aay,

of ip

I exattiple, wh:
the value of the public debt it also increases the. |

‘Michasi a” Walker, Director a
Lo ThaFraserinstilute : Oe

ane, ties are Increasingly the stuff of which our
y; 40 ‘day lives are made and an appropriate~
grasp’ of ‘statistics, particularly relating to the
ecy omy, ° is a prerequisite for. informed -
decition-making particularly about matters.
Telated ‘to governement policy and the conduct

y government officials.
ause of the importance of these matters 1
intend. ta persist in discussing these statistical
obécurities and those of you who are lulled into
pommnolence by such talk had better brace your-.
pelves! ‘Today 1 want to talk about another

statistical illusion which the fiscal magicians are |

about to-pawn off on us.-

eThe nation is this, that while ‘it’ appears to. |"

every man and. dog that Canada has inor-
dinately large deficits, in reality the deficits are
Non-existent. An. increasing amount of at-'
tention is being focused on this perception and
the. Ontario Economie Council held a con-
‘farand bringing. in pundits and observers from
‘af _and wide to consider exactly how large the.
deficit is. Those who claim that the deficit is
. fion-existent’ perceive two problems with
Current meaiurements of the deficit. The first
‘atises from the fact that inflation, via’ the

~ higher interest-rates on the public debt which It
has ‘caused, artifically boosts total government

expenidture. Interest payments on the some—

’ $200 billion worth of public debt outstanding.
constitute an Increasingly large fraction of total.
federal expenditures. Now, those who perceive
@ Cettdin amount of statistical confusion -say:
that If we are to include these payments in the
piblle deficit then we must subtract an equal:
aunt corrésponding to the reduction in the
tae of the public debt caused by its ersion by
tion, In other words, if the Government of
a owes $100 billion this year and the in- -
fldtion rate is 8 per cent this year then by the
end ‘of the year the real burden assatiated with -
that $100 billion debt has declined to about $92
illion. The $8 billlon reduction, they say, ought
tobe subtracted from the total amount of in- -
terest paymentstocalculatethetruedeficit. -

» The second calculation Is the so-called Full
“Emploment, Calculation. Essentially the point
-heré is that with the given expenditures and tax
rates, a significant amount of the current deficit
will simply be eliminated as the economy moves
‘back. towards full employment’or at least to |
-more normal levels of uriemployment as the
“economy recovers, This amount, it is argued,
‘ought to be subiracted from’ the current deficit .
because everybody agrees that during a period .
_of economic distress there ought to be.some
allowance made for an increase in the ex-

- penditures of government in order’ to provide .
those who fall out of the workplace with a kind
of gcanomic safety net.

“Well, what about it?’ Sounds | pretty

nable but doesn’t that mean-that concern.
“ abpist the deficit is ‘much ado about nothing?’
.Before you write the Minister of Finance a
congratulatory letter on the fine job he has
fa in restraining the size of the deficit,do
on.
ere-are other aspects of the deficit which
thie fiscal legerdemain ‘does not consider. iFor
fej increasing inflation does reduce

*

“unfunded liabilities of the federal government,
articular pension liabilities realted to the
J:service pension program and also the
a jada Pension Plan. Also, rising inflation has .
the effect of increasing the replacement costs of
the government capital installations which have
-petn financed by the public debt in the first
. place. In other words, those roads, bridges and
public buildings as they wear out will cost much

More to replace because .of inflation. If a-
roper accounting were to be-made of public | - -
nahces, these two items would have to be ad- |

ded to the current deficit to get a true measure
fits size.
9 Y Unfortunately, it is difficult to know exactly
‘the magnitude of these adjustments, Estimates
which’ Frased institute economists - have
calculated suggest that these latter two effects
of inflation completely offset-the deficit reduc-
tidns' which: some analysts think ought to be

made, Calculations recently done for the]

. United States indicate that accounting for’ these:
special factors in their entirety would-actually.
. increase father than reduce the net. size of the

deficit, A

"You" know, it is when 1 encouriter twisted ”

| statistical stories of this sort. that I catt really’. 5
‘to understand why it is that people say f

that.if you laid all the economists in the world.
‘eng: (o end itwould probably be-a good idea!
‘Unfortunately, the matter at hand is of critical
importance because of the Minister of. Finance
. jn, Ottawa actually formulated his budget on the
basis that no deficit-existed, the outcome could
be disastrous for the. long-term prosperity of
the country.

“750, boring as statistics may "be, Canadians
_ must pay a good deal niore attention to’ this
Er de about: deficit nothings because they

Soclallst Republic of Vietnam.”
af. the National, United “Front, for . the.”

A spokesman for External Affairs, political division, sald,

“TORONTO ‘:. (CP).

