Canada

By MIKE PHILLIPS

OTTAWA — It’s being called a
“botched privatization” by some, but the
latest scandal to erupt around the bank-
Tupted Transport Route Canada trucking
firm demonstrates how the sell-off of
Crown corporations is being used to
benefit the Mulroney government’s friends
I private business.

The Tories again came under fire over
the issue last week when Liberal transport
Critic Russell MacLellan challenged Trans-
Port Minister Benoit Bouchard to explain
Why the Canadian National Railway Co.
Was paying TRC’s fuel bills some two
years after the former Crown-owned
trucking line was sold to a trio of Toronto

Usinessmen.

MacLellan produced invoices from a

Ingston, Ontario truck stop showing
that TRC drivers had bought their fuel
with CN credit cards. The truck stop’s
Manager has stated the drivers were using
the cards after his company refused to
honour TRC’s, about a week prior to the

firm’s collapse.

He later also rejected the CN cards
When he noticed. an unusually large
Number of trucks were fuelling up on the

N’s tab just prior to that announcement.

The disclosure in Parliament sent both
the minister and CN management scurry-
Ing to investigate the claims. Previously,

Ouchard had resisted opposition and
Union demands for an inquiry into the
Privatization on the grounds the federal
80vernment’s jurisdiction didn’t extend
Ito examining a private corporation’s
financial affairs.

_ Opposition parties and the unions
_ |NVolved, the Teamsters and the Canadian
Brotherhood of Railway Transport and
€neral Workers, have charged that the
Privatization in 1986 was nothing but a
Money grab by the buyers, Toronto busi-
Nessman Manfred Ruhland and _ his
Partners David and Paul Fingold.

For only $29 million, they bought what

ad been CN’s ailing trucking division.

€ sale included the firm’s terminals and
Other real estate for which the owners were
able to raise some $80 million in mort-
Sages in 1987.

The unions charge that Ruhland and
the Fingolds, with no previous back-
8Tound in the trucking business, simply
Stripped TRC of its valuable assets and

led the company dry without a thought

CN ‘bled

Sept. 12 announcement of the trucking :

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FINQUIRY

Transport Route Canada truckers demonstrate outside Treasury Board chair Pat

Carney’s office in Vancouver Sept. 1 6.
given to the 2,600 workers and families
whose lives have been disrupted by the
closure.

Charges have flown across the floor of
the Commons that the Mulroney govern-
ment deliberately undervalued CN Route
Canada by some $50 million, fully aware
the new owners were only interested in
whatever they could realize on the real
estate.

At the time of the trucking firm’s privat-
ization, CN issued a statement admitting it
took a lower sale price for the company in
an effort to keep the business afloat for
three years. But no one knows the exact
details of the sale agreement because the
government has repeatedly refused union
and opposition requests to make it public.

Indications confirming this theory be-
come stronger as the story unfolds. In'an
interview with the Tribune Sept. 28 Tom
Barron, a Moncton-based official with the
CBRT, said Manfred Ruhland had app-
lied, together with CN, to close a number
of its terminals in Atlantic Canada in Feb-
ruary, 1987, specifically those in Bathurst,
New Brunswick, Charlottetown, PEI and
both Stellarton and Sydney, Nova Scotia.

Ottawa, however, didn’t like the timing
and according to Barron, “advised the
company not to shut down then, but to
wait until late 1987 or lose contracts it had
with the federal government.”

While Ruhland was trying to negotiate

the possible closure of the terminals, his
regional management was telling the
CBRT throughout Atlantic Canada that it
had no intentions of closing its doors.
Instead the union was told TRC was
planning to move ahead in the trucking
industry, Barron said.

Meanwhile, the union obtained a copy
of an internal company document show-
ing a map of Transport Route Canada’s
Canada-wide network — minus its ter-
minals in Bathurst, Charlottetown, Stel-
larton, Sydney and Halifax.

Another signal of the company’s inten-
tions and the government’s possible
knowledge of TRC’s plans came in Sep-
tember when the transport minister’s
office reneged on a previous. decision
instructing CN to extend the terms of a

» “special agreement negotiated on behalf of

workers laid off because of the CN Route
Canada sale.

Last February, CBRT officials met with
then Transport Minister John Crosbie’s
administrative assistant requesting the
extension of the special agreement, which
normally would have expired at the end of
June, 1987, for 162 maritime employees
who lost their jobs because the company
cut back its operations in the region.

The union was informed that CN had
been instructed by the minister’s office to

grant the extension, but in early Sep-

tember, just weeks before news of the clo-

rucking sell-off

sure broke, the government reversed its
position.

At press time, a spokesperson for the
labour minister’s office confirmed that
wages for all of the terminated workers
had been paid up to Sept. 23.

While vacation and severance pay enti-
tlements have also been calculated and
presented to the employer for verification
and payment, the catch as Toronto CBRT
representative Marilyn Pitcher pointed
out, is that under current bankruptcy laws,
employees, unlike creditors, don’t have
first call on the company’s assets. So
nothing but wages and the TRC pension
benefits are secured.

In addition, the company _hasn’t
refunded the dues it has collected from the
workers since February, which now total
some $150,000, according to CBRT vice-
president Tom McGrath.

