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HomeMy WebLinkAboutThe Wingham Advance Times, 1995-05-10, Page 5Lack oftarget hurts rattn Dear Editor: On April 12, after weeks of spec- ulation, Moody's Investor Service finally lowered Canada's credit rat- ing. The reason — Canada's high level of debt and the federal gov- ernment's lack -lustre attitude to- ward paying it off. Said Moody's, "Despite aggres- sive corrective actions recently un- dertaken, the level of uncertainty in forecasting the medium and long- term position of the public sector warranted the rating reduction." What the credit rating agency was really saying was that it has lost confidence in the federal gov- ernment's ability to control spend- ing and to set long-term deficit re- duction goals. Finance Minister'. Paul Martin has the deficit pegged at about $24 billion by 1996-97, down from his $32.7 billion projec- tion for 1995-96. That's the good news, The bad news, and the reason for the down- grade, is that Martin has failed to provide a target date for a balanced budget. In other words, Moody's wants to know when the deficit will be eliminated all together. Without this knowledge, the people who buy Canada's bonds - Moody's cli- ents - get a little nervous. They want to be certain that their bonds will not decrease in value if the Fi- nance Minister fails to meet his goals. Legion offers thanks for Dream Auction Investors are doubly concerned that the government will lose its re- solve to pay down the deficit when the next recession rolls. around. When that happens the govern- ment's tax revenues will likely fall, and its social spending will rise. That makes it much harder for the Finance Minister to focus on deficit reduction. Because of this added- uncertainty these same investors need an extra incentive to buy Ca- nadian bonds. Their compensation comes in the form of higher interest rates. This is where it starts to hurt. The increase in interest rates need- ed to ensure that people buy our bond's has an adverse effect on tax- payers. For the average taxpayer this means it will cost more to buy a house, finance a car or carry a balance on a credit card. It will also cost businesses more to buy new equipment and ' gives them less money to create new jobs. All this in addition to the painful fact that for every percentage point that interest rates go up, the govern- ment -pays another $1.8 billion in interest charges in the first year alone. The more the federal govern- ment shells out in interest pay- ments, the less money it has for spending on things like healthcare and education. How then, can the federal gov- ernment reduce interest rates, and the accompanying cost to the tax - Dear Editor: Branch 180 Wingham Legion wishes to thank all those who par- ticipated in their "Dream Auction" on April 28, 1995. A special thanks to all town merchants, who supported and made donations, to make it a suc- cess. All proceeds go to the elevator fund. Keith TOye Branch PRO Caution advised over `Trust' Dear Editor: There's a saying "When some- one says Trust me" it's usually a good idea to be cautious". When a company has the word Trust in their name you hope you can. Well, I found out you can in a sense. When a person is one dollar short on an insurance payment, you can trust them to take seven dollars.When you offer to pay that dollar on the same day, you can trust them to say "no just started the paper work, we'll keep the sev- en dollars". I trust I'm getting a good interest rate? Creative banking, sometimes it just has to be done. Like when you're broke on the 29th, so you write a cheque at the store for bread and milk. You know you get paid on the 31st, put the money in the account, cheque is covered, no problems, wrong. It seems that it doesn't matter if the money's there before the cheque is,' "1t wasn't there on the 29th, we say that's a N.S.F cheque. I quote "We are doing you a fa- vour, we could have charged you $18." Sure when you charge seven dollars on a one dollar loan you can afford it! Now I understand that money has to be made, the right way or the wrong way. When the company with trust in their name discovers what trust is, they will be that much closer to the right way. Joel Hill Blyth payer? The short-term solution is for Paul Martin to set out a full- blown deficit reduction plan. This might satisfy Moody's and at least stabilize Canada's credit rating. Over the long-term, however, such a measure would do little to prevent the federal government from running future deficits. Nei- ther is there any guarantee that the government would adhere to its re- duction plan in the first place. Martin might come up with, a plan only to abandon it when times get tough. No, the best way for Paul Martin to assure investors of Canada's stability is to legislate limits to his and future govern- ments' spending. Tax and expenditure limits would force the government to bal- ance its budget - not just for the short-term, but for years to come. A binding balanced budget act would reduce the uncertainty that forced Moody's to lower the credit rating. If investors are absolutely posi- tive that Canada will balance its budget they will be much more likely to invest their money with confidence. This translates into lower interest rates for consumers and the eventual possibility of low- er taxes. Who could argue with that? Paul Pagnuelo Ontario Taxpayers Federation, Ajax, Ontario initiatives There can be no