Looking glass magic at Skeena Mall Manufacturing profits up OTTAWA (CP) - Canadian manufacturers have increased prices and profits this year despite a levelling out of the rate of wage increases, says a study released Monday by the Centre for the Study of In- flation and Productivity. The report, released as leaders of the federal and provincial governments gathered to discuas the economy, points particularly to the food and beverage industry and says: ‘Profit increases may have contributed somewhat to the rapld increase in food prices over the last year.” Tt says it will be watching over the next few months to see if industry contributes to another round of inflation with higher prices and DAVIS SAYS profits that could stimulate wage demands, The report of the centre, operated by the Economic Council of Canada, says Profits in the manufacturing sector for the first nine montha of 1976 were up about 35 per cent over the same period in 1977, It says the manufacturing sector had raised prices '‘de- spite a substantial reduction in labor cost pressures in 1978.” The study says that average base wage set- tlements—those to workers in the lowest-paid clas- sifications—averaged 6.9 per cent in the third quarter this year, It says this is up slightly from the average 6.4 per cent wage settlements of the second quatter and con- cludes that the decrease in the rate of wage increases may have bottomed aut.” The study says that moderating wage increases and higher productivity have enabled industry to tran- sform price increases into substantial increases in profit per unit of output. dustry,“ profits per unit af “profits per unit o output in the third quarter of 1978 are 63 per cent higher than in the first quarter of 1977 and have increased at a significantiy faster rate than unit labor costs over the same period,” The depreciated value of the Canadian doliar has _ Meant foreign imports now cost more, thus making Canadian-manufactured goods more competitive at Ontario moving OTTAWA (CP) — Ontario Premier Willlam Davis said Monday some. rogress has been made in inp lementing new economic policies in Canada, but he warned government leaders not to sit back and relax. Inhis opening statement to the first ministers’ con- ference on the economy, Davis sald ‘We atill have a lot to do if we are to ensure that our economy is fully world competitive.” Although he suggested many of the federal government’s actions in recent months have represented emergency repairs to the economy, Davis expressed confidence the federal system has the capacity to hold to a steady and dependable program of economic management, But he sald economic man- . agement demands a clear and lasting solution to problems surrounding division of powers between federal and provincial governments. The current structure invites too much unilateral action, confrontation, duplication and buck- passing by all levels of government, Davis said. Urging federal-provincial cooperation to establish and implement a strategy to Teallze jobs and economic strength, Davis said: “Our objective has to be the creation of many more productive jobs for Canadians, and equally as important, a better regional distribution of income throughout the country on a more-efficient basis than we have now,” Davis cited as an example of sound economic strategy the cooperation and initiative exhibited by On- tario and the federal government to provide the Ford Motor Co. with a $4s- million incentive grant to locate its new engine plant in Ontario. Davia said, however, one af the faults of federal economic policy has been the treatmentofin- dustrialization as a natural process that would look after Income redistribution, re- gional development and the equallzation of basic ser- vices mus, be achleved, but meeting those objectives must not “hamstring the development of an industrial policy which treats ex- cellence and com- pelitivencss aa paramount,” Dae rgued bef the avis a lore other first ministers that an industrial strategy which “relieves heavily on wil d giveaways, will only come back to haunt us," The premier told reporters later he was referring to traditional federal govern- ment programs such a5 make-work projects which provide only shortterm benefits to communities or regions. Davis said he supports the goal of regional develop- ment, but insisted that whatever action the federal government takes should lead to establishment of efficient and competitive projects and businesses. “I worry about the future of Canada when I see. disparities that have developed because of the build-up of enormous cash surpluses in one region while low-income regions are suffering unacceptably high rates of unemployment and high levels of taxation.” Davis referred specifically to the Alberta Heritage Fund and said the more than $3 billion in the fund should be recycled more effectively through the economy to benefit all of Canada. $64.95 (R27F) Replace: Battery with anew 36 month/36000 mil warranty. BATTERY SPECIAL Motorcratt Battery with Terrace Totem Ford Sales Ltd. 463) Keith - 635-484 Dealer Licence Number DOUZ7A o; Special Opening far amas Party 632-4205 | sc® home and in foreign mar- ets, But the report says there are serious questions about whether . manufacturers have been choosing to raise domestic prices to the higher import levels rather than expanding domestic sales. “The centre wants par- tleularly to urge Canadian firms which compete with importa to tse the depreciation to expand their markets rather than raising their prices up to the higher import level," the report says, “Given the improved financial position of car- porations, the moderation of | labor costa and the recent reduction in federal sales taxes, the centre believes that corporations should ex- ercise a substantial degree of price and profit restraint.” it says. 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