< Castlégar News October 23, 1985 TAKEOVER FEVER SHAKES UP ECONOMY | By EUGENE ELLMEN The Canadian Press Companies worth billions of dollars have changed hands this year as Canadian business works through a bout of takeover fever shaking up huge sectors of. the economy. + Gulf Canada Ltd., CP Air, Canada Trust Co. and Union Enterprises Ltd. are only four of more than 25 large publicly-traded companies involved in takeovers in 1985, and business observers say the trend has not ended. While the movers and shakers who mastermind these deals reorganize their holdings, economists debate whether consumers, workers and small investors will be the ultimate losers. “I think what's happening in the 1980s, is that industry 4s reorganizing to do business in the 1990s,” says Fraser Mason, director of the mergers and acquisitions department ‘of Woods Gordon management consultants. But Toronto lawyer Edward Waitzer, a champion of minority shareholder rights, views the current takeover spate as little more than a continuing power grab by the Canadian establishment. - NOGAINS MADE __, “People are reinvesting in existing facilities rather than building new ‘facilities, which means there's no net gain to the economy — we're just shuffling ownership around.” Woods Gordon says that so far this year there have been more than 25 mergers and takeovers of publicly traded Canadian companies worth at least $9.5~ billion. By comparison, there were seven such transactions in all of 1984 with a value of $900 million. The list of takeover targets covers all major sectors of the economy. Earlier this, year, relative upstart Unicorp Canada Corp., an investment holding company, made a daring bid for all shares in Union Enterprises, which holds the second-largest gas Utility in Ontario. Later, Gulf Canada, the country’s fourth-largest oil company, was sold to Olympia and York Developments Ltd., the huge real estate firm controlled by the Reichmann family of. Tordnto. More recently, Genstar Corp. a San Francisco-based conglomerate, acquired control of Canada Trust. Genstar intends to merge the trust company with Canada Permanent Trust to form the sixth-largest financial institution in Canada. ‘Industry is reorganizing to do business in the 1990s' CP Air and provincially owned Quebecair have made rival offers to take over Nordair Inc. of Montreal, one of Canada’s most successful regional airlines. LOANS CHEAPER Recent economic stability has put companies in a takeover mood, said Mason, and lower interest rates have cut the cost of borrowing money to finance acquisitions. He also said the federal government's moves toward deregulation and the sale of publicity owned enterprises to the private sector are encouraging companies to get bigger to face growing competition in the future. The Reichmanns sold Gulfs western refining and marketing assets to Petro-Canada partly out of concern over the effect deregulation of oil prices would have on those operations, Mason said.Similarly, the Genstar deal was put together to enable Canada Permanent to face deregulation in the financial services industry. Other observers say the prolonged debate over a bilateral trade agreement with the United States is ing some ies to their power. “I think they are getting ready for a possibility of a deal with the Americans,” said Carl Beigie, chief economist at Dominion Securities Pitfield. Waitzer_said public takeovers are only the tip of the iceberg, because many more acquisitions are negotiated in private deals. “People sit down for lunch at the National ‘Club or the Toronto Club and swap assets.” He said there is more than simple competition behind the takeover boom. It’s cheaper to buy assets than to create new ones, ntly, Canada’s “perverse” tax “from a tax effici point of view. Companies must pay taxes on their profits and shareholders must pay taxes on their dividends, so it makes sense to spend earnings on takeovers rather than distribute them to investors. “It's all done for tax reasons, so in one way or another there's a public cost in the transaction.” This takeover mentality distorts stock markets and. leads to a preoccupation with short-term profits rather than long-term goals, he said. Moreover, takeovers increase concentration and cross-ownership irs the Canadian economy, which is already more concentrated that the U.S. economy. ‘A 1983 study on the level of concentration in Canada's publicly-traded companies indicated that only 64 stocks, or 23 per cent, of the 300 issues on the Toronto Stock Exchange composite index are widely held (meaning that no single shareholder holds more than 20 per cent of the stock). BUSINESS DIRECTORY Beauty Salon Brian L. Brown CERTIFIED GENERAL ACCOUNTANT THE HAIR ANNEX le 365-3744 1241 - 3rd St. Castlegar 270 Columbia Ave. Castlegar Ph. 365-2151 - SOLIGO, KOIDE — & JOHN CHARTERED ACCOUNTANTS 615 Columbia Ave. (Upstairs) Castlegar Phone 365-7745 | Henry John, B.Sc. C.A. Resident Partner MOROSO, MARKIN & BLAIN CERTIFIED GENERAL ACCOUNTANTS 241 Columbia Ave. » Castlegar Ph. 365-7287 OGLOW'S PAINTS & WALLCOVERINGS 365-6214 Chimneys your acivertising dollars do better in. 5:29 2 ‘© 1985 Universal Press Syndicat “*What exactly is a Financial Planning =F RUMFORD ” PLACE \Gi> © super Sweep Chimney Services Ltd. * Complete Masonry Work * Chimney Lining * Certified Fire Satety Inspections 735 Columbia Ave. 365-6141 1 CAN HELP WITH: * Investment Funds © Guaranteed Investment Certificates * Registered Retirement Savings Plons © Estate Plannin: isability Insurance Cameron A.R. Bond Call 352-1666 (Collect) 10 a.m. - 3 p.m. Mon.