The Citizen, 1991-05-01, Page 14PAGE 14. THE CITIZEN, WEDNESDAY, MAY 1,1991.
Dedicated player
Core blames high interest
for cross border shopping QTRDV-BILT
Steve Fritz (left) accepts a watch as the Mike Vincent
Memorial Award for being chosen most dedicated player
on the Brussels Bulls this past season. Team manager
Steve Coulter presents the award honouring the late
member of the Bulls.
The high interest rate policy of
the federal government must
shoulder the majority of the blame
for the current problems caused by
Canadians shopping in the United
States.
This comment came from John
Core, chairman of the Ontario Milk
Marketing Board yesterday as he
addressed the Ontario legislative
committee hearings into the cross-
border shopping problem.
A progressive erosion on the
dairy industry has occurred over
the last five years. “That same
erosion is now affecting many other
products and commodites,” Core
said.
Border communities are hit hard
but this is the tip of the iceberg.
Core added. “Foregone sales
means lost jobs anywhere in the
country where manufactured goods
or food products are produced.”
Studies done by Agriculture
Canada indicate that the losses for
the dairy industry are staggering.
A study in British Columbia esti
mated that 7.6 per cent of fresh
milk and 4.5 per cent of cheese
consumption was being brought
into B.C. by “same-day” Canadian
travellers. A shrinking market
means dairy farms are being lost.
“Losing dairy farms has a pro
found impact on the rural commun
ity,” Core said. “The dairy farm
loss is only one dimension. Parallel
losses occur for the processing
sector - leading to plant closures -
and for milk transporters, veteri
narians, equipment dealers and
feed suppliers.”
Canada’s high interest rate poli
cy has driven the exchange rate up
almost 20 per cent to $0.86 U.S.
from $0.72 since 1986. These
artificially-high rates are a major
source of price differences between
Canada and the U.S. “We have a‘
situation that puts Canadian prices
out of line with those of our major
trading partner,” Core said.
The interest rate policies aimed
at fighting inflation have had a
devastating impact on the econo
my. “Is this another example of the
cure being worse than the disease?
Canadian taxes are set at a level
needed to pay for our services and
when Canadians shop in the U.S.,
without all applicable taxes being
collected, they avoid paying their
share of the bill. The result is that
either taxes must rise or services
be reduced. “Along these lines,
the B.C. “fast lane” experiment
seems like abject nonsense, a
carte-blanche to “smuggle” with
the government turning a blind
eye,” Core said.
“The average Canadian has to
be made to understand the effect of
their actions,” Core said. Canada,
like any country, is a community of
citizens where we all enjoy the
benefits and similarly share the
costs.”
“Cross-border shopping is a very
complex problem without obvious
or easy solutions. While the ex
change rate is a major underlying
factor, all appropriate taxes and
duties must be collected and exist
ing laws on stays outside the
country must be adhered to,” Core
said.
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