Winnipeg Free Press

Winnipeg Free Press (Newspaper) - August 12, 1981, Winnipeg, Manitoba August 1981 1 Iby Michael Doyle free a flies Ottawa Bureau t 6ft Awa pittance Allan almost every of the nations health is sending bad signals and the government seems on the a most unavoidable course of breaking the Only two election promises it had made to win the 18 Here Are some of the bad signals if he Dollar is within Only a few basis Points of its ali4ime level Low of cents Setin i 4 the Bank account of official National reserves at last count had been eroded to Only it was running at billion in the 1970s and stayed at Between and billion during most of this v inflation is at per cent and fikely to Rise As the dollars loss forces up the real Price of Partio ulary fresh food imported in the Winter from the the Federal budgetary deficit had reached billion by the first Ter of this it was less than billion when the liberals took Over from former opposition Leader Joe the billion is overspending on a budget of real Gross National product grew by per cent in the last Quarter of its growth was Down to plus one per cent in the first three months of this year and by the end of the second Quarter june 30 it had fallen a marginal on half of one per Here Are the Good signals unemployment is Only per cent for men and women out of canadians have shown they will accept eight and nine per exports Are reflecting the competitive advantage of a cheap Dol the Trade surplus grew to a seasonally adjusted million in up from million in june exports at billion were up per cent from the billion a year Export figures Are Likely to be a because there is a steel strike on in the Industrial heart land of Ontario and a Forest strike under Way on the West the finance minister has been sending out he has hint or allowed his officials to several times that wage and Price controls have not been ruled he has indicated that the government needs More Revenue from an Oil Deal with the higher or he has sent and then repeated his message to the world financial Community that the National Energy plan which puts so much pressure on the Canadian Dollar the last of what critics Call Canadas interventionist economic at the same he has said Canada May be forced to go on foreign markets to borrow Money to replace depleted Maceachen is caught in a vicious Circle which rivals Only that which canadians will find themselves in if he increases taxes and introduces wage and Price controls at the same Here is How the Circle works Maceachen is going on the foreign markets is because official reserves Are run Down and he has already taken out a big loan with Canadas chartered the reason the re serves Are run Down is that they were spent shoring up the one reason the Dollar is Down is that the world capita Market is having doubts about one reason it has doubts is that Canadas deficit is so one reason the deficit is so big is that on sixth of the billion budget goes to service debt the government already took on in the that debt is cheaper than the new debt will be because interest rates Are higher Accord the Cost of the new will increase the further eroding Confidence in Canada unless Mareachen gets Money from somewhere else to t keep Down the deficit that somewhere is to be a tax after fewer and fewer people Are willing to lend in Money because the rates he pays on government Bonds Are less than the Banks and Bonds have More re so must he take it in tax not he can also get it from Alberta which is gushing with to get it Energy minister Mare Lalonde have to be Able to make an Oil Deal with the albertan i to make an Oil he will have to agree to crude Oil prices sharply higher than they Are now and to prices related by percentage to the world the world Price is about and the Alberta wellhead Price is a bar Liberal election Promise 1 was to make a Deal with Alberta that would result in lower prices Over four years than would have occurred under the want a Ter Deal than they almost almost two with and i the wellhead Price is not from whence comes the extra Money that the two governments would Ottawa would ease pressure on the deficit and to ease pressure for a hefty tax increase election Promise 1 is almost certainly broken whenever an Oil Deal is Promise i is almost broken Trudeau made a major speech on economic nationalism in Toronto on just six Days before the Tion with the aim of stealing key seats in Ontario Industrial heartland from the he promised that he would ensure that the Federal government is an Allan Maceachen is entangled in irresponsible election promises of Pierre Trudeau that have damaged our Active player rather than a referee11 in the Industrial he said he would expand Canadian control of the Economy while increasing the benefits to canadians from existing foreign ownership and he would capitalize on the nations Energy resources to build a world competitive Industrial it was built up As a great Promise during the last election Industry minister Herb Gray was supposed to use the principles from the speech to create a new Industrial Stran egy one that would see the ment intervene rather than ref but Maceachen now says the Energy policy is the last of Canadas Maceachen is not out of line with Trudeau latest the prime minister gave everyone a hint on july he was asked whether he was going to live up to the will expressed by delegates to Winnipeg Liberal i would say basically that i think their recommendations must be studied Trudeau quite to think that this Canadian government would get More involved in manufacturing and in some Way buy into manufacturing is some thing which is not in my line of think nor is it in the line of thinking of the present he added a few minutes most people missed the focus was whether the seven nation Summit would be successful not Domestic Maceachen did not miss he expanded upon he moved the Energy plan Back from the Centrepiece of the governments legislation to somewhere near the Middle in one characteristically Fluffy in Light of the other requirements of ithe Canadian namely the Exchange Short term interest rates and it is appropriate that the National Energy plan take into account these other requirements of economic he put further precision on Trudeau words on july 29 it is not the intention of the government to extend the policies that have been embodied in the National Energy program to other Sec tors of the Canadian Trudeau had Only mentioned the manufacturing sector on july 12 and had made promises about the Industrial sector on it had been up to Maceachen to signal the full scale brazils by Peter Smith special to the free press the brazilian armed Force that seized Power Early in 1964 broke with tradition by refusing to return the Polit ical process to the coup leaders quickly burned their Bridges by purging civilians and soldiers who could be accused of seeking either to impose violent change less import to Block peaceful but one thing must be borne in mind about the armed forces that have ruled Brazil for 17 years they Are deeply the current division within the army the Navy and air Force Are completely subordinate dates from the end of the second world the experience of the brazilian