The Red Book

Jean Chretien defeated Brian Mulroney at the polls.The year was 1993 and he apparently won on the red book.It was a complete plan of what the liberals would do once elected.The main platform was scrapping the G.S.T. tax. but once he got in he expanded the tax to be on all goods and services.Formerly it applied to only half of the goods and services.Now the effective tax rate was truly 7% whereas before the effective rate was only about 3.5%.Chretien probably came to this conclusion when he saw the federal government budget deficit climb every year from1991 to1994.So in 1994 the new rate was in effect.

At this time the G.N.P. was about $770 billion.Now the amount of tax collected was about $50 billion a year. He was now well armed to slay the budget deficit.However strangely it climbed every year during his regime.His Minister of Finance during these years was a man called Paul Martin.