EDITORIAL “Six Bit Dollar” Two American visitors to Terrace dropped by the office of the Terrace Herald yesterday to buy a copy of the newspaper. They asked If anyone could tell them why the Canadian dollar’s value has dropped so much -over the last year. : There were the usual answers: | “Hs all political.’ : ifs all a question of manipulation by in- bankers."’ aternational ‘Another said it’s because “a lower dotar will ‘help Canada sell more of her products abroad.’’ : After listening for a few minutes, the ‘Americans Interrupted. ‘ Saldone of them, “I don’t belleve any of those ‘theories. | don’t buy these answers.” | “The reason,” she went on tosay, "is that you : Canadians have no confidence in yourselves and ‘tyour country. You can’t tell me that a country with the wealth Canada has, with the untapped ‘resources Canada has, and, most of all, with the opportunities Canada has, that your, dollar should be worth — eighty-six ° ‘cents.’ The other American added, ‘We travel up here to Canada at least once a year for the last fifteen - years. We've spent our money uphere when your dollars was worth $1.06. The only thing that seems to have changed Is the people and the - value of the doliar.” ; We hope these tourists are ‘wrong. USCVSNE: Pom iation Tou galt THE HERALD, Friday, September 8. 1978, PAGE 4 Mining Wants To ‘Improve TORONTO (CP) — The "Canadian mining industry is gut to nip in the bud any public misconceptions about its operations. It plans to extend a° , curriculum program already under way in British Columbia and parts of On- tario to other elementary schoo] systems across Canada, in order to give stu- dents a better insight into mining. nos The $500,000-project is sponsored by the Canadian Institute of Mining and Metallurgy under the direction of Douglas Sloan, partner in Coopers and Lybrand Associates Ltd., Toronta, and Richard Bowles, associate professor in University of Toronto’s education faculty. . Sloan said in a recent interview many people in the mining industry are ¢on- = cer.ed about “the increasing . Vaneouver, ' the joe Clark Expands Policy Position Joe Clark, Leader of the ' Progressive Conservative ‘ Party of Canada is gaining : momentum in his quest fr the opportunity to lead a Canadian government. In a speech delivered before the Canadian Club of Mr. Clark achieved a summit of communication with his audi ence which surpass all ! of his efforts to date. - Over the summer months Progressive Con- seryative Party has worked i to refine and expand its : policy position concerning, the ‘Canadian economy and ' Joe Clark’s address in Vancouver was the first of a series he will give for the of ensuring that | Canadians can become more ‘ familiar with the party's policies. In the speech to the : Vancouver: Canadian Club : the Tory leader got his | message over effectively. For the benefit of con- ' cerned citizens the Daily ; Herald publishes some notes .+ from the above-mentioned .,: address. - “With both the economy and the Constitution, the .. actions of the Trudeau Government aggravate the ! problems that are serious ‘ enough in themselves. “J will have other oc- ' casions to speak at length on ‘ the Constitution. But two points need making. First, . || everyoneexceptthe Trudeau Government wants to start constitutional reform by discussing constitutional powers - what level of government will have what powers, For ten premiers, | for myself, for Claude Ryan, that is the priority question. For the Trudeau Govern: ment, it is ‘phase two’, less ‘1 urgent than changing the to pursue changes in in- stitutions, while everyone else wants changea in sub- , stance, it is a guarantee af new and uonecessary con- | flict “within Confederation. “Second, some of Mr. Trudeau's proposals are very dangerous - and may be iegal. Those proposals would let any political party which could control the Federal Parliament change unilaterally the Supreme Court, the Senate, or the role of the Monarchy - against the wishes of one or all of the provinces, against the wishes of the majority of the population, and over the objection of other parties in Parliament, The distinguished Constitutional authority, Professor W.R. Lederman, told the Parliamentary Committee that the powers proposed in this Bill go beyond the authority of the Federal Parliament. Flora ‘Mac- Donald has asked that Parliament stop considering’ the Bill unti] the Supreme Court has judged whether guch unilateral action is within Parliament's power, and I hope her request will _ be accepted so as to avoid further unmecessary con- frontation between Ottawa and all the provinckes. “But important as the Constitution is, I want to address myself today to economic policy, and to certain fundamental changes in attitude-which a new government would bring to national economic policies. You have heard Mr. Trudeau's diagnosis that, Canada isa healthy economy ina difficult world. The facts are otherwise, We are falling consistently behind our competitors and below our potential. Among Industrial countries, Canada has the worst record of unem- ployment andthe second worst record of inflation. Other countries have been doing better in that difficult world’than we have - and doing that without our’ natural potential. This country has a capacity for real growth of at least five per cent per year, In each of the past three years, we