Tough to Take

Since Easter, Finance Minister Douglas Charles Abbott and his technical experts had worked long & hard on the budget. With Prime Minister King's O.K., Abbott laid down the general line: a tough plan, and no major tax reductions.

It was far different from a year ago, when Doug Abbott, passing out tax-reduction gifts (TIME, May 12, 1947), looked like Santa Claus. Since then the price situation had worsened. So had the international outlook. Doug Abbott had toughened with the times. He was no longer a patient listener. Many a time in budget conferences he cut short advisers with a brusque yes or no and hurried to the next item. Even with colleagues of Cabinet rank he had lost the habit of turning aside importunities with easy banter.

Flat & Toneless. When budget night came, External Affairs Secretary Louis St. Laurent moved into Abbott's seat to let the Finance Minister have the front-row place of honor next to the P.M. The House was only two-thirds full. M.P.s trickled in as Abbott started to read his 14,000-word speech. As he recited the hard facts of the nation's financial life, his voice got flat and toneless. More & more M.P.s left the chamber for a smoke.

"Canadians," said Abbott, "are realists. We do not expect to get something for nothing." In that belief, he had given them a completely realistic budget. Though "we have stopped the abrupt decline in our exchange reserves," said he, and "our domestic economy has continued to boom . . . the general policy for this year should be to use our surplus [$670 million] to reduce our debt and thereby to fight inflation . . ." The nation should get set for an economic slump, and be ready for an international emergency. "A substantial surplus will help to keep our powder dry."

Budget highlights:

P: No reduction in personal income taxes except for people over 65. They get an added exemption of $500, or a total of $1,250 for an individual, $2,000 for a couple.

P: The 8% commodity tax comes off canned fruit, fruit juices, vegetables, soup, fish, meats and poultry, breakfast cereals, spaghetti, macaroni and wheel chairs. This will cost the government $20 million a year, may save the consumer as much as $30 million.

P: The 25% sales tax comes off silver plate and watches with Braille dials (of which 300 were sold in Canada last year).

P: Amusement taxes of 20% and 25% and the 5% tax on pari-mutuel betting are abandoned, at a cost to the Dominion of $23 1/2 million annually. (At least three of the provinces will impose similar taxes to fill their own tills.)

P:Succession (inheritance) taxes will be laid only on estates of $50,000 (instead of $5,000) and up, thus exempting 90% of them.

Hope Deferred. Canadians, knowing there was a whopping Treasury surplus, had hoped for more, but active resentment was confined to the professional opposition. Most Canadians knew that Abbott's budget, though tough to take, was good for Canada. Few would agree with the Ottawa cynic who cracked: "You have to be blind, over 65 or dead to get anything."

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