Since the Sept. 12 closure, the unions
have tried and failed to arrange meetings
with the transport minister: ““We’ve writ-
ten, lobbied and called for a meeting with
the minister with no response to our
requests,” Pitcher said.

Another letter was sent to Bouchard
Sept. 23, demanding a meeting and
requesting the extension of the CN special
agreement. As the Tribune went to press
there was still no indication that the min-
ister was ready to meet the unions.

The workers aren’t in a mood to wait
too much longer for Bouchard to respond.
By mid-week, an action strategy beginning
with public demonstrations as the first
step was being developed in the Atlantic
region.

“This sets a broad example for the Can-
adian population to look seriously at the
flaws of the privatization and deregulation
policies of the federal government,” Bar-
ron said. “Anyone looking to buy shares
in Air Canada might want to look at our
experience before they lay out any money.
What’s happening at Transport Route
Canada is a true example of what privati-
zation is all about.”

McGrath agreed: ““Workers had better
be leery of privatization. It turns out not to
be any good for those who are used to
having good, paying jobs that will guaran-
tee a steady living for them and their fami-
lies.

“It shows the intentions of those who
buy these public properties is to get as
much out of them as they can and later put
the workers on the street.”

See

Oil patch scandal points finger

ae all the sectors to tap into the Tory
ee fund, few have done so well as
aie - The Lloydminster Oil Upgrader
the Rafferty-Alameda dam in Saskat-
“Wan are the latest to cash in, but not
Out prying open another Tory scandal.
Tas a related move exposing Tory back-
ative dealings, Elizabeth May, a former
To Sor to federal Environment Minister
360 ¢ cMillan, revealed she quit her
the a a year job to protest his approval of
fferty Dam on the Souris River. —
da ay said the controversial $125-million
in eo of a billion dollar power project
for Seastevan area, was licensed in return
ish Katchewan’s agreement to the estab-
ee of a new “Grasslands National
nig. Ong the U.S. border. She was a
tee Policy advisor on both mega-
J€cts,
she Ong May’s concerns was the lack of
On on on the environmental impact
35 paoba, which is dowstream on the
Saskare Souris River after it flows through
'chewan and North Dakota.
Manit, Waterworks supervisor in Souris,

Oba fears the dam will reduce water

flow, and worsen the town’s summer water
supply problems of bad taste and odour. A
U.S. Army Corps of Engineers study says
the river may contain more dissolved solid
waste and heavy metals and wildlife may be
cted.
eee the Liberal and NDP opposi-
tion forced an emergency debate in the
Manitoba legislature on Sept. 12, the pro-
vince’s Tory government has rejected
demands for an independent study.

In Saskatchewan, the SCRAP coalition
(Stop Construction of the Rafferty-Alameda
Project) has again called for a halt to the
project, which will destroy large farming
and wildlife areas.

SCRAPand other groups are demanding
that McMillan release the documents and
rationale for his approval of the dam. Until
this June, the minister appeared to hold
many reservations about the project. His
sudden change of heart fuelled suspicions at
the time that political rather than environ-
mental factors were uppermost.

Meanwhile, Tory politicians from Ottawa,
Alberta and Saskatchewan announced
details of the heavy oil upgrader financing

Sept. 2. The $1.27-billion project involves a
$929-million public investment, with Ottawa
contributing 31.6 per cent, Alberta 24.7 per
cent and Saskatchewan 17.5 per cent of the
total cost. For this 73 per cent of equity, the
governments will get only 45 per cent of the
net operating revenue. Husky Oil, the only
private participant, will get 55 per cent of
the revenue for its $338-million investment.

Critics point out the logic of the govern-
ments dumping Husky, adding the 25 per
cent themselves, and doubling their revenue.

But most speculate the imminent election
figured highly in the governments’ announce-
ment. Ian Doig, publisher of the Calgary-
based energy newsletter Doig’s Digest, puts
its this way: “A lot of folks in the oil patch
are furious with the Husky deal. Just count-
ing the federal investment in Hibernia and
the upgraders, the bill for the Canadian
taxpayer is going to be more than $3.5 bil-
lion. There’s three Conservative seats in
Newfoundland and two in Lloydminster
District. So we are paying about $700 mil-
lion per Tory seat,” Doig writes, adding, “I

at Tories

am not sure we can afford the next elec-
tion.”

Many oil.experts doubt the feasibility of
the project. None of the major transnational
corporations would touch it, nor would
PetroCanada. On a list of potential mega-
projects prepared earlier this year, the fed-
eral energy department ranked Lloydminster
dead last in terms of energy output and cost.
World oil prices will have to skyrocket to
make the upgrader’s output competitive.
Current North American bench mark pri-
ces are in the $14 per barrel range. The
upgrader’s planners are predicting prices of
$20 U.S. a barrel when the plant starts up in
1992, but most industry analysts see that as
unlikely.

Some in Alberta think Premier Getty is
using the upgrader deal to repay a debt to
Husky. When Getty was boss of Edmon-
ton’s Nortrek Energy Corporation, Husky
walked in and saved the debt-ridden com-

pany and gave its chief executive officer a
job.

With files from Norman Brudy in Edman-
ton and Kimball Cariou in Regina.

Pacific Tribune, October 3, 1988 e 7