Winnipeg Free Press Newspaper Archives Apr 11 1986, Page 13

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Winnipeg Free Press (Newspaper) - April 11, 1986, Winnipeg, Manitoba Winnipeg free press april Page defence White paper is Long time coming by John Best special to the free press Ottawa whatever happened to the conservative governments promised White paper on defence policy the signals coming from these vere looking downtown Ottawa office building which houses de Fence Headquarters suggest that it has taken up residence on a shelf somewhere possibly for As with the foreign policy White paper they also once talked the tories have become progressively less interested in putting out an Al embracing de Fence this will disappoint and even enrage defence analysts and critics who maintain that 15 years is Long enough Between full dress statements of Canadian defence the last defence White paper was published in from the standpoint of the Mili tary and civilian bureaucrats at defence shelving the once highly Active plans for a policy paper makes eminently Good defence minister Erik while not committing himself one Way or the seems to the bureaucrats Are arguing that no White paper is warranted unless the government has some fairly fundamental changes to for the tories might have made it official that they intend to beef up the regular armed forces to a strength of about something which they promised on the election stump to do and which would restore about half the Man Cut imposed by former prime minister Pierre or they could have Laid out a lon term plan for rebuilding the mouldering Canadian the government is not in a position to say much about any defence initiatives Likely to Cost More than around Nielsen and his officials have been Busy for weeks trying to come to terms with the slash in defence spend ing announced in the late february Federal the budget took away Mil lion from the amount the defence department had been counting on for the 19861987 fiscal just now and for defence spending for this year is pegged at for next year at the real increases of per cent and two per cent respectively compare with the three per cent the department has become accustomed to and which it hoped would defence officials took some Comfort from finance minister Michael Wilsons Assurance that the two percent increase will be maintained for a minimum total of four but there is no doubt that the Overall Impact of the budget will be to squeeze defence including major procurement projects especially during the next two it leaves Little scope for Glisten ing new or new Depar Tures of any which might lend themselves to unveiling in a White the govern ment has promised to try to do better for defence if the fiscal situation but to at Tach Many Hopes to this Promise is a bit like believing in the tooth the big guessing game Here at the moment centres on which defence programs will be axed or stretched out to accommodate the funding there is a feel ing that the writing May be on the Wall in some Way for the pro million Low level air defence Llad project to protect Canadian air bases in Europe against air associate defence minister Harvie Andre has described re ports to this effect As Specula while refusing to either confirm or deny a contract award for the Llad project was supposed to come any Day the whole Issue could be a near run the portents do not appear exactly for a Large increase in the Reserve armed forces maj Reginald chief of re had spoken of a possible to around faced with a financial squeeze that May be worse than originally Nielsen and his aides clearly Are concentrating More on making ends meet than on questions of grand Nielsen where is it Chi values go focus awry Ottawa these who live on this part of the the chances Are about one in two that the Energy news one gets from ones waffling newspaper will Deal with we joyous lot of Drivers filling their or tanks in a world awash with rather than the Melan Choly balance sheets and layoffs that Are now becoming the daily fare of Canadas Oil it is a value system gone and thoughtful people not least of All because the Short term if the 1970s taught us almost certain to be fou Lowed by term and possibly i k tent with the tumbling Oil from a barrel a few months to and just the other briefly below come mount ing debts and the prospects of bankruptcy for the weaker components of Canadas Oil Industry of foreign buy ups of of the shelving of Meg projects ranging from the Oil Sands to the Atlantic and for now the least of our concerns the abandonment of canadians individual commitments to Energy yet deep nothing will have Oil remains a none finite no one in Canada would seriously suggest that we should leave ourselves at the mercy of outside suppliers with a product so critical to every aspect of our National All of this is a Strong argument for action by the government to establish a floor Price on Oil and and thus commit however to a new round of intervention in the Battle lines Are form both for and against such a such a floor would allow prices to remain quite perhaps around but would keep the Bottom from falling totally out of the proposals were first aired for such a plan a year and at least one such measure is now before the such action Here would presumably include imposition of an Emer gency Tariff on imported which besides jacking up the Price would produce Revenue that could be used for Energy the situation remains very much in a state of and govern ments would do Well to watch and and give open a bit More time to try to get production Energy minister Pat Carney is quite properly biding her on any assistance plan for the but even