have fallen well below that potential. The fault for that lies here at home. “The last 15 years have produceda dramatic change in the attitude of Canadians. Until the early 1960's we were a nation of builders and federal governments marked their ac- complishment in terms of what they helped to grow: Reconstruction; The Seaway; The Pipeline; Roads to Resources; Nor- thern Development; The Naltional Oi] Policy; and a system of incentives to develop Canadian potential - through the tax system, research and development, and agencies like the Canada Councell. _ ‘In the 1960's, the attitude changed, and an era was introduced when govern- ment services grew, and private productivity declined. Many of those TERRACE/KITIMAT services were uverdue, and they will remain a per- manent part of the Canadian system. - . “But we paid two kinds of costs - a dollar cost which is heavy and known, and an attitude cost which we can't afford to have continue. That attitude cost is evident on several fronts: the mutual hostility between the private and public secoirs, which was not as marked before the 60's; the willingness of the Trudeau Government to excuse the unemployment of a‘ million Canadians by saying unemployment in- surance, or welfare, ate as good ag work; and the exodus from Canada of people and investment that this young country needs. “T have indicated the major change in attitude our « government will take to the four billion dollars Canada spends each year on unemployment insurance. The insurance program will stay in place for those who need it. But we will divert as much as possible of thaT FOUR BILLION DOLLARS TO HELP PRIVATE EM- PLOYERSPROVIDE PERMANENT JOBS FOR Canadians who are now out of work. The focus will be two-fold. First, money that would be spent supporting a reon Who was out of work will be diverted to an em- ployer prepared to give that person a job. The govern- ment support would be for a ‘start up’ period, no longer than the maximum benefit period. While government support would be temporary, our expectation would be that the job would become permanent. Second, work skills would be developed. Nearly half our unemployed - at least five hundred thousand unemployed . Canadians - are under the age of 25, and have no or little practical work ex: perience, This program will help business - large and small - teach work skills to young Canadians. The philosophy will be to change the emphasis from a system which pays people who are out of work toward a system which pays people to go to work. “That speaks of an in- vestment in work, We also need an emphasis on initiative. “That speaks of an in- yestment in work. We also need an emphasis on initiative. “Politicians pay attention to statistics and encounters. The investment statistics are alarming. Between 1973 and 1977, Canada suffered a net outilow of direct investment capital of 1,440 billion dollars. That is dramatized by the fact that, in the previous five years, the inflow was 2.2 billion dollars. In fact, capital had come to Canada in every year since the Second War - until the tide turned in 1973. “That is a dramatic reversal of pattern - from money moving into Canada in the '40’s, the 50's, and the .'60's - fo money moving out of Canada in the middle 1970's, That pattern con- tinues. In the first quarter of 1978, there was a net outflow of direct investment capital of 160 million dollars. Since 1974, 53 percent of that direct capital investment outflow has been to the United States, And 1 ~ figures don’t include un :¢-called ‘unidentified transactions’ - the individual British Columbians buying homes or businesses in California or Arizona; the individual Torontonians moving money te New York. “The personal encounters ‘flesh that out. Ten weeks ago, in Toronto, a young Canadian entrepreneur told me that, despite his active history of committment to -Canada, he ‘felt more at home’ in New Jersey. Saturday, in Vancouver, another entrepreneur in his thirties, whom I met by chance in a store, told me had moved south ‘because there is more opportunity down - there.’ “The fact ls: there is more -opportunity here, We are younger, less developed, with more to do - whether you are an artist or an én- trepreneur, But the at- mosphere is different. The United States is a creative country, challenging its citizens to excel - while we have become a cautious country, where the regulator is more respected than the innovator, *4One reason is taxes - their amount and thelr effect. “In Mr. Trudeau's first year of office, the average Canadian taxpayer paid 13 percent of his earnings to Ottawa; today, he pays 17 percent, Coopers Lybrand compared effective tax rates in Ontario and New Jersey, and found that a Canadian earning twenty thousand dollars a year would pay $3,708 in income tax, while an American, with the same salary, would pay nearly one thousand dollars less im taxes. Those are citizen taxes not corporate . into and © taxes. Ordinary people pay for government luxuries like Petrocan. “Comparison of corporate tax structures between the two countries is more complex. Corporate rates are slightly higher in the United States - but that is more than offset by the much wider range of investment tax credits available in that country, and the much heavier weight in Canada of ‘hidden taxes’, like the sales tax, Taking all those factors account, Price Waterhouse concludes that thesame .