EDITORIAL PAGE — Recessionary blues

The federal finance minister’s recent economic statement or “mini-budget” has its supporters and its detractors, the more vocal, apparently, being the latter. If anything, Donald Mazankowski’s statement illustrates how difficult it is to continue to run faster just to remain at the same spot, measuring any advance (if that is possible in today’s economic climate) in millimetres rather than kilometres.

By reducing unemployment insurance (UI) benefits, cutting foreign aid and freezing public service wages for two years, the federal government says it will be able to bring the estimated 1992-93 federal deficit down to $34.4 billion and to — wait for it — $32.6 billion in the next fiscal year. The estimated budget shortfall for this year is almost $7 billion greater than an earlier forecast.

“Canada,” observes the Certified General Accountants Association of Canada, “continues to flounder in a sea of red ink.” Mazankowski’s cuts are a case of too little, too late, it says, going on to remind those who care that our national debt is “a staggering $440 billion and growing.”

Labor, to put it mildly, was not amused. Mazankowski’s statement, according to the national president of the Communications, Energy and Paperworkers Union of Canada, “is bankrupt of vision and will not put Canadians back to work.”

The Canadian Federation of Biological Societies says it is “dumbfounded” over what it interpreted as an end to eight years of continuous efforts by Canadian researchers and professors to secure a more stable financing plan for the granting councils. Ottawa, it says, has gone back on its word of budget increases and instead has deleted a sizable sum from the councils for the next two years.

Ontario’s Construction Trades leaders were upset at the UI cuts, finding it hard to believe the government would “further attack the unemployed in the middle of the worst depression since the 1930s.” Echoing those sentiments was the Canadian Auto Workers union, which also suggests that what the country really needs is “a war on unemployment.”

The Canadian Construction Association, while complimenting the federal government for its economic plan to restore confidence in the economy, said the plan lacks the financial commitment to adequately stimulate growth in the country. In particular, the group is disappointed that capital funding for national infrastructure improvements will not soon be forthcoming. The economic statement appeared to have little to say about mining, although the topic of flow-through financing was raised in connection with the hard-pressed oil and gas industry. We understand that investors in small oil and gas companies that drill but come up with a dry well will now be able to write off 100% of their investment for flow-through-share financing purposes. Of course investors in Canadian junior mining companies involved in exploration continue to benefit on a dollar-for-dollar flow-through-share basis, and at least one province, Quebec, is offering additional tax reductions up to 16623%, depending on the type of exploration work. If there is a solution to our economic woes, Canadians of all walks of life would certainly like to hear about it. How weary the government must feel pedalling on a treadmill of debt (as one organization has said), knowing that it has little room to move because of the continuing recession.