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Lethbridge Herald Newspaper Archives

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Lethbridge Herald (Newspaper) - March 23, 1973, Lethbridge, Alberta 22 - THE LETHBR1DGE HERALD - Friday, March 23, 1973 Peacock lambastes Socreds for building resources�rail EDMONTON (CP) - The, story of a railway in the wilderness that nobody wanted unfolded Thursday in the legislature. The legislature was told the Alberta government spent $120 million to buiJd the Alberta Resources Railway (ARR) but couldn't sell it for any more than $12 million. Industry Minister Fred Peacock was describing what he called stories of mismanagement, lack of business sense and foresight as well as bad timing and judgment by the previous provincial government - now the opposition - in building the 220-mile railway in the foothills north and west of Edmonton. The railway, opened In 1969 by the former Social Credit government, had been described by members of the current Progressive Conservative government and railway experts as a "white elephant." The railway so far has cost the province about $130 million and this cebt is growing at about $7 million a year, mainly because of interest on the debt incurred in building the line. In addition, about 37 miles of the railway were washed out last spring when the Smoky River spilled its banks. Repairs are estimated at $8 million, with the Alberta government paying $2.5 million and the CNR, which leases the railway, $5.5 million. BUYERS Mr. Peacock told the legislature the government tried to sell the line after the flooding but realized the only buyers could be the CNR or CP Rail, the only lines connected to the Alberta Resources Railway. "I think in a very light vein we had maybe $3 or $4 million offered by the CPR . . to purchase it," Mr. Peacock said. "We started off at a $75-mil-lion offer. We finally moved them into $12 million . . . and we abandoned the sale." There was laughter from the government side. MOTION Mr. Peacock was speaking on a motion by backbencher L. G. Young (PC - Edmonton Jasper Place), who asked his government colleagues to reconsider, at least temporarily, plans to repair the flood-damaged railway. Mr. Peacock's department negotiated the agreement with the CNR for the repairs, but the minister, who both opened and adjourned debate Thursday, did not say whether he was for or against the motion. The minister said it is "difficult to track down the reasons why the railway was ever built." "The utter ambiguity of the agreement (with the CNR) made all understanding and analysis of this agreement nearly impossible . . ." The railway was built for the Alberta government by the CNR, which leased it for 20 years. Since the government couldn't sellthe railway and couldn't abandon it because of commitments, the only alternatives were to take over the line from the CNR or negotiate an agreement to repair the damaged sections and maintain the status quo, the minister said. The government concluded it would be unrealistic to take over the line from the CNR, partly because the Alberta Resources Railway uses the CNR's roling stock. The provincial government would have I to buy its own rolling stock at considerable expense if it took over operations. Mr. Peacock left no doubt, however, how unhappy the government is about being saddled with the railway. "It was apparent the route chosen for the ARR was a risky one," he said, referring to the route alongside the Smoky River. "The (Social Credit) government and the CNR hadn't given any great consideration to the problem." In addition, it was difficult to investigate the financial operations of the railway because the CNR had been using accounting procedures for it "that are something for the birds." Mr. Peacock said these procedures, used in the 1970s, "go back to the turn of the century . . ." The nu'nister spent most of his time criticizing the previous government for concluding the contract wjth the CNR to build the railway. He said the per capita debt for Albertans from the construction of the railway is about $83, about the same "as the people of Canada incurred for the (whole) CNR." The minister said Donald Gordin, then president of the Gordon, then president of the in the mid-1960s that they should not proceed with the railway until they obtained "traffic guarantees." "The government ignored the warning." The Social Credit government apparently never made any studies about the viability of the various stages of the railway, Mr. Peacock said. He said the premier of the time, Ernest Manning, appeared to act naively by assuming all risks for the railway. He added that "during the expenditure of nearly $100 million in the construction of the rail- way, no exceptions were taken to any items of expenditure in any way by the government." The government had arranged for "irrevocable credit" for the CNR to pay for their expenses in building the line. "The money could be drawn out without full and adequate details disclosed . ." Mr. Peacock also charged the Social Credit government continued later stages of expansion of the line towards Grande Prairie even though it was clear that prospects for traffic and revenues on the line were diminishing. The railway runs from Hin-ton, on the CNR main line about 180 miles east of Edmonton, to Grande Prairie. Most of its traffic comes from the coal mining community of Grande Cache. The coal, however, is moved south to Hin-ton for export to Japan,.using only about one third of the total track. The washed-out sections are on the other, relatively-unused two-thirds of the line. New auditor Calgary-born James Johnson Maedonell of Montreal, was named Thursday