*~any doing the same th..g. in the two countries would be only half as profitable in Canada as it would be in the United States. “We can’t continue to be a less attractive place to build than the United States, and one of the basic goals of our new government will be to make the total impact of the Canadian tax system at least as attractive to individuals and corporations as that of the United States. “We will apply three principles. “First, the tax system must reward initiative. In preparing our first budget, we will review the rates to ensure that progressive escalation does not eliminate incentive. “Second, the tax system must encourage private investment, not just gather government revenues. Ourfirst budget will change the application of capital gains tax and corporate inventory accounting to take account of inflation. We will enlarge the pool of venture capital in Canada, adopting methods that have been negative feeling” toward mining aid publicity over, environmental and health issues. “The Industry in Canada is under attack at a time wher: global economics ce already Gavs.ug svine mining companies to look effective in other jurisdic- tions, We will introduce to Canadian practice the idea of the tax contract, which will encourage industry to locate in slower growth regions. “Third, the tax system must offer strong incentives to the risk-takers and the innovators. We will in- troduce an Investment tax credit of up to $5,000 per year against investment in Canadian small businesks. We will substantially in- erease tax credits for in- dustrial’ research and development, particularly research by Canadian-owned companies. We will in- troduce the incentives necessary to énsure adequate exploration and development in energy and ning. “We have a number of other specific. proposals, -. ready to announce, 50 Canadians can judge the detail, ‘a3 well as. the direction, of the different approach to tax policy of the two national parties. The basic difference is in, our belief that governments don’t build countries - people do- and our determination to free the creative energies of the Canadian people. “Obviously, that requires restraint in government spending, both to pay for the tax changes and to wi back confidence. It has to be serious restrai., with a pattern and a pw pose. Most of the so-callec cuts an- nounced by Mr. Tiudeau, are culs in planned spending, not real spending - and involve delays in spending, not reductions. What govern- ment saves today it will spend tomorrow. After all, outside: Canada for future investments. we “It (the program) is no” anow job. None of us in the: industry wants to tell the kids there’s no sulphite in the , gmoke from smelters. _*. “But we do feel there should be more of an” awareness of one a Bowles said he had been. assured ‘‘there were to strings attached” when he agreed to supervise preparation. of curriculum materials. — ' “Pm not going to be a shill for the mining industry.” He said the materials will use an “identity” or ‘‘cross- cultural” technique ‘to provide students with ah. understanding of the. economics and operations of the industry as well as of life in remote mining com- munities. , 7 “Very often there’s a lot of . bull taught about issues in the classrooms without a lot. of factual background. 7 “Kids in Toronto have very little concept of: what . it's like to work in places like . , Kirkland Lake, Ont., and other more remote mining “ communities. We're trying to correct that.” the Trudeau Government promised restraint in 1960, . and then doubled spending~ within five years. Turner promised restraint in 1975, and federal spending — has increased 44 percent since the promise, What has changed is a time-table, not a philosophy. . “We willrestrain spending - in a much more systematic way. The past decade has seen a pattern af deliberate concentration of power in Otlawa - the FederalGovernment moved in on the private sector, the provinces, even voluntary: agencies. Imperialism is expensive- and we will start: restraint by getting Ottawa out of activities where Ot- Mr. ° Concerning Economy . tawa should never have been . involved Petrocan, “thd Sate for Utban Attire: ang thd Atiiy ore may have .been growing faster than the Public Ser- vice has. “Then we wilt introduce | the concept of the ‘sunset. law’, so government agencies regularly will have to prove their need to con- tinue to exist. We will reduce the weight of regulation, introduee better budgeting | concepts in Ottawa, stop the | rate of growth of the public - service, and restore Parliament's er to - control spending. “Let me say something in closing about the Americans. It has become the fashion in Canada to criticise, or at least to be wary, of the United States of America. For good practical reasons - thelr instinct to Invest, own, control. Those are practical challenges we have to face. In recent weeks, detalls of federal government spending cuts and re-allocations have been - activities like -- increased by $20 a month. This means aneligible pensiuoner will receive the basic Old Age ‘daily herald General Ottice - 635-4357 Published by Circulation - 635-6357 Sterling Publishers PUBLISHER - Knox Coupland CIRCULATION Pat Zelinaki 632-2747 CIRCULATION - 635-4357 KITIMAT OFFICE - 632-2747 Published every weekday at 3212 Kalum