” "Attempts to re-establish the:

North “American newsprint

list price at $500 U.S. Bo tonne
“on July 1, up. 6,7: per cent”

from the $468,50levelit sank -
to last November, have met
‘more realstance. . .-

“Bolsa Cascade Corp. of
Boise, Idalo, sald ‘Puesday it

has rescinded its decision to

increase the price for

|. customers in Western -U.S.

"markets, although it intends

fo Hold: the $800. price an.’

Bounced for customers east

Of a line roughly drawn
from Montana’. to New -

Mexico.

In the east, newsprint:

manufacturers | have
Menerally gone along with
the “July 1 lst ‘price -in--
crease, prompted more by ”
the ‘general recognition of
Unprofitability -at recent

_-prices’ than any basic

strengthening in supply and
demand fundamentals.
- Canadian. |< newsprint

producers have been barely

been extensive discounting
off the lst price,

. ‘The $500 prica was first .
thrown into doubt two weeks

ago wher St. Regis Paper
Co, of New York decided not
to implement the increase
until Aug. 16, Instead of July -
1. : nO

: Generally, analysts were

a A ‘ an, interview from Ota ache is skeptical ‘of eles thes

) Jucky i economic: con-
ditions warranted - higher.
prices in the fourth ‘quarter
and it would be more likely
an, ‘increase: could : be fat
‘through early inles4.
“Looking. at uventory
“levels, ‘John Morris ‘of
Richardson, Greenshields of
‘Canada Ltd. -in. Winnipeg,
expects continued weakness:

in the market well Into the ,

fourth ‘quarter..

Producer , inventor!

’ =, _:, added Canada is sympatheti
‘who fled the Boviet-backed involvement in: their homeland. aa

vi However, Dien said, the Vaiitouver area branch of the
“front, formed last July, has oaly. 60 members. “A second |
ron ‘exists in Nanalmo and one is'planned for Victoria.

! general .

‘

. group poaes a threat tothe Vietnamiese governnient, Bit, Lis
ic to the anti-communist cause.
‘Members of the organization include former officials,
‘Soldiers, students -and businessmen whose ties with the -

{former government drew the disfavor of the Viet Cong after

: the fall of the Republic of Vietnam in 1975, .
Dien, a former. South Vietnamese army officer, sald thé:
ie of, ‘the: > organization are: , organize, moral bene 7

"premium ‘peice cover. “the .
east

‘Vancouver-based "Com:
panies ‘such ‘as ‘MacMillan
Bleedel, Crown Zellerbach

Canada Lid, and. British.
Colunbla Forest Products

Ltd, will be mont affected by’

‘a two-tler price, although

gestern producers © ‘do

. compete in many of the

same markets,

‘worldwide ” over-

have built up and must. he = Capacity in newsprint (and

worked’ down, Publisher
inventories are also a little
high, “he wald. - . ‘

_ A: two-tler price syatem
‘would recognize the serious ~
- newsprint. overcapacity ‘in
the west, where producers:
_ showed an unwillingnéss to -
follow their eastern coun:
(erpacis with a price’ in-

“The ewsprint industry in 4

British = Columbla ~~ {a
_ operating atonly 66 percent —

of capacity,
Puusepp of Pemberton:
Houston Willoughby Tne. of
Vancouver, ~~

“Phere is a precede for
a split system,” said Larry

Ross of .Paine Webber

Jackson and Curtis Inc. of
New. York, In 1944, Mac-
‘millan Bloedel Led. of”
Vancouver cut its: price
. sharply in the west .to-
capture siarket share. In

effects of the devaluation of
“Scandinavian currencies) is. Oslo,

> that Norwegian producers
are shipping pbout 8,000

tonnes of newsprintamonth | :

to California, . bringing

Deaths
‘ « studied.

A MONON (CP) =_ The ;

sald Jaak’~ Alberta Attorney. General's
‘confirmed -
‘Tuesday it is Investigating

: Department’

the death by drug overdose
of an infant suffering brain
damage, and the apparently
unrelated death of another
~ Attorney General

death last -fali of Candace

Taschuk, who died 16 hours "| -
after birth at University ©

“East - :’
because: they — compete

‘Neil .
: Crawtord sald his depart-. |
ment. is investigating ‘the .

; ‘Newsprint price increase resisted =

added pressure to the West .
Coast markets,
~~ Although émall, given the
re of the West Coast ~
-Miarket, the. Scandinavian

" presence is up from zero, 30

it makes-a difference, one

‘analyst sald,

“The - two - Norwegian

- companies, Norake Skog of |
Skogn and Follum - of

. - Honefoss have started a
Qne indication of. the.

Francisco. The two’ also
have a joint sales office ‘in

‘One possible explanation,
although specutative, is that
eastetn ‘producers’. U.S,
Coast = markets,
directly with’ thosa same.