by Prime Minister Trudeau to replace Maxwell Henderson as auditor-general of Canada. Mr. Henderson is retiring. men Elevator back to work Ottawa said ignoring needed gas price policies OTTAWA (CP) - Darcyi McKeough, parliamentary assistant to Ontario Premier William Davis, called on "the federal government Thursday to show leadership in seeking a solution to the problem of price increases for natural gas. Mr. McKeough told the Commons resources committee that federal Energy Minister Donald Macdonald has been "sitting on his derriere" instead of providing needed federal policies. Mr. McKeough repeated previous Ontario expressions of concern about the Alberta government's plan to increase natural gas prices by 10 cents a thousand cubic feet, to 26 cents from 16 at the wellhead. But e added that such an increase by itself would not be a great problem to Ontario consumers of industry. Ontario's chief concern was the likelihood that further steep increases would follow until Alberta gas prices reached 70 to 80 cents a thousand cubic feet. Such prices would severely hurt Ontario consumers and industry and prevent creation of a large-scale petrochemical industry in Canada. NEED FAIR PRICE Mr. McKeough emphasized that Albertans have a right to the best possible returns for their gas, but other Canadians SEE THE LENS THAT DARKENS IN THE SUNLIGHT (VARIGRAY) OPTICAL PRESCRIPTION CO. have a right to lower prices I than U.S. purchasers of Alberta gas pay. "We think as Canadians that we have a preferential right to the use of the resources in this country. I would go further than that and say we have a right to those resources at reasonable prices." Domestic industry such as Ontario petrochemical firms needed every possible advantage to meet the cut-throat international competition. Canada is "a very small toad in a very large pond." Mr. McKeough said a possible solution to the problem of high revenues for Alberta and low prices for Canadian consumers is for the federal government to provide subsidies. A special tax on gas exports could produce revenue that would be turned over in whole or in part of the Alberta government, which would then abstain from increases it might otherwise make. This would produce the so-called three-price system proposed by Mr. McKeough in a recent Sarnia, Ont, speech-low costs for gas in Alberta because of Alberta government rebates somewhat-higher prices in the rest of Canada, and still higher prices in the U.S. Jean-Jacques Blais (L-Ni-pissing) said it would be "unwise to take decisions at this time." "The federal government must be very, very cautious in not taking sides in the issue. . . . Let the cards come out and let the people play the cards to their best interests." Then the federal government, as final arbiter, would provide legislation. Mr. McKeough said "the final arbiter in this is not the govern- ATTENTION! Conscientious, reliable person needed to operate a farm. Must be knowledgeable and experienced in the operation and maintenance of farm equipment. Good salary to properly qualified person. Re* ply, stating experience and other par-licufars, to Box 104, Lothbridge Herald All replies held in strictest confidence. ment of Canada. The final arbiter in this instance is probably the government of Alberta." Alberta owned the gas and would make the final decision. Mr. McKeough said the federal government must not try to m:-'-~ - cisions in "splendid isolation" but should rather become involved in negotiations and show leadership at the bargaining table. Mr. McKeough criticized Mr. Macdonald, saying the minister has rejected Ontario suggestions but has not come up with any proposals beyond saying the market forces should determine gas prices. "Which market?" asked Mr. McKeough. If gas prices in Canada were determined by the energy-short U.S. market, that would mean in effect that Canada was allowing itself to share the U.S. energy shortage. Also, one reason for pressure to increase prices in Canada was the prospect of 70-to-80-cent gas coming from the northern territories in a few years and federal policies were a factor in that prospect. Alberta did not want its gas to go to the Canadian market at low prices while the expensive northern gas went into better-paying U.S. markets. The National Energy Board" has refused to approve further exports of gas until new Canadian supplies are developed. Mr. McKeough suggested that the federal government could allocate some of its royalties from northern gas to Alberta to compensate that province for holding prices down. COST $52 MILLION On the effects of a 10-cent increase in Alberta gas, Mr, McKeough said such an in crease would mean Ontario would pay an extra $52 million a year and each Ontario householder who uses gas would pay $20 extra, or almost $2 a month. "Two dollars a month nrob-ably isn't going to break many households in Ontario. But that's just the beginning. . . . "Ten cents, I want to be honest with you, although it is 52 million bucks, is not the problem." Business interests are discussing establishing a large-scale petrochemical industry in Canada worth "many hundreds of millions of dollars." But high gas prices might stop that and in any case they needed to know what gas prices will be and what will be the long-term availability of gas before a decision is made. That required federal policy. Mr. McKeough said the National Energy Board has been left to grapple with such problems in the absence of a federal policy for it to administer. Policy, however, is a matter for politicians. By THE CANADIAN PRESS A compulsory arbitration bill passed third reading in the Ontario Legislature Thursday night and was given royal assent