Street, Terrace, 6.C. A member of Varifled Circulation. Authorized as second class mall. Reglatration number 1201. Postage pald in cash, return postage guaranteed, NOTE OF COPYRIGHT The Herald retains full, complete and sole copyright In any advertisement preduced and-or any editorial or photographic content published in the Herald. Reproduction Is not permitted without the written real parmiasion of the Publisher. announced by a number of my Cabinet colleagues. These announcements have followed the Prime Minister’s firm commitment to government restraint outlined in his nationally- televised speech on August 1 The sweeping nature of the announce-nents puts the lie to arguments of those who say the Prime Minister is playing a cynical game, that no change is really contemplated or that changes will be short-range. But the announcements also underline that It has never been the intention of the government to cut indiscriminately. The intention {s to deliver more for less - fo provide the level of service Canadians have a right to expect while cutting the government’s own draw on national resources. As our country grows and changes, So rust the role of government In meeting the demands made of It by Canadians. Consequently, most of the recent economic announcements have outlined spending cuts based on a very tough reassessment of govern- ment programs: coupled with selective In- creases fo protect those Canadians most In need, The cuts substantially outwelgh ¢ the spending Increases though; more than $2 billion in real savings will be achieved by the end of fiscal year 1979. ; 5 AS & case in point, Finance Minister Jean Chretien met with newsmen in: Ottawa's downtown Conference Center last week fo an- nounce three decisions that will directly benefit tens of thousands of Canadians - while achieving savings In government outlays. Ne. Chretien announced decisions to limit energy price Increases, fo give more help to older citizens In need and to provide a major restructuring of benefits for children. OIL AND GAS PRICES _ Scheduled domestic oll and gas price Increases have __ been sharply cut back. fi THIS WEEK yar Sue AN from Ottawa wy Fat Be Iona Campagnolo, M.P. A$! per barrel increase in oil prices planned for January 1, 1979 will not be allowed. This, together with recent OPEC statements that . middle east off prices will probably not increase this year, means people who drive cars or heat their homes with oll will not face bigger bills for some time. * ‘The government will also move to de-regulate the price of natural gas - now kept artifically high through pricing agreements with producing provinceks, As there Is currently a gas surplus In Canada (a bubble made possibly by Increased exploration activity), de-regulation will probably mean a drop in heating biils for natural gas users. Lower gas prices may also convince more Canadians to convert from oll to ntyural gas - reducing our reliance on foreign Imports. These measures are expected to reduce government revenues over the next year by $165 miltion- but to benefit Canadians ata level many times as high, through thelr effect on reducing our rate of Inflation. ASSISTANCE TO SENIOR CITIZENS Older Canadians at the lower end of the Income scale are among those who suffer most from ion. recognize =» sponsibility to protect them - and have tnoved fo improve such protection by Increasing the benefits available through the Guaranteed Income Supplenement Guaranteed Income Supplement payments, which are selective payments made 10 ‘hose Canadians over 65 with financial need, have been * Security rate of $159.79, plus the GIS of $112.08 (for a single pensioner), plus the $20 additional for a monthly payment of $291.87. All of these ~- payments are indeved to the cost of CHILD BENEFITS Iving. In a number of respects, Ww. Chretien’s an- houncement concerning reform of the child benefits (or family allowance) system was the most dramatic. It established, for the first time In the’ Canadian social security system, the principle of selectivity - directing benefits not to all Canadians regardless of income, but selec- tively to those who are most In need...af con- siderable ‘financlal saving. . The reform will be accomplished through a refundable tax credit to be paid in axicltion toa . basic federal family allowance of The details are fairly complicated) but the essence of the new program [s that all Canadian _ families will recelve a reduced family allowance payment of $20 per child (down from $25.68) plus a tax credit which Is scaled according fo family Income . e maximum tax credit will be a those with family incomes of $19,000 orients credit wilti be reduced as the income level In- What this all isth 3 all means Is that a family with th children (and earning less than $18,000) vill recelve $312 more In child support benefits under the new system than under the old, inall, more than 2.4 million familles with more than Smillion children will receive the Child Tax Credit '- with 5300 million golng directly: to Canadian families below the Statistics Canada poverty line. This significant new initiative will be achieved with no Increase In overall Social Security spending. For more details on these new programs, please do not hesitate to contact me. Write to me care of the House of Commons, Ottawe, Ontarlo, KIA . 0X2, No postage is required, "