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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - January 22, 1972, Lethbridge, Alberta New ownership policy has skimpy foundation By CARL MOLUN8 OTTAWA (CP) The led- eral policy on foreign owner- ship, expected has i skimpy foundation of laws ud traditions to buUd upon. General governmental pol- icy for more than a century has encouraged foreign In- vestment. There have been few actions to prevent that in- vestment from developing into alien control of major sectors of the economy. Nevertheless, scattered re- strictive lawt and practices have developed from histori- cal accident or by recent de- sign. The effect has been to keep largely in Canadian hands such enterprises as banking and broadcasting, power utili- ties and some transport sys- tems. Fast methods used to en- sure at least a measure of Canadian contril break down into government ownership, laws enforcing Canadian own- ership and a few instances of government intervention to prevent particular enterprises from falling into foreign hands. In addition, there are a few tax administrative measures de- signed to encourage Canadian ownership Or control of do- mestic business. They work with varying degrees of effec- tiveness and some new ones are untested. Government ownership and restrictive ownership 1 a w i have proved the most effec- tive methods of guaranteeing Canadian control of key sec- tors Of the economy. Advance indications are that the Trudeau government has rejected the key-sectors approach to control, favoring some Investment screening device. Prime Minister Tru- deau has said it would be too costly for Canadians to buy back control of their indus- tries. Further, the Trudeau gov- ernment has moved away from the pattern of govern- ment ownership of major na- tional enterprises. The gov- ernment set up Telesat Can- ada and the Canada Develop- ment Corp. to be commercial enterprises with majority Ca- nadian ownership but not gov- ernment control. As for laws requiring ma- jority Canadian ownership of an enterprise, successive gov- ernments have been reluctant to dp in broad- safeguard an existing degree of Canadian ownership. In the insurance field, for example, federal law forbids foreign takeovers of Canadi- an-owned life insurance com- panies. But no action was taken to roll back foreign domination of fire and cas- ualty insurance. OTHER METHODS OPEN With government ownership and statutory enforcement of WANTED SCRAP IRON NOW PAYING MORE FOR ALL TYPES OF SCRAP METAL Farm Industrial Anything of Irani COPPH BRASS RADIATORS lATTERIES CAST IRON etc.- Truck loads Truck Sculn Meentt Crane Service National Salvage Company LIMITED NEW LOCATION 206 33rd Street North Phone 321-1711 "Scrap li Our Butlntn" SWEEPSTAKES Ths vilmiine's Heirt nprmntt tfa HEART of oar auia art for the hindictpped, reseirch on bums, crippled children! hoipiult. f cardiac centre, senior citiiens centre! ind tsilittnct tor the blind. NEXT DRAW FEB14 (Earty Bonus Draw) Hire's your china to win I gnnd prin of tSO.OOO, I ircvnd prut of 115.000. third prltl of 7.000. fourth prin of 13.000 or 70 print of HOC eich plus up to tCfOOO In print In iich of Mo mori EARLY tONUS DRAWS. Finil Dnrt Mif 24. 1972. Ctrly Drna Fit. 14 'int April 1, 1371. Order lickel-s now they come in this GIFT FOLDER SHRINE-LION SWEEPSTAKES ASSOCIATION P.O. BOH 1030 CALGARY I, ENCLOSED li my piyiMt to I THE SHBINE-LIOH SWEEPSTAKES ASSOCIATION FOI I J Pkiu fomrt On Mntnc No. ol Mutt (duck 1 Held Q D I I fj I J20.00 SPICIM. IONUS 12 HcMl 125.00 I NAME..........................................