EDITORIAL PAGE — A haunting melody

Haven’t we heard this tuneful little number before? The melody is more than faintly familiar. Even the lyrics have a deja vu quality. We refer, of course, to the latest government budget, specifically, the deficit reduction refrain.

Less than a decade ago, a Tory finance minister rose in the House of Commons to denounce the preceding government’s role in force-feeding annual deficits to unmanageable levels. The minister then warbled about how his government would finally break the deficit financing addiction — or, at minimum, the growth in deficit financing.

We can’t recall the precise numbers, but if memory serves, that finance minister’s projections went something like this: a $32-billion deficit in Year One of his deficit battle, $30 billion in Year Two and $27 billion in Year Three.

Last week, a Grit finance minister rose in the House to denounce his predecessor’s profligacy. He then vowed to trim the deficit in the coming years — $45.7 billion in the current fiscal year, $39.7 billion the following year and $32.7 billion the year after.

From past experience, we know the Tory minister failed miserably to harmonize deficit estimates with actual deficits. Whereas the year-to-year estimates began on a high note and moved down the register, the tune, as it played in the real world, reached ever higher notes. The Tory minister struggled valiantly in this vein, but his boss, now a prominent and rather wealthy director of a major gold mining company, couldn’t say “no” or “non” to handouts and political vote-getting.

Should we expect any better from the current regime? No and emphatically non, unless a robust economy temporarily saves it from the tough choices that sooner or later must be made.

Government deficit charts seem always to portray estimates of future debt levels as declining over time when, in real time, the actual numbers consistently follow a rising trend.

Aside from the farce of the federal government’s efforts to cut deficits, the budget did offer the mining sector something — a tax deduction on mine reclamation funds in the year they’re set aside. This is slightly better than halfway toward what the industry needs — which is a writeoff, as well, on the interest earned on money set aside for reclamation.

What it gave the industry, however, it grabbed from investors. Effective Feb. 22, 1994, the $100,000 personal capital gains exemption will be history. So next year, investors will file a tax election with returns to take advantage of whatever exemption they might have remaining. Holdings will be valued as of Feb. 22 this year. To value your mining portfolio, save the Feb. 28 issue of this paper, as it features the Feb. 22 closing prices.

But such tinkerings are evidence of the government’s desperate efforts to squeeze money from wherever it can. It will not, however, put much of a dent in the rising national debt, which the government forecasts will reach $583 billion by fiscal 1995-96. And we all know how accurate government forecasts are.

To quote Abraham Lincoln: “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all of the time.”

Canadian taxpayers have been fooled once too often.