‘producers in Europe. Stable

Européan markets are vital
7) their interedts,

ay “readucation camp.'" He says 3,000 political: prisoners: :
were fred ino bardabor aa camp ot omar arth of :

not’ want to upset the ©
Tao government pole eat with total coro aver

. a th gy Bem ot lan
Salsas Mie sho SN inethie tic at cited inert oes afm 193

The Hersia Wess May 05, ime. pees Yes

socialist sup pport. +

“financial bixpport ‘or the cause and tb infor the gro

public of conditions in Vietnam. \"
Long Nguyen, employed by a major: insurance company, :
tells a story typical of the tales half a dozen former Viet: :-

, hamese nationals gave in Interviews. oe

‘Before the Apeil 34,1976, fall o Sgn be waka for

Bank of Vietnam."

Nave poli ot autor eda var sch

‘Sonne’ of tis Tbndy ar sti there, be said, :
* Dien ‘said thie. front's army is. drawing’

_fromi_
villagersin the rural provinces ands laying the futidation

fora nationwide rebellion. -.
Troops. are avoiding full-scale. ‘conventional’ warfare

because of the strength of the large Vietnamese Army...

“The mission is to organize the people. To build the in
frastructure. Economic warfare ang ‘propaganda, " Dien:

_ sald.”

He would: not . ‘estimate the amount of monty ralaed ©
locally but salt some of it pays for medical supplies. -
. “Wa don't care how long it takes. Five years, 10 years of:

18 years,” he sald, “Maybe our children will continue the :
U.5., newsprint marketing a
arch, Nor News Ind,’ of San °

fight. "

the External Affairs spokesman sald he has never heard”
of the National United Front although he is aware of other

-

. Toups, mainly in Quebec, which hold strong views — both. .
‘pro and con —on the Communist Vietnaniese government.*~
ig diffteult for’ Santi government forces tos.

He sald it
operate in moilern-day Vietnam.
“There is some resistance, but it 1s probably minimal.::

people.
“Personally, Pdon’t think its true, IPs hard to go there:::

and find out, They could have that many supporters, We've::: 3.

been proved before."
Dien andhis ends uay the front represents. real threat
to government forces.

“You were asking.

about the Kemano. Completion Project:

- This is one of.a'series of answers from Alcan
_ people to questions about plans forthe |.
“Project asked by residents of the Northwest,

saying the induitry would

the mid- 19708 the west hada

llya cero

” Sterling News Service
Feature

A New Vietnam?
Each generation Of liberals iti hiodern history

has to have Its own object for bleeding hearts.
‘- In 1938 they. passionately. demanded the

the United States, considering that this would
be the best way ‘to appease Hitler and -the:
Japanese generals.

In the sixties they were successful in forcing
the United ‘States government to abandon
South Vietnam and Cambodia, In 1973 when

- U.S.. troops left. Indochina Congress cut the

* military aid to South Vietnam by two thirds.
‘ ‘The day of. this vote was celebrated as the
greatest victory of the “peaceloving forces’.
By -a ‘strange coincidence the. Kremlin. im-
mediately doubled its aid to North Vietnam and.

‘| . to the communists in Cambodia. Having a four

to one advantage in numbers of troops and ar--
, Maments, ' the Communits! took- over three
countries of Indochina - Laos, Cambodia and
Vietnam - and ‘massacred: five milltion: people
there -
But that did not disturb our peaceniks, It
does not disturb them now elther. They have
anotherobject-ElSalvador.

Sixty American. advisers helping the govern-

‘| ment. of El Salvador to resist. communist ‘
eaggression are presented to the public opinion

in the U.S, and Canada as a menace which can
_ be compared only with the military build-up in
Vietnam. Our peacslovers have a point, The:
situation in El Salvador. Nicaragua and H
duras should really remind one of Vietnam.
The constant supply of Soviet weapons to the
front of the “Farabundo Marti in BI Salvador
- through the Sandinistas; regime In Nicaragua,

‘|. thousands of Cuban advisers to each, of these

countries, and $100 million.a year provided by

have made Central America the international
battlefield under Moscow domination.
No one can argue that the governments of Et

‘Western meaning of this word. Neither was
‘South Vietnam a democracy such as Sweden or
_ Belgium. Yet In all these countries there were
electiéns.of a kind, opposition of.a sort and
gradual improvement of living conditions. The

world.”

ig in the same fashion, lias established more
prisons and ‘congentration camps than did the’

. pro-American dictator, Anastasio Somosa.

ine can only imagine what would happen to

: the people of El Salvador, who prior to the civil
|

T enjoyed one of the highest living standards

in hati Anietica, when the rebels take over.

.. Apart from the shumagitarian issue, : the
strategic interests of the United: States will be

~sbases appear in El Salvador and Honduras, as
“thes “are ‘presently i in Nicaragua, Granada and
- Cuba.
~~ When our bleeding | heart liberals ‘understdnd
‘this it will, as usual, be too late. This would not

‘| concern them, ‘however: At that time they will.

