NDP Caucus Commentary<br> Robert Chisholm, Leader
March 27, 1997


     Thanks to the Liberals, April 1 is rapidly becoming an
unhappy anniversary for Nova Scotians. On April 1 last year the
Federal Liberals gave us the Canada Health and Social Transfer,
or CHST. This year the Ottawa Liberals, in league with their
Halifax counterparts, give us the Blended Sales Tax, also known
as the BST. Together, the two measures constitute a bad April
Fool joke. 

      The BST is coming into effect despite overwhelming
opposition. Consumers face a 114% per cent increase in sales tax
on necessities like heating fuel, gasoline and children's
clothing to pay for a $200-million a year tax break for
corporations. The only way to escape the unfair tax now is for
Nova Scotians to put New Democrats in power in the next election.

     Much has been written and said over the last few months
about the BST. The CHST has received less attention, even though
it is potentially more devastating. The CHST is aptly named
because if transfers prime responsibility for the funding of
health care, social services and post-secondary education from
the federal government to the provinces. Under the CHST, Paul
Martin and Jean Chretien are cutting over $7 Billion in federal
social spending between 1996 and 1998. That's 40 cents of every
dollar the federal government spent on social programs before it
imposed the CHST.

     Poorer provinces like Nova Scotia are hardest hit by the
cuts. Because they have less ability to absorb them, they will
end up piling cuts upon cuts. Services will deteriorate, jobs
will be lost and Nova Scotians will suffer. But rather than
facing up to the consequences of their handiwork, the Liberals
are trying to make April Fools of Nova Scotians. 

     The CHST cuts were announced in the Martin budget of 1995.
But like a time-release capsule, their effects on provincial
finances will be felt over a three year period - $90 million last
year, $100-million this year on Nova Scotia's budget. This time-
release feature allowed Paul Martin in his recent budget to
plaster some headline-grabbing bandaids on the health care system
while it bled to death from his earlier cuts.     Instead of
standing up for Nova Scotians and opposing the federal
downloading, the Liberals under John Savage and Bernie Boudreau
have quietly gone along with the April Fool joke for their own
political ends. 

     By signing on to the BST deal, the provincial Liberals made
themselves eligible for a $250-million payment from the Federal
government. This money is supposed to "compensate" the Province
for revenue lost through the corporate tax break that comes with
the BST. But the government is free to spend it any way it wants.

     During a year when both Federal and Provincial elections are
expected, the provincial Liberals can be expected to use as much
of the $250 million "compensation" as they need to produce a
balanced budget while shoring up spending in health care where
deep cuts have put them in political trouble. The $250 million
will thus be doing double duty. It will deceive Nova Scotians
into thinking the Liberals have balanced the provincial books
through good fiscal management. At the same time, it will
disguise for a while the devastating effects on Nova Scotia's
health care system of the Martin-Chretien CHST.

     Unfortunately, once the Federal compensation is spent, Nova
Scotians will be faced with funding social programs with
severely-depleted federal transfers and a sales tax base that has
been eroded by an across-the-board corporate exemption. Unlike
most April Fool jokes, this Liberal one is not a harmless prank.