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Dear Editor: ;

Re: “Corporations not guilty of
tax rip-offs”

Recently, Filip Palda of the cor-
porate-funded Fraser Institute pub-
lished an article in your paper
claiming that three myths “cloud
the truth" about corporations and
taxes,

Mr. Palda was responding to
media reports on Corporate Tax
Freedom Day, an event the B.C.
Federation of Labour holds annual-
ly to publicize the unfairness of our
tax system.

Unfortunately, Mr. Palda’s
myths and facts missed the point,

First, he claims that while more
than 63,000 corporations with prof-
its of nearly $14 billion in 1990
paid no taxes, this had no effect on
the tax burden for ordinary taxpay-
ers,

We disagree. In 1961, personal
income tax generated 32% of feder-
al tax revenue, and corporate
income tax generated 21%.

But by (992, personal income
tax generated 50% of federal rev-
enue, while the corporate share had
shrunk to just 7%.

And Canada has the lowest cor-
porate tax rate of the G-7 countries,
including Japan, Germany and the

Mr. Palda also says a study done
by the Ontario NDP government's
Fair Tax Commission concluded
there was no problem with “corpo-
rate tax rip-offs.”

But the Ontario government has
recently introduced a corporate
minimum tax to ensure corpora-
tions pay at least some taxes. -

The B.C. Federation of Labour
has never claimed every company
showing a profit but paying no tax
was ripping off the system. But
unfortunately many are enjoying

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the legal ability to dodge their fair
share of taxation.

The 1992 auditor general's
report documents one way in which
this takes place. The Auditor
General said that tix arrangements
for foreign affiliates were open ta
abuse. and that Canadian compa-
nies were repatriating Income tax
free, using tax havens.

The auditor general estiniated
that the lost revenue in that tax year
alone was $240 million.

We could also look at the $36
billion in deferred taxes owed to
Canada by corporations. This $36
billion is’ an interest-free losn to
companies, and at an annual inter-
est rate of 7% would have generat-
ed $2.5 billion in 1992,

Lastly, Mr. Palda claims corpo-
rations don’t pay taxes, their share-
holders do. If only this were true.

First of all, corporations do pay
tax under our tax system.

Secondly, if only the sharchold-
ers should pay tax, how would
Canada see any tax revenue from
foreign-owned corporations with-
out Canadian shareholders? Should
they be allowed to operate in our
country, make profits and export
them tax-free to foreign sharehold-
ers?

Mr. Palda represents corpora-
tions who fund the Fraser
Institute's right-wing philosophy,
so his complaints are not surpris-
ing.

But it is too bad that many of
those companies can make tax-
deductible donations to the Fraser
Institute, which has “charitable”
status, while not paying a cent of
income tax to keep this country
gaing.

Kenneth V, Georgetti
President
B.C. Federation of Labour

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What are land claims, and why are
we negotiating them now?

Land claims are formal requests made by Aboriginal people,
asking the federal and provincial governinents to negotiate
issues about land and resources that have remained unresolved
for more than 100 years.

Unlike most of Canada, the first European settlers in
B.C. negotiated very few treaties with First Nations regarding
the use of land and resources.

Treaties are being negotiated now to end land-use
uncertainty in B.C., and because the courts have said rhat
treaty negotiations — not costly court battles ~ are the best way
to reach fair and lasting solutions.

&

Who's representing my interests?

It is the job of your provincial government to make sure your
interests are both represented and protected through open and
inclusive treaty negotiations.

The B.C. government has asked the federal government
and First Nations to join us in opening negotiations to the pub-
lic and ensuring that information is shared as widely as possible.

When land claims negotiations are about to begin in
your area, we will organize. community meetings where you'll
have the chance to speak directly with negotiators. At che same

time, we will establish regional committees — with representa- ~~"

tives from business, environmental, fish and wildlife, labour and
social welfare groups — to directly advise negotiators. oe

And following the provincial government's recent agree-
ment with municipalities, local governments will be appointing
an individual from each region to work with negotiators to
ensure that community interests are fully represented.

Ministry of Aboriginal Affairs
908 Pandora Ave.
Victoria, B.C. VY U4

hab) Government of British Columbia