Castlégar News

February 7, 1990

Group slams fed finances

OTTAWA (CP) — The govern- ment could have cut the deficit by more than half if it had it trimmed $1 in spending for every $1 raised in higher taxes since 1985, says the Canadian Federation of Independent Business.

“They have no one to blame but

Ives" for budget Catherine Swift, chief economist for the federation, said.

“They could have got things in order — they said they were going to back in 1984 and, as we all know, they’ve done nothing of the sort.'’

The federation, representing 85,000 small and medium firms across Canada, is the latest group to present a public brief on the next budget to Finance Minister Michael Wilson.

Swift said the federal government could have slashed the annual bud- get deficit to between $12 billion and $13 billion for the next fiscal year if it had ‘cut spending with the same enthusiasm it taxes.

Instead, the. next budget will probably leave the shortfall between what the government spends and what it gets in revenues at $32.5 billion for the year ending March 31, 1991

showed for raising _

Swift also said Wilson is using high interest rates as scapegoat, blaming them for thé rising deficit.

The government estimates it will spend $39.4 billion on interest this fiscal year out of total spending of $142.9 billion

But Swift said the government has left itself over-exposed to high rates by not cutting spending

The risk of -rising rates ‘‘is something that business people have to live- with. If you .put-yourself in. the position that you are so vul- nerable to interest rates, your debt numbers go absolutely crazy.

The federation saved its toughest criticism for the proposed goods and services tax, which it strongly op- poses.

The pre-budget brief urged Wil- son to start again and work out a simpler plan, saying 68 per cent of 1,500 peple surveyed by Angus Reid in December opposed the seven per cent tax.

Calling the proposed tax ‘‘uncon- scionable,’’ the brief said the feder- ation conservatively estimates the cost to small business of implemen- ting the complex tax at $1.2 billion to $2 billion a year.

Wilson is expected to present his budget by the end of February. Several groups have already urged

him to slash several billion dollars in spending.

But Swift said it would be irres- ponsible to impose draconian cuts when the economy is slowing sharp- ly.

The federation backs a proposal by the goVernment's own research group, the Economic Council of Canada, to freeze spending for two years on subsidies to business,

transfer payments to provinces and the hiring of public servants.

That would cut the deficit by about $3 billion.

The federation rejected _one fee

i from the

Council — to stop increasing family allowance payments to keep up with inflation, The measure would hurt low-income people and ‘save only $120 million in the first year, it said.

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NEW YORK (AP) — Would you really like to see zero in- flation?

A lot of people would, in- cluding Alan Greenspan, chair- man of the U.S. Federal Reserve Board, and John Crow, gover- nor of the Bank of Canada.

Also of that mind are some academic theoreticians, lots of business people and some in the financial community, where in- flation or its threat is considered as enemy to securities.

Many ordinary folks might like it too. Retired people enjoy knowing their pensions won't be eroded. Savers want an assur- ance that their money won't diminish in buying power. Work- ers want pay raises to mean something.

Many people would like to see inflation disappear simply be- cause they have come to view it as deceptive and destructive.

In all, inflation is about the most popular enemy in econ- omics.

Yet, in the past 60 years inflation generally has been ac- companied by economic growth, while its absence has been asso- ciated with recession or depres- sion.

One rap against inflation is that high or rising inflation is often a prelude to recession — even a cause, and certainly a re- flection of unsustainable growth

Only in 1936 did U.S. inflation average exactly zero for the year.

That was in the Great Depres- sion —but it was one of the better Depression years. Gross

Zero inflation

economy

slow

national product grew, only to fall again later.

In most of the Great Depres- sion, there was no inflation — in fact, deflation ran wild.

The worst of it was in 1932, when prices dropped 11,5 per cent, but deflation was evident every year from 1930 through 1934, and again in 1938 ‘and 1939,

In 1949, prices fell again, by 0.4 per.cent, and while the econ- omy didn’t shrink it also failed to grow

Since then there has always been at least one-per-cent an- nual inflation in the U.S.

It is hard to dispute the empirical evidence that the pur- suit of zero inflation may be hazardous.

Theory bolsters the conten- tion. For example, proponents and opponents of the zero-in- flation goal agree that reducing inflation slows economic expan- sion

But an induced slowdown, im- plemented by restraining money supply and keeping interest rates high, is perilous. At best, it is probably guesswork as to when to apply or relileve pres- sure

The central on, statistical such factors as production, sales, earnings and employ

bank must rely measurement of

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and most of these measurements provide evidence after the fact When they reveal their news, it is already too late. To seek zero inflation, therefore, is to risk recession

Valhalla map sparks study

VANCOUVER (CP) — Park and wilderness areas in British Columbia could more than double in size without causing long-term harm to the province's forest industry, an independent study concludes.

The year-long study says that if more than 100 new wilderness areas were created the amount of wood cut annually by the forest industry would drop by only 3.52 per cent

Under the worst-case scenario, if industry and government made no attempts to offset that loss, 2,554 direct forestry jobs would be lost and $52.9 million in annual govern- ment revenues would disappear, says the study, conducted by resear chers at Simon Fraser University.

