 1994 1995 1996 1997 1998 Current policies 10.9% 10.4% 10.1% 10.1% 10.5% With NDP jobs plan 10.3% 9.0% 8.0% 7.5% 7.1% Total jobs created in the economy (thousands): 1994 1995 1996 1997 1998 Current policies 238 281 257 194 121 With NDP jobs plan 328 399 361 266 247 Plan (cumulative) 328 727 1088 1354 1601 2. Details of Job Growth Created by the NDP Plan Here are the cumulative number of jobs we expect to generate through each major component of our plan: 1994 1995 1996 1997 1998 Job Creation Infrastrucure 57,300 114,000 131,200 130,000 129,600 Investment Fund 41,100 82,300 123,500 164,700 205,800 Child Care 6,800 15,000 26,200 39,200 47,100 R&D, other 6,500 16,500 22,300 26,300 31,300 Mixed Effects Revenue initiatives (14,600) (17,400) (9,800) (11,500) 53,500 Reallocations Defence (7,500) (15,800) (21,400) (25,900) (30,700) Market effects Lower interest rates 1,200 13,400 40,100 61,600 73,500 Total 90,800 208,000 312,100 384,400 510,100 These projections are drawn from Informetrica's report, except for the employment targets for the Investment Fund, which are based on Coopers and Lybrand's Third Annual Economic Impact of Venture Capital Study. 3. Effect of the NDP Plan on the Federal Deficit Our plan will reduce the federal deficit while reducing unemployment. Three effects work together to improve the federal deficit through our plan: *Our proposed investments earn returns. *We cut federal spending in some areas as well as increase it in others, reallocating a substantial sum from defence to job creation and economic development. *Scrapping the GST over five years, as Informetrica's calculations demonstrate, has a major year-by-year anti-inflationary effect. With lower inflation, interest rates will decline. That saves the federal government money and creates jobs. The overall effect is a substntial decline in unemployment while reducing the federal deficit, aggregated over five years. In the table below, Informetrica's projection shows the *net* effect of our investment plan and revenue measures on federal balances. Some of our investments show as positive figures in this table because, Informetrica calculates, they produce direct returns to the federal treasury in excess of the amount invested. Informetrica projects an $8.2 billion improvement in federal balances as a result of this five-year strategy. Impact on Federal Balances ($ Millions) 1994 1995 1996 1997 1998 Investments Infrastructure $500 ($1,000) ($400) $400 $500 Investment Fund 0 0 0 0 0 Child Care (100) (500) (800) (1,400) (1,700) R&D, other (500) (1,300) (1,600) (1,800) (2,200) Reallocations Defence 600 1,300 1,700 2,100 2,600 Total 500 (1,500) (1,100) (700) (800) Revenue Consumption taxes (2,500) (6,900) (10,100) (11,200) (18,500) Corporate taxes 500 2,800 3,500 4,100 4,200 Income taxes 2,200 5,200 5,700 6,900 7,600 Total 200 1,100 (900) (200) (6,700) Market Effects Interest Rates 700 3,400 4,800 4,800 7,300 Net Fiscal Impact 1,400 300 2,800 3,900 (200) Total over 5 years 8,200 Informetrica's report does not include a calculation on the proposed National Investment Fund. Econometric models like the one used by Informetrica cannot trace the effect of such a fund. Investments under the Fund would involve taking an equity stake. Therefore, investments on the debit side would be offset by new assets on the credit side. For the purposes of this table we assume these will roughly balance, and we show neither losses nor potential gains (from increased equity values, higher taxes, and increased economic activity) on fiscal balances. 4. Investment Plan As detailed in the NDP plan, we propose a focused, targeted federal investment strategy. Investments are designed to increase job growth sufficiently to bring unemployment down, and to produce long term benefits for the economy. Our new investment commitments are summarized below (millions of dollars): 1994 1995 1996 1997 1998 Infrastructure Program $1,500 $1,500 $1,500 $1,500 $1,500 Investment Fund 2,000 2,000 2,000 2,000 2,000 Child Care 250 500 750 1,000 1,500 Research & Devt 145 325 530 770 1,020 Farm Credit Corp 500 500 500 500 500 Other Programs 410 614 550 555 576 Total 4,805 5,439 5,830 6,325 7,095 5. Effects of the NDP Plan on Inflation Informetrica's projections show that our plan will reduce inflation. The elimination of the GST over five years provides a continuous, annual brake, helping to trigger interest rate cuts that reduce pressure on the on the federal debt and add to growth. Informetrica's projections: Consumer Price Index 1994 1995 1996 1997 1998 Current policies 134.56 136.69 139.78 143.73 148.15 NDP Jobs Plan 133.96 134.10 135.78 138.64 140.80 Inflation Rate 1994 1995 1996 1997 1998 Current policies 2.52% 1.58% 2.26% 2.82% 3.07% NDP Jobs Plan 2.07% 0.10% 1.25% 2.10% 1.55% 6. Impact on Provincial and Territorial Balances Informetrica's projections demonstrate that the fiscal return is greater than the fiscal cost for our plan at both the federal and provincial levels, over five years. Three major programs within our plan impact directly on provincial and territorial budgets: The National Infrastructure Program would call on provincial and territorial governments to match federal and municipal investments in infrastructure. Federal investments in each province and territory through this program would be proportionate to population. The National Child Care Program would call on provincial and territorial governments to invest in child care. The proposed training levy would invite provincial and territorial governments to review public service training programs. As Informetrica comments in their report: When the infrastructure program stops, these [provincial and territorial] balances move into substantial surplus (+$7 billion) and, of course, the local governments have a greatly improved infrastructure. The provinces also benefit throughout the period from increased economic activity and increased personal income tax revenues. In order for provinces and territories to take up new programs, a solution is required to the problems caused by Tory deficit offloading through cutbacks to existing tranfer agreements. We are committed to the early negotiation of new, stable and long-term transfer agreements for existing programs. Our objective is to stabilize federal cash transfers at a level sufficient to ensure that all jurisdictions have adequate resources, and that basic national guidelines for health care and other existing programs are sustainable.