when the dust it is Likely the policy makers will be getting a Stream of contradictory just As they Are at for both the Independent Petroleum a grouping of Canadian Energy pro Joan Cohen Ottawa editor and the multinational do minted Canadian Petroleum Asso Are strongly opposed to any government intervention in the mar and Carney has insisted she will respect their the two groups maintain that they fought for years to have the Market set Energy prices and get the government out of the they Are determined to stand by that however rough things to make the Point that when prices Rise later they should be free to reap the Industry experts say the Multin and with them most major Canadian should be Able to take the knocks for Many smaller particularly those with substantial debts be these Large and have won Royalty concessions from Alberta and Are now putting pressure on Ottawa to drop its Well head tax on Oil and one might Well argue that the difference be tween government assistance when it is a special tax and government assistance when it Means intervening in the Market place with a Price support is not quite As marked As the Industry would like to one can understand carneys Dif yet from the governments per it would not by inter vening in the marketplace be desert ing some tightly held after this very week the government moved quickly to bring in a financial institutions Bill that could be used to put Canada Trust out of Ima cos closer to Carney has always promised to intervene in the if Energy prices should Ever shoot up to Cushion the Impact on in the present circumstances the beneficiaries of an intervention would in the Short on the flip for Royal Bank Vic president and chief economist there is another potent reason not to move too for the he said in an too few hard facts Are available about the Impact on the Industry of the declining prices to make an decision about any kind of government be it the tax reductions the Industry is seek ing or a floor in his the priority task for government is to get the facts assembled and on the still another significant word of caution comes from Richard a longtime Queens univer sity economist and currently senior economic adviser to the Howe Lipsey would like to do some research before making up his mind on the in his that research would involve discussions with Ca Nadian businessmen about the Likely Impact of a policy that held Cana Das Energy prices above those prevailing already any successful Canad an Export manufacturer is consider ing building a Plant in the he or else is already building and Canada is losing a tremendous amount of the exporters Are worried about no Tariff surveys of investment intentions suggest that Large numbers of firms Are carefully and hanging right on the margins As Lipsey puts whether to build their plants in Canada or the he is not ready to make a but he is concerned that Canadian Man poised at the could decide that the added Burden of higher Energy prices would push them to locate on investment analysts close to the suggest that the one development that could make a floor Price palatable for the Industry at this Point might be prior action by the to adopt such a the final contradict of is the Industrial worlds general expectation that de pressed Energy prices will produce Boom times on a Broad scale except for developing nations that Are Oil Canada As a whole can Hope for More growth and much increased with world Energy prices at Rock the economic Council a few months ago put some figures through its computer and found that a drop in Oil from to would be a significant Spur to growth and jobs in Council chairman Judith Maxwell quickly acknowledged the benefits would be concentrated in the Central provinces while the West and the would be producing provinces on the Atlantic would see their dreams of growth abruptly Oil Price drops As yen shoots up and everyone May still Benefit by Macrae special to the free press London i have just returned from a visit to which is in one of its states of economic since september the yen has appreciated by 35 per cent to 40 per cent against the this has put the accounts of Small japanese exporters in a terrible the object of the appreciation is to Stop Japan repeating the total Export surplus of billion which it ran with the world last and especially the billion Export surplus it ran with the trouble is that it will immediately reduce that the fall in the Oil Price is going to Cut japans import Bill once japans medium Tern con tracts with the Middle East run out after about june of this some of japans biggest exports Are at present restricted by not by Japan will now sell its full voluntary quota of automobiles at a slightly higher Dollar Price than though with the japanese companies getting fewer yen for those so both american con Sumers and japanese companies will feel nevertheless the dearer yen is going to have one huge and Good effect for the rest of the there is going to be a big expansion of japanese direct investment both in Rich countries and in poorer it is now much cheaper to buy factory space in much of North America and nearly All of Europe than it is in making of components for japanese factories is going to move to the asian one statistic i kept on hearing in Tokyo is that the biggest Ameri West German and even British companies typically carry on 15 per cent to 20 per cent of their product Ion while the biggest Japa Nese companies usually carry on Only three per cent to four per cent of their production the japanese never do things by i think we will see a fivefold or sixfold increase in the next 10 years in japanese owned and efficiently japanese managed fac