With product sales of $11.5 billion in 1987, forestry is the largest industry in British Columbia, acc- ounting for 82,500 direct jobs

The report, which uses data from the Ministry of Forests and key forest. companies, says increased tree planting and secondary manu facturing of Jumber would offset losses due to wilderness designa tion 4

With good faith and commitment

on both sides, the province could

“‘get the best of both worlds — wil- derness protection and a healthy forest industry,’ says Michael M'Gonigle, study supervisor and professor of natural resources man- agement at Simon Fraser University in suburban Burnaby :

Copies of the 136-page report were scheduled to be released to the Forest Ministry, the forest industry and environmental groups

M’Gonigle and several. graduate students began the study a year ago after the release of. a controversial map by the Valhalla Wilderness Society

The map identified all key pro- vincial wilderness areas that en- vironmental groupswant barred from logging =

When released, the Council of Forest Industries said it was skep. tical of Valhalla’s view, labelling it a wish list

The council said the society's proposals -would reduce the forest base by 10 per cent, cost 8,500 direct forestry jobs and jeopardize another 17,000 indirect jobs.

The Simon Fraser University stu- dy disagrees, saying those figures are inflated. British Columbia's for- est industry could adjust, it says.

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CasNews columnist John Charters takes a look at the Rossland Light Opera Players ... . 87

Ethnic treat -

Rustavia Company from Soviet Georgia performs at ~the Cominco Gym in Trail Feb. 13... Bé

_LOTTERY NUMBERS

The winning numbers in Saturday's Lotto 6/49 draw were 15, 21, 24, 27, 42 and 47. The bonus number’ was 36. The extra numbers are

18, 27, 93 and 98.

The $1,000,000 winning number in Friday's

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Vol. 43, No. 12 60 Conts

AW yk

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News

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1990

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; Oise Watson, 9, gets ore Friday to participate in Robson of the French festival, Carnival. Kinnaird elementary also celebrated | the ‘annual event Thursday, photo page A8.

CasNews photo by Ed Mills

Celgar to fill shore

By CasNews Staff

Celgar Pulp Co. will fill in an area of the foreshore along the Columbia River in front of the Castlegar pulp mill to create as muchas four hectares (10’acres) of usable land as the com- pany continues site preparations for its proposed $630 million expansion of the mill.

‘The amount of tand the will create with the fill depends on where the construction camp for the expansion project is located, Celgar controller John Lebidoff said.

Before that takes place though, Lebidoff said Celgar needs the area to

reroute some piping at the mill.

“*What we need to do is fill this area in so that we can re-route some of our piping during the Easter shutdown while the mill’s down for two weeks for other routine maintenance ac- tivities,’’ he said.

Lebidoff said the company is not planning to construct any buildings onthe filled area_

waiting for final approval from the Ministry of Crown Lands from which Celgar leases the foreshore area.

Lebidoff said the government has strict guidelines on how the foreshore area may be filled.

“The government has extremely rigid guidelines on how the fill is to be placed,’ he said. ‘Everything has to be done in accordance with Ministry of Environment regulations.””

Lebidoff said Celgar has applied to purchase some of the Crown land.

“We thought if we filled it, it would come in handy later for perhaps an access area or that type of thing.””

Celgar has received permission to fill the area from several government agencies, including the Coast Guard, and has received endorsement from Castlegar city council. However, as of last week the company was still

CASTLEGAR-ROBSON FERRY

Ombudsmanwill

review move

By SIMON BIRCH Editor

Provincial ombudsman Stephen Owen will review information on the closure of the Castlegar-Robson ferry and the ferry’s removal from its mooring by the provincial gover- nment in January, deputy ombud- sman Brent Parfitt said Friday.

The Robson-Raspberry Ferry Users Ad Hoc Committee is seeking the ombudsman’s help for the second time following a meeting last Sunday in Robson at which the committee vowed to continue the fight to restore the ferry service.

“Yes, of course we will review it,"’ Parfitt told the Castlegar News. “Certainly in the pasi we’ve looked at this matter.”’

Parfitt said the ombudsman’s ability to review the matter “depends

on how the decision was made’* to remove the ferry.

“If it was a cabinet decision, we don’t have access to the documents,”’ he said.

However, if the decision was made by the Highways Ministry bureaucracy or Highways Minister Rita Johnston, then the ombudsman is able to review the decision, Parfitt said.

The government removed the ferry in the early morning hours of Jan. 24. The vessel will be refurbished at Shelter Bay near Revelstoke before bein gput into service at Arrow Park, replacing a ferry there which carries logging trucks acorss Upper Arrow Lake.

The committee’s lawyer. Dalon, said Saturday the committee has not asked the ombudsman to

Terry”

review any of the questions the com- mittee has raised in its court battle to have the ferry service reinstated. Earlier in the week, Dalton said he hopes the B.C. Court of Appeal will hear the case close to the next provin- cial electon so that the issue will have the greatest political impact

Dalton said the committee has asked Owen to consider if in fact there was an agreement between the government and the committee that

the ferry should BF WOR10_the com- mittee for $1 and, if there Was an agreement, if that agreement has been breached

He said the committee has also asked the ombudsman to investigate the removal of the ferry ‘‘in the darkness of the night,"’ to try to determine who gave the instructions

continued on page A2

Talks may be delayed

By CasNews Staff

Arbitration_talks between Celgar Pulp Co. and Local 1 of the Pulp, Paper and Woodworkers of Canada to settle a company grievance against the union are expected to resume this week.