-......PHONE--------------------- JCITT........................... ZONE............'WOVINCE--------------- 3og producers advised o 'run your own ship' domestic ownership given krw priorities, the methods left are greater Incentives U> en- courage private C a n i d 1 a n ownership and a sys- tematic manner of Intirven- tjon to prevent further take- overs. The effectiveness of govern. Kent ownership In maintain- ing Canadian control is re- flected in a study published last month by Statistics Can- ada. It shows the extent of for- eign and domestic control of various Industries. For example, non-residents have total control of alumi- num production and almost total control of rubber and the automobile and auto parts in- dustry. Aliens control 79 per cent of chemicals, 77 per cent of electrical apparatus, 74 per cent of oil and natural gae, 65 per cent of mining, smelting and refining of metals. Fifty-, seven per cent of all manufac- turing is foreign controlled. By contrast, only two per cent of the Canadian railway industry is controlled abroad, only five per cent of other utilities. ECHOES OF THE PAST Both statistics are echoes of a past when Canadian govern- ments financed or took over enterprises they regarded as essential to the country's de- velopment, which often by na- ture were monopolies, or be- cause private financiers were unwilling or Incapable. Hence, Canadian National Railways has been a federal government company since 1919, Air Canada since 1937. The CBC and the National Film Board were set up as Crown corporations in the 1930s to foster national com- munication. The Northern Transporta- tion Co. in the Northern Canada Power Commission in 1948 and the 45-per-cent fed- eral interest in Panarcb'c Oils Ltd. in 19M all were govern- ment enterprises to develop the North. In utilities, a makirity of provinces decided long Nova Scotia has Just extended its control-that they should run their own electric power monopolies. The Prairie prov- inces operate their own tele- phone systems, Saskatchewan provincially-owned bus fines, Ontario and British Columbia their own railways. All provinces have taken over health and hospital insur- ance, Saskatchewan and Man- itoba automobile insurance. SHARE SOME CONTROL Wartime pressures gave Ca- nadians some share in the chemicals and uranium indus- tries when the federal govern- ment set up Polymer Corp. and Eldorado Nuclear Ltd. as government corporations dur. ing the Second World War. Telesat Canada, established by government action in 1M9 to run a communications sat- ellite, will restrict foreign ownership to no more than 20 per cent of shares available to the public. The Canada Development Corp., set up last year to channel public and private In- vestment money into Cana- dian enterprises, also would have restricted ownership. Apart from past measures that kept sections of industry in Canadian hands through partial or total government ownership, a handful of re- strictive laws and regulations were-introduced in the 1960s to prevent foreign takeovers or encourage Canadian owner- ship. The regulations accompany- ing the 1968 Broadcasting Act are the most stringent exam- ple. Foreign ownership of i broadcasting enterprise i s limited to no more than 20 per cent and that rule is being applied to companies with greater foreign interests. EDMONTON CP) Alberta Agriculture Minister Hugh Hor- ner told hog producers that they should not start asking for ovemment regulations and re- rictions when their industry gets into trouble. 'We should have learned in past that this type of re- action hasn't done much )r. Homer told the Western Hog Growers Association con- rentioo. He advised producers to "run our own ship." Dr. Homer said there are ast opportunities for more Ca- nadian meat sales around the world if some of the bottlenecks Etadio station power o hospital CHUIIWAC, .KBC. (CP) Radio sbaiton CIIW Chilliwack returned to the air in this pow- er-short Fraser valley city Fri- ay after a voluntary close- own to allow its emergency power init to be used by a hos- ital. The station as off the air for about 17% hours while its standby power generator was in jse at Chilliwack General Hos- jyital. CHW Chilliwack return- d to the air about a.m. oo emergency power, op- erating at 250 watts instead of ts normal signal. The station switched to emer- [ency power Thursday after reezing rain knocked out pow- f lines serving the city. The talon closed down about 5 .m. and turned Its power gen- rator over to the hospital lo provide power for the hospital's xtended can unit. )ilmen look to Canada NEW ORLEANS (AP) Oil men, stalled in the hope of leas- ng exploration sites off the coast, are