following the return to work by most elevator workers in Toronto. Workers in other provinces also started returning. It was the first time compulsory, binding arbitration had been imposed in the private sector in Ontario. The act, was expected to encourage holdout union members in Hamilton, London, Windsor, Ottawa and Kingston to return to work and end the seven-month strike which has held up numerous construction programs throughout the country. About 670 of Toronto's 2,400 elevator workers returned to work earlier Thursday following pleas from the International Union of Elevator Workers in Ontario. Most of the workers who returned to work were assigned to top priority jobs including the new northern terminals of Toronto's subway system which are due to open March 31. Mac Alldis, business agent for the Hamilton-based local that takes in London and Windsor, and Joe Kennedy, business agent for Local 96 in Ottawa, had said workers in those areas would return to work if the bill passed the legislature Thursday. ALBERTA READY In Edmonton, Bruno Schultz, business agent for the local with 230 members in Alberta, said earlier he expected workers would return to work if the Ontario bill was passed, and Labor-Minister Bert Hohol said Alberta is ready to impose similar arbitration if the workers do not follow the Ontario back-to-work legislation. However, in Winnipeg, Bob Good all, business representative for Local 102 said workers in Manitoba and Saskatchewan have offered to return for $6.06 an hour although companies have offered only $5.41-the rate they were being paid when the strike began. "We haven't been on strike to go back to work for what we were getting before," Mr. Goo-dall said in an interview. Court rulings in Quebec and British Columbia have already ended strikes in those provinces and in the Atlantic provinces only a few workers are affected. Major issues in the strike have been job security and work jurisdiction, not wages An estimated $800 million worth of construction has been held up across the country because of the strike. NDP OPPOSED In the Ontario legislature, the bill was approved 71 to 13 on second reading, Liberals siding with the Conservative government while the New Democratic Party voted against the measure. The NDP argued that if arbi- tration was necessary it needn't be binding. The legislation prohibits further strikes by the International Union of Elevator Constructors or a lock-out by the five eleva tor companies involved in the dispute. Labor Minister Fern Guidon told the House he regretted the government was forced to bring in compulsory arbitration to end the strike. Earlier in the debate, Frank Drea (PC - To ran it o Scarborough-Centre) lashed out at both parties in the dispute. "Never before in the history of this province has the collective bargaining system been more abused and more exhausted by the worst pair of anti-social swashbucklers that ever came down the pike." Both sides had the motto "let the public be damned." PRIORITIES WANTED Philip Givens (L-Toronto York Forest Hill) pleaded with the government to allow the arbitration board to put priorities on certain jobs, with hospitals and homes for the aged at the top of the list. He said "big employers will offer inducements both over and under the table" to get the workers back at the big jobs first. Mr. Guindon said the proposal had merit but it wasn't a task for the arbitration board and the proposal was turned down. Liberal leader Robert Nixon lashed out at the government and New Democratic Party. He accused Premier William Davis of being "totally irresponsible" for not opening the legislature sooner to deal with the matter, and said he couldn't understand the NDP rationale in wanting arbitration that wouldn't be binding. Mr. Nixon said public safety was* the main concern and noted that the chief elevator inspector for the province had indicated some elevators may be unsafe. DESERVES MEDAL The Opposition leader said he suspected the chief inspector had "laid his job on the line" for making the statement but "he deserves a medal" for saying what a government minister should have said. Acting NDP leader Ian Deans said the "matter of public safety is a red herring in this dispute . . ." He warned that the govern ment was betraying its true attitude toward the collective bargaining process. "This government is bent on destroying collective bargaining and this is the first step," he said. 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Note how quickly bloat disappears, how much better you feel. More alive, youthful appearing and active. Zeller a 1 SATURDAY SUPER SAVERS MERCHANDISE ON SALE TONIGHT 6 TO 9 P.M. AND ALL DAY SATURDAY 9 A.M. TO 6 P.M. PERSONAL SHOPPING ONLY DOOR BUSTER SPECIALS SATURDAY 9 A.M. TO 11 A.M. ONLY OR WHILE STOCKS LAST EARLY BIRD BREAKFAST Bacon and Eggs with Toast and Coffee '0 SINGLE KNIT COTTON MATERIAL YARD WOMEN'S CRIMP FLAIR SLACKS 2.96 Sizes 10 to 18 PAIR PANTY HOSE 10 PAIR THE FOLLOWING SPECIALS ON SALE FRIDAY 6 TO 9 P.M. AND ALL DAY SATURDAY CLEARANCE SHOES - RUNNERS ETC. -Broken Sizes For the entire family. PAIR TODDLERS' SLIMS LADIES' KNIT TOPS EACH W0MENS' POLYESTER Sizes 2 to 6x PAIR EACH GOLF SET -Set of Clubs, 2 woods, 4 irons, putter -Bag and Cart SPECIAL 3-PIECE LUGGAGE SET 69.96 POSTERS SET 24.96 -Full size -Kittens and Puppies EACH 10 BOYS' OR. GIRLS' HI RISE BICYCLE ELEPHANT BRAND FERTILIZER EACH 16-20-0 50-lb. bag MEN'S SHORT SLEEVE m mm KNIT SHIRTS 1 M SPECIAL ......................... !� I I Zeller's County Fair Ifci^ aft w^^fo^Wri^ Located in loner's Shopping Centre on Mayor Magrath Drive. Open Dally 9 a.m. to 6 p.m.; Thursday and Friday 9 a.m. to 9 p.m. Telephone 328-8171 ;