Union first vice-president Mike Espenhain said Saturday the hearings are tenatively scheduled to resume Wednesday but may be delayed further as a result of a death in the family of Celgar’s lawyer.

Celgar is claiming more than $600,000 in damages from the union in connection with a work stoppage at the Castlegar pulp mill in September 1988 when 200 union workers walked off the job over a dispute about seniority

The union has been trying to show at the hearing that the company suf- fered no loss of production or profits during the three-day walkout because the mill was shut down at the time for maintenance.

Espenhain said negotiators had been working towards a settlement of the dispute without further ar- bitration hearings but those talks have

broken off because the two sides were too far apart

“Specifically, the company was looking for some’ things ‘contrary to our labor agreement,” Espenhain said. ‘‘We didn’t want to give those away.””

He said he expects the hearings to take about another five days.

Celgar officials could not be reached for comment Saturday but have declined to comment on the hearings in the past

Mann pleads not guilty

By CasNews Staff

Fire chief Bob Mann entered a plea of not guilty Monday in Castlegar provincial court to one count of sexual assault, court records show

His next court appearance is scheduled for March $

RCMP have not released details of the charge against Mann, who is being defended by Castlegar lawyer Ken Wyllie

The court has imposed a ban on publication of any information which

could identify the complainant

Mann, 52, is Castlegar’s~second fult-time-paid fire chief. He took over the job in October 1982, replacing Dan Fitger who resigned in May 1982 after just 18 months on the job, blaming lack of cooperation and sup- port from city council and his volun- ter fire department

Mann was honored~in~December 1989 with a 30-year federat exemplary medal for his long service as a firefighter

village it wants to emulate.

announcing that the 81-year-old

definitely due to spiralling losses.

February. to the west,

new Red Dog mine imAlaska

gone.

But underneath the snowy ‘blanket, behind the Alpine facades that line the town’s platzl (small plaza), there's cynicism, bitterness and uncertainty.

Cominco Ltd. dropped a bombshell last month,

mine, the town's largest employer,

More than 600 people were given two-week layoff notices with an additional 150 out of work by mid-

Cominco’s smelter in. Trail, one mountain range now will get lead and zinc concentrate from foreign sources and, starting in July, Cominco’s

Even if the mine, now tended by a skeleton staff of 60, reopens as Cominco promised, the shutdown is a taste of what the town can expect when the ore is

The community of 6,700, nestled in the East Kootenay region between the Purcell and Rocky Mountains, owes its existence to the mine. It’s still largely a one-industry town.

In the basement of local 641 of the United Steelworkers of America, idled mine workers slowly

Sullivan lead-zince would close in-

KIMBERLEY (CP) — The era when Cominco used to push em- ployees to run for city council is past, but Kimberley Mayor Jim Ogilvie says the mining firm still casts a giant shadow

Once owned directly by Comin- co, Kimberley was incorporated in 1948, but for years afterward the company kept its hand in through the council, says Ogilvie, the

major closed last

ployer. It

mayor for 17 years.

“Although it's not a company town, it’s got a lot of the elements of a company town, except the citizens pay for everything."”

Even today, Cominco remains a landholder month, lead-zinc mine was the major em- pumped about $36 million in wages directly into the

drain a coffee urn, trading trade stories of enforced

domesticity — who vacuumed; who cooked supper Cominco says it warned workers almost a year

ago that rising production costs might jeopardize

Sullivan's already-limited future. “It hasn't hit yet,”’

Mayor asks for help

economy of the southeastern B.C

community

down Cominco cited

and, until it its Sullivan off.

couver,

says a third-generation miner

The 81-year-old mine was shut indefinitely low world zinc prices and high production costs More than 700 workers were laid

“If you compare that to Van it would be like losing continued on poge A2

23 years, table."

Kimberley faces uncertain future

KIMBERLEY (CP) — With a blanket of fresh snow covering its many steeply pitched roofs, Kim- berley looks almost like the kind of Bavarian mountain

whose grandfather started here in 1907. ‘I'm shocked “What upsets me more than anything is that after two-weeks-layoff notice just isn’t accep:

He won't give his name, worried he might be

labelled a troublemaker by” potential employers if

Sullivan doesn't reopen

Local 641 president Mike Park says he wouldn't be surprised if the mine reopened about theytime that negotiations begin for a new master contract in June The shutdown may be a way to soften them up

last month

workers

must do,"! he says

“Let's not pull any punches,”” who doesn’t want his name used lockout, pure and simple.

Cominco’s office, is done up to resemble an Alpine chalet ministration manager Ron McLean rejects the charge the company is trying to get concessions from mine

adds another miner “This is a

few steps from the union hall, Inside, ad

1 don’t know that there’s anything they can or “We want 70-cent zinc and we continued on poge A2