Legislative Assembly Following the Federal Government announcement last December which in¬ creased the Federal Sales Tax to a new high of 12%. following this, Sir, has come a spiral of increasing prices to all people, with many prices increasing, not by this small increase of tax, but increasing by quite substantial amounts in many cases. Increases of 10% or more are seen attributable to tax increases that have worked their way through to a broad range of retail prices. These increases, it can be readily seen, will increase living costs for rich and for poor alike, even including the Old Age Pension¬ ers, Government's allegedly intended to assist. It will be the poor and the elderly, those with pensions and with savings, that this increase will most seriously burden. At the same time, the increase in the maximum Old Age Pension Tax announced, this is an interpretation by Mr. F. Gerald Townsend , the Toronto Accountant specialising in taxation, this will mean to a person with a taxable income of $6,000.00 an increase of 2% additional tax, while at the same time a person with a taxable income of $20,- 000.00 will mean only an increase of one half of 1%. So it can be seen here, Sir, that this tax bears principally on the middle income tax bracket. There seems to be little hope of relief from Federal Sales Tax and Federal Income Tax when we read that the Pearson Government last month produced supple¬ mentary estimates for the new fiscal year revealing a 1.3 billion dollar increase in Government spending bringing it to a record high ofll.2 billion. This sets the stage for a new inflation spiral or tax increase. No wonder that the Guardian editorial writer has his column of March 20th dealing with this subject, with the question of where will it end. I know many people in Prince Edward Island are looking forward to the pos¬ sible early removal of the Provincial Sales Tax, now, Liberal Members. Those of us who are here will well recall that the many Liberal Members at that time spoke against the imposition of this tax when it was put on, possibly seven years ago, and also on later occasions as well. They had bragged long and often of all the huge amounts of money they are able, and will be able, to receive from Ottawa. The result to date in this department has been somewhat disappointing as I have indicated earlier. Any¬ way, we shall await their Budget presentation and see what Provincial Tax deductions they plan. This, Mr. Speaker, at a time when the public is being gouged by increased taxes federally by the Canada Pension Plan contributions, and, indeed the pay cheque of every wage earner is subjected to deductions of so many descriptions. To give them certain protection in another area, I believe the time has come for this Province to consider Legislation stipulating that interest rates be declared on all loans and all credit transactions. This is something that has been adopted in Nova Scotia and I believe that something similar was considered in the Province of New Brunswick . While many Companies were criticized, for a variety of reasons, along these general lines, it is only in recent years, very recent years, and it is somewhat alarming to note that even the banks have included themselves in the group that transgressed in fail¬ ing to indicate the cost of some of the money that is borrowed from them. The banks employed various methods designed to increase the effective yield of money that they lend. The common practice, Mr. Speaker , began I believe about three years ago, to demand a mandatory balance, a minimum balance in a loan account and this amount is often placed at 10% of the customer's loan and. of course, this mandatory minimum balance is held without accumulating interest. Another practice is to access certain service charges which achieve the same result. The net result, Mr. Speaker , of these arrangements is that the effective loan rate is raised to at least 6.6% and indeed in some cases a great deal more. I wonder at times if this circumvents the spirit of the law that until recently set the interest rate of 6% and if it is legal, indeed, for a bank to withhold 10% of a person's money. I do know, Sir, that many medium and small businesses in this city, and in this Province, have been hard hit by these pract¬ ices. Some reference has been made, Mr. Speaker , by several Speakers to that mas¬ sive document, the Speech from the Throne. Now, as I read through it, it was indeed gratifying to read that the new Government is in favor of, and these various para¬ graphs indicate as you go down the list, they are in favor of the Queen, they are in favor of Centennial Year, they are in favor of the Queen Mother, they are in favor of Confederation, they are in favor of Federal Provincial Conferences, the Confedera¬ tion Centre is mentioned in complimentary terms, and a number of similar items. Of course, this is not too surprising nor is it new. We know too that they apparently —172—