tories i think Wise countries should learn to Welcome because i believe the japanese ure going again to be the most efficient manufacturers in the next stage of the Industrial Revo Lution the stage when it becomes possible to put a microprocessor into practically every when 1 first went to Japan in i forecast a huge and successful Rise in japanese production of cars and electronic goods in the next two there is going to be a similar increase in installation of what the japanese Call machines and new materials that much of the though organized by will not be in Japan in Deputy editor of the economist of Devine is tories High card in coming election if Grant Devine wants to keep his Job As Premier of his main task will be to convince the voters in the election he is about to Call that he can be a bedtimes Leader As Well As the Leader of Choice when economic conditions Are on the there is no doubt that like the other Prairie is heading into Tough the times could include and the combination Devine could bankrupt the the message Devine will attempt to deliver to Saskatchewan voters is that his tory government is More needed when the pressure is on than it was when it was first elected four years anyone who reads the polls knows that Devine has a fight on his some of the polls give the Saskatchewan nip a Lead of As much As five what reelection polls do not take into account is the effect the Campaign itself has on the outcome of an As even those who hate him will Devine is one Heck of a the audience that crowded into the second level Hall of an Estevan hotel last saturday night got a taste of what that Campaign will be unlike the conservatives in the Saskatchewan tories will not hesitate to criticize the record of the new democratic in even though the nip has been out of Power for the past four the conservative Campaign expected in the elec Tion that will be called before summer will remind everyone within earshot of what the nip did when they were in things have changed a great Deal in Saskatchewan in the past four Devine delivered on his most important election Promise within minutes of being sworn in As that Promise was to remove the Fred Cleverley provincial tax on the nip is now in favor of keeping gasoline tax free at the but Devine and his tories will keep reminding Saskatchewan motorists had the nip been returned in the last Gas prices would be considerably higher than last weeks 34 cents a the conservative Campaign will also concentrate heavily on turning this years elec Tion into a two Way one of these conders of Devines nomination was a former Liberal who drove Home the Point that three Way votes often elect someone the majority of people did not vote in his returned to the same that a split vote could result in government by a party that receives approval from Only 37 per cent of the Devine will do what Howard Pawley did which is to run on his of course he will run on that part of his record he thinks will get him such As the removal of the gasoline the control of interest and Tho scrapping of the nip former land Bank which Devine that Farmers in financial difficulty had to sell their and to the government and become As he did in the last Devine will attempt to distance today nip from its Kcf his Wonis at Estevan were to the effect that the of Saskatchewan Kcf was a lot like his preset Clay conservative in that it had a program to build on a popular coalition of different he said while individuals May have disagreed with some Kcf no one could deny under its the province grew and the Devine told his if returned to set Saskatchewan Back 25 mainly because the party can get along with no he is proud of his ability to get along Well enough with the to have the Prospect of million in funds coming to help build the Rafferty dam to control the Souris he is proud of his ability to get along with Ottawa Well enough to get agricultural and assistance with est Evans new Airport the ideas being brought by the nip into the coming Saskatchewan Devine Are nothing More nor less than present conservative program he suggested that the nip could do More what it now advocates by simply Votint Meserva Tive on election Day he the nip is still preaching doom and gloom i praying for Given current tight economic neither the Saskatchewan conservatives nor the nip Are Likely to have much in the Way of new programs which can be programs and promises Are Only part of any election the conservatives have going for them in this election is Grant Devine the last election produced such a lopsided Victory the tories took 53 of the provinces 64 leaving a shattered Lim Ember nip caucus that the nip seemed to concede automatically that the tories would stay in Power for two the party deliberately left Allan Blakeney in place As in a move that seemed to indicate that a somewhat better showing in the next election would allow him to recover some of his dignity before being apparently no one in the nip foresaw the downturn in provincial with the potential loss of direct jobs in the provinces Oil and the effect of the farm Bill on wheat had anyone in the Saskatchewan nip realized the tight fight that could take place in it is pretty sure that the Leader would be Roy Romanow rather than Allan As things the charismatic Devine has merely to Point to Blakeney to make Clear what he Means when he says that to elect a new democratic government this Spring would be to turn the provincial clock Back a Quarter of a by Harry Trudeau 600p i Hap its Normal for 2c a there g0qp aha i Spital xray its Allright w his How can 1hats Olp Micro you 1bll film from his smuggling

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