doubt that the agriculture and agri-food sector of the Canadian economy is working its way through an era of great change -- change driven by the necessity to conserve scarce tax dollars and reduce government debt; the imperatives of world trade and new world trading rules; ' the need to enhance Canada's effi- ciency, productivity and competi- tiveness; the impact of science and new technology; and our thirst for greater diversification, value-added growth and jobs. To support our producers and processors in managing the changes that confront them, the recent federal budget established a series of specific "adjustment funds" connected to the termina- tion of in subsidies, namely: west- ern grain transportation subsidies, feed freight assistance, and the Maritime and Atlantic region freight assistance programs. These adjustment funds will help smooth the transition to a new op- erating environment. In addition, the Government of Canada has created a more gener- al fund of up to $60 million annu- ally to be used, nationally to en- courage agricultural adaptation and rural development. Here are some illustrations of how this fund will be put to work: The Canadian Farm Business Management Program will be re= newed for another four years, Ralph GOODALE with a; federal focus on develop- ing the tools and services which have applications beyond a single province. A new . farm income- review process will concentrate upon helping farmers to avoid future farm debt crises, while offering. reasonable supaoft services to those already in difficulty. Through the Farm Credit Cor- poration (FCC), a pilot business planning service will be available to assist in the establishment of new agriculture -related enterpris- es in rural Canada. Funding will be provided to help small and me- dium-sized food processing busi- nesses implement internationally - accepted inspection standards, to promote export potential. A Canadian Agriculture Safety Program will be established to help reduce injuries and deaths that result from farm acci- . dents. Financial support will be increased for the POS Pilot Plant, a non-profit organization which concentrates on commercializing new agricultural and agri-food technologies: The Matching. Investment Ini- tiative will be enhanced to lever- age more private -sector dollars into practical agricultural research and development in Canada. Federal funding for the 4-H movement will be increased. A package of transitional measures will be developed to help offset the unintended' regional' implica- tions ° oftransportation reforms. There will be a specific focus upon developing modern public infrastructure (including informa- tion technologies) in rural com- munities, and upon partnerships and joint ventures in the promo- tion of regional economic devel- opment. The FCC and the Farm Improvement and Marketing, Cooperative Loans Act -- with en- hanced mandates, if necessary -- will be used, to help improve ac- cess to capital in rural a These initiatives, together with others to be developed in consultation with farm organiza- tions and other rural stakeholders, do not constitute any form of "hand out." Instead, they amount to a " hand up" -- to support the agriculture and agri-food sector to groW, capture new markets, diver- sify, modernize, and strengthen its bottom line -- all on a solid foun- dation, nothing artificial. I welcome your questions or comments. Please write to me at Office 175 -EB, House of Com- mons, Ottawa, KIA 0A6. QUALIFIED VOTERS e �u of YourVote JUNE 8th, 1995 You can help make sure YOUR NAME is on the NEW LIST of VOTERS for the Ontario Provincial Election. If you are eligible and wish to vote, it's up to you to make sure your name is on the NEW LIST of VOTERS. You must answer (or provide the information for someone else to answer) the questions the Enumerators will be asking. This will make sure your name does appear on the NEW LIST of VOTERS so that you can vote. CAN YOU VOTE ON JUNE 8th? These are the questions the Enumerators will ask: (1) On Election Day will you be 18 years of age or over? (2) On Election Day will you be a Canadian Citizen? (3) On Election Day will you have resided in Ontario for the preceding 6 months? (4) On Election Day will you be a resident at this address? They should also ask if there are other eligible voters resident at your address. The phone lluffl l : aysdnble: fll!otdikl . i eeifi+ . to yaour If you have friends or relatives who have difficulty reading, please make them aware of the information in this notice. Published by the Office of the Chief Election Officer of Ontario Warren R. Bailie, CHIEF ELECTION OFFICER WHAT YOU SHOULD KNOW ABOUT ENUMERATION The two Enumerators who will soon be calling at your door should produce their appointment form and identify themselves and the purpose of their visit. If you are at home, or if someone else can answer their questions, the Enumerators will complete a Form 301 for you and for any other , qualified members of the household. The names of all eligible voters should then appear on the NEW LIST of VOTERS. If they miss you on their first visit, they will be making other visits or "call backs". Please give them access in order to, help make sure the NEW LIST of VOTERS is as complete as possible. E...a. ERAL•E'i ELECTION ++ ORMAlION,. CALL: ONTOAREA 416.754 -VOTE (8683) TORONTO, 1-800-6684727; Elections Ontario A non-partisan: Agency of the Legislative Assembly KEEPING YOU INFORMED