SEL A Nt At Al a A ene ede 1 Iu, \ ieee A || on vo Fe

FEATURE

The following is extracted from a forth-
coming book by Ben Swankey entitled
“Brother, can you spare a billion?” to be
published in May by the Centre for Social-
ist Education.

IT n Canada today a small group of cor-

porate giants both domestic and for-
eign together with a few extremely rich
families, and a handful of banks control
practically every sector of the Canadian
economy. Their ownership and control is
so all-pervasive that no Canadian
escapes paying financial tribute to them.

No matter what you buy, whether it is
food or drink, clothing or appliances, a
house or a car, you pay excessive prices
with the profit going into the coffers of
these corporate giants. Not only that, by
their sheer size and wealth they are able
to manipulate the economy and govern-
ment to serve their own narrow selfish
interests. Their control of the media ena-
bles them to influence public opinion
into acceptance of the policies they
pursue. “What's good for us is good for
Canada” is their motto.

This concentration of wealth in a few

-hands, plus the growing foreign control
of our economy, should be and is a mat-
ter of great concern to all Canadians. An
examination of its extent and implica-
tions is long overdue. More important
action to end this corporate control and
replace it with democratic people’s con-
trol has become the most important issue
of the day.

The trend towards centralization of
wealth and increasing foreign control of
our economy is continuing at an acceler-
ating pace. Almost every day we hear of
new mergers and takeovers in the corpo-
rate world.

In the 1960s, Canada had about 250
mergers and takeovers per year. Between
1971 and 1984, it went up to 500 a year.
By 1986, it had reached 800.

The speed with which this concentra-
tion of wealth is taking place has alarmed
Canadians in all walks of life.

“In a number of years there will be six
groups running the country,” predicted
Bernie Ghert, president of Cadillac Fair-
view, Canada’s second largest develop-
ment company.

Henry Knowles, formerly Canada’s
top security watchdog, warned: “We
must grapple with the problem of con-
centration of substantial economic power
in Canada in the hands of a new aristo-
cracy consisting of twenty or thirty pow-
erful families and the Canadian banks.”

Richard Thomson, chairman of the
Toronto-Dominion Bank, is even more
alarmed. “I worry about the political
backlash if it is not dealt with,” he said.
“This could lead to socialism!”

The rationale of the corporate inter-
ests engaged in mergers and takeover
was that this will make their companies
more efficient and competitive and that it
would lower prices to consumers.
Ottawa and provincial government give
their blessing using the same reasons. In
fact, the results are just the opposite.

The first important feature of take-
overs is that they create no new industries
or new jobs. They merely redistribute the
wealth in a different way, into new and
fewer hands. The corporations eat each
other up; it is a form of corporate canni-
balism.

Globe and Mail columnist Jeffrey
Simpson made that point in an article
April 9, 1986. “New jobs seldom come
from these mergers,” he stated. “(But)...
certain people, principally large share-
holders, have certainly got rich from the
mergers.”

Conglomerates often close down
plants, mines, mills, offices and services
of the target company which do not pro-
duce a high enough rate of profit or
which may be in competition with some
other companies in the conglomerate.

ination.”

“Canada’s 32 wealthiest families, along with five conglomerates,
already control about one third of the country’s financial assets, nearly
double what they controlled just four years ago.”

Controlling Interest by Diane Francis.

“Forty-six per cent of the value of the most important companies in
the Toronto Stock Exchage was controlled by nine families.”
Jeffrey Simpson, Globe and Mail, April 9, 1986.

“The basic challenge facing Canadians today is that of extricating
ourselves from increasing American control and domination over our
economic and political life, and from increasing American military dom-

William Kashtan, leader, Communist Party of Canada

“During the past two years over 1,200 Canadian companies have
been taken over by non-Canadians who have already captured some 44
per cent of all non-financial industry profits made in Canada

Council of Canadians, advertisement in Globe and Mail,

“Fifteen of Canada’s biggest conglomerates which own 27 per cent
of non-financial assets grew by 86 per cent between 1980 and 1983.”
Controlling Interest by Diane Francis.

March 24, 1987.

_- aR a ge eaeime umes tt usar ae ee

The
alarming
growth of
corporate

mergers

Edward and Peter Bronfman

VOOM
Edper Investments Ltd.
| 51% 30% |
Brascan Holdings Ltd. 49% Hees Inter 1 Corp.
rasca | 37% am | ss |
eam MN APE JoneLabatt Ltd “North Canaclan | _Carons-Bancorp ne_ =
| **** Great Lakes Group Inc. Oils Ltd. 49%
40% 87% Costain Development
> Trilon Financial Corp. Bankeno Mines Ltd. Corp.