considering shifting their efforts to Canada r Alaska. The United Stales interior de- partment in Washington ui- nunced Thursday it was calling off the pinned lease nally scheduled Dec. 21-due to delays caused by the depart- ment's legal fight with environ- mental forces opposed to new offshore oil-well drilling. A, E. C. Alexander, president Crestwave Offshore Co., said "If the several obstacles to development are not worked out ij government, Industry and he public, the search for new ncrgy sources will move to where It Is not hampered." Other oil executives expressed similar views. H can be removed and suggested Canadian meat processors could be mote aggressive in preparing meals for export trade. A. M. Runciman, president of United Grain Growers Ud., told the convention there ap- pear to be loopholes In national marketing legislation "which could be dangerous to western meat producers." 'I would suggest, Mr. Rund- man said, "that all beet and hog groups on the prairies keep close tabs on their respective ministers to make sure they don't get locked Into a provin- cail quota system which even- tually will lead to i plebiscite and thence into the act." Mr. Runciman's speech was read by Allan Smith of Red Deer, a United Grain Growers' vice-president. The 1967 Bank Act rettricts the non-rdldent ownership of chartered bank lo 25 per cent. An exception was made for U .S .-o w n e d Mercantile Bank of Canada, but It has agreed under pressure to comply with the rules by 1980. Provisions in a series of statutes governing Kfe Insur- ance, trust, loan and sates fi- nance companies chartered by the federal government prevent the takeover of exist- ing Canadian-controlled com- panies. Those laws, however, do not require foreign subsidiaries in to increase Canadian ownership, nor do they pre- vent new subsidiaries from getting up in business. Fur- ther, companies incorporated b y provincial governments are immune. There are few restrictions on the ownership of mineral resources, which ere regu- lated mainly by the provinces. However, federal regula- tions governing exploitation of oil and gas in the Yukon and Northwest Territories snd mining in the Northwest Ter- ritories effectively bar foreign subsidiaries' that have no Ca- nadian ownership interest at all. MUST OFFER STOCK The minimum requirement that the company must at least list some shares for sale on Canadian stock exchanges. Government guides for any future Arctic pipelines say Ca- nadians roust be offered some ownership interest. Other than the laws requir- ing Canadian majority owner- ship of broadcasting stations, backs and some other finan- cial institutions or the regula- tions requiring some Cana- dian participation in northern minerals, there are tax laws that indirectly discourage for. eign ownership in varying de- grees. A 1964 measure disallows the deduction of advertising in a foreign-owned newspaper or periodical, no matter where published, as a business ex- pense for tax purposes. This effectively bars the foreign takeover of existing Canadian publications dependent on ad- vertising revenue. Canadian editions- of U.S.-owned Time and Reader's Digest were considered Canadian. Other tax measures, while not restricting foreign owner- ship, are designed to encour- age more Canadian ownership of industry. TAX IS REDUCED For example, the withhold- ing tax levied on corporate dividends paid to non-resi- dents is reduced if at least 23 per cent of the company's shares are owned in Canada. The revised tax law that came into force Jan. 1 also includes Uiese provisions de- signed to encourage more in- vestment by Canadians in Canada: special taw rate of cor- porate tax for small busi- nesses is available only to Ca- Kinglana, 'rlefeaitn eJLtd. INSURANCE IS JUST NOT PART OF OUR BUSINESS -IT IS OUR ONLY BUSINESS Phone 327-3009 CONN VAN HORN! JACK WARBURTON S07A 7lh STREET SOUTH INTERNATIONAL INTERNATIONAL BATTERIES GROUP 1 6 VOLT 110 amp hour! 1A 11 Rig. I I GROUP 2-6 VOLT 135 amp houri A Jf Reg. 29.92 Ttia GROUP 3-6 VOLT 150 amp hour! A4 Reg. GROUP 4-6 VOLT 165 amp hour! LQ 39 S3___AiliWT GROUP 24H 12 VOLT BATTERY Fits IHC, Chec., CMC, Dodge, Fargo