LL TINE A anada-USSR endship Society ser Valley Branch IVARM GREETINGS ON THE 100TH ANNIVERSARY OF MAY DAY Canada-Cuba F riendship | . Association |°.9. Box 69482, Stn. K Man. B.C. V5K 4W6 _ Greetings * On the 100th ~ @Mniversary of _ May Day from Ukrainian Senior Citizens Club, #1 ‘ Stn, IF ETM LEE CO Free trade seen behind Genstar furore By G. VAN HOUTEN Within the space of a few days, two of the largest corporate takeovers in Cana- dian history took place. For $3.3-billion, the Reichmann Group acquired Hiram Walker, an energy and distillery giant. For $2.5-billion, Imasco took over Gen- star in order to get at Canada Trust, the largest trust company in Canada with total assets of $20-billion. These two takeovers are only the most recent of a wave of mergers and take- overs which have been taking place since 1981. That was the year when Dome Petroleum bought Hudson’s Bay Oil and Gas for $3.8-billion, making it the largest takeover in Canadian history. Some of the takeovers have hit the news because of the controversies sur- rounding them. Unicorp took over Union Enterprises for a mere $7.4-mil- lion in the summer of 1985, but not before a bitter fight had taken place. Others have not received as much pub- licity although they have been larger. Last year Dome Mines took over Falconbridge for $160-million and then used that company to buy Kidd Creek Mines from the Mulroney government (as part of its privatization plan) for $230-million. Also last year, Genstar took over Canada Trust for $841-million and then merged it with Canada Permanent Trust, one of its subsidiaries. Genstar itself then fell victim to Imasco. But the biggest takeover of 1985 was the $3-billion purchase of Gulf Canada by the Reichmann Group. The latter then used its new acquisition to take over Hiram Walker. In less than a year, the Reichmann brothers had spent $6.3-bil- lion to vastly increase the size of their corporate empire. One year ago, the Reichmanns controlled 69 companies. Now they control 171. Similarly, Imasco controlled 40 com- panies at the beginning of 1985. Now it controls 154. In all, 13 conglomerates control 1,684 companies, and 15 of Canada’s top 50 industrial corporations, in addition, some of Canada’s largest trust com- panies. All these takeovers in the recent period raised no real objections or pro- tests from the Mulroney government. Why then would a large number of MPs, including Tory backbenchers oppose Imasco’s takeover of Genstar? The ostensible reason for opposing Imasco’s acquisition of Genstar is that it would give Imasco control over Canada Trust. This in turn would lead to ‘*self-dealing’’ in which the owner of the trust company would use its financial subsidiary as a captive source of funds to finance its deals. In fact, however, a number of corporate conglomerates al- ready are in this situation. Through the Trilon. Financial Corporation, the Bronfmans control Royal Trust and London Life. Paul Desmarais’ Power Corporation controls Montreal Trust. The Belzbergs control First City Finan- cial Corporation and Genstar controlled Canada Permanent even before it won control of Canada Trustco. The answer to this question lies not in “*self-dealing’’ — which has been taking place for years — but rather in the ownership of these corporations. Gen- star’s largest shareholder is Belgian while Imasco is controlled by BAT Industries of Britain. By acquiring Genstar, Imasco has not only given itself Canada’s largest trust company but much more importantly has given itself the size and financial strength to compete against Canadian and U.S.-owned cor- porations. In the longer term, Canadian monopoly has always been jealous of its control of Canada’s financial system, Imasco’s takeover of Canada Trust amounts to a serious erosion of the financial basis of Canadian monopoly. In the end, the Cabinet and the Mul- roney government decided to allow the acquisition to proceed. In order to obtain free trade from the United States, the government realizes that it has to avoid the kind of state intervention that the U.S. transnationals find so offensive. Canada is open for business as the de Havilland sale to the Boeing Corporation showed. Having announced its intention of. allowing foreign capital to penetrate further into Canada, the Mulroney government could hardly renege now. It cannot make exceptions to foreign take- overs any more than it can make excep- tions to what is to be negotiated in a free trade agreement. In short, the policy being pursued by the Mulroney government with respect to Imasco’s takeover of Genstar is con- sistent with its sell-out of Canada’s sovereignty and independence. I TMM IMAY DAY EETINGS vil Bennet Didi Trail Castlegar naby Etfie Jones ernl Vancouver Fast : «Mpbell River Fishermen — ’ eorge Vernon . Mox Valley Fort Langle Toe Victoria | ¢!espondence Fraser Valley North Island Shuswap Westside { quitlam Kamloops North Shore Sunshine Coast White Rock Teston Kineswavy Olgin. | Surrey | 1986 e 29 PACIFIC TRIBUNE, APRIL 30,