” march under a new banner: “American hands

* oolulk Weel lead to atempest,_ a Oe io

; Lif Mexico'”. for example,

HOT SPOTS|

disarmament of Britain and France as well as |

Muomar Khadafi to the rulers af Nicaragua, ‘

Salvador or Honduras are democratic in the |

|. North’ Vietnamese communist. regime has
| managed to bring rapidly the whole country in- -
- to; the club of. the ten poorest. nations in the

ifune Sandinista povernment of Nicaragua, ac-

_substantially hatt: when the Soviet mititary |

_ Hospital. The baby died of |“
-anoverdose of the painkiller on

morphine. .

Sharon Kelly, awe
spokesman for Crawford's [- -
later |.

department, sald

Toreday that ‘the depart-. as
“-ment-ds also looking a= | >
second. infant death, which | 4

_ occurred at home,
Crawtord, .

legislature, would not give
the agé or time of the death

of the second baby. He did.
say the second Investigation . .
dose Hot involve University — |
vat Hospital, one of Alberta's’

sa

“Detaile’ . ” the - ine.
a vestigations al ‘be mada:
me ‘publi. ‘id it's "in the public. 1
intereat, "Crawford. said. ©
; Kelly said the’ ‘Taschuk. | -
baby: died. Oct, 8, not lest. |
August, au first reported by

-the- medical: examiner's
office,

CREMATES _ - BABY'S

-BODY wy
Dr. Jennifer Rice, deputy
chief - ‘medical examiner,

sald her department was —
not brought into the case |
* until February, four months _
after the death. The baby's
body was cremated and no}.
"autopsy was performed so -

becaine™ suspicious about - .

théTaschuk deat: after a
. rottine audit of medical
records in February, ‘

“The baby was born with —

severe braln damage: and.
there has been nd indication |
why: the beby was ‘given
“morphine, - “ pavertul ,
On ‘the wéekénd;

| ton Journal: voted." _
an ‘unidentified doctor who .

helped treat the infant as.

saying the-cbilld was dying |.
. becatse . of’ the
dan -
“i wen deg, that is the
_ only: thing: I will comment
oar Be daar was gece

promecutora are =
“soo gan
‘the "Taschuk " deatir: to
_ detérmine If there is any

basis for eriminal. charges. ;

brain

Kelly sald an inquiry into’
the death may be convened :
if no charges are laid. it
- could investigate the death :
_ without making findings of
: leaf remponafiity.

interviewed =|
Tuesday ‘hight at the

medical

6. . Why has ‘Alcan chosen a a smelter site near ;
- Vanderhoof? How will hydro power be.
transmitted to.a smelter there, and won't
~ transportation costs be prohibitive iéa*“
: smelter i is located &0far from. tidewater?
Alcan chose the preferred atte between.
‘Vanderhoof and Fort St. James on advice::::
_ "from community leaders who felt a amelter
‘‘\... +. -woiild.tie in with local developmenit goals...
Co We haven't announced the start of construc

. tion of'a new ‘plant only & preference’

residents from Vanderhoof, Fort St: James, °::
~. Fort Fraser and Fraser Lake would be within
-. commuting distance. Employeescould
‘> thus be drawn from all four communities,
’_ Jessening the possible impact on any
one community.

at ° : Tnfransmitting hydro power tothe ste, Alan

into the grid at Kitimat and power would be
- supplied by B.C; Hydro at the smelter

“While there would be added costs to. ship
alumina from the coast to Vanderhoof, this
would be partially offset by savings
achieved by shipping from Vanderhoof as
* miuch as 100,000 tonnes of aluminum that’
go by rail from Kitimat to Canadian‘and US.
‘destinations each year Shipping coke from-:
Alcan’s Strathcona Works near Edmonton to
smelters in the Interior would also costless .
_ than shipping to the coast. Transportation .
Costs are important when a site is selected,
_ but-there are other important considerations,
- too.These include community acceptance, -
"environmental quality proximity to existing
_ ~~ Communities, a level site, closeness to
-. high-voltage power lines, to water and to
natural gas pipelines. These factorsall
influenced the choice of the site between.
Mendeshoot and Fort St. James. ° ee

"Bill Rig h
"Vice President for
~ British Columbia ©
. “ffyou have a question, or would tke whee oe
At Kft mare about Keman® Corp tion, ,

: _ Please contact Alcan at: a

Aluminum Company of Canad Ltd | i. ey
| BoIes7O Cty Cento a
tiet Ac. vac 176

Alea nin,
British Columbia _

. for a particular site. The location is such ta B |

=
Ta

wi

could approach B.C. Hydro to feed power — . : ar

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.. es ariaatmeten ee