70% Brascade Resources Ltd. +4

63%
Westmin Resources Ltd. |

46% _ Noranda Inc.

ak a ae
Macmillan
Bloedel _* Royal Trustco Ltd. coe,
Northwood | 51%
Forest Royal LePage Ltd.
ol Lonvest Corp. —
Addison * 55%
Mines _ 49% _|
Brenda London Life
Mines = t Co.
ee eee aac

Continental Bank

Norcen Energy 19% -_
of Canada

Resources Ltd. 440,

(64%
Trizec Corp. Ltd. 37% voting)

Bramalea Ltd, 43%|
ee ee

Coseka Resources Ltd.

24%
The Rouse Co.
5 aa EL

Chart shows scope of Bronfman empire.

The interests of the workers who need the
jobs, or the communities who need the
purchasing power are of no concern to
the corporate takeover artists.
Corporate conglomerates often buy
up cash-healthy corporations, bleed
them of their cash assets, and then let
them go into bankruptcy. One example
is the Argus Corporation which extracted
dividends from Massey Harris, while
putting nothing back into it, and eventu-
ally forced it to borrow huge amounts.

That, in turn, put the company on the
brink of bankruptcy and resulted in a
government bail-out. Another example
is Peter Pocklington’s purchase of Fidel-
ity Trust. He sold it millions of dollars
worth of properties the value of which
was highly speculative, including an
empty Gainer’s building for $10 million.
Fidelity went into receivership and Pock-
lington walked away with handsome
profits.

The growing concentration of eco-

4
nomic wealth in a few hands leads to
monopolies and cartels, to price fixing
arrangements and profiteering.

One of the best examples of price fix-
ing is the oil industry.

The world price of oil went down in
recent years from $32 a barrel (U.S.) to

.B8. Now it’s back up to $14. The B.C.

energy ministry and the federal depart-
ment of mines and resources estimated
that for every $1 (U.S.) drop in the world
price of oil, the price of gas in Canada
should come down by one cent per litre.
That would have meant a 24 cent drop in
the price of gas at the pump. No such
thing happened. After much pressure
and after some months the oil industry
reluctantly dropped the price by three
cents a litre, while raising the prices of
other products such as heating oil.

Now that the world price has gone up
to $14 a barrel the oil companies have
again raised the price of gas at the pump
by three cents a litre. Canadians never
did get the benefit of the drop in the
world price of oil.

This small group of corporate giants is
able by its sheer weight and wealth to
manipulate both the economy of the
country and government policies to serve
its own narrow selfish interests. Sitting
on the economy like giant octupi, they
squeeze wealth from every province,
every region, every sector of the econ-
omy.

This corporate elite has only one
objective — profits — not fair profits
or normal profits but maximum profits.
Everything that promotes this objective
is considered moral; everthing that
stands in the way is immoral and must be
removed.

To achieve its aims the corporate elite
is moving in four main directions —
restructuring the economy, shifting the
tax burden from capital to labor, attacks
on labor and democratic rights, and
promotion of the arms race and the cold
war.

e Restructuring the economy is to be

achieved by integrating the Canadian
economy with that of the U.S., encourag-
ing foreign investment, a bilateral free
trade agreement with the U.S., privatiza-
tion to increase its hold on the economy,
and deregulation to allow big business to
do what it-wants without any legislative
or public controls.
e Shifting the tax burden from capital
to labor is to be achieved by lowering
corporate taxes, increasing grants and
subsidies to the corporate sector, increas-
ing taxes on working people, and cutting
the deficit by cutting social programs
such as unemployment insurance, health,
education, pensions and welfare.

@ Restricting democracy and the
rights of labor serves two purposes — it
weakens the labor movements in its
struggle to maintain wage and benefit
levels and thus increases profits, and at
the same time it weakens the ability of
the people to fight back against the poli-
cies being imposed by big business.

@ Intensifying the arms race and the
cold war also serves two purposes. It
diverts capital into the arms race where
profits are twice as high as in peacetime
production, and it assists the U.S. in its
insane global strategy of planning the
destruction of socialism by means of a
nuclear war.

The growing monopolization of Can-
ada’s economy has put the issue of an
alternative program on the agenda. The
central aim of such a program would be
to break up corporate concentration,
end foreign domination of our economy,
establish people’s control through a large
measure of public ownership, and devel-
opment of the economy in the interests of
all the people rather than a small eco-
nomic elite.

22 e PACIFIC TRIBUNE, APRIL 29, 1987