-Fri. Buvestov. PROFIT FROM OUR EXPERIENCE Appliances ‘@FAST COURTEOUS SERVICE ‘GENUINE MAYTAG PARTS: WE SERVICE ALL MAKES — SPECIALIZE IN MAYTAG CASTLEGAR PLUMBING & HEATING LTD. 1008 Columbia Ave., Castlegar, B.C. 365-~ Russell Auctions 399-4793 " Thrums Buy or Sell by Auction By comparison, 85 per cent of the 500-major making up the Standard and Poor's index of U.S. stocks are widely held. Mason said growing concentration is limiting stock- market opportunities for investors. But investors in acquired companies often stand to profit. handsomely because their shares are purchased at-a premium to their market value. At the same .timie, shareholders of companies may suffer because the companies can become overburdened with debt to finance a takeover. And shareholders in target companies often lose because” of anti-takeover measures known as “poison pills” or “shark repellents.” POISON PILLS During the Union Enterprises takeover, for example, Union purchased Burns Foods Ltd. for $125 million. Bay Street observers said this was a poison pill to bloat Union with debt and make it more difficult to take over. But shareholders aren't the only possible losers in the current takeover boom. “A more efficient company is a more viable company in the 1990s but that is cold comfort now to the man who has lost his job,” said Mason, noting that operations at acquired companies are often trimmed. One outcome of the Gulf Canada takeover was closure of the company’s Montreal refinery. Gulf said 450 jobs might be lost. Other observers say consumers stand to lose from increasing economic concentration. “The minus is that many of these companies will attain a degree of market power that will hurt the consumer,” said Beigie. Auto Rentals purchasing Saturday and Sunday LOCATED AT Castlegar Airport Terminal on Adastra Aviation — 365-2313 Plus 12¢km. on’ © Pickup trucks aveilable 50 FREE KMS Castlegar Airport and 1444 Columbia Ave. 365-7555 \ WEST K CONCRETE LTD. PIPELINE PITT RD. 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There. are also sub- A former Hockey clinic Australian national field hockey team. striker was in Castlegar to conduct a RSE Castlegar News UNDAY CASTLEGAR, BRITISH COLUMBIA, SUNDAY, OCTOBER 27, 1985 VOL. 38, No. 86 WEATHERCAST Cloudy today with some sunny periods and occasional showers, highs near 8°. Tonight. partly cloudy, lows 0 to 3°. Monday cloudy with sunny periods and a few showers, high near 7°. Freezing level today and Monday 1,300 metres. << 50 Cents 2 Sections (A & B) CASTLEGAR CHAMBER Moroso to serve — second term. By CHERYL CALDERBANK Staff Writer Paul Moroso wa$—re-elected presi- dent of the Castlegar Chamber of C for a second term Thursday ago. “Until that time, the building will stay as is and has been,” he said. O'Connor did say some preliminary work will be done for the proposed start-up date of Nov. 12. night at a di ” meeting z the Chamber's annual meeting. In the past, have in his speech to the chamber, Moroso said, “I've got a lot of elected the executive officers as well as the directors, but a set of bylaws adopted by the members stipulate that _ the officers be selected by the dir- CLEANING UP . . . Nick Chernoff Jr. loads debris trom Doukhobor Historical Village fire into dump truck driven by Terry Markin during work day held at the village Saturday to clear the site in preparation tor rebuilding. Castiews rnota by Kyort Waser HOURS: Mon. - Fri. 7.a.m.- 1 pam. Sot. —Ba.m. -9a.m. Call 365-6256 Welding & Backhoe ROCK BLUFF BACKHOE SERVICE ‘on rates and details of advertising in the Business Directory PHONE 365-5210 = we H weld 11 We dig basements. septic systems, water bines. etc ° REASONABLE RATES 365-2383 Ralph Sea. ‘Owner MATH ~ CIRRICULUM — REVISED By SIMON BIRCH Staff Writer. More emphasis on geometry, less repetition of tedious drills and a greater reliance on the calculator are just three of many changes facing B.C.’s students in a sweeping revision of the Grade 1-12 math curriculum duled for it i inning in the 1986-87 © school year. The Curriculum Development Branch of the Ministry of Education has circulated a draft of the revised curriculum — two years in the making — to school districts throughout B.C. Math teachers in each district have been meeting during October to discuss the changes. Tomo Naka, principal of Mt. Sentinel high school in South Slocan, is one of six educators on the co-ordinating committee for the curriculum revision. In an interview Friday, Naka said he is impressed with the job the ministry has done with the revision. “In the past, review of curriculum was a little more snappier with decrees from the government,” he