THE WESTERN CANADIAN LUMBER WORKER 1 % AT THE TAXPAYER‘S EXPENSE f < HOW TO BE A MILLIONAIRE Editor’s Note: How would you like to be able to borrow $130 million dollars, set up an industrial complex free from federal or provincial taxes and have the option of picking up all the company shares for $2,000 and with the promise that your business will have no competition. This is what Premier Joey Smallwood of Newfoundland did for New York promoter John Shaheen, sidekick of Republican presi- dential candidate Richard Nixon. The whole sordid story, written by well-known columnist Charles Lynch, is reprinted below. x *% *& CHARLES LYNCH OTTAWA — You remem- ber that Richard Nixon, cur- rently the Republican candi- date for president of the U‘S., visited Ottawa in 1955 as the lawyer for New York promot- er John Shaheen — who was out to make a killing by build- ing an industrial wonderland at Come-by-Chance, New- foundland. And you remember that, subsequent to the Ottawa vis- it, Nixon and Shaheen went to Europe with Premier Joey Smallwood—and they wound up touring Moscow together, looking for Khrushchev. Shaheen is one of Nixon’s backers in his current run for the presidency, and was one of the big party-goers and party-givers at the Republi- can convention in August in Miami Beach, where Nixon was nominated. NO FLIES Nixon has said, about Small- wood, that “there are no flies on Joey,” and you might won- der what sort of deals he and Shaheen were cooking up with Smallwood. Newfound- land people have been won- dering, too, and Joey’s recent cabinet crisis blew up over charges that he was coddling Shaheen. Coddling, it turns out, may be far too polite a word. We are indebted to the mag- azine Canadian Petroleum, published in Toronto by Southam Business Publica- tions Ltd., for some details on how Joey and Shaheen have combined forces to avoid fed- eral income taxes for 15 years on a huge chemical-refining complex at Come-by-Chance. LATENT AVARICE The magazine calls the deal “a monument to the foolish- ness of unchallenged political power and the avarice latent in capitalism at its very worst.” The Come-by-Chance refin- ery will have a capacity of 100,000 barrels a day. Under the terms of the deal, Joey has set up three Crown corporations. One, the Provin- cial Building Co., will build the refinery. Another, the Provincial Refining Co., will own it until it reverts to Sha- heen in 15 years. And a third, Provincial Holding Co., will hold the shares of the first two — its shares in turn be- ing held by the Province of Newfoundland. GUARANTEE LOAN The Newfoundland govern- ment will guarantee a $130 million loan to be repaid by Shaheen over a 15-year per- iod, when the refinery will be purchased by him for a nomi- nal sum. During the life of the agree- ment, the refinery, as prop- erty of a provincial Crown corporation, will be exempt from Canadian income taxes, property taxes, and the seven per cent provincial sales tax on building materials. Crown lands for the refin- ery will be supplied at a cost of one dollar, including all legal fees. Electric power will be supplied by the province at 2% mills per kilowatt hour — far below commercially available rates. MANAGEMENT FEE Shaheen will supervise con- struction of the refinery and will be reimbursed all his su- pervision costs plus 100 per cent. Then Shaheen will oper- ate the refinery and receive a management fee of 27.8 per cent of annual net profits and a sales fee of 5.1 per cent of net sales. . There is no possible way for Shaheen to lose money. When the $130 million is paid off in 15 years, Shaheen has the option to purchase all the shares of Provincial Holding Co. for $100 per share, or a total of $2,000. For that paltry sum, he will acquire all the assets of the refinery and 15 years accumulation of tax- free profits. FIRST RIGHT For the next 25 years, Sha- heen interests have first right of refusal on the construction of any similar government- assisted refinery or chemical plant in Newfoundland. As Canadian Petroleum puts it, the Newfoundland government has made it pos- sible for Shaheen to buy 15 years of untaxed profits of a provincial Crown corporation for $2,000. : The magazine adds: “Fed- eral income taxes in that per- iod have been completely eli- minated, and the profits of the operation, which should have gone to the people of New- foundland, have been handed over in their entirety. GROSS PERVERSION “Surely, such a gross per- version of the intent of Crown corporation legislation has never before occurred .. . y “When the entire operation is financed, almost without any risk to Shaheen whatever, by funds improperly diverted from federal and provincial treasuries, the picture be- comes a very ugly one.” Up to now, most of Small- wood’s wheelings and dealings have been cloaked in mystery, _with Joey telling the people to put their trust in him and hope for the best, while he has cavorted about with the Nixons and Shaheens and John Doyles of this world. PROVINCIAL ACT What brought his latest col- laboration with Shaheen into the open was inclusion of its terms in a provincial act rati- fied by the Newfoundland legislature, giving Shaheen the guarantees he demanded — guarantees that were too strong for two