and A] moif can. 60 amp noun. Mo. INTERNATIONAL HARVESTER CO. OF CANADA LTD. 304 STAFFORD DRIVE, LETHBRIDGE PHONE 327-3125 nadian companies. K they are bier taken over by aliens, past tax saving] would be re- coverable from the new own- en. interest piid on funds borrowed by a Canadian com- pany to take over another will be a tax-deductible business expense for tax purposes. The same deduction ic not availa- ble to foreign-owned compa- nies. pension and re- tirement finds must put no more than 10 per cent of in- vestment funds into foreign system of calculating tax credits on income re- reived as corporate dividends favors investment in Cana- dian enterprises rather than foreign-owned companies. There are subtle, though un- written, measures' that proba- bly tend to prevent the foreign takeover of existing Canadian firms in transport and com- munications, such as Bell Canada, Canadian Pacific and TransOanada PipeLines Ltd., wliich monopolizes natural gas distribution east of Al- berta. REGULATE OPERATIONS Such companies are subject to regulation of their opera- tions and finances by federal bodies the Canadian trans- port commission and the Na- tional Energy Board. A regulated company seek- ing, for example, to raise for- eign financing that would di- lute Canadian ownership is unlikely to be heard sympa- thetically. In the wide-open field for foreign takeovers unrestricted b y government ownership, laws or regulation, the gov- ernment hag acted Inconsist- ently. Twice in the last two years it has intervened directly and exerted pressure to prevent the sale to U.S. companies of control in Denison Mines Ltd. of Toronto in 1970 and in Home Oil Co. of Calgary in 1971. In each case, the pressure succeeded in keeping the com- panies Canadian, although amid controversy. Reasons died officially were that Deni- son is an important uranium producer and Home Oil is one of the last Canwiien petro- leum producers. However, no direct action was taken to bar the takeover of Royal Securities Corp. Ltd. of Montreal by U.S.-owned Merrill, Lynch Canada Ltd. in 1969. Svhirdoy, Junmry 22, 1t71 THf LITHMIOGI HMAID GOES TO JAIL Labor leader Michel Chartrand gtrt a last kiu from hii wife before entering Quebec provincial police detention centre la a ent month sentence for contempt of court. Chartrand, 55, elected to lerve the lenience rather than pay a fine, although a cheque for the amount had been given to him by a group called the Movement for the Defence of Quebec Political ELLIS' AUTODROME LTD- HOURS: Monday Friday 8 a.m. 12 noon 1 5 p.m. Saturday 8 a.m. -12 noon Sundays Closed 1805 2nd AVE. S. PHONE 327-4453 NO GLARE! POLARIZED LENSES completely eliminate mnoyinj gltra from water highways and beaches. And now yov can have thatn in your own prescription! Drive more ultly. Sw more clearly. Framud In our zingy new platteri, aquiru, ovali or octagoni, Specializing in the fitting of Eye Doctor's prescriptions rVncription Sunglami Cnlldran'i Frame! Magnifien Reaianable Prica OPTICAL PRESCRIPTION CO. Qualify yourself for a better future COMPLETE YOUR EDUCATION BY CORRESPONDENCE Catch up on the subjects you need to complete High School by taking courses through the CORRESPONDENCE SCHOOL BRANCH of the Alberta Department of Education Junior High and Elementary courses are also available. EARN YOUR HIGH SCHOOL DIPLOMA Earn credits toward matriculation on the same basis as students who attend a regular high school. Courses are available for many Senior High School subjects Junior High School subjects and Elementary grades. SPECIAL ADULT UPGRADING PROGRAMS These are arranged for adult students (18 years or over) to upgrade their education through selected courses. Textbooks are loaned to students residing in Alberta and not taking other courses in school. Correspondence courses may be started and completed at various times throughout the year. torm and further Information wrlle or send this coupon TO: THE DIRECTOR. CORRESPONDENCE SCHOOL BRANCH DEPARTMENT OF EDUCATION. EDMONTON. ALBERTA PLEASE SEND CORRESPONDENCE COURSES INFORMATION: Grade in which I am Name. Address. OOVnMMINTOP Alberta EDUCATION ;