said. But this time, he said, the ministry has taken the time to seek input from math teachers throughout B.C. “This time they've done a thorough job of going through the old curriculum and thrown out what was unnecessary.” “Tm quite impressed.” Naka, who is a math teacher himself, and has been teaching in B.C. for 34 years, said the demand for a new math curriculum came mainly from teachers at the junior secondary level. = He said those teachers found both the existing curriculum and textbooks inadequate. “To teach (the existing) curriculum they had to crank off worksheet after worksheet to make the kind of course they would like to teach,” Naka said. The outcry resulted in the Education Research _right from the elementary grade level all the way Council, under the auspices of the Ministry of Education, conducting an assessment of B.C.’s math curriculum in 1981, he said, adding that the assessment was primarily designed to get feedback from math teachers in the province. The revised curriculum grew out of that 1981 assessment. One of the reasons that a new curriculum is necessary is the need to keep pace with technological changes. Since 1974 — the time of the last major revision to the math curriculum in B.C. — Naka said “the era has changed.” One .major change in those 11 years proliferation of mass-produced. calculators. The proposed curriculum changes recognize that the use of calculators can't be ignored. “We're saying that they ought to be a tool to be used is the © through secondary grades,” Naka said. But he emphasized that the use of calculators will be a tool — not a.crutch — with students still expected to learn methods of calculation. In addition to greater emphasis on the use of 's, the ing are other prop changes to, the math curriculum: ea greater is on skills e an increase in the amount of time devoted to geometry and the emphasis it receives; probability and statistics, currently an option at the senior level, ‘will become -part, of a new strand in Grades 1-12 called “data analysis;” e an i d is on the ing of concepts and processes; 7 e at the elementary level, a shift in emphasis to decimal fractions from common franctions; e math in Grades 9 and 10 will develop rather than assume abstract thinking skills; : e three new courses, General Math 9 and 10 and Introductory Math 11 will be developed; the courses will focus on less ab aspects of e computers should be used wherever possible in the revised curriculum to formulate mathematical models and as a tool in. problem solving. Satoshi Uchida, now in his 19th year of teaching 2 continued on poge A2 i bl vi Pp pre 4 ectors. In other elections, Doug Drinkwater was elected first vice-president. He re- places Tom Oglow. Gary Pearson was elected second vice-president, replac- ing Drinkwater, Harold Webber is the financial officer, replacing Pearson. Other directors are: Mary Anderson, Larry Bosse, Nick Chernoff, David Gairns, John Kemle,. John Landis, Tom Littlewood, Mike Mayrhofer, Mike O'Connor, Jack Parkin, Gordon Soukeroff and Marilyn Strong. All dir- ectors were elected by acclamation. Moroso as past pi “The economy is difficult not only in this area, but in B.C. and the whole of Canada, but I think we have to work very hard and we have to be com- petitive,” he said. “We are seeing something is happen- ing within the region. People are starting to pull together. That's leading to co-operation.” Moroso said the chamber also has to be careful to protect the community's existing industries. “It doesn’t mean allowing them to take advantage of us,” he said. Moroso said the chamber has to start working to protect Cominco and Westar and other similar employers in the area. Moroso also touched on Cominco’s “the city’s representative, were ap- pointed to the board. Moroso said in an interview he agreed to head the chamber for another year in order to finish off “projects initiated like the chamber's new building and the tourism pro- ms. The chamber building was one of. nine Canada Works projects in the Central Kootenay region announced last week. The chamber will receive $29,349 to, construct a new building near the Community Complex to house the chamber office, a tri-city regional tourism centre and a small business centre. “Hopefully we. can break ground before the’ freezing. sets! in,” Moroso said of the new building. He said the building will not only be the focal point for the chamber, but other services clubs and groups could also make use of the building and help defray operating costs. The building will be built on city property near the “ommunity Complex. But building chairman Mike O'’Con- nor was more cautious about the proj- ect. “We still haven't received final con- firmation that we have received the grant,” he said. “It happened once be- fore and then we didn't get the grant. Until we receive an official letter, nothing will be done.” O'Connor noted that a letter of con- firmation was to have arrived a week Committee chooses library By CasNews Staff The Castlegar Expo 86 Committee will apply to the Expo legacy fund for money for an extension to the Castle- gar Library. The