Force that fought with the army in the italian Campaign was profound its officers returned deter mined to reshape the brazilian army along lines and to encourage cooperation with the colossus of the North in other that bloc of officers was Able to gain Ascendancy within the despite being a because of the Allied its members were thus through the higher War College they to Force acceptance of the postwar which saw communism As the chief threat to the to prevent subversion at they a development was be cause they were so sympathetic to the they advocated development by private Enterprise because the need for development was they welcomed foreign which would provide the technology and management Brazil did not yet initially opposing them were the offi cers who did not go to the products of French their army had been More hierarchical and nation while they agreed with their More Peers that communism was the chief threat to internal and that development was the Best cure for they rulers deeply divided were much less receptive to private and particularly foreign they preferred significant state control and participation the Economy they also advocated Stern repressive measures against the former because its Mem Bers have attended the elite higher War Are characterized As the the latter is called the hard line another Bone of Contention is when if should be returned to civilian the hard line has consistently opposed arguing that civilians have proven in competent and that National develop ment cannot await political the on the other argues that to keep civilians out of politics will generate tension and disaffection among the which could threaten that de Bate is much in the forefront since 1964 the two blocs have struggled for Power usually behind closed Power from barrel of a the focus is the presidential because of the enormous Power the chief executive has to make the army High command designates the and the Choice reflects the current balance of con elected by popular then elects the president the heir apparent has not yet had a serious the contest Between the two blocs has rarely in for exam the hard line forced the sorbonne president to curtail his term of office and designate a hard line in a hard line revolt very nearly succeeded in ousting the sorbonne in the current drive by the sorbonne president to return politics to some measure of civilian control is actively opposed by the hard line demerits of the latter group have been desperate enough to Plant ing to delay political the president has reiterated his determination to press on with the but the situation is Peter Smith teaches history at the University of second of three articles Ottawa right to grab Oil revenues for us All a number of influential american investment and economic groups have warned of political ability in Canada and analysts have cited the Lack of an Oil pricing agree ment Between Ottawa and Alberta As a major reason for the flagging Canadian Dollar and a july study by the Atlantic Council of the a group of academics and former government officials which promotes interests said Canada faces years of internal political controversy and constitutional the study pointed to the fact that Canada is racked by Federal provincial disputes and lacks any political party at the Federal level with broadly based it went on to claim that prime minister Pierre Trudeau is employing nationalist eco nomic policies to Shore up his country this is not the first time Canada has been likened to a banana Republic by nor should canadians be at we act like As the Oil pricing agreement Issue dramatically the Lack of International Confidence in Canada caused by the Ott Waal Berta Row is created 93 much by the spectacle of a National government having to negotiate vital policy with province As by the Lack of an agree ment Canadas Domestic cons to Frances Russell Tut ional unique among major developed leave the world the impression of a country where no one is in it is Safe to assume that no other nation certainly not the Brit Japan or West the eco nomic leaders of the would tolerate a situation in which a state or local government Youw thwart National halt Oil shipments and hold off major needed new sources of Supply in a quarrel with the Central Canada does need an Oil pricing put even Canada needs a Domestic political order which permits regional conflicts to be re solved at the National level by National not by economic warfare waged Between 3 province and the Central until it becomes Clear who is in charge of National Canada will continue to be characterized As politic ally unstable and its Economy will continue to suffer from periodic Lack o the most frequently heard argument by those defending the Alberta position on Oil pricing is that it is unfair and stupid for canadians to be paying the world Oil Price to foreigners but Refus ing it to their fellow a leading american Ter has provided a succinct reason for this a recent the writing about the american econ Thurow addresses the problem of vast increases in Oil prices in the since the like produces a Large amount of its own Energy the parallels Between the two countries Are close enough for his assessment to apply Thurow Frigyes that the in come losses imposed on individual americans by the big hikes in Oil costs Are More socially unsettling if the Eficia Rie of to Jose hikes Are other they Are More tolerable politically if the gainers Are foreigners from Tine perspective of we her Oil prices represent a mixture of gains and Obj Row in americans paid an extra billion offshore for imported but since 80 per cent of american Energy is domestically american con Sumers wow have paid an additional or six per cent of the to american producers if Domestic Ergy prices had been raised to the Price of Thurow continues on the americans Are not poorer because of this it is from one Argeru can to another but particular americans will experience Large in come gains and other americans will experience Large income Given that the free Market solution leads to Large income losses for a Large fraction of the it is not Surpris ing in a democracy that government stepped in to prevent these losses from the government could not Stop the billion Transfer to but it could and did Stop much of the billion Transfer among the parallel with the Canadian Situa Tion is exact except that in Canadas the wealth Transfer occurs not Only from one Canadian to but from Al canadians to one provincial the Alberta heritage fund now stands at with Oil prices at less than half world if massive income transfers Between individuals Are socially and politically As american deregulation May be about to the Impact of a further massive accumulation of funds in one Small province within a country socially and politically Intok in throws was so called Revenue grab through the National Energy policy was the least the Canadian government could do in order to retain a semblance of National legitimacy for the Central in order to get a Deal with Ottawa sacrifices its position that All canadians should have Access to the Energy it May have to adj Domestic woes to its International image of doonesbury w pipnt1 sorry a30utthat i ;