members of Joey’s cabinet to stomach. For what we must hope - will not be the last word, we turn again to Canadian Petro- leum: “The federal government’ can exert pressure fo have this act repealed. And bring pressure it must, before the entire eastern Canadian in- dustrial establishment sinks in a slough of sweet deals for court favourites and bidding with diverted federal income taxes for projects of uncer- tain value.” FROM PAGE SIX SSS a eS “LOCAL 1-367 REPORT” 1946, 1953, 1958, 1964 and 1967. He emphasized some of the highlights of the recent Southern Interior strike and the militant support by IWA members for their leaders during that strike as reflected in numerous government su- pervised and Union strike votes. The Regional President fur- ther dealt with the threat of low wage areas within the - Region, Canada and the United States and the import- ance of educating the younger people entering into the forest industry by stating: “The provincial economy and the related wage struc- ture were developed on ac- count of the high percentage of Union organization within the Province of British Co- lumbia. “The younger people entér- ing our industry do not rea- lize the struggles that took place to obtain the wages and conditions that are now prev- alent throughout the forest industry. : “Many more problems will have to be solved in the im- mediate future and some long Sup a programs will have to be developed. “That will take the involve- nt of the younger genera- who at present take a lot of things for granted. LA- BOUR EDUCATION IS THE ANSWER.” KEITH JOHNSON In his address to the Local Union meeting the Interna- tional 2nd Vice President dealt with: © area-bargaining versus company bargaining, © cooperation between var- ious Unions when negotiating with large integrated com- panies, ® organizing the unorgan- ized in order to protect the benefits enjoyed by organized labour. In closing Keith Johnson paid.tribute to Walter Simcich —Director of Research—and Oliver McMillan—Director of Education—for their untiring efforts on behalf of the Inter- national Union. NOMINATIONS After nominations and de- clines the following members were elected: e Balloting Committee: D. Grant, T. Grant, Kreigher, Cropley, Cotton and McCor- mick. e Safety Director: J. Hag- gerty. e Safety Delegate: E. Del Rio. e Delegates to the next B.C. Federation of Labour Convention: Cy Godfrey, C. McCormick, R. Fraser and E, Wood. After nominations and de- clines the following members will go out on a referendum ballot for Local Officers, where required by the Inter- national Constitution: © President: M. Nordblad and R. Fraser. © Ist Vice: R. Funk (by acclamation) . e 2nd Vice: Cy Godfrey and E. Del Rio. © Financial Secretary: E. Wood and W. Buker. © Recording Secretary: Bill Hayes (by acclamation). © Warden: J. Haggerty (by acclamation). © Conductor: (by acclamation). © Six-year Trustee: J. Las- lo (by acclamation) . [Sa A SE INERT AEE 2 eee | RESULTS As they walked home to- gether, Tom told Fred he was going to give his wife a ser- ious talk on economy. When they met again next day, Fred asked: “Well, did you give the missus that economy lecture?” “¥ did,” replied Tom. “Any results?” “Yes—er—I'm going to give up smoking.” L. Crouch LIBERALS DROPPING SASK. AUTO INSURANCE? REGINA — Labour repre- sentatives in Saskatchewan are deeply disturbed by evi- dence that the Liberal gov- ernment of the province may be going to turn over the Sas- katchewan Auto Insurance Plan to private interests. The plan, initiated by the CCF government in 1946 has re- sulted in Saskatchewan. mo- torists having the best and most economical insurance coverage of any in North America. It brought upon the heads of the CCF administra- tion the everlasting enmity of every private insurance com- pany and it is believed that these private companies be- came one of the main sources of finance to the Liberal party with the understanding that a Liberal government would abandon the economical pub- lic plan. A recent speech in Regina by J. E. Burns, president of the all-Canada Insurance Federation contended that private companies could pro- vide better insurance cover- age for the public, but Sas- katchewan citizens are not falling for this baited hook. C. C. Cave of Moose Jaw, vice-president of the Saskat- chewan Federation of La- bour, made pointed comments on the situation. Mr. Cave said, “One of the most prevalent complaints you get from residents of other provinces and the American states has to do with the excessive cost of their auto insurance. The truth is that the big insurance companies have failed to do as good a job as the public plan in Saskatchewan. The number of government en- quiries that have gone on and are continuing in Canada and the U.S.A. respecting auto in- Surance proves that Mr. Burns and his associates have not produced the goods.” Se | LIGHTER SIDE Women can drive as well as men can, which, when you come to think of it, isn’t such a great achievement. Ke ok Wife to reluctant husband, who is helping their small son with his homework: “Help him now while you can. Next year he goes into the fourth grade.” * * * Overheard in the bunk- house: “You show me a thirsty physician and I'll show you a dry dock!”