decision on what to use the money for was made Thursday at a , and Gairns, . ion. for a lead modernization grant from the federal government. “I think we would sure like to hear some comment ‘on Cominco’s grant,” Moroso noted: The president added that he has been told by Trail businessmen that potential investors in the city are waiting for the decision by. the federal government to see if Cominco will get funding. c Moroso said if the federal govern- ment isn't prepared to make a state- PAUL MOROSO . .. optimistic ment on the funding, the community should turn back and “try to carry on.” “We shouldn't try to resolve the whole economy around one focussed item,” he said. Moroso added that the same applies to-Westar. “We've got to do everything we can to help business people ,” he said. Moroso said it is also important for small business people to‘ survive as well. continued on page A2 Candidates scarce for city By SIMON BIRCH Staff Writer Although noon Monday is the deadline for filing nomination papers for the Nov. 16 municipal election, candidates for Castlegar. city council positions are scarce. As of 3:30 p.m. Friday, the mayor- alty race is still a two-way contest between incumbent Mayor Audrey Moore and Ald. Bob MacBain. There are three two-year aldermanic seats up for grabs this year but only incumbent Ald. Carl Henne and retired Castlegar resident Gordon Ferguson have filed nomination papers. And as of Friday afternoon, no one had shown any interest in the one-year term to replace ~ former’:alderman Marilyn Mathieson, who moved to Vancouver. Moore said Friday her campaign will focus on the need for good leadership in the community. “I see the necessity to have some- body who has excellent contacts local- ly, provincially and federally,” she sai indicating she feels she can fill the bill. Moore, who said Castlegar must still face some “difficult times,” added she would like to see the completion of Castlegar’s proposed transit’ system and is “interested in the council Incumbent trustee George Anutoo- shkin will battle fellow Ootischenia re- sident Bert Rourke for the Area J seat. Smecher said Thursday she thinks the school system in Castlegar is running smoothly. - “Given the state of restraint, I think the Castlegar school system is in good shape,” she said. “I don't see any major issues from ‘where I'm standing. “We have some large classes, but then we have some small classes,” Smecher said. “Our transportation system is in good shape and our employee relations are in good shap i Krull said she expects provincial government funding of education to again be a hot issue in the campaign. She said the education system will have to function as well as it can with what it gets from the government. “I'd like to see education continue as well as it can with the funding allotted from the government,” Krull said:- Both women are likely to get an argument from Guglielmi, who recent- ly told The Castlegar News, “I don't like quite a few things going on in the district.” As two examples, Guglielmi listed the board's ‘ion of Grade 5 and 6 dations of the Expo Legacy project.” Neither MacBain nor the two alder- manic candidates could be reached for on their i meeting of the Expo said committee chairman Mary Anderson. - Anderson said the committee will apply for $200,000 from the $30 million Expo Legacy Fund. She said the city will also put up over $200,000 to match the grant. One requirement for the grant.is that the community match it.” Anderson said the city will put up $150,000 in money and $53,000 in land and improvements. Tentative plans are for an expansion that will increase the size of the library to over 557 square metres from 278 square metres. “It’s going to keep everybody hap- .” And said of the i noting that a referendum for a new library was defeated. “The race for Castlegar school board seats promises ‘to be interesting with eight candidates so far having filed for the four available trusteeships. In the city, incumbents Doreen Smecher; the board chairman, and Linda Krull have their can- French and Russian second language programs this-year and the firing and rehiring of noon hour supervisors last spring, for which Guglielmi says no reasons were giv He also cited what he says is the board’s penchant for conducting the publie’s business .in private. “believe the board should be more accessible (and) should show greater lacies. They are joined in the fight for the two city seats on the board by Castlegar letter carrier Tony Guglie- Imi. . In Area I, incumbent Lovette Nich- volodoff is not_ seeking re-election, ending an eight-year stint-on the board. Challenging for her seat are Pass Creek resident, Ed Conroy, Eileen Kooznetsoff of Glade and Alex. Reibin of Shoreacres. with the people and be much more open to the public than now.” Guglielmi’s feelings are echoed by Area J candidate Rourke, who stresses the “importance of openness in the conduct of school board business. “(This) schoo! board does a lot of the public's business behind closed doors,” said Rouke, manager of Castlegar airport's air traffic unit. + continued on page AZ